Trust in sustainability

REMI ERIKSEN

Welcome to Trust and transformations - leaders navigating change, a DNV podcast. I'm Remi Eriksen, DNV’s Group President and CEO.

In this series, myself and our business area CEOs sit down with other global leaders to talk about how they tackle transformation, build trust in their business and people, and what they think is coming next for their industry. Right now, they are experiencing a series of historically significant transformations, making trust more important than ever.

This episode is hosted by Barbara Frencia, CEO of Business Assurance at DNV.  

BARBARA FRENCIA

Hello and welcome to Trust and transformations - leaders navigating change. I'm very pleased to be welcoming Luca Ruini, Health, Safety, Environment and Energy Vice President at Barilla Group to the podcast today. Barilla Group is an Italian family-owned multinational food company founded all the way back in 1877 as a bakery and is now the world's largest pasta producer. Through its Center for Food and Nutrition, now known as Fondazione Barilla, Barilla Group has been championing sustainable behaviors and healthy food choices in support of the transformation of the industry.

Welcome to Trust and transformations, Luca.

Luca, you are an expert in industrial food, food supply chain, sustainability, energy and environment. But we need a quick icebreaker here. So what's your usual choice of breakfast that sets you up for the day?  

LUCA RUINI

As usual, I start with some yogurt and with some cereals and also some biscuits because we are a bakery products also. So we start in the early morning and also with an espresso because due to the fact that we are, we are an Italian guy, so espresso cannot. But I usually take it at home, we're using the mocha. It is all the way to produce, to prepare the coffee. So it's a little mocha that every morning when I'm at home, I will start the day in this way.  

BARBARA FRENCIA

Fantastic. And I recognize some of those habits, I have to say. All right. So let's start. Barilla was formed in Parma 146 years ago as a smaller bread and pasta shop and can now be found in more than 100 countries as a pillar of the international food industry. What have been the biggest transformations that the business has gone through during this time?

LUCA RUINI
For sure, the internationalization was one of the biggest things that we have done in the last years because starting to be an Italian company, we started to be also an international. In this moment, we have also the production plant in the United States, for example, in Canada recently, but also in other countries like Greece.  

 BARBARA FRENCIA
All right, but from your perspective, what are the most significant transformations and challenges currently shaping the food industry? And how is Barilla positioning itself to navigate these changes while continuing to meet the consumer demands and uphold its commitments to sustainability?  

 

LUCA RUINI

For sure, the big debate around food and sustainability is something that when I started about 15 or 20 years ago to talk about it was quite new, because in the past when we talk about sustainability and environmental impact in general because in that time, 20 years ago, we talk not about sustainability but environment, we were talking about the big industry, transport, but not food.

In fact, it was about 15 years ago that we started to try to connect the nutritional impact of the food with their sustainable impact. And with the Barilla Center for Food and Nutrition, we started to try to link that with a model, it's called the Double Pyramid Model, where it was quite interesting to see that all the food that from the nutritional point of view it is recommended to eat more. It is also the one that has a lower impact. So in order to have more, I say, balance from nutritional point of view, but also with a lower impact in terms of CO2, for example, to the environment, following the Mediterranean diet, it is one of the right things to do, because the Mediterranean diet was one of the more sustainable types of diet to follow. And it was quite interesting because in the times when we started to understand that about one third more or less of the impact, for example, in Europe, it is linked on the food that we eat in terms of CO2 emission.

So the way to work in order to decarbonize our food industry, but in particular the agriculture phase that it is the most difficult. It is one of the big, big challenges, but also opportunity. Because when we talk about agriculture, there's the problem, but also the solution. Because if you adopt some way to make a more sustainable agriculture, then it is possible that the soil and the way we do agriculture can be one of the solutions of the CO2 emission and environmental impact. This is not common in most of the other sectors of industry.  

BARBARA FRENCIA

That's extremely interesting. And Barilla's recent study with the University of Minnesota found that shared meals are crucial for wellbeing and happiness globally. How does Barilla plan to leverage this insight to not only promote its products, but also contribute to societal wellbeing?  

LUCA RUINI

When we talk about what we eat, what we decide to eat, it is quite interesting because if you go in a different country, you find a different way to approach. Make some example, if you go in France, everyone eats about 12 o 'clock for dinner. This is the habit. And also if you can see, you can see you have the bistro with a little table that is not common.

If you go, if you see the TV serial in the United States, you never find people that are eating around the table. It is quite rare because the habit that they have in the United States, it is that everyone eats whatever they want. They're not one particular moment. Completely different it is, for example, in Italy where there's the tradition to find ourselves around the table in order to eat and in a common way.

So the socialization and what it means and what the significance of the food and which way you do it, it is something that they give in order to better maintain the relationship. It was another quite interesting study that are saying that for the future, in the country where there's the relation between the parents or the friends are well maintained, they have an expectation of life that it is longer.  

BARBARA FRENCIA

And can you share some of the most impactful initiatives led by Barilla Foundation that promote responsible behavior and healthy food choices and how these efforts are driving tangible results or changes in society towards a more sustainable and health-conscious future.  

