Illycaffè and flexible strategies: A case of a resilient company

CHAPTER 12

Illycaffè and flexible strategies: A case of a resilient company Luciana Florêncio de Almeidaa, Decio Zylbersztajnb a

ESPM, São Paulo, Brazil Economics of Organization, School of Economics and Business, University of São Paulo, São Paulo, Brazil

b

12.1 Introduction In July of 1993, Dr. Ernesto Illy was debating with businessmen and academics who studied coffee at a Program of Agribusiness Studies (PENSA) seminar at the University of São Paulo. His on-stage presence was that of a simple, somewhat fragile man. However, when he fielded questions from the audience, his profile changed, and he began to dominate the room. This is how he reacted to a difficult question from a businessman who was present. The businessman argued that he was an irreplaceable leader and that the company would suffer when he had to step down from the presidency. Illy replied that his mission was to serve the consumer in the best way possible, as it was the consumer who had power over the company. In his words: “For a family company, this is a fundamental formula to be passed down the generations, understanding that companies are at the service of the market and are constituted by consumers, whose power is decisive. We serve consumers in a way that large corporations cannot.” The year 2018 marked the 10th anniversary of Dr. Illy’s death.The business leader played an important role in the direction of the company and consolidated his business philosophy based on a passion for quality initiated by his father, Francesco Illy. The word passion expresses the attitude of the family of controllers who sustains a global family business, now in its fourth generation. In 2016, the company continued to professionalize the board of directors by hiring an executive as CEO, Massimiliano Pogliani. In the 1970s, the company faced the challenge of supplying raw material to keep the tradition of quality alive. That was when Illy decided to gamble on a new form of management founded on three pillars: first, buying directly from the producer; second, promoting quality with the establishment of a coffee quality award, creating an espresso coffee quality prize; and third, offering Coffee Consumption and Industry Strategies in Brazil https://doi.org/10.1016/B978-0-12-814721-4.00012-3

© 2020 Elsevier Inc. All rights reserved.

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prices that encouraged producers to achieve the desired degree of quality. In the 1990s, Brazil had a product that was most highly representative of the Illy blend. This was due to the characteristics of quality in comparison with coffee grown in other producing countries. It is likely that Illy did not imagine the impact that his decision would have on transforming the Brazilian coffee culture paradigm.The decision to implement a quality award for espresso coffee in 1992 was inspired by a successful initiative of the Ermenegildo Zegna Italian textile industry to obtain high quality wool from Australian producers. Illy’s vision created a wave of transformation that spread throughout the Brazilian coffee-producing regions. New regional frontiers of quality emerged, a new mindset was established, and with it a new profile of coffee producer was developed.The strategy of adding value to the coffee chain in Brazil spread beyond its creators and was captured by new players in search of quality to satisfy the requirements of increasingly demanding coffee consumers with broad access to information and different purchasing channels. Illycaffè found enthusiasts and began to pay premium prices to quality producers. Nowadays, high-quality coffee competitions are commonplace in all producing regions, and it can be said that it is easier for the industry today to find coffee with different degrees of quality on the market.Twenty-seven years after the disruptive strategy created and managed by Illy to supply quality coffee and generate value for producers, new current and future challenges are on the horizon, leading to reflections on the next steps the company will take in Brazil.

12.2  Strategic pillars of Illy in Brazil In the case study conducted by PENSA in 2002 entitled “Illycaffè and the Challenges of Growth in Brazil” (Neves et al., 2003), the authors pointed out the risk of a lack of quality in coffee, as occurred in the late 1980s. Quality is affected by weather conditions that predominate during a certain harvest and can lead to a reduction in the supply of the product within desired standards. The encouragement given to coffee-producing regions with a potential for high quality attracted investments, and new producers emerged. Increased production did not put an end to the variety of fine coffees available. In the early 2000s, the entry of new producers did not create an immediate problem, because increased consumption and the inclusion of new players in the special coffee market absorbed the surplus and balanced the growing market. Over time, the three strategy pillars adopted by Illy (direct purchase, pricing, and incentives through awards) were maintained. Nevertheless, if



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the pillars were maintained, the details changed and were adapted, always in accordance with the concepts of procurement and marketing (Fig. 12.1). The systematic interaction between producers of special coffees and the company enabled the building of a good relationship between coffee producers (suppliers) and Illy’s company (buyer) based on commitment and trust. With regard to this element of reputation, a set of specific strategies based on mutual trust and indirect added value was developed. The former (mutual trust) enabled Illy to introduce supply contracts with producers for mutual gain. The latter (indirect added value) meant that Illy’s suppliers were recognized in the market, which lent them an indirect reputational effect.1 To sustain the partnership strategy, Illy developed a network of collaborators composed of (a) Experimental Illy do Brasil, a company that conducts research and technological extension leading to adequate practices by producers and quality control for the coffee supply; (b) ADS, a company that organizes field days and coordinates the Illy Coffee Club and; (c) the Coffee University Brazil (Università del Caffè Brazil—UdC) that works alongside its partner, PENSA, which is connected to the Fundação Instituto de Administração (Administration Institute Foundation) and the University of São Paulo. Fig.  12.1 represents the reputational element conquered by Illy that resulted, to a large extent, in loyal suppliers, attracting new producers who compete every year for the Ernesto Illy Award for Espresso Coffee.

Fig. 12.1  Supply strategy. (Source: Prepared by the authors.) 1

The first theme, contract, is in keeping with the proposals of the FAO and UNIDROIT in favor of the adoption of contracts between farmers and industry. The second effect was studied by PENSA and published in the Journals of the Coffee University (Cadernos da Universidade do Café) (Saes et al., 2003).

