illycaffè CEO On Climate Change, Sustainability And The Best Way To Drink Coffee

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Andrea Illy, chairman and CEO of illycaffè. (Luca Bruno/AP)
Andrea Illy, chairman and CEO of illycaffè. (Luca Bruno/AP)

Before Starbucks and Keurig, there was illycaffè. The family business began back in 1933 when Francesco Illy developed an espresso machine. Today, the company is run by his grandson, Andrea Illy, and spans the globe.

Here & Now's Jeremy Hobson speaks with Andrea Illy (@andrea_illy), chairman of illycaffè, about the threats the coffee industry faces from climate change, the environmental sustainability of coffee pods, his thoughts on fair trade and the “right” way to drink coffee.

Interview Highlights

On how climate change will affect coffee production

Coffee is definitely affected by climate change in two ways — particularly the arabica ones, which is the best premium quality. Temperature might be too high for the plantations and this is one of the problems, and then water security. Droughts, or excessive rain, which favors the proliferation of some diseases that kill the plants. So this is something we have to work in advance because it might be up to 50 percent of the land, which is currently suitable for our arabica production, not being suitable any longer from now to 2050.

On adapting to climate change

From time to time, I see an acceleration of climatic adversity affecting quality and production. I'm extremely confident that there's enough science and technology around to fix the problem. But we'd need to adapt to the agronomical practices. We'd need to develop new cultivars which are resistant to the effects of climate change, and we will also need to migrate the plantations. All these will take a lot of time. We have already kind of a benchmark of something which has been extremely well done in Colombia. But Colombia did work over the last 25 years in order to adapt to climate change — that was very successful. And they're now reaching all time record in production with their new cultivar, but something similar needs to happen in all the other 50 countries producing coffee.

On the changes in demand of coffee

Coffee is not considered a commodity any longer, thanks to the gourmet coffee revolution over the last two decades. It became extremely popular. Coffee was able to develop the three virtues, which are pleasure, health and sustainability. There's definitely more quality and pleasure in the cups, thanks to preparation technologies, better places, more varieties and so on. And consumers are definitely more engaged. Health is now proven that coffee is good for health. There are several scientific studies confirming that coffee makes you live better and longer to such an extent even recently, the World Health Organization decided to reclassify coffee as non-carcinogenic, which is a great success. And last but not least, the last feature — sustainability. Sustainability did improve... So thanks to these positiveness, coffee is gaining ground, acceptance also from emerging countries, like [in] Asia. Asia has become the second largest region after Europe for total coffee consumption, bigger than the United States.

On how different cultures consume coffee

When coffee used to be just a commodity and the quality was just so-so, people used to drink coffee for the caffeine kick in the morning. Today, it's different. Coffee became an experiential product. People are engaged because they love the flavor, they love the ritual of preparation, and so it's becoming a similar experience to wine. This is why consumption is accelerating...

"Coffee became an experiential product. People are engaged because they love the flavor, they love the ritual of preparation, and so it's becoming a similar experience to wine."

Andrea Illy

On the sustainability of the popular coffee pods

Pods are part of the equation of pleasure because they deliver such an incredible amount of consistency in the preparation, consistency quality in the cup and convenience in the way to prepare. ... But why focus on the capsule, which is so dramatic in terms of consumer benefit, rather than focusing on the fact that the consumer drinks coffee in a paper cup, while you could drink — like we do in Europe, in Italy — from a china cup that could be washed and used again.

On fair trade coffee

I believe that the fair trade coffee is a very good step towards sustainability, but it's only the first step. As a matter of facts, fair trade coffee is not sustainable per se, because you kind of distort the value equation by paying more for the product which is normally valued less. So pricing is altering in such a way and consumers find themselves paying more just for the sake of feeling good. This is philanthropy. If you want to be a philanthropist, you give money to NGOs, which invest money in the cause you want to support. You don't need to buy a coffee bag in order to do so. On the opposite side, if you want to be sustainable, then you have to pay more for better quality, and the better quality meets premium price paid by consumers. This is our philosophy and this is why we direct source since 1991, working hand in hand with coffee growers, selecting only those who are really obsessed with quality. The second step is training them through the University of Coffee, which trains thousands of growers every year. And if their efforts result in quality, then produces the expected results, which is extremely high-quality coffee, then we buy them directly and we pay a premium price.

"If you want to be a philanthropist, you give money to NGOs, which invest money in the cause you want to support. You don't need to buy a coffee bag in order to do so."

Andrea Illy

On Italy's economy

Italy's coming back gradually, also thanks to a very good work by this government led by Prime Minister Renzi. However, Italy has structural problems. We lost competitiveness over the past decades and we don't grow enough — we grow around less than 1 percent now. We have too much public debt and too much unemployment. So Italy desperately needs some reform in order to be able to quickly accelerate investments and also increase internal consumption. And these reforms are not facilitated by the current constitution of the country, which is over-democratic, because this is a constitution that was designed in order to prevent fusses from happening. There's too much democracy and a law needs to pass three, four different times, or as many times as needed in order to get a final approval. And also the European Union, which is basically a bureaucratic institution doesn't facilitate these reform process.

This segment aired on November 3, 2016.


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