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GRANAROLO, QUALITY FROM THE STABLE TO THE DINING TABLE


GRANAROLO, QUALITY FROM THE STABLE TO THE DINING TABLE

It’s Italy's biggest milk production line, directly owned by the producers who have  joined together to form a  cooperative. A business that guarantees the quality and care of the product in an international company that in 2013 had a turnover in excess of € 990 million and that employs over 2,000 people. This is the Granarolo group, a major player in the Italian agri-food sector which in recent years has managed to maintain very high levels of growth, despite the crisis; this has resulted in an 18% rise in exports in 2013, a 14% share of foreign sales, with the aim of increasing this figure to 20% in 2014. We asked Granarolo's Chairman, Gianpiero Calzolari, to explain the Group's strategies and its plans for the future.

  • Granarolo is one of the most important brands in the Italian agri-food sector. Given your figures,  how do manage to keep quality so  high? How does your particular set up contribute?

We have a unique corporate structure, made up of over 1,000 farmers who, as members of  Granlatte (a consortium of producers that controls Granarolo SpA) - - deliver the raw materials to the 8 processing sites on a daily basis.

This model allows us to exploit the Italian milk supply chain to its utmost In fact, we work on quality through a system of additional payments to farmers; it is they who ultimately ensure that the end consumer receives a top-quality product that meets the highest possible safety standards.

Granarolo is the most important milk supply chain, and it is  directly owned by the  producers who are members of a cooperative; they benefit from a double reward system that recognises the quality produced. They get a  reward for the quality of the  raw material delivered and also receive dividends at the year's end. On a national scale it is a unique model in the dairy sector and one  which attracts a great deal of attention,  even  from abroad.

  • In recent years, your strategy for expansion has been increasingly aware of the international markets. What are the goals you have set yourselves in terms of  expansion and why have you decided to look abroad?

Expansion on international markets is a necessary path given that in Italy we tend to consume less milk; it also represents an  opportunity for Italian member-breeders to further promote the raw material. Operationally on this path we began a process of acquisitions in 2011, which led to the establishment in 2013  of  Granarolo International, a company that owns all of the Group's foreign businesses. The development plan is expected to achieve a turnover of approximately €1.5 billion in 2016 and a 30% share of the export market,  exporting Italian products. It's a project designed to promote the very best of our Italian made products abroad.

  • You recently set up different operations abroad, both in terms of acquisitions and  partnerships. Which of these are the most  important?

Over the past two years, we have concluded operations that are  of great significance for the Group. A particular acquisition was that of  the French dairy group, CIPF  Codipal; this  has allowed Granarolo to launch itself in a significant way on to the market for Italian cheeses in France, with a share of over  20%. December 2013 saw the launch of Granarolo UK for exporting Italian cheeses to the UK and Ireland and a few months ago we signed an international partnership deal  with the Greek operator, Vivartia Group, for the distribution of  "Greek yogurt" in Italy.

  • To date, which are the geographic areas in which you have the greatest presence and in what way?

The Group's products are present on Europe's foreign markets  (Spain, France, UK, Greece, Austria, Germany and other countries), on those of  North America and Asia, in particular Russia and China. However we are also working on expanding  our international presence in other countries where the consumption of  milk is increasing  (e.g. South America and Africa).

Which are those that you would like to focus on in the future and in which you see the greatest potential?

We are looking with interest at the USA, South America, Canada, Turkey, and then in particular at the major emerging economies (BRIC and MINT); these are markets that are changing their own patterns of  consumption and are increasingly characterised by the pursuit of high standards of safety, quality and the wholesomeness of food products. The challenge for the Group will be to reach a significant size in order  to serve far-away  markets with its own brands through an efficient  distribution network.

  • At this moment in time  your presence on the Chinese market is going through an important phase. What's happening and what are your objectives?

China is the largest non-EU market for Granarolo; it is also  a competitive arena in which to challenge the big players in the global dairy industry. At this time we are negotiating contracts with major distributors in order to  export larger quantities of UHT milk, baby food and ice creams to that country. It's a  difficult market and its very rich. We have just returned  from the Italian Government's Mission to China; whilst we were there  we had the opportunity of forging  alliances with local businesses in order to further accelerate our venture into China.



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