CASE STUDY – ANDREA ILLY: LEADING A FAMILY COMPANY RESPONSIBLY

Founded in 1933 in Trieste, Italy, by Francesco Illy, the Illycaffè coffee dynasty is led today by
the third generation of the family, with Chairperson Andrea Illy at its head. The firm operates in
over 140 countries and has a turnover of about €500 million. More than 100,000 retailers serve
Illy coffee, and the aim is to double that figure by 2027—but not at any cost. Mr. Illy is a firm
believer in responsible business

The 56-year-old has emerged as one of the most outspoken Italian business leaders. He has long
espoused a sort of pick-and-mix version of capitalism, resolutely refusing to focus only on sales
and profits. However, he rejects the notion his style of capitalism is charity, arguing instead that
what he does is just good business.

This view has been shaped by the coffee sector itself, where issues such as sustainability have
become a major concern. For decades, the company has paid its growers 30 percent higher than
the average market value in order to maintain its supply of top Arabica beans. “This is not just
good for society and workers but it is good for business,” Illy says. “It is about shared values. It
builds a long-term relationship with growers, which is good for customers, because of the quality
of the coffee, and for our business too.”

“This is about social responsibility,” he insists, “but the real one and not the fake one. This is
about being a stakeholder model and not a shareholder one. The business leader is always asking
people to do things for him, but instead he should be asking: ‘What can I do for you?’”

The Illy family is a supporter of arts and culture, including Trieste’s annual sailing regatta, the
Barcolana, where hundreds of boats race across the bay. Illy says this creates a virtuous circle:
the more attractive Trieste becomes, the more talented people Illy can attract to work for the
company, and the more visitors come to the city, raising its brand profile.

A portrait of his father Ernesto, one of his leadership heroes, hangs opposite his desk. “I put the
painting there to ask him to control what I do,” Illy says. But what has Illy learned from his
family? “Society is made by the private sector, mostly,” he says. “And if you want to improve
society, then we need to be able to pursue long term goals which are beyond profitability, and
then you have to be free and accountable only to yourself.”

Sources: Illy Shop website, www.illy.com, accessed August 11, 2020; and R. Sanderson, “Andrea Illy: Adapting a Family Business to a
Multinational World,” Financial Times, July 21, 2019