Illy Competes Against Starbucks With "Local" Branding

Italian coffee maker Illy is hoping Americans infatuated with coffee culture, but burned by Starbucks’ roast will pause for a taste of Italy.

Illy is increasing its profile in the United States through a stealth campaign in independent coffee shops, signing agreements with 28 independent cafes to exclusively brew the Italian roast, allowing Illy to intervene in order to assure quality control.

The coffee maker launched the program three years ago in Italy: "Artisti del Gusto," or Artists of Taste. In the US, Illy is currently found in high end grocery stores, restaurants and hotels. The new partnerships will raise the brand's profile as cafes adopt Illy-branded merchandise: espresso machines, artwork, ceramic mugs and red stand umbrellas.

The “Artists of Taste” program offers benefits to the cafes, and a chance to compete with local Starbucks shops. Café owners, like Sean Lupton-Smith, find value in offering Illy as a “consistent experience to our customers," and sees it as a "strong enough [brand] to stand up to the Starbucks around the corner.”

Illy has taken steps to ensure that the brand's integrity remains protected. Shop visits ensure its quality standards, like steaming milk and cleaning machines, are maintained. Illy provides training for its café partners at the start and on an ongoing basis, reserving the right to discontinue their agreement if standards flag and don't improve.   

While the program lets Illy expand into retail operations without the overhead costs associated with renting or owning, the move may impinge customers' ability to easily find Illy-associated coffee shops. Illy can never match Starbucks' 11,000 outlets, but it is latching onto a trend Starbucks itself is testing in their 15^th Avenue Coffee and Tea store in Seattle.

Illy has survived and enjoyed success for more than 20 years as a local roaster with limited distribution. Perhaps local is the new global?