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Whether it is a new supplier or a coffee producer that regularly supplies Illycaffè, when asked why they choose to remain as an Illy supplier, the two words that are repeated are “partnership” and “security,” both reputational elements constructed over time. Some examples of this effect are discussed in the following sections. José Aparecido Naimeg, who has supplied coffee to Illy since 1992 and was the winner of the second Award for Espresso Coffee, expressed his feelings for the company: “It is a pleasure and something I am grateful for (…) and this friendship, because we think of Illycaffè as part of our family.” Daniella Pelosini, a farmer who has been a supplier since 2016 and won second place on the 25th Award for Espresso Coffee, stresses the idea of partnership: “The relationship with Illy goes beyond the price they pay (…) It is much more than that. It is recognition of the farmer’s work, investment, and the willingness of Experimental/ Illy to welcome producers, as well as winning the award.” Partnership and security are perceptions that result from the company’s efforts with regard to the pillar of procurement. A set of actions are dedicated to supporting producers to help them achieve the desired quality levels of coffee, which includes sustainability and improved management of resources, ensuring an adequate and consistent supply to the company. Thus, some actions were designed to offer producers an opportunity to gain new knowledge and promote exchanges of information among their peers based on practical experience. In this respect, the following factors should be highlighted: (i) Availability of educational materials such as videos and the Path to Excellence and Better Practices and Sustainability manuals (Clube Illy, 2018). (ii) Adoption of the company’s own criteria and guidelines regarding the expected quality of coffee:Arabian coffee (natural, peeled, or depulped), type 3 or better (with a maximum of 12 defects), maximum humidity level of 11% (which represents 9.0% according to ISO 6673), in sieves size 15 and above (with a maximum of 10% leakage in a 14 sieve), and the lowest maximum residue limit (MRL) of agrochemicals permitted worldwide. (iii) Technical presence in the main producing regions, with specialist consultants who visit Illy producers’ farms. (iv) Direct purchase from the producer through Experimental Agrícola,2 which goes beyond the activities of buying and exporting coffee, conducting research and laboratory analyses to evaluate the quality of the coffee, and monitoring the analysis of residues performed by third parties. 2

Experimental Agrícola do Brasil Ltda is a Brazilian company whose majority partner is Illycaffè in Italy.



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(v) Research, seminars, training courses, and publications through the Coffee University (UdC) in partnership with PENSA. To ensure a successful procurement strategy, it is essential to publicize the Ernesto Illy Award for Espresso Coffee and the management of the relationship with suppliers. Among the main actions of the marketing pillar, the following deserve to be highlighted: (i) Creation of the Illy Club in 2001, which had more than 500 members (coffee producers) in 2017, distributed throughout the coffee-­ producing regions of Brazil. (ii) Web site and social networks with information on the award, courses, manuals, and other informative materials. (iii) L’Expresso and Em Foco Bulletins, exclusive publications for members and Illy distributors. (iv) Field days with the participation of technical consultants and, whenever possible, representatives of Illycaffè who come to Brazil for this purpose. (v) A ceremony to hand over the Ernesto Illy Award for the Sustainable Quality of Coffee for Espresso. (vi) A ceremony for the Ernesto Illy Award for the Sustainable Quality of Coffee for Espresso in New York. Currently, 80% of the Brazilian coffee supply to Illy come from lots submitted for the Ernesto Illy Quality Award and approved by the Experimental Agrícola evaluation team. Our premise is that a company can only control its own destiny if it understands how to control the destiny of its industry. Organizational transformation is a secondary challenge. The primary challenge is to become the author of industry transformation (Prahalad and Hamel, 2005, p. 24).

In keeping with the concepts proposed by Prahalad and Hamel (2005), Illycaffè not only transformed its future, but it also influenced the entire coffee sector in Brazil. The immediate positive externality constituted an expansion of the adoption of the principles of quality by an increasing number of producers who hoped to reap greater rewards than the price paid for the commodity, allowing reinvestment in improving quality, creating a virtuous circle. However, the purpose of all this movement was not only to supply to Illycaffè. Diverse players in the specialty coffee market benefitted from the Italian company’s initiative. Even the longest serving suppliers of Illy took advantage of the reputation gained through selling to the company, ensuring quicker entry into the

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circuits of international coffee purchases. Many have reported that when they say that they sell to Illy, international buyers respond by saying that this is a sufficient guarantee of their quality and origin. The cost of being a pioneer emerges strongly as a new challenge to Illy. In this new scenario, the present case study proposes the following reflections: How is it possible to maintain a winning strategy with growing competition? Which forces are in favor of Illy? Which points can be reviewed to face the new scenario?

12.3  Flexibility and evolution of strategies A company is similar to a biological organism: if it wants to survive, it has to put adequate strategies into action. (…) Trust, as argued by the economist and Nobel prize winner Joseph Stiglitz, lies at the heart of the system, provided it has a solid foundation (Illy, 2016, p. 107).

The successful trajectory in the supply of quality adopted by Illy in Brazil was made feasible through the construction of a functional and strategic network to operationalize the pillars proposed by Dr. Illy. As soon as he arrived in Brazil, the businessman organized a series of meetings with professionals that he believed were essential for orchestrating the idea of the award. Dr. Aldir Teixeira was one of the first contacts. At the time, Dr. Teixeira worked as an agronomy engineer for the Biology Institute of the State of São Paulo. He recalled this beginning, highlighting how quickly it all happened. As he remembered it,“My first meeting with Dr. Ernesto Illy was on May 18, 1991, from 9 to 11 o’clock in the hall of the Maksoud Plaza Hotel in São Paulo. On that day, he revealed his intention to create the Quality Award as a tool to identify the existence of potential quality coffee production in Brazil. As I had been told of his intention in advance, in my pocket I had a blueprint of the Regulation. He said that this was exactly what he wanted. On that day, he held individual interviews with other people. On May 27, 1991, Dr. Ernesto Illy called me from Trieste to say that he wanted to create the Award and that I would be responsible for organizing it, including hiring people (…).The first ‘Quality Award for Espresso Coffee in Brazil’ was held at the headquarters of the Ministry of Agriculture in São Paulo (…). Registration was from August 1 to October 10, 1991. The minimum lot for registration was 280 bags, and the prize was U.S. $30,000.The prizes were given out on December 12, 1991.” The initiative was a success. However, although all the mechanics of the award had been worked out, a fundamental issue had to be resolved: how



