Ret@il Summit 2023 – Il punto di vista, Antonio Baravalle Lavazza

Good morning. I'm embarrassed by the introduction. We use the term 'permanent change'. We are the largest of the small with €2.7B revenue, but compared to giants like JDE, Coca-Cola, Nestlé we are tiny. We've been in continuous emergency for 4 years: COVID, raw materials, war. The only way to survive is to keep changing. Our shareholders, two families since 1895, fourth generation, had the foresight to step back and bring in independent board members. We are structured like a public company and could be listed in two months.

Exactly. We could be listed in two months, so we have control mechanisms like any listed company, but we have extraordinary decision-making speed. For example, the acquisition of Carte Noire was decided in two preliminary meetings and a 1.5-hour board meeting. Speed is key. Also, in a difficult year like this, we can give up 15% of bids without cutting long-term projects because the family allows it. They say, 'We've been the same since 1895, losing a few points of gross margin won't change anything.' We don't have to ask permission from anyone except five people. But we also have a long-term perspective. I've updated the strategic plan many times in the last 5-6 years. It's very difficult to plan long-term today.

Yes, they are two different axes. I am extremely fortunate to have shareholders who, in a year like this, tell me not to cut R&D or hiring. They say, 'We've been the same since 1895.' We have the advantage of two families that are 100% shareholders, so we don't have to ask permission. But with a long-term view. I remember before being hired, I had a last dinner with Marco and Giuseppe Lavazza. They said, 'Sooner or later coffee consolidation will start. We know we have to step back and build a company with top managers. We want to sit at the table with all the coffee players and not be the first bite of the menu.' So we had to grow, change governance, and grow. After a few years, we had a major participation in Green Mountain that generated a huge capital gain. I expected a dividend, but they didn't take out a single euro. That's the long-term vision. So, three assets we focus on: first, environment and social responsibility; second, the world of work; third, the consumer. On environment, it's not a marketing gimmick anymore, it's a duty. We have a term 'sustainability by design'—thinking about products from the start to reduce impact. We already have 65% of packaging recyclable or compostable, aiming for 100% before EU law. On the world of work, smart working has reduced the vending market by 20% when people work from home. We offer 10 days of smart working per month, plus hours for family care and even pet care. We need to attract talent. On the consumer, they are more informed, less loyal. It takes 3 seconds to leave a brand. We see polarization between price and brand experience. The physical-digital blend is fundamental. Our recent acquisition of MaxiCoffee in France is an e-commerce leader but also a physical experience center. The word 'hybrid' is the most contemporary.

We don't want to become a mouthful. We must continue to grow. Giuseppe Lavazza would say we need to reach €4 billion in 3 years. The three assets I mentioned are key.

Exactly. We are already ahead of EU laws on packaging. We need to study products upstream to anticipate everything. The environment can be a resource, not just a cost. On the world of work, we see the return to office after the smart working euphoria. We try to balance. On the consumer, they are more attentive and less loyal. We need to build relationships. The acquisition of MaxiCoffee shows the hybrid model.

Thank you.