Illycaffè's international growth: evaluating foreign demand for Italian super-premium coffee

In recent years, Illycaffè had undertaken numerous internationalization initiatives, moving in different distribution channels and diversifying even beyond coffee. Over 60% of Illycaffè’s sales were made abroad, but the performance in different foreign markets was very varied, due to consumption patterns, distribution systems and tariff regimes. Both large multinationals such as JAB, Starbucks or Nestlé, and Italian brands (such as Lavazza) and numerous local “micro-brewers” ​​that catered to the same sophisticated clientele which constituted Illycaffè's target. Illycaffè was a family company that intended to remain independent (even if it was open to alliances with the giants of the sector): it had therefore to carefully evaluate the markets in which to invest resources. At the same time it had to preserve its competitive advantage, which focused on the quality of coffee (composed of the fine Arabica blend), which international customers were not always able to perceive and appreciate. Customer education and a careful selection of partners were therefore necessary to support growth abroad. The case is divided in three chapters as follows: - Company history - Coffee Sector Analysis - The internationalization of Illycaffè: market and distribution choices Key trends in the sector were global market and consolidation (big players buying small ones).