Paolo Barilla: rethinking a traditional family business



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One sunny morning in Parma, Marta Grandi stands in Piazza Garibaldi, in the center of the city, clinging to a banner on which is written "Change Food, Save the Planet". The 16-year-olds group together about fifty teenagers for most of the school age.

According to Ms. Grandi, they decided not to go to school that day, to participate in FridaysForFuture, the global climate protest movement launched by Swedish activist Greta Thunberg. "Business destroys our future," she says.

The recent noisy scene, located about a 10-minute walk from Barilla's honey-colored piazzas, the largest pasta maker in the world, recalls the immediate challenge Paolo Barilla faces, as well as his siblings, Guido and Luca, who together manage the fourth generation.

"We recently launched pasta made from red lentils," says Barilla, 58, who lives in one of the many Barilla offices scattered throughout the northern Italian city.

It offers a half finger-length, vegan and gluten-free streaked penne tube, but otherwise identical to the traditional type of durum wheat, as a microcosm of the strengths of durability, quality of food and uprooting lifestyle change. Barilla's business.

"The pasta looks like the past 144 years, but what's going on behind it is quite different," says the co-chair business man with his 59-year-old brother Luca. The eldest sibling, Guido, 61, is president but the three run the business on an equal footing.

The transition of the family group founded in 1877 was a significant change, he admits.

Barilla produces 120 pasta shapes and sizes as well as sauces, biscuits, breads, crackers and cakes. Its turnover reached 3.4 billion euros in 2018, up 3% from 2017. Italy accounts for one third of the turnover and the United States United is his second market.

In terms of sustainability, Barilla and his brothers created the Barilla Center for Food and Nutrition ten years ago. It marries the Mediterranean diet – consisting of many vegetables, pasta and rice and little meat – both for you and for the planet. Mr Barilla says that this was born from a redesign of the family business.

The brothers decided to make the society more international. This led them to take a closer look at how they produced food: first, the nutritional impact and, later, the environmental impact.

According to Mr. Barilla, racing car racing driver of Formula 1 before joining the family business, there was "some sense of new discovery" in the direction of the company.

"We had industrial production lines and we wondered: how are these products made and what impact do they have on people?", He said.

Since 2010, Barilla has modified 420 of its recipes by removing palm oil from all its products and reducing the use of sugar, salt and saturated fats.

Some 5,000 farms participated in a plan to produce sustainable wheat, paying a premium to farmers who use some land to grow wildflowers to attract bees and rotate their crops.

But there was also a cultural aspect to moving from a business model based on the habits of the traditional family. That's what they learned publicly and painfully. In September 2013, Guido Barilla stated in an interview on Italian radio that the company's fundamental value of serving the "sacral family" meant that it would not "advertise with a homobadual family". Comments fired and #BoycottBarilla appeared on social media. Next year's sales were not affected, but in 2014, Barilla lost 21 positions in the Reputation Institute's annual ranking of companies, a widely-understood indicator predicting a future drop in sales.

Mr. Barilla, who owns 85% of the capital with his brothers, says that the family has learned a number of lessons. "We have learned that your provincialism and your history can lead you to inflict unexpected prejudices toward others," he says. They also learned to be proactive. "We wondered: how can we account for the changing way of life of people?"

The company created a Diversity and Inclusion Council a few weeks after the scandal, donated to LGBT causes and launched limited edition pasta boxes from designer Olimpia Zagnoli, showing two women sharing a bad with spaghetti. In one year and every year since then, he has been awarded all the points on the employers list of the LGBT-compliant US-based Human Rights Campaign.

The irony, today, is that Mr. Barilla says that what drove them to commit the mistake is also what helped them to recover: to be a family business.

"It allows us to be more agile, more flexible and faster," he says. "We had the ability to act immediately and better understand what was happening."

Red lentil pasta was a response to Mr. Barilla's biggest frustration: gluten-free diets. "This has had a lot of impact on sales, in the United States and Italy."

Global economic and social changes will bring about a revaluation of family capitalism, he argues.

Mr. Barilla explained that his private family business was a business model quite different from that of Kraft Heinz, for example, the mega-merger of the consumer sector became a shortcut to a more ambitious Anglo-Saxon capitalism focused on the increase in earnings per share. . "Food has to be a pleasure and a fantasy for the mind and not just a fuel for the body," he adds.

Instead, he considers Barilla's private property rooted in the local community as a panacea for capitalism. The company was removed from the hands of the family only once, for a decade, when it was sold to the American chemical conglomerate WR Grace after the cost of a new plant had a huge financial cost.

Nevertheless, he believes that his best management lesson is probably his pbading through the Formula 1 cars. This experience has best armed him to try to bring rapid change to the global problems for which the teenagers of the main square of Parma are agitated.

"The F1 athlete knows where the weak spots of a car are, and the faster you find and correct them, the faster you'll go," he says.

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