Illy takes on Starbucks

As reported in this week’s issue of BusinessWeek, Illy is taking on Starbucks. A few years ago, Illy defined a handful of Illy Bar Concepts: the Core Bar is situated in historic centers, and functions as a meeting point that expresses the culture and the daily life of its location. Landscape Bars are set in busier areas, such as shopping malls or museums, and are meant to provide a restorative break. Transit Bars are spacious bars for travellers, in stations or airports; Community Bars serve regular customers in residential or semi-central areas; and Corner Bars are stylish, open-plan affairs offering fast service for quick consumption. Last year, Illy announced that its line of concept bars would continue to expand under a new brand: Espressamente. Over a hundred cafes have opened everywhere from Rome, Munich and Oslo to Sydney, Tokyo and Shanghai, all under Italian design, led by architects Luca Trazzi, Claudio Silvestrin, and Paola Navone. Fast growth countries are France and China. The United States, home of the Banana Coconut Frappuccino, isn’t on the roll-out list. Yet. Its first careful forays are temporary ‘Illy Gallerias’ in New York City: SoHo last fall, and the Time Warner Center this fall. Unlike Starbucks, Illy is focusing purely on high quality coffee. Forget being spaces, where consumers can park themselves with their MacBooks and Venti Lattes — Espressamente is all about a perfect shot of dark elixir. With rapid expansion plans, this means plenty of opportunity for franchise-minded entrepreneurs. It also shows that innovation never stops: next up, how about the inevitable uber premium coffee chain that will get away with charging 12 dollar for out of this world lattes? It’s all about upgrading the experience these days, not to mention upgraded margins. One to watch.