The “Made in Italy” brand is among the most famous in the world. It represents excellence that is undoubtedly Italian, ranks high among well-known brands in the global market, and is positioned in the high-quality market segment. This year, as part of Montclair State University’s Business Italian course, we students explored the links between Made in Italy and sustainability. We were fortunate enough to meet and interview three entrepreneurs, epitomes of Made in Italy who also adhere to sustainable economy principles. Our group interviewed Andrea Illy, chairman of illycaffè, who was a guest speaker at an event of the Inserra Chair in Italian and Italian American Studies at Montclair State, together with Daniele Balicco. Illy provided a business testimonial and also granted us a wonderful interview on the themes of Made in Italy, sustainability and the role of Italian language and culture in the business world.
The history of this Italian excellence begins in Trieste, in 1933. Founder of the company was Francesco Illy, an entrepreneur of Hungarian origins who moved to Trieste after World War I. In 1934 he patented a packaging method for coffee, based on pressurization for better preserving coffee taste and aroma. In 1935, he invented the first at-home espresso machine.
The company has been bringing innovation into the coffee business ever since. Today, illycaffè S.p.A. is part of the holding company Gruppo Illy, S.p.A., led by the third generation of the Illy family. Illycaffè is a stakeholder company which pursues economic, social and environmental sustainability through concepts like creating shared values, producer to consumer, growth in the sense of knowledge and self-realization, and respect which translates into the principles of not polluting, not wasting and using renewable resources. Included for the fourth consecutive year in the list of the “World’s most ethical companies,” illycaffè has adhered to various programs and initiatives for the implementation of sustainable strategies and the improvement of its own impact. With over 437 millions of euros in income, over 1,000 employees, 5 specialized labs, 4 quality certifications and 1 sustainability certification, 25 “Universities of Coffee,” a Code of Ethics and a Sustainability Manifesto (available online for download), illycaffè has found its recipe for success: innovation, transparency and quality.
The Chairman of the Board of Directors of illycaffè is the founder’s grandson, Andrea Illy. From father to son to grandson, family leadership of the company made it possible to maintain intact their family values, which symbolically also represent Made in Italy. Andrea Illy recalls that his father, shortly before his death in 2008, shared this advice: “The only thing that counts is ethics. The true principal of a company is the consumer, not us. Our family, like the shareholders, serve the company, but the company belongs to the consumer.”
This ethics is a business philosophy revolving around respect for the environment and for all the people involved in the production chain. The keyword is, in fact, sustainability, a concept that Andrea Illy has diffusely explained to us, highlighting the close bond with the Made in Italy. This relationship is revealed throughout Illy’s production process, from plant to cup. To ensure that the distinctive flavor of its coffee stays consistent, Illy seeks to sustain quality at every step of the production.
The first step is in the relationship with the farmers growing the beans used in Illy’s blend, which are selected from nine countries: Brazil, Guatemala, Ethiopia, Colombia, Costa Rica, India, El Salvador, Nicaragua and Tanzania. Since coffee is grown and harvested in countries with weak economies and not too strict regulatory systems, over the years this good has been under scrutiny of environmental movements for a productive process with a great ecological and social footprint.
While it is true that the company from Trieste is not the only one to walk the path of sustainable coffee production, it is also true that Illy’s philosophy differs from other experiences. The founder’s grandson explains what the company means with sustainability: “Illy regards fair trade as a good first step but we see its limits: this model is based on paying more for a commodity commonly available on the market without getting higher quality. This undermines the concept based on a quality-price ratio, so there is a distortion in the market. In fact there is an over-supply of fair trade products but demand is not increasing because it’s just an occasional consumption. Our final destination is, instead, sustainability which is based on the idea of producing superior quality goods at a higher price across the entire chain. Illy pays an average of 30 percent more for premium-quality coffee by market standards allowing us to offer a superior quality product with a higher price tag.”
