First part (Italiano qui)— Tapping beer, soda or water: few businesses are so non-technological and traditional. Nonetheless, from Cattolica, on the Italian Adriatic coast, Celli Group won over PepsiCo and Coca Cola, Heineken and Carlsberg and other large beverage companies to their IntelliDraft platform.

Celli’s evolved from coolers and taps to data analysis, real-time feedback from points of sale and disruptive ideas for a more sustainable future. Over breakfast at LiveWorx in Boston, Paolo Cavalsassi, Group Commercial Director of the Celli Group, talked to me about the company’s exciting journey.

 

Celli was family-run from 1974 until 2013, when, by selling around 70% of the outstanding shares, the family paved the way for a vision of material transformation of the tapping business, a quintessential manufacturing industry that had substantially not changed over the last 50 years. One of the first steps was a new president and a new team of managers, some arriving from the automotive or the IT industry, like Mr. Cavalsassi, who brought the experience of two startups and 12 years at Microsoft. Further steps were vertical integration, to widen Celli’s offer and geographical coverage, and acquisitions of very relevant British beer companies.

“To define our vision, we asked ourselves: how do we morph a quintessential manufacturing company into a 360-degree service company, with the medium-term goal that our customers, typically the large beverage companies, ask us to manage the process end-to-end—dispensing equipment, service, maintenance, etc.—with just one initial input: where, how and with which features they want their drink to be dispensed.”

 

Right, how do you do that?

Having an Internet of Things (IoT) platform was instrumental from the very beginning. It was clear that to transform our business into a 360-degree service provider, we needed to draw on the maximum efficiency and effectiveness from a ‘system of systems‘ managed by a solid platform that would allow us to monitor the equipment and provide efficiency, service and maintenance.

We transformed our business organization: to the manufacturing part we added a service division dedicated to supporting customers in their daily operations. We took off in Italy in January 2016. Now we do business in eighteen countries worldwide.

Since the challenge was to provide assistance to customers that can have in an area tens of thousands of tapping equipment units, which are in turn instrumental to the business of tens of thousands of points of sale (POS), and we wanted to expand our services abroad, we knew we first needed to set up a platform.

We positioned ourselves as a systems integrator with the added benefit of the skills of our newly created Digital Solutions internal division. Then we selected our strategic partners to set up and expand the platform.

Over the last 24-28 months we brought to the market this very practical and material platform— a great reward for an evangelist of the digital transformation arriving from the IT world like me. Now we are on an acceleration path.

Was it difficult to integrate your IntelliDraft platform with the platforms of your customers and suppliers?

We had the advantage of having just started and of having a clear idea about the need for a very scalable and flexible platform that would allow the integration with our customers’ information systems.

Having big customers in mind, we chose the solutions to would cater to them from the very beginning. Those where: PTC‘s IoT platform ThingWorx, the Azure cloud, Microsoft’s Power BI systems integration and Salesforce services—all secure platforms capable of providing great flexibility and support worldwide.

It is not very common for a small manufacturing company to have its service center on the Azure cloud, but when you have a plan in mind that you want to implement in a short period of time, you need to substantially move to the edge of the cloud.

We then speeded our plan further with the adoption of Vuforia for the augmented reality (AR) service. Almost three years ago we presented the first tutorial solutions using augmented reality with Microsoft’s HoloLens.

And the service part?

Creating an internal company’s technical service force was not part of our vision. We planned rather to leverage on the network of dealers and technicians we can resort to across the world, wherever we already have a presence, and, if needed, bring new technical centers on board.

The Celli Group is now thus a reference point for our customers and for a constellation of technical centers.

Our customer’s IT systems, that is the call centers that open the tickets, communicate directly with our system, and we dispatch the appropriate technical teams available for that location.

Meeting one of our client’s request, this allowed us, for example, to launch this business in Italy in about three months and, recently, also in Mexico and in Chile in about three weeks. That is because we already have the skills, knowledge and tools to do remote support and training.

Our technicians in San Giovanni in Marignano, near Cattolica, provide remote training with the HoloLens and AR to the technicians managing the equipment in Chile. This does not mean that we do not go on location at all, but that we are much more efficient and can short consistently time-to-market and service times.

