Christmas and cakes: an Italian combo thanks to “pandoro”, the traditional Christmas cake which accompanies Italian consumers throughout the holidays together with the Milanese cake “panettone”. “Pandoro” was invented by a confectioner from Verona at the beginning of the 1900s. Alberto Bauli, the president of the eponymous company (www.bauli.it), is heir to the business which started 80 years ago and which has built its fortunes on the natural leavening process. This technique qualifies the pandoro and panettone on the market as unique products for their digestibility, quality and overall organic characteristics.

But because at the end of the day we are still talking about seasonal products, we have asked the president to tell us how hard it is to manage a company whose products are consumed only during a few weeks of the year.

It is undeniable that our activity is linked to Christian holidays, i.e. Christmas and Easter – times of year in which “pandoro”, “panettone” and “colomba” (traditional Easter “dove-cake”) are consumed. The custom had existed for centuries, but it became a widespread gastronomic staple from the mid-1800s and then an item of mass consumption towards the mid-1900s. It is however a fact that our profits only during the holiday season amount to 70-80 million euro out of a total of 280 million euros in 2006.

So Christmas is an important but not crucial time of year for your sales, i.e. Bauli does not ‘live’ only of Christmas. In order to ‘de-seasonalise’ your profits have you diversified your operations?

Precisely. If we had stuck to the production of traditional cakes, our growth prospects would have remained limited. On the contrary, we used the technologies for leavened cakes to prepare croissants. We are currently the largest manufacturer of croissants in Italy: we make 3 million pieces a day with a production cycle lasting from 25 to 30 hours. Nowadays 50% of our profits come from products sold outside the holiday period, such as croissants, mini-croissants and confectionery products.

Do you believe diversification can expand the range of your offer, allowing you to better engage in foreign markets?

Actually the issue relates more to volume. Already today Bauli exports its “pandoro” and “panettone” cakes to more than 50 countries, almost exclusively for customers who are either Italian or of Italian origin. However, there is an increase in foreigners’ appreciation of our cakes, which are naturally soft because leavened without chemical additives. After all, “pandoro” was borne of the automatisation of a confectionery process which used to be manual: today processes respect the product’s original, century-old features, with the added value of greater food safety controls.

So why is it so difficult for you to sell your products outside of Italy? Bauli’s export quota accounts for merely 4% of profits.

There are cultural and logistical reasons. Our traditional cakes are synonyms of Christmas or Easter, but only for Italians. To gain the appreciation of foreign consumers we would have to run advertising or marketing campaigns which a group with our turnover cannot afford. Aside from this consideration, I am still convinced that “pandoro” or “panettone” have all the necessary qualities to win over even overseas consumers. The other issue is one of logistics and distribution: transportation does not only increase costs, but also lengthens delivery times up to three months, where in fact it would be better not to exceed 30 days delivery time from the factory to the table.

Are you then thinking about international production initiatives, to bring the production closer to the consumers?

In the past five years we considered four or five proposals for production joint ventures. We need to find the right opportunity and a business who wants to diversify with us. Bauli can offer its ‘Made in Italy’ know-how: we safeguard an extremely interesting production technology and we want to create the conditions for a trust-based relationship with our customers. The only way, though, is to get closer to consumers outside of Italy. Only once we will have broadened our market and our critical mass in terms of profits will we be in a position to the think of the next step, i.e. the launch of advertising campaigns aimed at the main global markets.