so I know I'm a little bit late to the
game but I do want to talk a little bit
about the whole deal between JB and Ely
in Italy which was announced not too
long ago really and it's kind of an
interesting deal right because JB did
not acquire Lilly as they have done
typically in the past instead they've
kind of done a licensing deal to take
ILI's coffee and put it in Nespresso
pods and take those to market now this
kind of Rex my head a little bit in a
few different ways firstly JB ultimately
owns Keurig which is a totally different
system this deal does not cover Lille
going into Keurig pods that actually I
think is a thing that already happens
but that's not being covered in this
deal this is solely for specifically
aluminium Nespresso capsules which is
kind of interesting
now obviously Nespresso is the premium
coffee capsule especially for espresso
globally if they have set the standard
everyone is chasing that particular
system because there's so many machines
installed in people's houses all around
the world the question that I have is
kind of interesting to me is that why
did any partner with someone to do this
someone would happily pack Alize you
know coffee into capsules for them
people with good machines good
technology good grinders able to deliver
a high quality pod
and it's not like ILI's against pods
they've been doing pods I think for the
longest possible timer you know they
have the e se system the little paper
wrapped tamped tight little pucks of
coffee they've done them in other
systems I think by the the various kind
of random pod systems in in Italy that
are kind of popular but why why didn't
he do it themselves and I guess you know
in these growth it seems his sort of
flatlined which is interesting it's
still incredible they turn over I think
460 470 million euros a year they're a
big big company but there hasn't really
been much growth in the last four or
five years but then they kind of
flatlined this deal I guess is kind of
easy money I don't know the size of the
deal but they don't really have to work
particularly hard at me saying they
don't make much margin but but it's
still kind of weird now JB it kind of
makes more sense Italy is a powerful
brand they've worked hard to build that
brand it is one of the strongest most
recognizable brands in the world of
coffee
especially espresso coffee there you
know however you feel about le they are
undeniably premium in an enormous amount
of people's minds right now je B deeds
brands right like brands are incredibly
important because that they're the few
things that will stop you just going
with the cheapest option online right
like Amazon is experimenting with a
whole host of different products that
they're doing themselves where they're
kind of iterating brands as they go
right like they've got tons of data on
how people search will click or don't
click
they're able to kind of customize their
various brands around consumer data
which is really kind of fascinating I
would argue that it's going to take you
to a place where you give people what
they want but you won't give people what
they don't know that they want their
kind of evolutionary leap of brand or
quality weren't really happened you'll
just have a really good iterative
iterative brand but but nonetheless you
know if you look at Amazon and it does I
think in many ways tie all the way back
to ours and everyone's freaking out
about Amazon if you search for coffee
capsules on Amazon how do you get that
sale right and brand remains really the
only convincing answer which is you know
you need to trust the product you're
buying Amazon increasingly has a trust
issue you know there's a lot of
suspicious low quality and fake reviews
all sorts of sketchy stuff happening on
Imus and especially in electronics but I
don't see that being contained there for
particularly long so amazon has a trust
issue and so you know brands and
distribution really seemed to be the
pathway is being chased here now again
illy old company great wholesale
distribution network you know it's in a
lot of supermarkets you don't do it has
a reasonable retail distribution network
as well it's interesting that this deal
is really about distribution again right
like explicitly so it's about J a B or J
de which is Jacobs Darragh wits those
are the ones that are not going to do
the distribution network for them and
that's kind of interesting that Elise
E's JB is just having better reach or
more effective reach for this particular
product to be honest there's so much
about this deal I just don't necessarily
understand and I don't think unless
you're in the room you really would
understand I see the benefits to both
parties but I'm just kind of interested
that this this was the solution that
they both chose certainly if Italy to
choose this solution that's kind of
interesting to me
I'll be honest sitting down with Andrea
Ellie for an interview is is kind of
high on my wish list so I would just
love to understand what they're thinking
around that sort of stuff a little bit
better and maybe for them it allows them
to do additional business you know more
throughput for their you know roasting
manufacturing without really having to
take their eyes off that core business
right it allows them to remain extremely
focused as a company or what they're
doing and maybe for them that's the most
important thing nonetheless super
interesting time and coffee is always
lots going on lots to talk about as
always I'd love your feedback and your
thoughts and your comments down below
thank you so much for watching and I
hope you have a great day