It takes just a glimpse at his luggage to note that, when it comes to risk, Giuseppe Lavazza likes to hedge. The vice-president of the Turin-based Lavazza coffee empire is in Melbourne for the Australian Open, one of the four tennis majors sponsored by the family-owned business, and arrived lugging two near identical suitcases.
"One is 25 kilograms of summer clothing, the other 25 kilograms of winter clothing," he says with a beaming smile. "I have been to Melbourne enough times to understand I will need both. I have everything from summer shorts to a winter coat. The only thing I know for sure is that, in Melbourne, I will end up wearing all of it."
![Giuseppe Lavazza, global vice-president of Lavazza at the Australian Open in Melbourne.](/web/20170203151333im_/http://www.theage.com.au/content/dam/images/g/t/w/0/2/3/image.related.articleLeadwide.620x349.gu4n5k.png/1486097913330.jpg)
It's an interesting insight into the thinking of one of the leaders of the 123-year-old Lavazza empire, which dominates Italy's coffee market.
!['One of the family and company principles is to have a long-term vision.'](/web/20170203151333im_/http://www.theage.com.au/content/dam/images/g/u/5/2/e/q/image.related.articleLeadwide.620x349.gu4n5k.png/1486097913330.jpg)
Giuseppe Lavazza and his cousin, Marco Lavazza, are now regular visitors to Australia, ever since they took back control of the Australian rights for the family's eponymous coffee brand from Melbourne's Valmorbida family in November 2015.
Since then, they have entrenched Lavazza as the No.2 coffee brand in the country, and are striving to usurp the top spot from rival Vittoria, which turns over more than $220 million in Australia annually.
Despite the rise of cafe culture across the nation's capitals, Australia still ranks a lowly 42nd in the world in terms of per capita coffee consumption. Australians consume just 3 kilograms of coffee each per year, only marginally higher than the tea-obsessed Britain (2.8 kg).
"There is huge opportunity to grow in Australia," says Lavazza. "With your climate, there is also opportunity to innovate. We see chilled coffee drinks as a growth market here in Australia."
It soon becomes evident that it's not just in travel clothing that Lavazza likes to hedge. As we discuss the Australian growth plans, plans for lifting traditional coffee are offset with experimental cold drinks. Packaged beans, the lifeblood of the business, are tempered with a push into instant coffee, with the launch of the Prontissimo range. But it's the issue of climate change that reveals the extent to which the Lavazzas are hedging their bets.
A recent report by the Climate Institute suggests coffee production could be cut by as much as 50 per cent by 2050 due to climate change. As one of the major players in the global $20 billion industry, such reports are hard for the Lavazza family to ignore.
"Climate change is a real danger, not just to our industry, but to the world," says Lavazza.
When confronted by those who deny climate is happening, Lavazza has a simple answer. He quotes the work of 17th century French philosopher and scientist Blaise Pascal, and what is known as "Pascal's Wager".
Climate change is a real danger, not just to our industry, but to the world.
"Pascal asked people to bet with their life on the existence of God," says Lavazza.
"If you bet that God exists, and he does, then you win everything. If you lose the bet, you lose nothing. Now, asks Pascal, imagine if you bet the other way and God does not exist. Then if you win, you win nothing. But if you lose, well, you lose everything. I am like this with climate change. It is better to bet it is happening. Otherwise, if we say it's not happening, and we are wrong, we lose everything."
It is against that philosophy that the Lavazza family has worked to examine every aspect of its business to reduce the company's carbon footprint.
"This is very important to us," Lavazza says. "One of the family and company principles is to have a long-term vision. Climate change, this is the biggest threat to our business in the long term, so it is important for us to do something to lessen our own impact."
It's a tall order in the coffee industry. Traditionally, plantations existed under a natural forest canopy, allowing flora and fauna to co-exist with traditional farming techniques. A surge in demand in the 1970s led to the development of "sun-grown" coffee, with fertilisers used to help the plants thrive in an open-air environment.
Over ensuing decades, more than 650,000 hectares of rainforest were cleared in central America for coffee plantations. According to the World Wide Fund for Nature, 37 of the 50 countries with the highest rates of deforestation are coffee producers.
In 2014, the Lavazza company undertook an audit of operations, looking for carbon savings, and presented its first "Sustainability Balance Sheet". It revealed that Lavazza had cut CO2 emissions per tonne of coffee processed by 17 per cent.
Some came from switching electricity consumption at its key Italian production plant to renewable sources, but Lavazza also reworked the production process to reduce electricity consumption per unit of packaged coffee by 8 per cent. As a result of the changes, Lavazza generated cost savings of 3.9 per cent in just one year.
"If you do it right, it's a virtuous circle," says Giuseppe Lavazza. "We have not only cut our CO2 emissions, we have helped margins as well."
Instead of banking those savings, Lavazza re-invested at the source of its coffee. Working with Oxfam, the Lavazza Foundation launched a project supporting small coffee producers in the Dominican Republic and Haiti to try to restore traditional farming techniques. The project involves 2200 families and small producers in Haiti and 1230 in the Dominican Republic. This will see the replanting of a million coffee plants a year in each country.
"Do I know what the future holds? I don't," says Lavazza. "But I do believe in Pascal, and I would rather make the bet this way."
Mark Hawthorne is editor-at-large of The Age.
Twitter: @HawthorneMark
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