JAB and Italy's 'illycaffee' collaborate to produce coffee pods

Italian coffee maker illycaffee has agreed on a partnership with Jacobs Douwe Egberts, a unit of Luxembourg-based conglomerate JAB Holding, to produce Illy-branded coffee pods.

The agreement comes as competition intensifies to capture a growing market for drinkers looking for quality espresso.

"illycaffe has struck a licensing deal with JAB's JDE under which JDE will sell aluminium capsules containing coffee produced by illycaffe," illycaffee CEO Massimiliano Pogliani said an event in Milan on Monday.