The Art of Excellent Products: Enchanting Customers with Premium Brand Experiences

By Riccardo Illy

Italian brands are known to create some of the most premium, sought-after products in the world. Learn to compete in the modern marketplace using the proven business principles that Italian brands have been employing for generations. 

While it is no secret that Italians create superior products that both withstand the threat of ongoing competition and stand the test of time, the specific business principles that have led to such tried and tested successes are shrouded in secrecy, until now.

Businessman Riccard Illy details personal experiences using these Italian business standards to run his family’s world-renowned coffee company for generations. Through the age of intense competition from Starbucks and Coffee Bean, the Illy empire has remained at the top of the coffee industry simply by employing key Italian business principles and values.

In The Art of Excellent Products, you will:

• Learn how to approach your research and development process to find ways to add quality to your products and brand.
• Understand how Italians have created so many brands that have stood the test of time.
• Learn how to approach the marketplace so that your product stands out as the go-to product.

 

By applying those principles to your business, you will ensure your products meet or exceed the level of quality necessary to be ultra-competitive in today’s market, even in an industry in which new companies aggressively challenge your brand daily.

• Language: English
• Publisher: Thomas Nelson
• Release date: Feb 22, 2022
• ISBN: 9781400225118

Riccardo Illy

Riccardo Illy is the Chairman of Polo del Gusto, the holding company for Groupo Illy’s non-coffee businesses, with controlling interests in a number of world-class producers of chocolate, tea, wine, and confections. The Illy brand has a passion for quality and for growth pursued the right way: this has led to rewarding investments in everything from Domori's legendary chocolates to Mastrojanni's magnificent wines. He lectures regularly at business schools around the world, from Stanford in the United States to HEC in Paris to MIB in Trieste. He is the Academic Director at Italia Innovation, an organization which fosters research, education, and new ventures in the manufacturing economy with a humanistic approach.

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© 2022 by Riccardo Illy

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Published by HarperCollins Leadership, an imprint of HarperCollins Focus LLC.

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ISBN 978-1-4002-2511-8 (eBook)

ISBN 978-1-4002-2510-1 (TP)

Epub Edition December 2021 9781400225118

Library of Congress Control Number: 2021949876

Printed in the United States of America

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To my wife, Rossana,

and my daughter, Daria

CONTENTS

Cover

Title Page

Copyright

Introduction

One: Perfection

Two: Coherence

Three: Beauty

Four: Authenticity

Five: Family

Six: Simplicity

Seven: Cultivation

Eight: Refinement

Nine: Relationships

Ten: Patience

Eleven: Surprise

Incanto

Acknowledgments

Notes

Index

About the Author

INTRODUCTION

I have lived my whole life in Trieste, in what is now Italy. Our city is not famous in the way that Venice is, or Capri, or Rome. We sit on the easternmost corner of the Italian border, a short drive from Croatia and a little to the west of Slovenia. Our culture, the food, and the local dialect are shaped by our neighbors and by our history as a seafaring people.

We Triestini see ourselves as sailors: the sea is as much a part of the city as the land. In the summer, we sail and swim and fish. In the winter, the Bora wind brings cold air down from the mountains and across the Karst Plateau, behind the city, churning the harbor, throwing up white waves, and chilling the air. Our main square, the largest seafront square in Europe, opens onto the Adriatic Sea. This reflects how closely our fortunes are tied to the water (sometimes literally, when those winter storms flood the piazza).

Trieste is in Italy, but it is not completely Italian. At various points in our history, we have been claimed by Rome, the Germanic Lombards, and the Franks. Napoleon occupied us three times. We were proclaimed a free city by the Holy Roman Empire in the fourteenth century and were under the protection of Austria until November 4, 1918, when we were liberated by the Italian army, only to return to being a stateless city (like Monte Carlo) after World War II. The Iron Curtain was just six miles from the center of our city. Finally, in 1954, we returned to Italy, and we have been happy to consider ourselves Italian ever since. (However, our region, Friuli Venezia Giulia, is one of five autonomous regions in Italy that have greater power over their own legislation and administration, due to diverse cultures and three distinct languages.) Most Triestini carry this collective memory of our cultural rootlessness. It’s made us more adventurous and bolder than we might have been otherwise. We take care to preserve our varied past with religious and cultural associations that allow old traditions and knowledge to survive. All the while, the fortunes of our city have ebbed and flowed with the vagaries of history and the ever-changing populations of immigrants who have made their mark on our home.

