Illy Café was founded in 1933 by Riccardo Illy’s grandfather, Francesco Illy. It began as a venture partnership, with both the business associates owning 50% of the company. Francesco Illy was driven by passion and curiosity, inventing not only a revolutionary espresso machine, the Illeta, but also an innovative way to preserve packaged coffee beans for distribution which maintains and enhances the quality of the coffee for a longer period of time than its competitors. This technology pressurises the coffee with an inner gas, nitrogen, which is still in use to this date.
Over the course of time, the company has negotiated various deals with its partners, and even adapted to the great historical and political changes that have impacted Gruppo Illy’s growth strategy. But one thing remains the same: Gruppo Illy is still family owned, with the 4th generation already preparing to take on the business in the future.
How has Gruppo Illy managed to successfully transition its business operations from generation to generation?
This was the predominate question during the last Italian Slovenian Business Forum, which took place at Jožef Stefan Institute in Ljubljana, Slovenia on February 23th, 2016. During the round table, Ricardo Illy, current Chairman of Gruppo Illy, addressed this question with a poignant statement:
"More than anything else, relationships in a family business can become difficult to manage unless you clarify which hat you are wearing. You can typically wear four hats: that of a family member, mother, father, brother, daughter or son, or that of the owner, the entrepreneur or the manager. So, in family conversations you have to make it clear which role you are taking, otherwise it may happen that one member talks, say, as the entrepreneur, while another replies as a member of the family.”
He added that family members have to earn their place inside the company. They have to prove that they have the required amount of passion, dedication, and skills to thrive there.
He further specified that sustaining strong family values led to the successful management of the company during the global crisis of 2008. They decided to sacrifice their profit margins during the period of temporary price rises for raw materials, while never compromising on the quality of their products. Gruppo Illy had to sacrifice their profitability for two years, in order to continue the feasibility of the business for the future generations to come.