We have been a case in the financial world over the last two-three years, not just owing to the pace by which we grew our revenues, but because we kick-started a very strong positioning and overhaul of the the reference market.

To elaborate on your reference market, how did you have the the physical machinery become part of the platform?

By making smart an object that is just a simple refrigeration circuit—a water tank, an ice counter, coils and a few other components. The big challenge has been—and still is—to engage our customers and explain why a $1,200 tapping equipment suddenly was costing $1,700, an increase that our market was not looking for.

With PTC defined in advance the need for an IoT platform that would be always on and connected, and allow simultaneous access to thousands of thousands of systems—consequently, we chose ThingWorx. we designed internally the technology of the systems. We assigned the matrixes and control units, etc., to Alma Automotive, a very important company. We commissioned the electronic components and the sensors. For the M2M network, we partnered with Vodafone.

The IntelliDraft platform so monitors the fundamental characteristics of a plant in real time, and allows preventive and predictive maintenance.

The next phase began with our first feedback loop: now that we had the data on all operations and service events on the machines, we could relay back all that information to our engineering team for them to modify the design of the systems, and make them more efficient, easier to maintain and to serve and possibly more sustainable. When you become aware that unscrewing 10 screws is taking 20 minutes of the service technician’s time, you can look for a design solution, like a component that doesn’t require them. This was the first step.

Secondly, drawing on the data, we began to proactively return to our customers valuable and useful information for their decision-making, helping them understand that smart systems imply higher costs but also new benefits.

We can, for example, isolate a specific section of a geographical area where the customer has given number of POSs with a given number of taps and brands. In addition to the data from the machines, we saw fit to capture information from other sources, such as Trip Advisor, but also social media like Instagram, Pinterest, etc. We were thus able to render to the customer a complete scenario containing timely, clustered and digested information.

For example, we now know, because we “nose” it on social media, that a given area is particularly popular at happy hour, and that the brands sold in those POSs are not the ones that our customer is distributing. He might be distributing there, e.g., drinks that do not appeal to that particular segment of customers or, in the case of the after dinner, beers that are too heavy. Our customer can so change the brands he distributes to those POSs, but noted only: he can now measure the impact in the increased sales, say 15% in 2-3 weeks. He does not need to wait six months or a year as before. We are thus providing our client with a stimulus, a new starting point for his business.

How do big customers use the data you provide to them?

When you have smart systems, it’s the data that leads you. In April last year in Las Vegas—I can say this now because it’s public—PepsiCo launched the Hydration Station*, a flavored water dispensing equipment of our making.

It was an interesting challenge. We had just a very few days to put together an offer and a proposal, and our competitors were five important American companies in our industry that are already work with PepsiCo. So we drew on what we call the Celli Foundations, that is, our seven most highly developed areas of expertise to include ideas from each one. We put together a proposal and took off.

We presented our idea showing a digital twin of the system. In other words, they were virtually seeing the final dispensing equipment. With virtual reality they saw how the machine worked and had all of their questions answered. Our group included our partners, PTC for the IoT platform and the digital twin, Microsoft for the cloud, etc., to emphasize the concept that we were not presenting something that would come about in the future, but a product that was already there, and that around that table they had all the skills that were needed have the product working readily.”

They chose Celli despite the geography and the fact that we are a European company because, they told us, we went there with a cohesive team, a constellation of exceptional partners, very clear ideas and we presented not just their idea realized, but also other ideas they had not thought about.

It was fun. The availability and the possibility of using the data led us to create new and different systems: we made our products smart. This is the innovator’s paradigm: meeting a market need or trying to invent something from scratch. We did not invent something totally different, but we anticipated the needs of the market.

*PepsiCo, Inc.’s (PEP) Hydration Station is a “hydration platform” built to reflect how people drink water today, with a rising demand for customizable, healthier options while developing ways to deliver beverages without single-use plastic bottles. The drink dispenser recognizes via smartphone app one’s preferences, such as flavors and favorite carbonation level. The app, in addition to monitoring hydration, shows how the user many plastic bottles he has spared the environment. It is part of the PepsiCo Beyond the Bottle initiative.