Trieste is a place that lends itself to beauty. I couldn’t live anywhere else. We are known as Vienna on the Sea because of our graceful neoclassical architecture and the many statues that remind us of the Habsburg Monarchy. Our streets bustle with cafés where patrons enjoy midafternoon espresso and cappuccino that only in Trieste are served in the same typical small espresso cup. This café culture was adopted from the Austrians (along with their appreciation for Doric columns and intricate plasterwork figurines that decorate the interiors of the cafés). There is a special quality of light: maybe it is the Bora, scrubbing the air of pollution, or the way the light reflects off the plateau that sits behind us like an amphitheater. Either way, Trieste is beloved by photographers and artists. It is beloved by writers as well: James Joyce wrote parts of Ulysses here.

My grandfather chose this city to start his business because it was already busy with coffee and café culture. He realized our port gave us access to the world. But most of all, he loved the experience of living here, as do I. Like him, and like most Triestini, I drive to the mountains on most winter weekends to ski. In the summer, we sail. We see one another in the theaters and operas or in restaurants that line the piazza, eating food pulled fresh from the Adriatic and the mountains and flavored by our history: Austrian omelet, Greek lamb, Hungarian goulash, Slovenian jota (hotpot).

I often wonder if we could have done what we did with illy anywhere else. Probably not.

There are other reasons, besides the simple pleasures of life, that we can operate so effectively here, rather than decamping to a larger center of industry. For one, Trieste has a highly educated population that has access to a large, state-subsidized university. Unlike other secondary and tertiary cities, our young people stay here, even when bigger opportunities beckon from Milan, Rome, London, Tokyo, or New York. Why? Because the quality of life is too good to risk losing. We are a civilized place, a town that offers art, science, commerce, and nature, while also taking care of our citizens with great schools and health care.

This balance between the necessities of modern business and the necessities of a well-lived life is key to our success. The sea has connected us with the global business community. Our culture prioritizes beauty, art, nature, and science. These priorities have allowed us to develop a passion for quality, a desire always to excel, and a determination to leave our world improved rather than degraded. We call these fundamental beliefs Incanto, and they are the foundation of everything we do. illy is a business: we wish to grow and profit and succeed. But we are also woven deeply into our community. Our choices and our actions reverberate through our town and our larger network of global suppliers, sales accounts, and subsidiary companies. Our work is not just for us, it is also for them. Every facet of our business, be it our products, our management, or our employees (many of them members of the same multigenerational families) must be in service of a sustainable future. And this future must be one that focuses on quality and on lasting for generations, supporting our grandchildren and their grandchildren.

DEEP ROOTS, TALL TREES

Like their contemporary descendants, the Romans were obsessed with quality. They painted elaborate frescoes and set exquisitely detailed mosaics in the floors of their villas. They drank good wine and pressed olives for oil. They mastered a concrete so strong that their buildings survive today (though the technology to mix the concrete has been forgotten). When I ride my motorbike to the office, I pass by the Roman theater. It was built in the first century CE, and though it is weathered and the original facades and walls are long gone, we still use the stage and the amphitheater for occasional concerts and performances. It feels natural to sit on the stone benches under a warm summer sky and enjoy music or a play, just as our very distant ancestors did. I doubt the original inhabitants of Tergestum, as the Romans originally named Trieste, imagined the rock concerts that occasionally play here. However, I’m sure, in one way or another, they assumed that their distant descendants would still use and enjoy their theater. This belief that some of what we do is not for ourselves but for the people we will never know, decades or centuries or millennia from now, is key to everything about the Italian way of business.

Some of this belief system is born in the nature of the products that we grow and produce in Italy. In Italy there are families that have managed their vineyards for more than six hundred years. A new vine must grow for five years before it will produce a grape. The wine must wait five more years before we can sell it as Brunello di Montalcino. On our estate, Mastrojanni, we grow olive trees and press the olives for oil. Some of these trees are a thousand years old; the quality is still excellent. So, in Italy, we are used to building an environment that will create consistent, exceptional quality for generations. We understand that we may not be doing this for us.

When we expand our operations at illy and consider new investments and acquisitions, I focus less on whether it will enhance my own life and more on the belief that someone will benefit from it. Those someones might be my own descendants, or those of the many families who work for us, or even the descendants of farmers on the other side of the world who support their families by selling raw materials to us.

THE THREE LEVELS OF QUALITY

When you understand the Italian love of quality and commit to it as the primary philosophy for running your business, you are committing to consistently generating a product that surprises and delights your customers. Why? Because to connect with discerning consumers, you have to offer them something more, something charming and unexpected. We break quality down to three levels.

