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jerryking : coffee   38

Andrea Illy: adapting a family business to a multinational world
JULY 20, 2019 | | Financial Times | by Rachel Sanderson.

*The coffee group chairman argues his style of capitalism is good for business, workers and the consumer*

Andrea Illy, third generation heir of the Illycaffè dynasty, last year struck an alliance with investment group JAB Holdings to produce and distribute Illy coffee capsules...he makes it clear that he does not intend to sell the closely held family company..... “It is a very simple principle about preserving our freedom,” he says of his and his family’s decision, one....Freedom is a word that comes up frequently in conversation with Mr Illy.....who espouses a sort of pick-and-mix version of capitalism, resolutely refusing to focus only on sales and profits. Illy argues his style of capitalism is not charity but good business.......Illy has paid its growers on average 30% more over market value for decades in order to maintain its supply of top Arabica beans. “....The company is rooted in the border city of Trieste....which is also ingrained in the nature of the family......globalisation and increasing competition in the coffee sector has forced Illy to adapt. Staying closely held does not work any more. Co-opetition is his new mantra."“It is like the way to adapt in the savannah. If you do not want to be prey to the big lion, you live in a tree.”"

Part of that adaptation has been the deal with JAB, which allowed Illy coffee capsules to be produced and distributed in supermarkets globally, something that Illy could not do alone......The global coffee industry has become increasingly like the beer tie-ups of the 1990s, with big groups such as JAB and Nestlé snapping up smaller companies. Illy has risked being squeezed between these behemoths and the microroasters emerging as the hip caffeine hit for millennials and Gen Z.....Bigger groups have circled Illy for years. Mr Illy says the family chose JAB because it had the technology he wanted and accepted a licensing agreement rather than an equity one.....To build its global presence, Mr Illy is now looking for a retail partner in the US to help launch Illy coffee bars in the world’s largest coffee market. He says he could even sell a slice of equity. But he is very specific who it would be to: a private financial investor, not an industrial group.....there have been other adaptations. Three years ago, Illy hired an outside chief executive — Massimiliano Pogliani, a former executive at Nestlé’s Nespresso — for the first time since the company was founded in 1933 by Mr Illy’s grandfather, Francesco. Mr Illy has also built a board including executives from clothing group Moncler and Italian cosmetics group Kiko...... studies show that family businesses often fail in the third generation. The move to hire outside management and governance comes as studies also show that family-owned, professionally-run companies are among the best performing in the long term. ......Mr Illy sees these alliances as the only way for a family business model to thrive and to not have to cede control to a multinational when “complexity is becoming too big for a single person to manage”.
.....good stewardship is good business......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. Mr Illy says this creates a virtuous circle: the more attractive Trieste becomes, the more talented people Illy can attract to work for it and the more visitors come to the city and raise its brand profile........A portrait of his father Ernesto hangs opposite his desk. “I put the painting there to ask him to control what I do,” Mr Illy says.

What, then, has he learnt from his family? “Society is made by the private sector, mostly. 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,” he says.

Three questions for Andrea Illy
Who is your leadership hero? I have three: Muhtar Kent, former chairman of Coca-Cola; my father; Sebastião Salgado [the photojournalist].

If you were not a CEO/leader, what would you be? A neurosurgeon.

What was the first leadership lesson you learnt? My father asked me when I turned 14 years old where I wanted to go to school. Do you want to start a journey to be a leader or do you want to have fun? I chose the first option and as a result chose boarding school in Switzerland over a local school at home. There I learnt about discipline and hard work but also about the power of a charismatic leader from my headmaster.
alliances  boards_&_directors_&_governance  climate_change  coffee  coopetition  dynasties  family  family_business  family-owned_businesses  financial_buyers  heirs  high-quality  Illycaffè  investors  JAB  licensing  Nestlé  premium  private_equity  privately_held_companies  stewardship  sustainability  the_counsel_of_the_dead  virtuous_cycles 
july 2019 by jerryking
JAB’s Peter Harf: hire ambitious talent and give them a mission
February 16, 2019 | | Financial Times | by Leila Abboud and Arash Massoudi.

