The slick lobby in Illycaffe’s head office is a lively blend of gallery, museum, store and – this being Italy – bar. I stroll up to the counter with Andrea Illy, the company’s dapper chief executive officer and co-owner, and we could be stuffed into a street bar anywhere in this coffee-mad country. The espresso machine hisses to the clinking sounds of china cups. The patrons – Illy employees and their guests – are jabbering away, producing the pleasant cacophony of Italian life.
Mr. Illy and I have just finished lunch upstairs and the requisite post-meal caffe is in order. “Espresso?” he asks, and I respond: “Si, ma per me espresso macchiato, grazie.”
Within a second, I realize my mistake. I had just ordered an espresso cut with a few drops of frothy warm milk: “Macchiato” means “stained.”
The addition of milk is not to every Italian’s taste and it certainly is not to Mr. Illy’s. You see, he considers his coffee the finest blend on the planet and millions of coffee drinkers from Canada to China would agree. To him, sloshing milk into espresso is like sloshing Coca-Cola into champagne.
He gives me a slightly condescending look. “It’s not a pure coffee experience with milk,” he says, as I knock back my polluted little espresso, suddenly a guilty pleasure.
Which is why I assume Mr. Illy is not a fan of Starbucks’ coffee products, which are typically drowning in milk and often laced with caramel, peppermint, cinnamon and other confections that would make an Italian burst into an aria of pain. But I know he is a great fan of Starbucks as a shop, because he says so. “They have been terrific as a retailer,” he says. “Their soul is of a retailer. Their coffee? I prefer Illy.”
He is such a fan of the coffeehouse retail concept that Illy is undergoing its most radical change in its 79-year history: It is becoming a business-to-consumer company – that is, it is focusing on the retail side of business. In the past, Illy largely existed as a business-to-business company, supplying coffee to hotels, supermarkets and independent coffee outlets.
Illy already has 400 Illy-branded shops, including one in Toronto, and the goal is to double that number within five years. Mr. Illy knows he will never truly compete with Starbucks, which has almost 18,000 outlets. Nor does he want to. “If we want to grow so big, we would have to compromise on the quality of the coffee,” he says. “Our real goal is more social than business. We want to create a community of people – stakeholders – who are really proud of what they do, rather than just generating profits for shareholders.”
Clever investigative journalist that I am, I decide to visit an Illy caffe in the centre of Trieste, before my lunch with Mr. Illy.
Trieste is in Italy’s extreme northeast, by the Slovenian and Croatian frontiers. In the 19th century, it was the main naval port of the Austro-Hungarian empire. In the early part of the last century, it was a thriving industrial and cultural town, a sort of Vienna by the Adriatic, and attracted the likes of Sigmund Freud and James Joyce. Italy annexed Trieste after the First World War.
A faded beauty, Trieste today is better known as the unofficial coffee capital of Italy, the one big European market that Starbucks has been unable to penetrate, in spite of on-again, off-again efforts for about 15 years. While Mr. Illy thinks Starbucks will inevitably make its Italian play, even Illy finds the market exceedingly crowded.
The Illy caffe I visit certainly has its work cut out for it. Within a couple of hundred metres, there must be a dozen competitors. Italy has one coffee shop for every 400 people; in the United States, the figure is one for every 20,000. The Illy shop is a sleek little study in white and chocolate brown.
While I sip my espresso, one of the two baristas writes the menu on a chalk board; unlike many caffes, you can get a hot lunch at an Illy. The row of small white angular tables are empty – no one is taking advantage of the free WiFi. The patrons are all clustered together like grapes at the bar itself. The noise level is high. The place feels like a meld of coffee bar, restaurant and club. I like it.