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to make the existence of the award known in the coffee-producing regions of Brazil and motivate producers to enter the competition. Some publicity agencies and public relations people were invited to attend a meeting with Dr. Illy. In the statement given by Ingrid Rauscher, widow of Antônio De Salvo, founder of ADS Brasil, there is evidence of some curious factors that were decisive in those early days. According to Ingrid: “We were the only agents that arrived on time, because Dr. Illy would arrange a meeting and arrive 10 minutes early, and we arrived before him (…) Antonio De Salvo arrived first and he was Italian like Dr. Illy (…) so they had that affinity. De Salvo was a charismatic man, a raconteur, pleasant, communicative, but also very strict, honest and focused on getting results. Today our company is 47 years old and continues with this same philosophy of ethics and commitment, which is really in line with Illy.” The publicity operated on six main fronts (ADS, 2017): (i) Posters and regulations were exhibited at farmhouses, cooperatives, associations, trade union headquarters of coffee growers, and branches of Banco do Brasil. (ii) An ambassador for the award, known internally as the social advisor, was hired to lend legitimacy to the competition. At the time, Manuel Eugênio Vidal, an active and well-known farmer in Minas Gerais State, was invited to work alongside the cooperatives. (iii) A web site was created with informative material, and an 0800 telephone number was made available to clarify doubts. (iv) Publicity materials on coffee quality were created in specialist columns on agriculture in widely-circulated newspapers such as O Estado de São Paulo and Folha de São Paulo (Annex 1). (v) A publicity program was implemented on radio stations in the coffee-­ producing regions with interviews recorded by Dr. Aldir Teixeira (vi) Dr. Ernesto Illy visited the coffee-producing regions and gave lectures at conferences and seminars on coffee in Brazil. With the success of the first award, Dr. Ernesto Illy began to structure the operation of analyzing samples so that he could continue the award. The same structure would serve as a quality control system of the lots acquired by the Illy company. In this way, Assiscafé was born, in partnership with Dr. Aldir Teixeira, which would later evolve into Experimental Agrícola do Brasil. To this structure were added the services of ADS advertising and public relations company and a partnership with the Porto de Santos company, which would become the exporting wing of Illy in Brazil until 2012, when exporting was assumed internally by Experimental Agrícola do Brasil.

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It would prove to be a winning strategy, which has lasted until today. According to Dr. Aldir Teixeira, the main reasons for this were clear: “Since 1991, Illy has never lacked the amount of coffee it needed within the established quality standards. At the time of the first award, acquisitions were approximately 10,000 bags.This number has now risen to around 200,000 bags.” The main changes in this strategic trajectory were made to adapt to the technological, market, and institutional contexts that emerged. In this sense, an attempt has been made to cluster these transformations into three main fronts: (A) partnership network, (B) quality award and Illy Club, and (C) forms of acquisition.

12.3.1  Partnership network Fig.  12.2 illustrates the configuration of the networking of partners and stakeholders fundamental to solidifying the strategy of supply and distribution of Illycaffè in Brazil. The following facts cover the strategic pillar of procurement: (i) Experimental Agrícola, the company that succeeded Assicafé in 2012, is a Brazilian company that is a partner of Illycaffè S.p.A, presided over by Anna Illy, with Dr. Aldir Teixeira as the operational director. (ii) The technical group is made up of three consultants, agronomy engineers who serve the producers in the regions of Matas de Minas, the Midwest, Rio de Janeiro, Bahia, Espírito Santo, South of Minas, São Paulo, the South, Cerrado Mineiro, and Chapada de Minas.

illycaffè Trieste Technical team

Warehouses

Experimental Agricola

UDC/PENSA

Networking illycaffè Brasil

ADS

Clube illy illycaffè Sud America

Fig. 12.2  Networking—Illycaffè in Brazil.



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(iii) Accredited warehouses are located in Leme, in the metropolitan region of São Paulo, and São Sebastião do Paraíso, in the Cerrado Mineiro region. (iv) Illy Coffee University (Universitá del Caffè (UdC) Brazil) was established in 2000 to “train and improve producers, their successors, technicians, and other professionals associated with the coffee production chain, within the principles of technique, economy, and quality” (Illycaffè, 2018). UdC Brasil is a unique initiative in the coffee chain in Brazil that has reached 9000 coffee growers in the last 18 years through regular and distance learning courses, seminars, lectures, webinars, and workshops on a variety of themes such as quality production and processing of coffee, economics, coffee market, vegetable physiology, and good agricultural practices. One of the core activities was the Specialization Course in the Agribusiness Management of Coffee in partnership with cooperatives in coffee-producing regions. Five sessions have been held, resulting in the qualification of 218 students, including farmers, technicians, and professionals from cooperatives. Another initiative consisted of the scientific production of journals of Coffee University (Cadernos da Universidade do Café), with research and articles related to the coffee chain. In the first journal in 2003, the following declaration was made by Dr. Illy in the prologue: “This document is a wonderful demonstration of the results of a collaboration between a private industry with a public university and coffee producers. (…) This collaboration makes available to experts in Brazil, the largest coffee producer in the world, the factors responsible for the phenomena in question, creating an important information chain that will constantly be enriched in the future.” In Volumes 5 to 7 (2010, 2011, 2013, 2015), the five best works of research conducted by the students of the specialization course were published as a form of award for their efforts and the contribution these students made to coffee research. In 2018, to celebrate 18 years of activity, a book was published, Research on Coffee, 2013–2017. This is a collection of studies supporting the diffusion of knowledge created for the agroindustrial coffee system community. Carmem Lucia Chaves de Brito,3 a coffee producer in the municipality of Três Pontas in Minas Gerais State, spoke of the qualification importance for her development as a coffee farmer and Illy supplier since 2009: “I was

3

Carmem Lúcia Chaves de Brito is currently BSCA president (Brazilian Specialty Coffee Association).

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really encouraged to see how Illy added producers that had a vision, a really different stance when it came to growing coffee … I understood that Illy had actually built a big family of very passionate people and with a purpose … the specialization course was a special time. The whole thing amazed me, and I was wondering how those people from the other side of the world could come here to our production center, sit at the table with us, go to the coffee plantation, [and] help us to improve … there is nothing like it anywhere in the world. You can’t express in numbers what Illy has done for us.” In the strategic sphere of the marketing pillar, the company has the following network: (i) The ADS publicity company. Since the first award, it has been responsible for all the publicity and communication with diverse media and interlocution with suppliers through actions for forging relationships such as dinners, gatherings, and field days. (ii) The Illy Club is the club for the company’s relationship with its suppliers. It was established in 2000, and its actions are operationalized by ADS. (iii) Illycaffè Sud America is the subsidiary of Illycaffè that focuses on distributing the brand’s products in the country and expanding supply to HoReCa channels (hotels, restaurants, and cafeterias). Illy’s share of the Brazilian domestic market remains small, which suggests a potential for expansion. Until 2012, the Porto de Santos company was responsible for the process of acquisition and export, including receipt of the samples and preanalysis, as well as the commercial process, logistics, and exporting to Trieste. In that year, the partnership was dissolved, and Experimental Agrícola absorbed the entire operational flow. The process was not changed but to a certain extent was simplified because it was all concentrated in a single company. On the other hand, the responsibilities of Experimental were expanded, as it began to conduct activities associated with gauging quality, purchases, and research, in addition to agricultural extension, that is, technical orientation for producers. The routine of purchasing by Illy in Brazil began in June when the campaign was launched concomitantly with the publication of the Award Regulations. In both cases, the producers have to send samples of 1600 g of processed coffee representative of a minimum lot of 80 bags and a maximum of 1000 bags. The difference is that, for the competition, the sample is forwarded anonymously for a laboratory analysis of its quality and an