JAB oversees its portfolio of coffee, beverages, and casual dining companies. .....When everything was going wrong last year at Coty, the cosmetics company backed by investment group JAB Holdings, Peter Harf reacted with characteristic ruthlessness, replacing Coty’s chief financial officer and chief executive, and taking back the Coty chairmanship from his longtime associate, Bart Becht. Describing last year’s share price decline of more than 60% as “unacceptable” for JAB and its co-investors, Mr Harf says the situation “had to have serious consequences” even for his inner circle......Harf believes that identifying talented people — and incentivising them through performance-based pay — have been key to his success over his nearly 40-year career..... just as important to Harf is knowing when to jettison those who are no longer serving the mission he has overseen since he was 35: growing the wealth of Germany’s reclusive Reimann family who are behind JAB....Harf's vision was for JAB to be modelled on Berkshire Hathaway, the investment conglomerate built by his idol, Warren Buffett. Success would come not only from backing the right leaders but by patiently building brands, embarking on deals and taking companies public to cash in on bets....Harf felt he had assembled a dream team: “My mantra has always been that I need to hire people who are better than me. Lions hire lions and sheep hire other sheep.”

Three questions for Peter Harf
(1) Who is your leadership hero?

“Warren Buffett. Hands down. All this stuff that I intend to do to make JAB into a long-term investment vehicle, he does it to perfection. He’s the greatest investor in the world, and I want to be like him. If we invest as well as Warren, we’ve won. Very simple.”

(3) What was your first leadership lesson?

One of my biggest role models was Bruce Henderson, the founder of Boston Consulting Group. When I worked for him, I prepared a three-page analysis about a problem. It had 10 bullet points as the conclusion. He dismissed it as way too complicated and said: “Don’t try to field every ball.” He meant that if you wanted to be a good leader, you have to be able to focus on the important stuff first.
+++++++++++++++++++++++++++++++++++++++++++++++++++
The trouble often starts when leaders start listing five or seven or 11 priorities. As Jim Collins, the author of the best-selling management books “Good to Great” and “Built to Last,” is fond of saying: “If you have more than three priorities, you don’t have any.”
BCG  Berkshire_Hathaway  beverages  casual_dining  coffee  commitments  CPG  dealmakers  deal-making  departures  exits  family_office  family-owned_businesses  HBS  hiring  investors  JAB  Keurig  lifelong  mission-driven  private_equity  portfolio_management  ruthlessness  talent  troubleshooting  Warren_Buffett 
february 2019 by jerryking
Godiva indulges global coffee craving with café rollout
DECEMBER 16, 2018 | Financial Times by Andrew Edgecliffe-Johnson and Alistair Gray in New York.

Godiva, the Turkish-owned Belgian chocolate brand, is to roll out 2,000 cafés as part of a plan to multiply revenues fivefold over the next six years — the latest sign of a coffee craze in the global food and drinks industry..... to raise capital to fund the expansion, Godiva and its bankers at Morgan Stanley have been in talks with several potential strategic investors about a possible $1bn-plus transaction....The New York-based group already has 40 cafés, including an outlet in Harrods, London, after an initial pilot launched in Istanbul and Shanghai in 2010. Yet Ms Young-Scrivner, a former Starbucks executive, said the company believed coffee consumption would continue to grow and a larger chain of Godiva outlets was “a natural extension”. Coffee and tea, she said, “pair really well with chocolate”.....Godiva’s 1,500-2,500 sq ft cafés will start appearing in big cities around the world from next spring, when the first is due to open in New York. About a third of the outlets are planned for North America, a third in Asia and a third in the rest of the world. Their menus will feature hot chocolate, cookies, affogato, chocolate-dipped strawberries and croiffles, a sweet or savoury cross between a croissant and a waffle..........The second part of Ms Young-Scrivner’s plan includes expanding Godiva’s distribution in grocery stores. The company estimates its share of the US packaged chocolate market at just 2 per cent and plans to expand the distribution of its chocolate bars and packages aimed more at self-indulgent snacking than at the premium-priced gift market where it has long focused.

Godiva was watching with interest the growth of cannabis-infused chocolates and drinks, which has prompted several large consumer groups to explore investments in cannabis companies, but this was “not a priority” for the company, Ms Young-Scrivner said.
brands  cafés  chocolate  coffee  Godiva  high-end  rollouts  expansions  cannabis  self-indulgence 
january 2019 by jerryking
Nestlé: Betting on big brands
July 2, 2018 | | Financial Times | Ralph Atkins in Zurich and Scheherazade Daneshkhu i
Nestlé  brands  coffee  CEOs 
july 2018 by jerryking
An unusual family approach to investing
May 30, 2018 | FT | John Gapper.

JAB’s acquisition of Pret A Manger resembles private equity but with a long-term twist.

Warren Buffett’s definition of Berkshire Hathaway’s ideal investment holding period as forever. ....Luxembourg-based JAB, owned by four heirs to a German chemical fortune, takes a family approach to investing. It is unusual in that this holding company seeks to retain its portfolio companies for at least a decade. These include Panera Bread, Krispy Kreme and Keurig Green Mountain coffee, which it merged with Dr Pepper Snapple in an $18.7bn deal in January 2018. This week JAB acquired the UK sandwich chain Pret A Manger for £1.5bn, continuing its buying spree of cafés and coffee, mounting a challenge to public companies such as Nestlé.