First, you have the company that makes a product that offers necessary quality. These are the sweaters that may itch but keep you warm. The food that doesn’t taste so good, but that nonetheless satiates your hunger. The car that isn’t comfortable but gets you where you wish to go.

Then there is the company that offers products of expected quality. These are the sweaters that are both warm and soft. The food that is both tasty and nutritious. The cars that are both comfortable and reliable.

And finally, we have companies that offer products of augmented quality. These are the sweaters that are warm, comfortable, and delightful. The food that is tasty, nutritious, and surprising. The cars that are efficient, pleasant, and unexpected.

This concept of augmented quality, and specifically the idea of surprise, is a cornerstone of everything we do. It is one that drives businesses in Italy to global success, even in dire economic times. Think of a fashion brand like Prada or Ferragamo. The anticipation for a new season is electric; how will they interpret the cultural moment in a way that surprises the intellect and delights the eye?

This is the essence of augmented quality: a garment made by Prada uses exceptional material and impeccable manufacturing techniques. However, that’s not why fashion aficionados gravitate to Prada’s garments or sacrifice to buy them. After all, serviceable cashmere sweaters are available in mainstream brands everywhere. What makes Prada’s dresses, coats, and suits so desirable is that mysterious extra, the sense of surprise and delight that comes from small, carefully considered details, the superlative nature of the raw materials, and the assurance that the customer is buying something that is, in its nature, superior to all competitors.

This delight, this surprise, is essential to everything we do. There is a reason our espresso cups are mounted on saucers that elevate the cup, showcasing it like a work of art. There is a reason we often commission actual works of art to decorate those same cups. Our customers know our coffee will be excellent. If we wish to continually surprise them, to offer them that augmented quality, we must enhance their purchases in ways they do not expect.

THE FOUR PILLARS OF INCANTO

So, how do you offer augmented quality? Through the years, I have identified four fundamental philosophies of Italian businesses. I call this family of philosophies Incanto. It is something unique to Italians, born out of our eye for beauty and our desire for simple, elegant quality.

In this book, we will look at some quintessentially Italian businesses that embody the Four Pillars of Incanto:

A perception of absolute superiority by consumers, in other words, perfection

A unique supply chain, incompatible with that of mass-market producers

The best materials available

A deep and broad attention to the issues of social, environmental, and economic sustainability

All of these elements are equally essential to creating a business that can produce consistent quality in successive generations, while adding to the well-being of the community in which it is based. When you look at your business through the lens of Incanto, you will inevitably see new possibilities and new avenues for your own initiatives.

After all, when a new business isn’t going to be making a profit for decades, you are forced to have a long-term perspective. Incanto gives us a framework to do this. Looking at a quarterly report doesn’t make sense in a winery. Even five years is too short a period to assess how you are doing. Instead, you have to look at other elements of your business. They may be less easy to read than a column of figures, but they are equally important. When I assess the health of my businesses, I look at the figures that are available, but I also review less tangible assets: I talk to my customers to see if my product is still enchanting and surprising them. Am I able to source the very best coffee or cacao beans, and are my relationships with these growers still happy and friendly?

I look at the scores that my wines are earning in various guides and read the feedback from customers. Am I making a product that is worth talking about on social media? Are our goods being tagged in positive ways? I talk to my employees: Are the older workers still encouraging their children to work at illy? And finally, I will look at the impact my company is having on the environment. Are we doing everything we can to maintain the good health of the land that grows our crops? Are we an asset or a liability to the people who live around our factories?

These four elements are crucial to an Incanto business: a superior product, a unique supply chain, the very best raw materials, and a commitment to sustainability. If you can hold on to these core principles and accept that you may have to work more slowly than your competitors, then you can build a radically resilient business. It may take many years, but it’s okay because you realize that growth needs constancy. Rather than chase immediate returns, you build a foundation that is rooted both in your family and in the larger community.

Let’s break these down further:

When we discuss absolute quality, we are talking about the value as perceived by the consumer.

When we say to develop a supply chain that is not compatible with mass production, we are actually discussing rarity. By definition, mass production is the common condition; rarity is when you can only do things in limited quantities.

The use of hard-to-access raw materials creates a condition that makes it hard to imitate, because it’s hard to acquire the raw materials.

Finally, the attention to sustainability creates the organization that makes it possible to take advantage of this.

INCANTO IN AMERICA

I understand that this is not a business model that is traditionally embraced in America. Often, when I talk to my contemporaries in New York, San Francisco, or Miami, I hear the intense pressure they are under to deliver shareholder value, dividends, and so on. They share how they are required to find ever cheaper raw materials, explore ways to