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Table 12.1  Samples received for assessment by Experimental Agrícola (2014–17) Harvest

14/15 15/16 16/17 17/18

Lots purchased Registered for the award

Not registered for the award

% Registered

161 271 317 364

280 296 179 211

37% 48% 64% 63%

Source: Experimental Agrícola, 2018. Internal Documents.

analysis of the residues by a specialist laboratory. The company has received a growing number of samples from producers who intend to sell their products to Illy and compete for the award (Table 12.1). The campaign is generally extended until the goal for purchases set by Illycaffè is achieved. In general, this goal is attained by the deadline for registering for the competition, which is in mid-September. Prices are negotiated after the sample has been approved by the quality analysis conducted by Experimental Agrícola’s team of technicians and tasters. If approved within the set criteria, the producer has up to 3 days to make a decision. When the deal has been agreed, the sample is sent for residue analysis at an accredited laboratory. If the sample is not approved at this stage, the deal will not go ahead and, consequently, no lots of coffee will be delivered to Illy. In the 2017–2018 harvest, 10% of the samples that were sent were rejected in the residue test, a rate that has remained stable in recent years. The grower is informed of the approval of the sample, either the one submitted for the competition or the one intended for sale, and he has up to 10 days to deliver the negotiated coffee at one of the two warehouses (Peneira Alta or Leme) accredited by Illycaffè in Brazil. Payment is made up to 11 days after the coffee has been unloaded at the warehouse. This practice was first adopted in 2015. In general, the lots remain a maximum of 20 days in the warehouses, with the month of November being the limit for the receipt of negotiated coffee. There is a company directive that no coffee should be stored in the warehouses between two harvests. The analysis of the MRL4 was always conducted in Italy following the arrival of the coffee in Trieste. However, in 2014, in compliance with the 4

Maximum Residue Limit (MRL) is the maximum quantity of residues of pesticides or similar products officially accepted in food as a result of adequate application in a specific phase from production to consumption, expressed in parts (weight) of the pesticide or its residues per million parts of food (in weight) (ppm or mg/kg) (Anvisa, 2018).

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export regulations for food to the European Union, the tests had to be conducted in the country of origin. Therefore, Experimental Agrícola in Brazil absorbed these costs. The average cost of a laboratory analysis per sample is around U.S. $150. Considering this amount, Experimental can spend around U.S. $90,000 per harvest on evaluating samples. These changes are intended to address the company’s concerns over sustainability throughout its supply chain. Thus, they have been using the purchase of lots that have a MRL index in accordance with the company parameters as a filter. According to the person in charge of coffee purchases in Brazil, the company exports its products to more than 140 countries. Therefore, it seeks to comply with and obey the law worldwide. The maximum amount of residues accepted by Illycaffè is determined for each residue analyzed, and the lowest limit established among all the countries is always used. In the context of environmental and social concerns, the company asks producers, when entering the competition for the award and/ or submitting their samples for sales, to sign a declaration stating that they comply with environmental and labor legislation and affirm that they do not use child or slave labor on their properties. The transaction between producer and Illycaffè involves considerable complexity that distinguishes it from producers that sell coffee on the market. The personal relationship, the identification between producers and company, the payment of consistent premium prices for their efforts, and the cost of producing quality coffee are differential characteristics. The natural evolution of the architecture of the purchase transaction was the adoption of contracts with a pre-set price by which the producer assumes the commitment of delivering the coffee with the required quality standards. This practice has attracted producers who have a history of quality and results in added value for both parties. Furthermore, the United Nations Food and Agriculture Organization (FAO) has advocated the adoption of agroindustrial contracts. On the issue of sustainability, the company seeks to be a leader in the global coffee chain and has adopted practical measures to achieve this goal. In the company’s profile, published in 2018 (Illycaffè, 2018), the company affirms that it “updates and reissues its Sustainable Value Report, a document that expresses the notion of sustainability as a strategic pillar for the company.” Since 2011, the company has earned the Responsible Supply Chain Process Certification issued by DNV GL, unprecedented in the coffee chain and around the world. Thus, the technical consultants of Illy in Brazil, with a view to meeting the DNV certification requirements, visit



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their suppliers with a checklist. The documents are then examined by the certification agency, which validates compliance with the requirements for accreditation. In February of 2018, when receiving an award from the American Ethisphere institute for The World’s Most Ethical Companies for the sixth consecutive year, Andrea Illy, president of Illycaffè stated: “The private sector creates most of the economic value in the world, and it is imperative that companies conduct their activities through a strict and rigid ethical code, especially during an era of growing challenges such as climate change and rapid population growth.”

12.3.2  Quality award and illy club In publicity material promoted by the ADS publicity agency entitled Illycaffè̀ Bets on Brazilian Suppliers (ADS, 2017), the company summarized the results of its partnership with Brazilian coffee growers: • R $5.5 million paid in prize money • 10,000 samples competing for the Award • Prizes paid to more than 1400 coffee producers • 1600 suppliers • Reputation of coffee growers because they belong to the Illy family • Illycaffè has become one of the most respected buyers of Brazilian fine coffee • Illycaffè has an exclusive portfolio of suppliers • Illycaffè achieves its goal of purchasing the best coffee in Brazil straight from the producer The mechanics of the award has evolved since 1991.The main changes have been to make it more adaptable to the coffee supply that has altered over time with the growing geographical production base and the acceptance of new processes. If natural coffee was once the most easily available and associated directly with quality, with climate change increasingly affecting plantations, other modes of processing have been considered. Peeled and depulped coffees have been accepted since 1999, as these characteristics do not affect quality production. In the past, most purchases were of natural coffee.Today, the highest volume is of peeled coffee, known as PC. This process can be clearly identified in the statement of the person in charge of purchases for Illy in Brazil: “Due to the climate, our highest volume is of PC (…) most of the producers that have grown became businessmen, changed the key and changed to PC.They evolved with the technology and discovered its benefits (…) Naturally dried coffee is still an option on most plantations, but the trend has been for growers to turn to PC.”

