Illy in the homeland of tea a local partner to conquer China

MILAN — Illy wants to bring coffee to China, the homeland of tea. And to do so, it has decided to form an alliance with Hangzhou Onechance Tech, a group with a capitalization of 800 million listed on the Shenzhen Stock Exchange.

«Thanks to this partnership we will strengthen our presence in home and online channels – he explains Cristina Scocchia, CEO of IllyCaffè – the goal is to triple our turnover in China over the course of the plan, i.e. by 2026». But IllyCaffè wants to bring coffee abroad, starting from the quality of the blend and the shearing done in Trieste, satisfying the tastes of various customers from all over the world. «In China we bring a capsule of instant coffee, to be opened on the spot, which is closest to a consumer who is used to drinking tea and infusions – explains the manager of the group controlled 80% by the Illy family and 20% from the fund Rhone Capital – for the same reason in the USA we have launched cans, cold brew, to drink cold like energy drinks, with different flavors based on coffee, cappuccino and so on. The DNA of the brand remains that of a high-end Italian product, but to be a global brand we must approach the local tastes of all consumers».

IllyCaffè, which is growing more than its rivals, remains in fact positioned on a medium-high range, present in 140 countries and in all major channels from Horeca (hotel restaurants and bars), to the shelves of large-scale retailers, but also to direct sales points in which there is an important investment plan. IllyCaffè plans to open new bars especially in those areas where the brand is less present, using the sales point as a marketing channel. “We have 176 outlets between shops and direct management and franchising – recalls Scocchia – and we aim to double opening another 150 franchises by 2026. The points of sale are our banner for investing in the brand and in the 360-degree coffee experience. We have launched new blends for this summer, such as Cocco-Mint, and the new bar machines for iced coffee, which becomes a sort of sweet ice cream after a meal».

To increase revenues and worldwide distribution, IllyCaffè has already launched a maxi plan investment in the factory of the Trieste roasting from 120 million. «We want to be the standard bearer of espresso, and to do so we focus on our roots, starting with the Trieste office – continues Scocchia – quality is our strength, and we always start from the best raw material».

In this regard, IllyCaffè in recent years has had to deal with the dollar, the increase in coffee and energy prices, but has tried to absorb the cost increase by leveraging volumes and cost optimization. “The turnover continues to grow, in all geographies including Italy, and in all channels. We do better than the sector and this confirms that the strategy is the right one – recalls the manager – certainly the impact on the margin has suffered slightly, even if we remain at 16%, which is a record in the sector. But the strategy of this company, which is a rather special place, is to be close to the consumer and to our people, who have contributed to making IllyCaffè an excellence in the world». With innovation, distribution and new channels, IllyCaffè plans it landing on the stock exchange, by 2026. “It is one of our objectives in the planning horizon – concludes Scocchia – the company is preparing for this great step, but the decision is up to the shareholders”.