Sunday,
December 31, 2006
Illy, Inventor of Expresso Machine to
The
ANNOTICO Report
Francesco
Illy, in the 1930s invented the espresso machine, a
steam-driven coffee maker to replace the little pots Italians used until then.
Illy, currently is one of three big Italian coffee makers,
along with Lavazza and Segafredo
Zanetti, but is arguably the leader in marketing
coffee as a fashion accessory.
Illy is now about to do battle with Starbucks in the
Italian Coffee Maker Seeks Gourmet Status
December
31, 2006
So it is not surprising that Illy, who now runs the
coffee company Illycaffe, sought in recent years to
have the name espresso protected by law, so that it could be used only by
Italian espresso makers. It was a gambit to take back the espresso heritage.
But Illy, 42, was told by authorities that espresso
had become a generic term and could not be owned by any one nation or group of
coffee makers.
"As we say, the cows were already out of the barn," Illy said, seated at his desk under an enormous painting of
the Illy logo.
Still, Illy is annoyed when companies like Starbucks
call their drinks espresso, latte or hybrid Italian names like frappuccino, and refer to an employee as a barista.
But the fact of the industry is that the bus i! ness of coffee has fundamentally
changed on both sides of the
"The coffeehouse evolved globally," said Nicole Miller Regan, who
follows the restaurant trade for Piper Jaffray. But
now the Italians are fighting back by positioning themselves as a gourmet item
much the way coffeehouse chains in the
Illy, nestled in this charming Adriatic port city, is
picking up the lead, vying with the fashion business for cachet and flair. Illy places its coffee the way Gucci does its handbags, at
the top of the market, and it continues to invent accessories, like t! he single-cup pouches prevalent in
It is also introducing espresso bars, called Espressamente,
with the look of fashion boutiques, and it surrounds its products with cups and
saucers whose design is the work of contemporary artists like Jeff Koons and James Rosenquist.
"Illy is a premier brand," said Miller
Regan at Piper Jaffray.
Illy expects to post $330 million of revenue in 2006,
selling coffee as beans, ground and in individual portions, or pods. It is
expanding beyond its traditional professional food trade, like hotels and
restaurants, and this fall opened the first three of its Espressamente
bars in the difficult Chinese market, in
"Once, everyone was talking about coffee as a commodity," said Illy, the company's chairman and
chief execu t! ive,
who says he drinks five espressos a day. "Not now."
But the Italians are facing strong competition from companies like Starbucks,
which entered continental
Starbucks is not yet present in Italy, but Cliff Burrows, president of
Starbucks Coffee in Europe, the Middle East and Africa, wrote, by e-mail,
"We are very excited about the opportunities for Starbucks in Italy,"
though he said the company was not yet prepared to announce an opening. Still,
Miller Regan said,
Illy is not fazed, noting that the Italians have
taken the battle to Starbucks' home turf. Illy now
has been selling its coffee in the
Last year, i! t opened
Galleria Illy in the
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