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As a result of this change in the regulations, regions that were once not known for quality coffee production have turned out to be winners. This is yet another result of the Illy Award, the identification of new regions that produce fine coffee. The regions whose quality was discovered following successive Illy awards were: • Cerrado Mineiro • Mountains of Espírito Santo • Zona da Mata Mineira • Region of Piraju • Western Bahia and others In the last 27 awards, considering the top 10, the Cerrado Mineiro region accounted for 41% of the winners, followed by the regions of Matas de Minas with 24%, Southern Minas with 19%, and São Paulo with 12%. More recently, larger minimum lots have been admitted, and a producer can enter diverse samples into the competition. Furthermore, because of a second prize for Mr. Ernesto Funaro in 1993, winner of the first prize in 1991, it was determined that the same producer could not win the award in consecutive years. Since 2016, Illycaffè has had four national awards and one international award, as follows: (1) Ernesto Illy Award for the Sustainable Quality of Coffee for Espresso—National: 40 finalists are chosen.The first six are announced at the annual event for presenting the award, which usually takes place in April. The top three receive a cash prize and a trip overseas to take part in the International Award and, when there, discover their actual placing. Meanwhile, those in fourth to sixth place receive a cash prize and a diploma with their placing. The other finalists receive a cash prize and a certificate. (2) Ernesto Illy Award for the Sustainable Quality of Coffee for Espresso—Regional: Awarded to the two highest ranked from each state/region (Espírito Santo, Minas Gerais, Midwest region, North/Northeast region, South, Rio de Janeiro, and São Paulo), with the announcement made at the award ceremony. The winners receive a cash prize and a diploma stating that they are Regional/State champions or finalists (runner-up). (3) Supplier of the Year Award: This award was introduced in 2001/2002 for the purpose of recognizing the member of the Illy Club who was most distinctive in that harvest, following criteria of the producer’s loyalty, prompt delivery, and sustainability. The winner enjoys a cultural trip to Italy, with a visit to Illycaffè’s headquarters in Trieste.



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(4) Classifier Award: To recognize the efforts and dedication of the classifiers in their constant search for quality coffee. Classifiers from three major regions by volume of supply are given awards: Cerrado Mineiro, Southern Minas, and Other Regions/States (Matas de Minas, Chapada de Minas, São Paulo, Rio de Janeiro, Midwest, North/Northeast, Paraná, and Espírito Santo). From each of these three regions/states, the classifier that stood out most according to the criteria of the regulations is chosen. The national prize is awarded to three winners who receive a cash prize and a diploma with their national ranking. The international award was created in 2016 (Ernesto Illy International Coffee Award) to extend the competition to other suppliers of the company around the world. The three best producers from nine countries that supply the Illy blend are chosen.The international award has been presented since 2016 at the United Nations in New York City. The coffee, known as the “best of the best,” was grown by Ethiopian producer Ahmed Legesse in 2016, and in 2018, the Ngororero Coffee Washing Station from Rwanda, represented by Mrs. Philotée Muzika, won the award for the best coffee in the world. Unlike the Brazilian award, which is judged by a committee of specialists made up of senior tasters, this award is decided by a special panel of judges made up of chefs and expert tasters who taste and evaluate the entries with different forms of preparation (infusion, double espresso, and cold brew). The Illy Club, founded in 2000 to strengthen the relationship between the company and its suppliers, has undergone changes in the last 18 years. It was initially created with four membership categories: (a) red card: offered to producers on their first sale to Illycaffè with automatic membership; (b) silver card: given after supplying for three successive harvests/years; (c) gold card, given after supplying for five consecutive harvests/years; and (d) platinum card: awarded after supplying for 10 consecutive harvests/years. In 2011, the diamond card was created for suppliers whose relationship with Illycaffè has lasted for more than 20 years. Currently, the company has three producers in this category. Following the harvest of 2005/2006, a special category of Classifier Member was created in the Illy Coffee Club, the green card. Every classifier that selects samples that are purchased by Illycaffè automatically becomes a member of the club. In all categories, if a supplier does not supply for 2 consecutive years, they lose their membership. Table 12.2 shows the success of the Illycaffè relationship program with the constant evolution and growing number of new members (red card),

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Table 12.2  Evolution of the membership categories of the Illy Coffee Club (2013–18) Categories

2013

2014

2015

2016

2017

2018

Red Silver Gold Platinum Diamond Green Total

307 56 77 24 0 92 556

264 59 80 25 0 55 483

243 57 75 23 0 71 469

277 66 60 29 0 79 511

317 74 63 26 3 79 562

324 70 57 36 3 70 560

Source: ADS Internal documents (2018).

and the long-term membership of the members, with no one leaving the club throughout its 18-year history. The main benefits offered to members of the club include: • Access to informative materials like L’Expresso magazine and the Illy Coffee Club Em Foco bulletin. • Attendance at exclusive gatherings for members and visits to farms to form new relationships and exchange experiences. • Attendance at courses and seminars of the UdC and the acquisition of Illycaffè products at special prices in the store or through online purchases from the company. Silver, gold, platinum, and diamond members attend the Sustainable Supplier Award of the Year, at which the winner is given a cultural trip to Italy to the Illycaffè headquarters in Trieste. It should be highlighted that membership of the Illy Club has come to be viewed as a reputational prize for producers. Remaining in the group through the years is an opportunity for continuous growth through the membership community and also enables access to privileged information on quality coffee production.This view was emphasized by all the producers who were interviewed and can be seen in the statements of Daniela Pellozi, who has been a supplier to Illy and won the second place in the 25th Quality Award in 2016:“I and most of my colleagues who are Illy suppliers say the same things, that it is not the price paid per bag of coffee, (…) it is the recognition of the producer’s work, it is the investment in the sense of constantly seeking better quality, the willingness of the people at Experimental Agrícola to clear up doubts and aid the process (..) I am really young for illy but, along with my colleagues, I joke about how we’ll go to our graves delivering coffee to illy as long as they are willing to buy it.”

