Competition is hotting up in the coffee industry

IN 1934, in the Italian city of Trieste, Francesco Illy came up with a way to package coffee in pressurised containers that kept it fresh. In 1935 he invented the first automatic coffee machine. In 1974 Illy, the company he founded, became the first to sell a kind of coffee pod—single servings of ground, tamped beans that produced espresso anywhere, any time.

Aluminium capsules, the successors of those pods, have become a fiercely contested battleground for the world’s biggest coffee companies, notably Nestlé, a Swiss food-and-drink giant, and JAB Holdings, an investment firm intent on building a coffee empire. On October 8th, in the latest sign that the coffee wars are hotting up, Illy signed a licensing deal for capsules with JAB, blending Illy’s coffee and cachet with JAB’s commercial clout.

Two decades ago as many as 20 substantial companies competed in the retail-coffee trade, says Jeffrey Young of Allegra World Coffee Portal, a consulting firm. In the past few...

via Business Feeds

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