**These companies are acquired not to be traded but to be invested in and expanded.**

JAB is an innovative combination of ownership and investment in a world that needs challengers to stock market ownership and private equity. It is family controlled, but run by veteran professional executives. When it invests in companies such as Pret A Manger, it deploys not only the Reimann family’s wealth but that of other entrepreneurs and family investors.......Some of the equity for its recent deals, including Panera and Dr Pepper, came from funds raised by Byron Trott, the former Goldman Sachs investment banker best known for being trusted by the banker-averse Mr Buffett. Mr Trott’s BDT banking boutique specialises in advising founders and heirs to corporate fortunes, including the Waltons of Walmart, and the Mars and Pritzker families.

This is investment, but not as most of us know it. By definition, the world’s companies are mostly controlled by founders and their families — only a minority become big enough to be floated on stock markets and need to disclose much of their workings to outsiders. Family fortunes also tend to remain as private as possible: there is little incentive to advertise how much wealth one has inherited......As [families'] fortunes grow in size and sophistication, more of the cash is invested in other companies rather than in shares and bonds. That is where JAB and Mr Trott come in.

Entrepreneurs and their families tend to be fascinated by their own enterprises and bored by managing their wealth. But they want to preserve it, and they often like the idea of investing it in companies similar to their own — industrial and consumer groups that need more capital to expand. It is not only more interesting but a form of self-affirmation for the successful....Being acquired by JAB is appealing. The group turns up, says it will not take part in an auction but offers a good price (it bought Pret for more than its former owner Bridgepoint could get by floating it). It often keeps the existing executives, telling them they have to plough their own money into the company, and invests in long-term growth provided the business is efficiently run.

This is more congenial than heading a public company and contending with a huge variety of shareholders, including short-term and activist investors. It is also less risky than being bought by 3G Capital, the cost-cutting private equity group with which Mr Buffett teamed up to acquire Kraft Heinz. While 3G is expert at eliminating expenses it is less so at encouraging growth.
coffee  dynasties  high_net_worth  holding_periods  investing  investors  JAB  long-term  Nestlé  Pritzker  private_equity  privately_held_companies  Unilever  unusual  Warren_Buffett  family  cafés  Pret_A_Manger  3G_Capital  discretion  entrepreneur  boring  family_business  heirs 
may 2018 by jerryking
Like great coffee, good ideas take time to percolate
Tim Harford FEBRUARY 2, 2018.

why do some obviously good idea take so long to spread?

Even if you don’t much care about London’s coffee scene, this is an important question. William Gibson, science fiction author, observed that the future is already here — it’s just not evenly distributed....Researchers at the OECD have concluded that within most sectors (for example, coal mining or food retail) there is a large and rising gap in productivity between the typical business and the 100 leading companies in the sector. The leading businesses are nearly 15 times more productive per worker, and almost five times more productive even after adjusting for their use of capital such as buildings, computers and machinery......If there were some way to help good ideas to spread more quickly, more people would have good coffee and much else besides....good ideas can be slow to spread, even when they are straightforward to grasp. In his classic textbook, The Diffusion of Innovations, Everett Rogers points out that many inventions have to cross a cultural divide: the person preaching the good idea is often quite different to the person being preached to. Rogers would probably not have been surprised to see that “not invented here” was a barrier to good practice.....good advice can work, but even good advice wears off. And we can all be resistant to new ideas. The status quo is comfortable, especially for the people who get to call the shots.....An extreme example of resistance to change lies behind the quip that “science advances one funeral at a time”, based on an observation from the physicist Max Planck. A team of economists has studied the evidence from data on academic citations, and found that Planck seems to have been right: the premature death of a star scientist opens up his or her field to productive contributions from outsiders in other domains. People can be so slow to change their minds that we literally have to wait for them to die.

There is an analogy in the marketplace: sometimes old businesses have to die before productivity improves, although that can mean desperate hardship for the workers involved...there is evidence that US industry is becoming less dynamic: there are fewer shocks, and companies respond less to them. The OECD research, too, suggests that the productivity laggards tend to be further behind in markets that are over-regulated or otherwise shielded from competition.