Another strategy to ensure premium quality coffee beans is the Ernesto Illy prize, inaugurated by Andrea Illy’s father 25 years ago for Brazilian growers. Today, the international award is open to growers from all nine coffee producing countries, and is presented in New York City at the United Nations headquarters.
But Illy’s philosophy, as mentioned above, is about the constant attention to product and process, from plant to cup; and at the end of the path there are those who prepare and serve coffee and those who consume it. With this in mind, in 1999, Illy opened the University of Coffee with courses on coffee culture. Initially created to educate producers and hospitality professionals, later on the University opened up to consumers: “Today we have some educational activities – stated Andrea Illy – that provide the fundamentals of coffee culture, from plant to cup, tasting classes that teach how to recognize quality and to prepare coffee in the right way.” Courses and tastings are also a way to engage consumers and gain their loyalty.
The company also seeks to achieve this goal via social media. “#LIVEHAPPilly is perhaps our most important campaign: with it we linked our brand to happiness,” explained Andrea Illy. “Coffee is the official drink of culture, thanks to its ability to provide inspiration: it brings pleasure as well as the stimulating effects of caffeine. Coffee is also the beverage of wellness, fostering good health. But making good coffee requires altruism, which is another ingredient of happiness, because it is consumed in rich countries but is produced in some of the poorest countries in the world. In order to improve quality, you have to work hand in hand with these populations. Happiness also means having prospects for growth. Through pleasure, wellness and sustainability, coffee has been able to stimulate consumption even in countries that traditionally aren’t coffee consumers. The growth rate is high: today there is one billion and a half consumers in the world but we can reach another five billion; sos there are also great prospects for growth.” The Ernesto Illy Foundation also provides funding for the World Happiness Report annually presented during the World Day of Happiness, promoted by the United Nations.
Through its social media campaigns illycaffè also highlights Made in Italy. According to the Chairman of the Board, the formula is simple: “Italy is the country of beauty and culture, and consequently it is also the country of coffee. Clearly there is great love for this social Italy.”
Indeed Italian coffee culture is now widespread in the world and for Italy the tradition, pleasure and authenticity of its coffee represent a competitive advantage in the global market. Many countries in the world have their own way of drinking coffee. For example, Americans consume filtered coffee and drinks with added milk, but the Italian way of drinking coffee – espresso, cappuccino, caffè macchiato – are known everywhere in the world. “Italians began drinking coffee, thanks to the Turks, in the mid-seventeenth century and since then, Italy has had a growth both in terms of consumption, and development of production techniques and technologies. We have succeeded in sharing authentic coffee culture in the world, and we have also done it with Italian words.”
Using the Italian language to communicate the authenticity of their products is part of Illy’s marketing strategy. Payoffs like “issimo”, easily identified as Italian, effectively convey the idea of the pleasure and desirability associated with the Italian lifestyle and experience. “We believe that using Italian is the way to communicate origins and authenticity,” Andrea Illy explained.
Strong family ties, attention to quality and ethical business standards, and loyalty to one’s own values and to a high-quality product are all features of the most authentic Made in Italy and at the same time they speak of a business philosophy oriented to the sustainability of the system, rather than just profit. Thanks to these values, illycaffè has been able to introduce its products to the world and is now a global Italian company that brings high quality coffee in 140 countries, following principles of ethics and sustainability, creating culture around coffee, and activating a virtuous circle that can have a positive impact on the entire world.
This is one of the three-episodes series Business Italian Style 2, a project in its second edition, developed by The Inserra Chair in Italian and Italian American Studies (Italian Program at Montclair State University) and La Voce di New York, within the Business Italian class (ITAL321) taught by Enza Antenos. Each of the three parts focuses on the link between Italian food, made in Italy and sustainability. The interviews were designed by the Business Italian students.
The other two episodes of the series:
Interview with chef and entrepreneur Lidia Bastianich.
Interview with Eataly head buyer, Dino Borri.
Here the first edition of the project Business Italian Style.
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