12.3.3  Forms of acquisition Compared with its competitors, Illy innovated when it decided to buy directly from the farmer, going against a long-term practice of sales through



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intermediaries, such as cooperatives and trading companies. However, although purchased directly, the form of negotiation and payment for many years followed the conventional practice on the coffee market: spot sales. In this form of payment, the purchaser puts out a call for a purchase, and the interested parties present their samples.The price is negotiated based on the price of a 60-kg coffee bag on the day set by the New York Stock Exchange (ICE Futures U.S.) or the London Stock Exchange (ICE Futures Europe), but many other factors are taken into account, such as the classification of the coffee, type of sieve, or even more elaborate criteria depending on the buyer, such as SCA scores and certifications. Nevertheless, in recent years, companies and producers have sought options other than the spot market, such as exchange operations (also known as bartering), statement of intention to sell, and a formal contract per harvest. In a recent study of coffee producers in Brazil, Zylbersztajn et al. (2018) found that these practices are widely used in coffee agribusiness, with more than 40% of the interviewees using exchange operations, 34% selling through formal contracts, and 27% using formal long-term contracts. With more buyers of coffee today, operating either directly or traditionally, most coffee growers no longer depend on a single form of sale as they did in the past, using alternative tools. The reasons given for this, according to the authors of the study, mostly involve price locking, which allows minimization of the typical oscillations on the agricultural commodity market, relationship with the distribution channel, guaranteed flow, funding for production, allowing banks to consider the contract as a form of collateral or a sign of risk control (due to the lower supply of rural credit at subsidized rates), and access to technical assistance. Adapting to this new reality, Illy began to use purchase and sales contracts for future delivery in 2012, when the export process was integrated by Experimental Agrícola. These are annual contracts with fixed prices in dollars and established quality criteria. Nevertheless, the contract does not guarantee the purchase of coffee that does not meet the quality requirements of Illy in accordance with the related contractual clause.Thus, on the delivery date, the producer has to provide a sample for analysis. If it is not in accordance with Illy’s quality requirements, the sale is not completed. More recently, in 2016, multiannual contracts were adopted for a diverse number of periods up to 4 years. This condition is the express wish of producers in other production chains, such as citrus. Contracts now account for 55% of the volume acquired in annual harvests and, according to the board of directors, with good results. Contracts are also a form of ensuring supply and minimizing price fluctuations by

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s­etting the value in dollars. However, the adoption of future contracts is linked to the coffee producer’s greater knowledge of more sophisticated practices as protection against fluctuating prices, such as currency hedging or derivatives on the stock exchange. Contracts can be broken, especially when the contracted value is lower than current market prices at the time of delivery, representing losses for producers who have not adopted tools to guarantee their position. According to Illy’s global purchasing director, contracts are a practice with no return in the sector, and he believes that the company’s innovation in this respect lies in offering assistance from its technical team to help producers become familiar with the most sophisticated instruments on the capital market to prepare them to adopt future contracts. Remaining on the subject of commercialization, delivery to the warehouses is an important stage of the sales process and should be viewed with great attention so that attributes of quality are not lost along the way. In this sense, Illycaffè is attentive to two important pillars of this process: bagging and traceability of lots. In the past, it was common practice to deduct U.S. $0.25 of the total value negotiated per bag if the coffee was delivered in bulk or in big bags to encourage delivery in 60-kg jute bags5 and thus preserve coffee quality. However, over time, this proved to be an unnecessary practice, nor was it in compliance with labor legislation, which limited loading by workers to 30 kg. Nowadays, according to the person responsible for purchases in Brazil, less than 10% of the coffee delivered to the warehouses is in bags, and 100% of exports are in big bags, which facilitates the logistics at the port of destination. One practice that has not changed over time is the preservation of the identity of the lots’ origin. All the coffee delivered to the warehouses is rebagged in Illy’s big bags, which weigh up to 1000 kg, maintaining the identity of the lots. Therefore, upon arrival in Trieste, the tests for forming the blend are conducted by lot, and if any anomaly is detected, it is possible to identify the origin of the coffee quickly, ensuring traceability. In this context, as well as maintaining the essential pillars defined by Dr. Illy, the company had the capability to make several strategic directives flexible over time. The main aspects of this are the purchase mechanism, using contracts, acceptance of peeled coffee cherries to complement naturally dried coffee, and creating awards to allow the expansion of new areas of coffee growing.

5

Bags made with the jute fabric.



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12.4  Current and future challenges for adding value to the coffee chain in Brazil Over time, Illycaffè organized the chain to add value and adopted mechanisms that distribute value among those who cooperate by delivering the product the company desires: 100% Arabian coffee that meets the company’s own quality criteria. As has been shown, the pioneer nature of the company was co-opted by the competition, and new challenges emerged in the maintenance of the strategy that hoisted the company to a secure level in the acquisition of quality coffee. In interviews with members and non-members of the Illy Club, as well as employees and directors of Experimental Agrícola and directors of Illycaffè in Italy, the main threats to the company nowadays and in the near future were listed. Furthermore, some key attention points were noted in relation to the resources and particular competencies of the company (Table 12.3).

12.4.1  Competition for raw material The acceptance of quality coffees on the Brazilian domestic market is reflected in the growing consumption of premium coffee in and out of the home, either in the form of pods, powder, or beans, and represented 10% of the volume of sales in foodservice and retail channels, equivalent to 1.5 million bags (48 kg) in 2016. This category is also expected to grow by double-­digit percentages in the coming years. “Many young people from the age of 20 are becoming interested in the category and are appreciating this kind of product” (Euromonitor, 2017a, p. 17). Since the dispute over the main patent for coffee capsule production by Swiss company Nestlé for the Nespresso brand in 2013, major ­international Table 12.3  Challenges and attention points Challenges

Critical issues

• Competition for raw material

• No differentials among club members • Future contracts with fixed price

• New technologies in the field and climate change • Challenge of propagated sustainability and loss of relevance of the certifications

• (possible) Vertical integration of Illy Club members • Certification for quality with own criteria and evaluation

Source: Prepared by the authors.

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players and the largest roasters on the Brazilian domestic market have begun to offer products in pods. The five largest coffee industries in Brazil (ABIC, 2018) offer coffee in capsules or sachets to their customers, namely Grupo Três Corações, Jacob Dowe Egberts (JDE), Indústria Maratá, Melitta do Brasil, and Mitsui Alimentos. The same trend can be seen in the medium-­ sized and small companies in the sector due to the low cost and easy access to the encapsulation technology available in Brazil (Valor Econômico, 2018). This market is attractive because of the above-average growth of coffee products categories and the high profit margins. From 2011 to 2016, traditional coffee powder, the most consumed coffee product by Brazilian families (81%), saw a 14% growth in volume, while capsules grew by 900% in the same period, starting from a small base. The cost of coffee powder in 2016 was R $0.025/kg, whereas for capsules the cost was R $0.27/kg. The outlook for 2021 is a 16% annual growth for capsules, 2.8% for coffee powder, and 0.2% for coffee beans (Euromomitor, 2017). In the minds of consumers, capsules are associated with quality coffee and, therefore, the companies that supply them need to adapt their purchase processes to create more sophisticated blends that suit the taste of informed consumers who are knowledgeable regarding the origin and coffee quality. Therefore, companies are invested in forming a direct relationship with coffee growers and developed a variety of tools to attract their loyalty, such as providing technical services and adopting contracts for future delivery or even funding production. In this scenario, the payment of a premium price combined with other benefits and other strategies to ensure loyalty is no longer an exclusive strategy of Illycaffè or a resource to guarantee supply for consecutive harvests. It would be interesting to investigate whether the companies on the market monitor producers and offer them mechanisms for shared value that have already been used by Illy. In addition to capsules, there is a new market that is enjoying rapid growth: ready-to-drink coffee (RTD coffee). These products have been growing quickly in Japan. However according to the estimates of Euromonitor (2018) for the global retail drinks market for 2017–21, this category of product will grow at higher rates than other drinks, such as bottled water, energy drinks, and tea, looking beyond Japan. The major market is the United States, followed by Asia and Europe.The reasons for the growing consumption of these products are the decline of other drinks such as fizzy drinks and nectars, in keeping with the adoption of a healthier, more active lifestyle, the growth of coffee culture worldwide, and the i­nvestments