All too often, we don’t pick up good ideas willingly. We grasp for them, in desperation, only when we have no choice (for example, when were facing a crisis, man-made or natural).
barriers_to_adoption  books  cultural_divides  coffee  crisis  customer_adoption  desperation  ideas  ideaviruses  inventions  London  not-invented-here  powerlaw  productivity  science_fiction  status_quo  Tim_Harford  unevenly_distributed  virality  William_Gibson 
february 2018 by jerryking
Nestlé aims to bottle appeal of artisan coffee
SEPTEMBER 29, 2017 | FT| Arash Massoudi, Tim Bradshaw, Scheherazade Daneshkhu and Ralph Atkins
artisan_hobbies_&_crafts  Nestlé  coffee  millennials  cafés  Big_Food  niches 
november 2017 by jerryking
Inside the brutal transformation of Tim Hortons - The Globe and Mail
MARINA STRAUSS
THE GLOBE AND MAIL
LAST UPDATED: WEDNESDAY, FEB. 22, 2017

Since taking over the iconic chain in 2014, its new Brazilian owner, 3G Capital, has purged head office, slashed costs and squeezed suppliers. Shareholders are happy, but is 3G tearing the heart out of Timmy’s?.....3G is regarded as ultra-disciplined owners who are sticking to the same playbook they have followed at companies including Burger King, Anheuser-Busch, Kraft Foods and Heinz: massive layoffs, replacing legacy managers with hungry youngsters and, above all, a fanatical devotion to financial benchmarks and cost-cutting. (It remains to be seen whether this will also be the approach for RBI’s latest acquisition, Popeyes Louisiana Kitchen.)....Will 3G's analytics-driven overhaul of Tim Hortons—using the same template the private equity firm’s founders have deployed at railroads, brewers and food makers—succeed in the long run, or is it in danger of cutting the heart out of a Canadian icon? ......Suppliers are also feeling the squeeze. From the get-go, RBI made it clear it would be reviewing vendor relationships. And the company pushed for better terms, including extensions on bill payments to as much as 120 days from 30 days or less. Maple Leaf Foods, a major partner that supplied meat to Tim Hortons, declined to accept the new terms, and walked away....
Former employees also say RBI has cut back on product research and development spending at Tim Hortons, offloading some of that work to suppliers. That’s not uncommon in the fast-food world, but it can be risky. “Suppliers can do a great job with innovating and R&D, but you’re limited to what the supplier is trying to develop,” ......3G has never encountered a brand quite like Tim Hortons. It isn’t just another coffee company. It is a Canadian destination, an integral part of many Canadians’ day and a brand that defines us, to some degree, around the world.......“The risk, in looking at Tim Hortons through the lens of efficiency alone, is to miss the greatest value of the asset, and that is the Tim’s brand and its deep connection to the fabric of the country,” says Joe Jackman, founder of strategic retail consultant Jackman Reinvents, whose clients have included Old Navy, Hertz, Rexall and FreshCo. “You can’t cost-cut your way to retail nirvana.”
3G_Capital  brands  Canadiana  coffee  community_support  cost-cutting  cultural_touchpoints  data_driven  downsizing  efficiencies  fast-food  franchising  goodwill  head_offices  iconic  JWT  layoffs  Maple_Leaf_Foods  Marina_Strauss  organizational_culture  playbooks  private_equity  R&D  RBI  restructurings  staying_hungry  supply_chains  supply_chain_squeeze  Tim_Hortons  transformational  walking_away 
february 2017 by jerryking
Starbucks can stomach Kraft $2.8-billion coffee jolt - The Globe and Mail
Kevin Allison
Starbucks can stomach Kraft $2.8-billion coffee jolt Add to ...
Subscribers Only

CHICAGO — Reuters Breakingviews

Published Wednesday, Nov. 13 2013,
Starbucks  Kraft  Pepsi  coffee  distribution_channels  disputes  grocery  supermarkets 
november 2013 by jerryking
Toronto café and coffee-shop boom about to go bust?
Feb 22, 2012 | The Grid |BY: David Sax
Since 2008, an estimated 100 new independent cafés have opened in downtown Toronto, offering premium espressos at premium prices—usually within bean-throwing distance of five or six other coffee shops. How the hell do they all stay in business?
coffee  Toronto  profitability  high-quality  Independents  cafés  David_Sax  bubbles 
may 2013 by jerryking
Are checkout counters headed for extinction? - The Globe and Mail
BRYAN BORZYKOWSKI

Special to The Globe and Mail

Published Friday, Feb. 22 2013,
Square  coffee  retailers  mobile_payments 
february 2013 by jerryking
Chain co-founder journeys from flophouse to coffee house
October 16, 1998 | Globe & Mail | by Margot Gibb-Clark.

