I wanted Parmalat, but I’m growing anyway

by Mikol Belluzzi

«I will always be convinced that every Italian company is a part of our industrial system. That is why we had no choice but to do what we did. It was too bad, however, that no one came with us after all...». With few, but effective, words Gianpiero Calzolari, chairman of Granarolo, the leading operator in Italy in the milk sector, made up of a consortium of producers (Granlatte) and by the industrial company that processes and markets the finished product, closes an important, but also controversial, chapter of the industrial history of Italy, concerning the sale of Parmalat.

«First Italy took charge of saving the company, then the politicians got distracted and neither the banks nor other industrial partners wanted to come with us, and considering that Parmalat was four times as big as us, we couldn't do it alone». That was the end of the dream of an all-Italian milk and dairy giant, and Parmalat, after the reorganization under Enrico Bondi, passed directly into the hands of its new French owners, Lactalis, with all its rich financial endowment.

That didn't stop Calzolari, however, and last September he acquired the Lombardy-based company Lat Bri, the third producer of fresh cheese in Italy, a «deal» that will enable the Bologna-based group to increase its export share, since the company brings about 40 million euros in exports, that will enable Granarolo to grow abroad, benefiting from the strong position of Lat Bri in the supermarket chains and the integration with new product lines in other countries, especially in northern Europe, where Lat Bri has a very widespread penetration.

«We turned the rental of a division into a full-fledged acquisition and now we aim to double the turnover of Lat Bri from 150 to 300 million euros» says Calzolari. «The company, which already worked for us, was an interesting opportunity because it is very strong in the private label market: for now it will continue to do what it knows how to do best, then we'll see...».

However there is still something missing in Granarolo's product mix, «because it doesn't include the hard cheeses and the DOP varieties» continues the chairman «and so we will make acquisitions in just this sector. Italy boasts a great wealth of products, like Parmesan and Grana, that represent Italy at the global level and would enable us to increase our export trade».

The world envies us those products (and demands them) and they also have a higher marginality than Granarolo's traditional products: 2011, however, closed with sales of 900 million euros (without considering the Lat Bri revenues), compared with 884.3 million in 2010, «and this despite the fact that we had to offset a heavy increase in raw material prices that raised our production costs: last year business was especially good for the Grana, not so good for the milk for human consumption».

The industrial plan extending to 2016, however, is even more ambitious: the goal is set at 2 billion euro revenues, which will be achieved through the growth of both internal and external lines. «We are looking for companies that can bring us new markets: right now we have six plants in Italy and want to strengthen our position in those places where we don't have a plant» continues Calzolari. «Other areas that interest us are the municipal companies that many municipalities would like to get rid of, considering the difficult financial situation of a lot of towns. We are doing all this with self-financing».

Free rein to acquisitions therefore. «We will aggregate anyone who wants to be aggregated» stresses the chairman «so that we can at least talk to the European competitors, but also to reach that dimensional advantage of trademark and efficiency that only a real megacompany can have».

Growth by internal lines comes, however, from product innovation and the entrance of Granarolo in niches with high added value, and this is possible because the Bologna-based company controls the entire milk chain and thus the quality of the raw material.

Thanks to the acquisition of Yomo in 2004, a company in need of restructuring, with the concentration of production in a single plant, the internal marketing team is launching a series of innovative products, like Yomino, a yogurt for children that can last up to four hours without refrigeration and can therefore be eaten away from home in place of other high-calorie snacks.

Using a unique preservation method never used before in Italy, Yomino is squeezable and it is equipped with an antisuffocation cap that makes the product safe even for children under 3. Then there is Yomo milk, which is like having two products in one: fresh milk and a probiotic beverage: this is an innovative formula that offers in combination both fresh milk and Lgg probiotic ferments (in addition to vitamin B6), i.e. combining two products in one, with considerable saving in costs for a family.

But the real news is Laben Oro milk, the first milk for immigrants to Italy, of which Calzolari is particularly proud. For the first time in Italy, Granarolo has developed a milk formulation designed for the needs of foreigners, especially Arabs, who live in Italy: with 250,000 new arrivals every year, now the foreigners in Italy total about 7% of the population, or 4.2 million people. For this reason, after performing some research on the target, the company has decided to launch a fermented milk on the market that complies with the rules of Arab tradition, the only products with Halal certification for productive processes of the Islamic world.

To achieve this and future goals, Granarolo has created a special team of experts with which it is performing research for the development of a range of innovative products for children, based on the key element of the quality of fresh Granarolo milk through its controlled chain. «Moreover, we have just come out with the new 1.5 liter bottle of high quality milk at a lower price, ideal for large families, who like it very much» concludes Calzolari.

A little concrete help for those who find it harder than ever to stretch their income to the end of the month.