Miller Magazine Issue: 142 October 2021

22 MILLER / OCTOber 2021 NEWS Tight global wheat supplies and soaring raw material prices are creating challenges for Italian pasta maker Barilla while also exposing fragility in the food system, Deputy Chairman Paolo Ba- rilla told Reuters. “We take food for granted, but some organizations and people work to provide it, and it’s very fragile," Barilla, 60, who leads the family-owned company with his siblings, said in an interview ahead of the Swiss Economic Forum. "We see this year a lack of wheat production, it can be a very tough period. “We didn’t expect that two or three months ago, so that is where the system is fragile. "We also start seeing the effect of climate change, it might negatively affect production in our catego- ry,” said Barilla. Intense heat has withered wheat crops in recent months across the world’s most important export hubs, catching trading firms by surprise and leaving buyers facing shortages and potential output cuts at flour mills. Barilla said the situation is very unstable at the mo- ment, and high raw material, energy, packaging and logistics costs left little room for flexibility. “We are not a very flexible company when it comes to these costs ... there is no way we can absorb them," said Barilla, who had a career as a Formula One race car driver before entering the family firm. "This year and next year will be very tough." Established in 1877, the company is the world lead- er in pasta, according to Euromonitor International, but also sells Mulino Bianco biscuits and pesto and tomato sauces. Turnover rose 7% to over 3.89 billion euros ($4.61 billion) in 2020. Upgrading its systems is a priority, Barilla said. The company is investing around 1.4 billion euros be- tween 2020 and 2024 in innovation and development. It has also made bolt-on acquisitions which, Barilla said, either fit its core business or, as in the case of fresh pas- ta delivery company Pasta Evangelists, allowed it to dis- cover a new business area. “Now the part of the learning is becoming more and more relevant, because there are so many new food propositions, on delivery, the gastron- omy, the recipe, the digital content,” he said. Barilla says high wheat costs a challenge