Intervento di Guido Barilla - Presidente Barilla G .e R. F.lli

We structured it this way because the beginning of the dream was really that. Those who came before us—not just my father but generations before—in different ways always expressed this same idea: bringing better products, a better life, quality products at balanced prices to the people who consumed our products. It has always been the idea that accompanied the company's life and history. Today we're articulating it more precisely, more determinedly. Four years ago we launched our strategy now called 'Good for You, Good for the Planet,' which combines the values gathered over the years—historical values, scientific values, and everything we've recently learned.

In 2008, when there were major problems with food raw materials—great volatility and the doubling or tripling of raw material values—we had a moment of enormous difficulty, not just us but our colleagues in the food world. Beyond the technical and economic problems, we had a huge wave of unfounded information about food. Everyone was talking about food, food prices had become a fundamental topic, and everyone exercised themselves sharing opinions on food. We realized that ignorance was extraordinarily impactful. We were also professionally affected—Barilla, having to raise prices due to tripling grain costs, was accused of wanting to eat out of people's pockets, one of the most despicable accusations that can be leveled at a company trying to do serious work. So we decided to found the Barilla Center for Food and Nutrition. It was established in 2009, almost seven years ago. We've invested about twenty million euros and worked with 500 scientists worldwide on food problems—agriculture, sustainability, nutrition—360 degrees. One of the main results is this double pyramid, showing that the greater the use of products at the base—fruits, vegetables, cereals, oils—the lower the environmental impact. It's the inverse of the classic FDA food pyramid from the early 1980s.

The industry begins by speaking to people more responsibly. All company communications start to have more structured information. Our packaging begins to include information not just about consuming more, but why—what substances the product contains, its environmental impact. Behind this informational model is the entire supply chain organization—from agriculture to transport to first and second transformation—working consistently. Each of us does our job, trying to produce new products of greater quality, sustainability, and balance.

The direction is certainly the right one. But awareness of the great issues and problems we face is still light. Within systems and models, it's not yet truly understood what path to take.

But I think the path has been taken. The most serious global producers are all very focused on continuing, and the next ten years will be extremely important.

It has meant a change over these ten years in the organizational structure, in most of the management. There's greater focus on these topics, and there's the cultural shift of deciding to spend more money, to allocate more resources to information that isn't exclusively commercial—not just 'we're launching this new product, consume it,' but allocating resources so brands can first of all become listeners and also interact with people. It's a long, non-immediate process that involves various steps. It's a path that's been taken.

Barilla was a 100% Italian company until the early 1990s. Today it's half Italian and half international. Going abroad, we began to understand that our offering wasn't necessarily the right one to solve problems for different countries and people. So we started questioning what we did, questioning our product portfolio and offering, to be closer to clients, distribution, and consumers. This was the first real cultural shift: opening up to new markets taught us that we didn't know enough, and from there dialogue began. We continuously receive stimulation from consumers—today many of our products are born from consumer needs. It's a much more uncertain world, not only because of geopolitical situations.

The product is perceived as the lowest-value item, the one you can stock up on most easily. But pasta needs to regain value and consumer confidence—pasta can give so much to people, not only in Italy but also abroad.

Food is first of all about information. Through mature information, people must begin to understand what food means, what food supply chains mean, what producing quality eggs and grains means, what having livestock that produce quality animal products means. Today people think food is always available, always close to home, always at a low price. This is something everyone in the food industry needs to work on—we must give value back to food, which is losing it.

It's inevitable and we must continue on this path. It's a significant investment and it's necessary. There are companies that take other paths. We believe this is the only possible one.

We're still learning—there's no certainty yet in the direction. I think traditional companies like ours that are opening up to this extraordinary evolution still need to invest heavily in skills and knowledge. Digitalization of information still needs to truly penetrate organizations. Only with the new generation of management over the next ten years will we truly make a qualitative leap in information. It will take time.

Channels are multiplying enormously. We are a traditional investor that needs contact with people at various levels. Traditional communication remains fundamental for product positioning and launches, but we want to reach people in a much more targeted, refined way. We're working on programmatic in an increasingly precise manner, and I think we'll be able to allocate resources to all these alternative channels in the coming years. But for Barilla, advertising is fundamental. Barilla has lived on advertising. It's a company made of supply chain and advertising—the two foundational souls. It was born this way, it developed this way. We make great products, good products, but we have an extreme need to always communicate them with the values we believe in. For us, it's the soul—it's part of our existence.

Within these different media we've discussed, for example the BCFN produces detailed, sophisticated content. The web has become fundamental for the BCFN—we hold a global forum every year summarizing the work, broadcast in streaming. The Barilla Center for Food and Nutrition has spread its expertise and knowledge especially through the web—that's the path we've invested in. But Barilla, with all its brands and product lines, must continue to communicate through the press to better inform about products, and television, radio, and so on remain fundamental.

It's not heretical. I think marketing needs to return to art, to sensitivity. We've passed through a moment of information oversupply—it was believed all campaigns and all information could be conveyed through certain data from analyses and studies. But we've seen that product launch mortality remains enormous—there's a huge death rate among supposedly innovative products. We need to return to greater sensitivity, to the real ability to listen to people's needs and respond with projects closer to humanity. Marketing has become too technologically detached from people's sensitivity. I'm not saying we shouldn't use tools, but we need to reinterpret how they give us information. We haven't improved in recent years—I'm talking about all consumer goods—in our ability to launch products that succeed.

We try to launch new products every year in all our categories. We're learning a lot. We've made quite a few mistakes—tried to relaunch product lines that we thought were mature.

Everything must be done at the right time. You really need to listen to what people say, even through weak signals. In our biggest recent successes, from the very beginning there were signals telling us 'you're doing something foolish—don't continue on this path.' And we were often stubborn in continuing blindly.

It's an oven we developed in collaboration with a partner over five or six years. It's a multi-purpose oven. The particularity is that you'll be able to buy capsules via the internet—not like coffee capsules, but containers with pre-mixed foods that can be prepared in the oven extremely quickly and with extraordinary quality. You can make pizzas, cakes, risottos, pasta, bread, and more. It's an extraordinary innovation—a concept like Nespresso brought to food. Are you sure it will be good for them and good for the planet, as the slogan says? I'm certain that for people who access the purchasing model through the internet, it will save on logistics, reduce movement, emit less CO2. People can make conscious choices with products delivered home. It's an extremely advanced project that, like all extremely advanced projects, risks being too far ahead in time—it may not succeed.

I see our work, I know our data, and I follow what happens to us. This semester hasn't been simple. We continue to have an Italy that is particularly tough. We think we'll do at least as well as last year. It's still a complex year—perhaps some macro signals are starting to appear. Surely I can't say we're doing worse. I have good hopes, but my attitude is always that in hard times you tighten your belt and stay attentive. I prefer to be very ready and prepared for difficult times rather than be caught off guard.

We haven't changed much in all these years. We've been much more careful—done very serious and thorough work on management costs, that's certain. But our marketing budgets have been respected and have given us good results. We performed well compared to the rest of the market. I believe Barilla has been very well managed.

Thank you, thank you, thank you, and good work.