Suzy Bibko is editor of Families in Business.
In Italy drinking coffee is more a way of life than a simple pleasure. Suzy Bibko discovers the secret of the perfect espresso bean and what the coffee tradition means to Andrea Illy, CEO of illycaffé
Every country has an identity that can be summed up in a landmark, a landscape or even a person. France has the Eiffel Tower. Sweden has its fjords. England has the Queen. And Italy? Espresso. I know what you're thinking – surely there are other symbols that are more approprate to this country with its rich, cultural heritage. But espresso is the perfect expression of Italy because coffee isn't just a beverage, it's a culture unto itself.
Family-owned illycaffé knows all about coffee culture. A company that has been dedicated to both the scientific and aesthetic qualities of coffee for the past 70 years, it is helping to spread both the word and the bean when it comes to espresso. In the past ten years, the company has tripled its turnover, created an intensive social responsibility programme, opened the University of Coffee, developed one of the broadest art collections in the world, and franchised over 120 illy-brand cafés around the globe. And let's not forget about those important innovations from its past: the first pressurised coffee tins, the predecessor of all espresso machines and the single serving coffee pod.
Andrea Illy (pictured), third-generation family member and chairman and CEO of illycaffé, says that producing the best coffee possible is not only a mission, but also a passion and obsession for the family – and one that is culturally intensive. "Coffee has always been the official beverage of culture," explains Andrea, "because of its aesthetic properties. The aroma is a delight for our mouth and nose, and because of its stimulating properties, it can also increase positive aspects of human life like socialisation, interaction and memorisation. And at the same time, from place to place and city to city you find coffee tradition and rituals as far as the consumption is concerned. So there is a lot to learn about the overall coffee culture."
In an effort to spread the knowledge, illy has created a one-of-a-kind centre for learning in its University of Coffee. The University is aimed at every group involved in the coffee process. Courses taking place at the University of Coffee in Sao Paulo, Brasil are are aimed at the growers. During these courses, international experts and technicians hold lessons on every step of the production process: from cultivation to grinding, toasting and preparation. Of course, there is always a risk for the grower because while he can absorb all the knowledge and be very motivated to produce the best beans, if the quality is not realised due to weather conditions, illy won't necessarily buy the beans. "However, the knowledge has still been transferred to that grower," explains Andrea, "and he can keep it and use it in the future and also use it to help him sell to other buyers in the world". Next there are the professionals: the baristas, the servers and the owners of coffee shops. "We teach these people the background of the coffee culture, from the production aspect to the skills involved in preparation," says Andrea. "And of course there is specialised training. We can also go on to teach them how to improve the relationship with the grower or how to improve the management of their business to increase profitability." Lastly, there are the consumers, the newest group that the University is targeting. "We have a strong belief that there is an interest in the coffee culture, which raises a lot of curiosity and passion in the consumer, much as has happened with wine," says Andrea of their newest students.
Courses taking place in Trieste and other recently opened locations around the world, such as Shanghai, are addressed to coffee bar operators or owners. The lessons on coffee are given by illycaffé's own trainers and experts, while lessons dedicated to the management of a business are carried out by lecturers and experts from the company.
Of course, these educational efforts mean that illy coffee doesn't come cheap. But for illy, quality and sustainable development take precedence over quick profits. "Sustainable development starts from the premium price," explains Andrea. "The premium price allows us to invest back all along the value chain in activities like research and development, knowledge generation for quality improvement, know-how transfer to the coffee growers and also improvement in our factories. It also means paying a premium price to the coffee grower for the high quality beans we source from."
Speaking with Andrea, it is clear that the family and the company feel a strong connection to its growers. They clearly are more than just farmers; they are families, too, who are an integral part of the coffee culture. So, to honour them and also to help spread the culture, the company conceived In Principo, a collaboration between illy and the well-known photographer Sebastião Salgado. The project features striking black and white photographs by Salgado, which 'narrate' the story of illy's coffee growers, documenting one coffee-growing culture each year since 2002. Andrea says that the company "wanted to represent the reality and the human beauty and pride of the coffee grower to our western consumers who do not know a lot about the culture of the coffee growing countries. They do not know that there are 25 million families behind coffee. So we made the project expressly within the frame of the coffee culture to communicate to our consumer through the photography of Salgado. And the pictures he took are absolutely incredible."
