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ILLYCAFFE ANDREA ILLY: [TRIESTE, ITALY]

By Published on .

Extolling the virtues of "one brand, one blend," illycaffe is focused on serving up identical, easy and perfect cups of espresso in every home, office and restaurant around the globe. Providing steam for this ambitious effort is Andrea Illy, CEO of his family's business since 1994.As part of an aggressive marketing strategy, the company has a new logo (unveiled earlier this year) and has returned to television advertising after a three-year hiatus. It also recently announced plans to make available its patented Easy Serving Espresso system, which uses premeasured filter packs, to other coffee roasters and coffee machine manufacturers. Why share the secret? illycaffe says it wants to establish E.S.E. as the coffee making standard worldwide.In Italy, illy already dominates the hotel, restaurant and bar business with 6% of the market and ranks second to Lavazza in home consumption, with a 19.5% share. Sales volu me rose 25% in 1995 from the previous year, to $126 million. Exports grew 38%, and illy expects that to climb to 40% this year. "In the next 10 years, we expect to grow fivefold and control 10 percent of the espresso market worldw ide," Mr. Illy said, based on an anticipated growth in demand and drop in prices after other coffee companies adopt E.S.E.Rather than a dizzying array of products, illy offers a single blend of espresso made of 100% Arabica beans. "Our marketing strategy focuses on building quality consumer perception-no promotions, just differentiating ourselves from the competition by offering top quality, consistency and an image of excellence," Mr. Illy asserted. Inde ed, the proof is in the price: A 250-gram container of illycaffe sells for just over $6, while the same amount of money buys 500 grams of a typical Lavazza blend.The 32-year-old CEO launched his career at Nestlé in 1983 before join ing the family business in 1990 as quality control manager. He implemented consumer satisfaction and quality assurance programs, then assumed product responsibilities in 1993. Much of the credit for the company's recent accomplishm ents, Mr. Illy said, goes to teamwork and the perseverance of marketing-savvy board members as well as family, including father Ernesto, president of the company, and siblings who work for illycaffe in various roles.Armed with an a dvertising and communications budget of nearly $16.4 million, illy returned to TV this year with a surrealist ad starring Spanish model and actress Ines Sastre. Titled "illy, extraordinary in all senses," the spot shows a finicky Ms. Sastre searching for the right fragrance to perfume herself and finally turning to a few drops of illycaffe. Working with Bozell Pella Testa Rossetti of Milan for the past four years, illy preceded the TV effort with an inform ational print campaign in Italy on the art of tasting and evaluating coffee. For 1997, it plans to return to print, while airing the current TV campaign in spurts. In November, illy also experimented with radio to advertise the ill y collection, a set of coffee cups decorated by prominent artists, which launched in 1992. The sets are sold in stores. Overseas operations comprise 50 markets and seven subsidiaries and account for one-third of sales volume. With a base in North America since 1981, the company entered the South American market two years ago and finalized several strategic deals with Japan this year. In April, bent on educating Japanese consumers on the finer points of espre sso, illy launched a direct marketing campaign. Further, as part of a distribution agreement with Suntory, illy will serve its coffee in upscale Japanese bars and restaurants, and aims to branch out into gourmet food stores. Local distributors already market the brand in Taiwan, Singapore, New Zealand and Australia.With E.S.E., illy hopes to further penetrate the U.S., Japan and Europe. The premeasured, single-serving system eliminates the nuisance of tradit ional espresso preparation and guarantees a quality cup of coffee, the company said. The filter packs already account for 50% of sales in the U.S., and among those privy to the inside scoop on the patent are Black & Decker, Briel, Gaggia, Krups and De Longhi.
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