Frank O'Dea, co-founder of the coffee house chain Second Cup Ltd.
coffee  inspiration  bouncing_back  fast-food  restaurants  franchising  entrepreneur  alcoholism 
december 2012 by jerryking
A Warm Welcome
Holiday 2003 | Elm Street | Julia Aitken.

Buttermilk Biscuits with Smoked Salmon
Creamy Mocha Coffee
Braised Lamb & Lentils
Herbed Salad with Balsamic Onions
Spiced Panna Cotta with Plum Compote
recipes  lamb  coffee  salads  desserts  salmon  cured_and_smoked 
october 2012 by jerryking
Coffee, triple cream (cheese, that is) - The Globe and Mail
Mar. 13, 2012 | Globe and Mail | Sue Riedl.

The cheeses we sampled included a chèvre; a triple-cream (Délice de Bourgogne); a young, fruity Gouda; and a complex, 18-month Comté. I also threw in the buttery Bleu D’Auvergne.

The coffees were made from single-origin beans and served black, allowing their flavours to shine, and leaving cheese to assume the dairy role. We stuck with coffee made in an AeroPress (similar to a French press) that brought out clean, crisp and nuanced flavours without being overpowering.
Sue_Riedl  cheese  coffee 
april 2012 by jerryking
When Latte Lost Its Luster
MARCH 29, 2011 | WSJ | By ROGER LOWENSTEIN. Oh, no—the aroma
from Starbucks's profitable breakfast sandwiches was masking the java's
ambrosial bouquet....Onward

By Howard Schultz
Rodale, 350 pages, $25.99
Roger_Lowenstein  Howard_Schultz  Starbucks  coffee  book_reviews 
april 2011 by jerryking
FT.com / Columnists / Lunch with the FT - Lunch with the FT: Howard Schultz
By John Gapper

Published: March 18 2011


Things are looking up again as Starbucks marks its 40th anniversary this
month and he has a book coming out about his return to the company and
the rebound, named with typical ebullience Onward: How Starbucks Fought
for Its Life without Losing Its Soul.
Howard_Schultz  Starbucks  profile  books  coffee 
march 2011 by jerryking
Coffee Break: Starbucks CEO Talks Prices, McDonald's - WSJ.com
MARCH 7, 2011 By JULIE JARGON.Coffee Talk: Starbucks Chief on Prices, McDonald's Rivalry
Howard_Schultz  Starbucks  coffee  MacDonald's  turnarounds  CEOs 
march 2011 by jerryking
Method not as important as the message
February 28, 2011 | globeadvisor.com | VIRGINIA GALT
Tweets and status updates offer a real connect with customers, as long
as you know your audience. "When you talk about what you need to grab
media attention, you need to have a really great story, you need to have
a story that engages people on an emotional level," said Geoff Rowan,
partner and managing director of Ketchum Public Relations Canada. The
communications method - whether it's old media or new media - doesn't
matter nearly as much as the message.
small_business  marketing  social_media  coffee  public_relations  Virginia_Galt  storytelling  know_your_audience 
march 2011 by jerryking
The 'idea guy' behind Tim Hortons saw others get rich while he went bankrupt - The Globe and Mail
Danny Gallagher

Special to The Globe and Mail Last updated on Thursday, Aug. 13, 2009 11:46AM EDT
entrepreneur  coffee  obituaries 
august 2009 by jerryking
Techie Grabs Wheels of Change - WSJ.com
JUNE 9, 2009 | Wall Street Journal | By DENNIS NISHI.
entrepreneur  Second_Acts  cycling  coffee  retailers 
june 2009 by jerryking
reportonbusiness.com: Set yourself apart from the pack
February 18, 2009, Special to The Globe and Mail, CHARLES
MANDEL. The article profiles Toronto-based entrepreneur Andy Wilkin, who
opens a coffee roasting company that will supply beans to restaurants
and cafes. The goal: bringing premium coffee to his customers. Mr.
Wilkin's strategic differences originate in large part from Tedde van
Gelderen, the president of Toronto-based Akendi, which helps launch
businesses and fine-tunes their products and services.

Akendi assisted Mr. Wilkin with his brand identity, logo, signage and
website, and also helped the coffee roaster understand what he would
need to do to differentiate his business.
entrepreneurship  entrepreneur  coffee  high-end  Akendi  start_ups  product_launches  branding  differentiation  brand_identity 
february 2009 by jerryking
Networking Together - WSJ.com
July 22, 2008 column by Kelly K. Spors on the increasing use of
social networking sites by small businesses to network with customers
and with other businesses to collectively raise the profile of a
particular geographic area or industry.
social_networking  small_business  Web_2.0  community  ning  coffee  Kelly_K._Spors  BIAs 
january 2009 by jerryking

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