Q&A with Evangelos Touras, CMO at illycaffè
Q&A with Evangelos Touras, CMO at illycaffè
Quality always mattered, but now, after the pandemic, some consumers are more demanding of it. Being stuck for many years at home, people started to re-evaluate themselves and started elevating their experience at home. We saw a boom with many companies serving food at home with an expanded quality. Now, as the world goes back to “normal,” these elevated expectations of quality are kept. In the past, coffee in the office generally was perceived as low quality, and that was accepted. Now, when people go back to their office, they don’t want to compromise; they have become used to their higher-quality coffee from home.
People are no longer satisfied; they want to go to places that mean something to them, that grants an experience. They want to come back thinking, “that was cool! I learned from and interacted with something nice.” The whole dining moment has been shifting to become an experience. It’s not enough to serve great quality coffee; people want more. For example, people enjoy learning where the food is coming from, from cultivation to societies, and how they can be a part of this chain and this community.
In the past, sustainability meant tradeoffs: lower quality or higher prices. There was a barrier for companies to be sustainable. Now, it’s becoming a pre-requisite and soon will be a Point of Parity.
Absolutely, in fact there are three relevant trends we’re observing:
“Mood boost”, or foods allowing people to get an extra boost; into other arenas – be it in energy or beauty. We have seen the rise of foods containing proteins, or even collagen as additions to their food and beverages.
“Healthier” alternatives, such as alternatives to dairy products, are just one example. A Barista now asks 10 questions for a simple coffee with milk (soy, almond, lac-free, whole, skimmed milk, etc.)
“Interaction” between categories and playing/mixing with ingredients, like alcohol and coffee.
However, in parallel to the three trends above, we also see people wanting to “go back to the roots,” to go back to how things were originally made (we see a growth of Mocha and filtered coffee); and people are trying to do that more experientially. They’re experimenting with the process.
These trends are manufacturer-led, but there are many forces creating trends (manufacturers, key stakeholders, influencers, and opinion leaders). We see, for example, many trends led by chef-influencers creating and sharing recipes.
My gut tells me that food is constantly influenced by other arenas and vice versa.
Behavioral segmentation is becoming more relevant than demographic segmentation. It’s key to understand the “Jobs To Be Done”, and how to satisfy them.
There are people drinking coffee made of mushrooms because they believe it’s going to help them thrive, yet, even if doesn’t taste great. It’s key for companies to be able to comprehend the real Job To Be Done in consumers’ eyes. Only in this way will we be able to innovate and build relevance from our consumers’ perspectives.
Food trends are constantly influenced by other arenas and vice versa.
If we could take our consumer to a coffee plantation, they’d be extremely happy. They want to know about the origins of their serve.
With the help of tech, you can do a lot to deliver against some key trends: 1) consumers want to learn more and 2) there’s a spectrum of experiences that can take consumers inside the company.
It’s not necessarily new, but they value getting into the company and understanding how the product is made. Our consumers are always inspired and want to learn more when they visit our Trieste plant.
It is important to acknowledge that there are both common trends and variations across different continents and markets.
We employ consumer segmentation to identify the one or two key parameters that define different groups of consumers. Usually, biological factors and the desired level of experience can be differentiating factors to drive people decisions.
In food, I believe a maximum of two or three parameters can create a common global consumer segmentation. However, the magnitude of these attributes may differ across markets. For instance, Italians prefer to drink short coffee, sometimes with some sugar, while Americans add more to their coffee. These differences arise due to historical and cultural influences. While it is not possible to change people’s history or biology, understanding their behavior and its common roots can help in designing products that have a global appeal while respecting local differences. It is crucial to have a global view and understanding of taste similarities, but to truly succeed, one must also respect the local differences that play a significant role.
In my home country, Greece, 90% of consumption was instant cold coffee. Now 60-70% is espresso cold coffee. A long, cold coffee serving was the habit because it lasts longer, but now, we this habit has changed in favor of an espresso based beverage.
There are two major challenges:
Anything related to supply chain is a huge challenge. In the last two or three years, supply chain networks have been hugely challenged and have changed socio-economic-political aspects.
Technological transformation (other than digital): We are being massively disrupted by tech advances—not only marketing or media advances, but increasingly, technological advancements will change the way we innovate, communicate, make products, and source. It’s an interesting challenge we’ll all have to face.
illycaffè celebrates 90 years this year, and nowadays, it’s more important than ever to be close to consumers or customers. If I look 20 or 30 years back, the level of offerings in terms of brands, products, stores, catering…there used to only be a few. If you had a great product and were doing a decent job in marketing, you were there, and you had one or two different mediums in channel communication. In the last 20 years, this has massively changed. Barriers to entry are zero; now, anyone can make a coffee.
We are living in a beautiful and challenging moment for marketing:
The barrier to entry is small.
It’s hard to truly differentiate: What is “high quality?” Nobody can answer in one standard way, and many brands are currently claiming it.
I’m trying to understand and redefine what quality is. The requirements have been blurred; specialty coffee, origins, sustainable packaging. What is quality?”
We need to develop a new narrative for consumers and help them understand that we are the right brand to go for when they’re looking at quality and sustainability as one.
Some challenges are clear: consumers now want quality and sustainability; not either/or. They do not accept either inferior quality or sustainability for the sake of the other. We need to deliver both.
Some others are question marks: How will tech play a role in our business model? We can do so much more in that aspect—from sourcing, to delivering products to consumers. I’m curious to see how this will blend into our business.