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in RTD coffee by major players, such as the Coca-Cola Company and Starbucks. Illycaffè operates in this market through an agreement with Coca-Cola in the United States, Europe, and Eastern Europe. However, it faces competition at the point of sale, with other brands that are also co-partners with big drinks companies. At the last food fair, Anuga, in 2017, which is held every 2 years in Germany, a coffee drink from this category was among the products that received an award for innovation. The Caffè LATTESSO Sport product from the Swiss brand Innoprax, combines the power of two trends in the super food universe: (a) healthiness (associated with caffeine and milk proteins) as a stimulus for sport and (b) higher protein consumption to stimulate the metabolism and gain muscle mass (Anuga, 2017). In this respect, the Illycaffè product portfolio in Brazil has remained faithful to its tradition of espresso coffee.The Illy blend is currently available in tins in the form of beans or powder for espresso, strained or mocha coffee, sachets, and pods. In the category of pods specifically for Illycaffè machines, the company offers four varieties of roasted and ground coffee for the Illy blend, Illydium coffee produced in El Salvador, and six Monoarabica capsules representing the regions of Brazil, Guatemala, Ethiopia, India Costa Rica, and Colombia. In late 2018, the company made an agreement with global company JAB through its coffee business unit JDE to license the Illycaffè brand for the production and distribution of Illy-branded aluminum capsules. JDE will produce the new capsules to meet the standards of excellence of Illycaffè and will make them available on the global market in the first half of 2019. This partnership is very bold and closely in keeping with the recent formation of partnerships and acquisitions in the coffee market in recent years, demonstrating the fierce and growing competition in this industry. Nevertheless, this trend in certain aspects is in conflict with the sustainability policy adopted by the company once the aluminum capsules have been criticized by environmentalists and consumers in developed countries due to the excess waste created by their mass consumption. Moreover, it will be the first time that the company has allowed its product to be manipulated in machines that are not specifically intended for Illycaffè products.

12.4.2  Disruptive technologies in the field and climate change Brazilian agribusiness is quickly absorbing new digital technologies that are widely available in other sectors, with the country being a leader in socalled Agriculture 4.0. Autonomous farms; the use of tractors, planters, and

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harvesters connected to a GPS system; use of drones; and georeferencing are some of the technologies that have been added to analytical techniques such as big data analytics, machine learning, and artificial intelligence. Although not widely disseminated in the coffee production sector, they have begun to attract the attention of younger entrepreneurs aimed at gains in productivity and access to accurate information online regarding relevant data for more assertive decision making in the management of the plantation or the signing of a contract for future sales. Producers, specialists, and industry managers are adamant regarding the challenges of climate change for growing coffee and its global consumption. According to the global director of the Coffee University, “Applied research in the field should increasingly stem from the agenda of companies to provide producers with solutions (…) the long purchase process should be increasingly shorter and automated.” Technology can help minimize uncertainties associated with climate change, providing an intelligent tool not only for industry but also for producers, which could be a new resource for generating differentiation and relationships. Combined with scientific and applied research in the field, technology can make new advances in all aspects of production and management. For coffee producers, these factors are priorities and require constant attention and renewed knowledge.

12.4.3  Challenge of propagated sustainability and the diminishing relevance of certifications In its report entitled The Global Coffee Pods Market in 2017: The End of an Era?, the research company Euromonitor (2017b) noted the commoditization of pods, which began with the breaking of the patents of Nespresso and Keurig in 2012, and the consequent lowering of entry barriers, growing competition, and falling prices. As a way out, to navigate their way through a red sea full of sharks, the major players began to emphasize brand strategy, but a new frontier also opened up: the challenges of sustainability as a differentiation factor. The report cites the growing rejection of pods by consumers because of the plastic waste they generate. New biodegradable options are already available on the market, but consumers are going a step further with regard to showing their preference. In England, coffee shops are facing difficult arguments with society and government regarding the adoption of recyclable cups at a higher price and discounts for people who bring their own cups (Comunicaffe, 2018). In 2016, a report published by Danwatch (2016) denounced a number of



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problems in the large industries monitoring of their coffee distribution chains, which involved negligence over child labor, analogous to slave labor, and the indiscriminate use of pesticides in coffee production. Other reports followed, demoralizing certification agencies that attested to the sustainability of these chains and guaranteeing the reputation of brands in the eyes of their consumers. Although these reports represent a small sample of the universe that they seek to portray, they demonstrate the difficulty companies and all the participants in the chain face when it comes to finding a coordinated way to ensure the traceability of their coffee. The issue of sustainability is placed on the consumer’s table at different angles, be it with regard to the origin of the coffee or the destination of its packaging. The fact is that consumers of coffee in Brazil and around the world are motivated to demand from participants in the chain, industry, coffee shops, and retailers a clear position concerning aspects of coffee’s sustainability. According to the global director of supplies at Illycaffè, the challenge lies in separating promises made by the industry regarding sustainability and the actual adoption of practices to guarantee them: “Solving problems of sustainability requires time, and the consumer does not have the time to wait.”

