Mercoledì, 26 Settembre 2018

Barilla launching major push into emerging markets


(By Gordon Sorlini)
Parma, May 20 - Barilla, one if Italy's largest
and best-known food companies, is looking to feed a lot more
mouths over the next seven years.
During a presentation in Milan on May 16, the company's
management outlined plans to double sales, excluding revenues of
Barilla's German bakery unit Lieken (which is being sold), to
over 6.0 billion euros between now and 2020.
In order to reach its goals, Barilla is relying on a major
push into emerging markets, new product launches and continued
investment in research and development and marketing and
Barilla - founded in Parma, Italy by Pietro Barilla in 1877
and still controlled by the founding family - is known the world
over for its pasta, sauces and Mulino Bianco snacks, among other
The company has 42 production facilities globally turning
out some 2.5 million tons of food products each year. In
addition to being the leading pasta player in Italy, Barilla
already has a strong international presence, in part through its
ownership of brands like Harrys (France and Russia), Golden
Toast (Germany) and Yemina and Vesta (Mexico).
Near its hometown, Barilla runs the world's largest pasta
factory, which can produce up to some 1,000 tons of pasta per
The company is placing a big bet on rising demand for its
products in markets where consumers are not yet big eaters of
pasta. During the presentation, Chief Executive Claudio Colzani
- who joined the company recently after a long tenure in
consumer goods giant Unilever - said that right now the firm is
very dependent on Europe: 84% of total sales come from the
Italy, where overall pasta sales have been contracting
since 2009 and where Barilla is the market leader with a 35%
share, makes up 40% of the company's revenues, which last year
totaled just shy of 4.0 billion euros (including sales from
Despite a recession in its largest market and rising raw
materials costs, sales grew by 2 percent. Barilla President
Guido Barilla - who also spoke at the presentation - said he was
"satisfied" with the result. Net profits dropped 21%, to 60
million euros, as the company kept prices to consumers steady in
the face of rising raw materials costs and as it kept up
investments aimed at reducing its environmental impact, Colzani
Referring to the company's international expansion, the CEO
said that "between now and 2020 there will be one billion new
consumers in the world," in particular in areas like South
America and Asia. Getting into these new consumers' shopping
carts is one of the key drivers of Barilla's growth strategy.
Currently, these markets represent only 4% of group sales, the
chief executive said.
In turn, international growth is also meant to offset some
of the firms' dependence on its home market: the strategy to
2020 sees Italy's share of total group revenues dropping to
between 25-30%.
During the presentation, Colzani pointed to Brazil as a
case study in how its new strategy is playing out. Sales in the
Latin American country, which reached 18 million euros in 2012,
are expected to reach up to 100 million euros by 2016 and over
200 million euros by 2020. A key driver of this growth will come
from another part of Barilla's strategy: "customization", or
developing products for local tastes.
"Trying to sell the same sauce in China as we do in Parma
clearly would present some difficulties," Colzani said.
Looking again at Brazil, the company has launched a new
range of products - including pastas, pasta sauces and even new
packaging formats - targeting local consumers.
Investments in research and development and quality control
are seen as other drivers of the company's strategy. Colzani
said the firm spends 29 million euros every year carrying out up
to 250,000 quality tests on the grain it purchases for its
products. Not surprising for a firm whose mantras include "good
for you, good for the planet," and whose management strongly
believes in the need to limit industry's environmental impact
while making products that are tasty and healthy.

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