The photography exhibit is just one in a series of arts-based projects that began back in 1992 for this culturally aware company. As art is usually recognised as the embodiment of culture, the Illy's felt there was no reason why that culture shouldn't be the coffee culture. To that end, the family came up with the idea of working with artists to create designs that would feature on illy espresso cups. "The reason we developed the project, the Collection, was because the idea is that drinking coffee is not a necessity for human life, but rather a pleasure," says Andrea. "It is a pleasure because even if you are looking for caffeine, you don't specifically need espresso. So when people choose to drink espresso, it's really for a moment of pleasure, an aesthetic experience, a complete multi-sensory experience. This is one reason to involve the visual aspect. Of course, it is also a discreet communication tool."
The Collection is well-known, as the original designs of Jeff Koons, David Byrne, Federico Fellini and Robert Rauschberg, to name just a few, have graced the surfaces of the illy cups. Andrea says the family is thrilled with the results of this on-going project, but not just because of the famous artists they have worked with: "50% of the illy art Collection cups are designed by new talent, new artists. Some of them have become quite famous and we think we gave them a tiny contribution to their success."
While design is virtually synonmous with Italy, it doesn't automatically conjure up coffee. However, Andrea says that design does contribute to the coffee experience: the packaging, the accessories (cups, machines) and the places of consumption are all important. It's a wholisitic approach in achieving the final result – the perfect cup of espresso. Illy's packaging is a very simple, beautiful design, that only enhances the coffee inside it. On the acceessories front, there are not only the artistic espresso cups, but also the FrancisFrancis! espresso machines, a perfect example of form meeting function. Finally, in an effort to make sure the consumer is consuming in the correct atmosphere, the company has started to franchise coffee bars, espressimente illy, which have been designed by the same people who designed the FrancisFrancis! machines, ensuring once again that the illy aesthetics will be in place. Andrea says that each of these components are important, and they come full-circle with the University and its aims: "For the perfect cup, whatever contributes to the preparation, the service, the ambiance, the quality of the surroundings is as important as the quality of the product. So for the preparation, we have the machines, the preparation systems, but we also have the knowledge and skill of the user who prepares the coffee. For service, we have the competence and professionalism of those who serve the coffee. And for the ambiance, we have the architecture and the overall concept of the café. We started with three products at the same time: the University for the culture of the coffee, the espressamente illy cafés for the place of consumption, which are a place of culture because culture is not just knowledge but also rituals, and finally the instrument of culture to deliver the results, the FrancisFrancis! machines."
Illy seems to have all bases covered, which is a good thing, considering the phenomenal growth of the coffee industry in the past few years. And even though there seems to be a Starbucks on every corner in almost every city, making some wonder if we're becoming an over caffeinated society, from a business standpoint, Andrea believes coffee is here to stay. "There is a lot of good news surrounding coffee at the moment. There is an incredible increase in quality, which allows the consumer to get a much more pleasant beverage every time. This is due mainly to the improvement of the beans in the producing countries, the improvement of the technology and the spread of espresso preparation. The other good news is that not only is the beverage more pleasant, but it is extremely positive for health. There has been, in the last ten years, a lot of spontaneous scientific research demonstrating the extremely positive effects of coffee on health. Coffee also doesn't contribute to your caloric intake. You can enjoy any amount provided you don't drink too much and become over excited! So, there is no reason to limit coffee consumption. In fact, consumption has doubled, which is a sign of success for coffee."
These positive effects of caffeine have also stimulated illy's profits. Now the most global brand of coffee in the world, the company's coffee reaches people in 144 countries – 52% of sales are outside of Italy. In coffee talk, that's 5 million cups of coffee each day, 2 million of which are espressos served in Italy. 2005 turnover reached €227 million. That's a lot of coffee, but still only a sip of the market Starbuck's has (2005 sales for Starbucks were nearly €5 billion). So, how does illy compete with the behemoth beverage maker, who also beats a similar, sustainable development drum? "The basic rule is not to compete," emphasises Andrea. "I think the job of corporate strategy is to find a new path to grow and develop a business model that is totally different from the business model of our colleagues in the industry: first by avoiding specific competition, and second by providing more of the wholistic approach. Until six years ago, coffee was considered a commodity. Now there is this gourmet coffee segment that accounts for something like 8-10% of the total coffee consumption in the world. And this was possible only thanks to the fact that there was a little bit of competition in this gourmet coffee segment."
So, is illy ready to take on the rest of the world? In a word, no. "We are not looking to conquer the world," emphasises Andrea. "The idea is to consolidate this new project with the development of Italian cafés around the world, the development of preparation systems and the coffee culture in general which allows the consumer to get perfection in the cup no matter where they are in the world. This will take a long time. We are looking at key elements of our strategy, which are the uniqueness of our blend, not producing products that are of a lower quality just to satisfy a lower price point of demand, not changing our focus on premium quality. So that means we will expand our brand to the optimum size, which is serving those consumers who are resonating with our values." Sounds like illy has found the perfect brew.