ITALY: Barilla eyes Brazil in Latin American push
A present, 80% of Barilla net sales are from Europe, with 15% from North America and 4/5% from emerging countries
Italian food group Barilla has revealed it is looking to invest in Brazil as part of a wider push into Latin America.
Barilla, which recently welcomed on board Unilever executive Claudio Colzani as CEO, told just-food its "renewed strategy" includes a focus on emerging countries where "pasta and Italian food are highly popular and widespread". Latin America, particularly Brazil, is one market where Barilla sees demand for its core products.
"[Emerging markets] are markets we want strongly to invest in," the spokesperson said. "Here we aim to increase the share of our business from 5% to 20% by 2020."
A present, 80% of Barilla net sales are from Europe, with 15% from North America and 4-5% from emerging countries.
Barilla has recently opened a research facility in China, to where the company exports its pasta and pasta sauces.
"From one side we find a high appreciation of Italian authentic food and culture, although when it comes to practical pasta cooking, we learned that the kitchens of Chinese families often miss the basic equipment. For us this means we need to focus on more convenient solutions, that makes easier for Chinese to enjoy a pasta meal. It is [too] early [to] anticipate any new launch on the market."
Barilla's international plans will focus on organic growth, rather than on mergers and acquisitions.
"Our strategy aims at growing the world leadership in pasta and Italian meal solutions by growing volumes, reinforcing market shares in core countries and aggressively investing in emerging countries.
"All resources will be invested to develop this plan, focusing on partnerships with retailers and a higher presence on digital and e-commerce. We mean to enter new channels to follow the shoppers where they are. At the same time we need to adapt our offer with local customisations and be able to answer to the real needs of people."
In June, Barilla put its German baking business, Lieken, up for sale. No deal has been made but the spokesperson said the company wants to focus its bakery business where it has a stronger position.
"We want to nurture leadership in our bakery strongholds, such as Mulino Bianco and Pavesi in Italy and Wasa, which is the global leader in the crispbread market," he said.
In May, Barilla reported mixed financial results for 2011, with higher raw material costs putting pressure on EBITDA.
The spokesperson said the company is expecting to close the year with "a slight increase in net sales, but with lower net profits" as a result of margin erosion from higher raw materials costs it did not want to pass on to consumers.
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