12.4.4  Attention points Although the company has built a reputation over almost 3 decades, Illycaffè faces new challenges. As in the life of any organization, new resources have to be created and old ones discarded or renewed, but things cannot remain as they were. The strategy of maintaining the conceptual pillars and making strategies flexible seems to have been a practice that ensured the company’s longevity. Good to great transformations never happen in one fell swoop, no matter how impressive the final result. There was no defining, single action, no killer innovation, no lucky break, no miracle moment. The transition from good to great is a cumulative process, step by step, one action and one decision at a time (…) Everything builds up to generate sustained and spectacular results” (Collins and Porras, 1995, p. 23). The factors that require attention are the results of the perception that changes can be made to reassign meaning to practices established by the company. The Illy Coffee Club and the company’s own evaluation criteria for quality are unique activities that are very difficult and costly to replicate. However, silence can lead to losing the edge. In this respect, would diamond and platinum members not wish for exclusive benefits that reward so many

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years of dedication to the company? Would providing greater visibility and highlighting Illy’s own methodology used in the quality evaluation process be a valid renewal process? As seen earlier, competitors are offering future contracts, some of them with flexibility in setting prices. The producers’ need for greater transparency and minimized risks could be a catalyzer in the decision-making process for those who supply, depending on the rules involved in contracting. In this respect, it is worthwhile for buyers to take advantage of their closeness to the farmer to identify other modalities that might be interesting to both parties, industry and producers. Finally, the growth of microroasters in Brazil is a phenomenon that attracts attention due to the strength of retail and the perspective for farmers to earn a higher income.There are examples of former members of Illy Club opting for the path of verticalization, some of them very successful and others not going forward with the project. There is always the possibility, but it is very difficult to undertake a venture in a market where the knowledge lies outside that of the coffee grower. Could a supplier who undertakes vertical integration threaten the investment of a global brand like Illycaffè? There is no easy answer to this question, but the chances of this supplier grow as the company makes its position in the market more vulnerable.

12.5  Final considerations on Illy’s future in Brazil The purpose of this case study was to review the pioneer strategy for generating value by Illycaffè in Brazil during a period of widespread mimicry by its competitors. In this context is the growing culture of premium coffee in Brazil and the world among consumers, generating a reinvigorating and competitive impulse for all participants in the coffee industry and retail. The case pointed out two axes that structure and pinpoint the strategy of creating value and strengthening the commitment between producers and Illycaffè: procurement and marketing. Little has changed since the visit of Dr. Ernesto Illy to Brazil in 1991. Important incremental changes were made in light of necessary adaptations to the context of the sector and the competition. Following the death of Dr. Illy, when it was thought that the company might not weather the storm, it showed maturity and continued its consolidation and expansion: it achieved significant growth, putting it on a par with the major players in the world of coffee. Ten years after the death of Dr. Illy, some reflections can be made on the future of Illy: How will new generations of coffee growers relate to the company?



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Will they see the company in the same way their parents see Illycaffè today? Will the same strategic axes remain? What new axes will be necessary? How should the company be positioned in Brazil, the world’s second largest consumer market of coffee? With the advent of connectivity technology in the field, can qualitative changes in the relationship with suppliers be expected? Could the adoption of aluminum pods lead to a new stance of the brand that conflicts with its historical efforts to ensure sustainability in its supply chain? In this scenario of intense changes in the coffee industry and the retail of coffee, the words of Dr. Illy, quoted at the beginning of this chapter, can pave the way for continuing the work he began in the 1990s: “(…) understanding that companies are at the service of the market and are constituted by consumers, whose power is decisive.”

References ABIC, 2018. Estatísticas da indústria do café. Retrieved from: http://abic.com.br/estatisticas/ indicadores-da-industria/indicadores-da-industria-de-cafe-2017. (Accessed June 2018). ADS, 2017. Illycaffè aposta no fornecedor brasileiro. Internal document, ADS. Anuga, 2017. Innovation Show 2017 Catalog. Retrieved from: http://www.anuga.com/events/ specialevents/anuga-innovation-show/anuga-innovation-show.php. (Accessed June 2018). Anvisa, 2018. Regulamento técnico. Retrieved from: http://www4.anvisa.gov.br/base/visadoc/CP/CP%5B4882-2-0%5D.PDF. (Accessed June 2018). Clube Illy, 2018. Informações instituições. Retrieved from https://clubeilly.com.br/2018. (Accessed June 2018). Collins, J.C., Porras, J.I., 1995. Feitas para durar. Rocco, Rio de Janeiro. Comunicaffe, 2018. UK Coffee Drinkers Want to go Green. Retrieved from: https://www. comunicaffe.com/uk-coffee-drinkers-want-to-go-green-but-price-is-a-barrier-saysresearch/. (Accessed June 2018). Danwatch, 2016. Bitter Coffee, fev 2016. Retrieved from: https://danwatch.dk/. (Accessed June 2018). Euromonitor, 2017a. Tendências do mercado de cafés em 2017. Relatório preparado para o Encontro Nacional da Indústria do Café (ENCAFE). ABIC, São Paulo. Euromonitor, 2017b.The Global Coffee Pods Market in 2017:The End of an ERA? Passport Report. Euromonitor, 2018. Top Ready-to-Drink Coffee Trends in 2018. Country Report. Illy, A., 2016. O sonho do café. Organização: Alessandra Viola Tradução: Adriana Marcolini, first ed. Editora Valentina, Rio de Janeiro. Illycaffè, 2018. Perfil Illy. Internal document. Neves, M.F., Saes, M.S., Rezende, C.L., 2003. Estudo de Caso: illycaffè e os desafios do crescimento no Brasil. vol. 1. Cadernos da Universidade illy do café, São Paulo69–103. Prahalad, C.K., Hamel, G., 2005. Competindo pelo futuro: estratégias inovadoras para obter o controle do seu setor e criar os mercados de amanhã. Gulf Professional Publishing. Saes, M.S., Boldrini Junior, D., Rezende, C.L., 2003. Externalidades no Fornecimento de Café para illycaffè. vol. 1. Cadernos da Universidade illy do café, São Paulo, pp. 33–57. Valor Econômico, 2018. Concorrência no café se acirra e empresas médias buscam diferencial. 21/06/2018. Retrieved from: https://www.valor.com.br/agro/5611285/concorrencia-no-cafe-se-acirra-e-empresas-medias-buscam-diferencial. (Accessed June 2018).

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Zylbersztajn, D., Giordano, S.R., Devita, C.L.R., Oliveira, G., 2018. Estratégias contratuais de suprimento de cafés de alta qualidade. In: Pesquisas em café da Università del caffè Brazil 2013–2017—São Paulo. Università del Caffè: Editora Pasavento, FIA.

Further reading Jones, G., Zeitlin, J. (Eds.), 2008. The Oxford Handbook of Business History. Oxford University Press, Oxford.