LUCA RUINI

So sustainable diet is one thing. The second area, it is the sustainable agriculture, which way it's possible to apply and the techniques that give an help in order to have a more resilient agriculture. Also from this side, it is quite interesting because when I started to do this kind of exercise about 20 years ago, I started to make the first life cycle analysis of our iconic product, the pasta, the Blue Ox, what came out to surprise me quite a lot was one of the... I was expected to have that the production, the packaging and the logistics and the distribution to be the highest impact. And it was not so because how to cultivate and the cooking phase cover more or less 80% of the impact of the pasta. And so this is the reason why when I started, I started to say, okay, I have to do something about also the cultivation. And when I talked with my colleague, the agronomic one, and I found out that it was possible to do using some old agriculture techniques that was in the past completely used, like rotation of the different crop, because if you, from one end, one crop give nutrients to the soil, then you can then cultivate the wheat that you use nutrients, but if you balance it in the right way, so you can give and maintain more balance the soil that gives nutrients for, and then if I've done some measurement about the CO2 emission or the environmental impact in general, they found out it's possible to reduce also in a quite significant way. And this is the reason why then we started with some project on that.  

BARBARA FRENCIA

But how does Barilla integrate sustainability practices throughout its food supply chain? And what specific challenges have you encountered in this journey towards a more sustainable and transparent supply chain?  

 LUCA RUINI

The area where we work was from one end, the decarbonization path, it is something that we are working in this period. In particular, we are launching also a big renewable energy with self production with photovoltaic panel, for example, because it was interesting that in the last two years ago, the less costly way to produce electricity is through a photovoltaic panel. This was not true 10 years ago, but due to the fact that the cost is going down and down, in this moment this is something that is not only given help in order to reduce CO2, but also from an economic point of view it is the best option.

So what we are doing quite interesting trying to find as much as possible to self-produce in our facility using and adopting the photovoltaic panel on one end. On the other end, we are trying also to study in which way it's possible to produce heat using the power of the sun. And this is completely new, because it is quite well developed at home because there's, in particular in the southern part of Europe you can see, on the house how it's possible to produce with by the sun the cold, all hot water. But for the industry, this is quite a new frontier and this is something that we are starting to understand in which way is possible to apply.  

BARBARA FRENCIA

How does Barilla ensure transparency and accountability in its sustainability reports? And what strategies are you using to build and maintain a trust with the consumers, stakeholders, and I would say the broader community, regarding your sustainability commitments and progress?  

LUCA RUINI

We started more than 10 or 15 years ago to print our first CSR report as other companies are doing. But on the other end, this is something that it's the way to try to collect and make a storytelling around this kind of transparency information. Normally there was a balance between the number that you are able to present and the storytelling that you're able to around the activity that you're doing. It is quite interesting to see during the years, sometimes we work more in order to have a more storytelling, other we have using more numbers, etc, because as usually depends of who are interesting about this, because a general public is more interesting of a storytelling, when you go to the expert, they want to see some brutal numbers, brutal factor, as sometimes they say. And this is with also the new legislation in Europe level, this given a big gap because everyone have to be and to start to make a collect data and also present data in the same way.

It is, as I said with someone, and this in the next year will be like in 1994/97 when they arrived the first European directive linked to the environment. So there was quite a change around that. And this is happening now also with the transparency with the CSFD directive that it is still arriving. So because give a clear framework in which way you have to present the number and then present also the strategy that you have if you fix some target. And this is, we are working on this kind of topic as all the other companies.  

BARBARA FRENCIA 

I understand that Barilla has an investment plan of one billion euros in the next five years to improve product quality and safety processes to drive innovation of products and markets. How will this investment be used to continue your progress in reducing Barilla's environmental impact?

LUCA RUINI

We are from one end developing this carbon reduction program. We are still working on the scope one and scope two activity, but we are still designing also the scope three that is the most complex behind that. We are also, there's the new center of research in Parma that is still, we are rebuilding a new area in order to be more easy to use, in order to make more research activity. And this, for sure, gives an help in order to think about how the product will be with a better quality and how the raw material and the process can be better maintained and generate this kind of activity.

This for sure will give an help because at the end it is probably an issue about competence and knowledge and how it's possible to apply and use this kind of knowledge not only inside the company but also through the supply chain because in any case when we talk about the quality and the sustainability, this is not possible to do alone. We need to work more and more from one end with the supplier and with them through the supply chain. But on the other end also with also the university and the research center because they give help in order to adopt what's new and what's coming.

Sometimes it is something new, new product. Not easy when you talk about food because generally food is quite traditional, but there's the possibility in order to try in which way it is possible to better operate the process or to better do the optimization of the process. In the last year, for example, the logistic part or the packaging equipment, they change quite a lot. It has become more and more automatized compared to the past. If you look from 20 years to now, you see that the robot, the automization, the electronics become quite important and relevant in the first part of our activity, in our plant.  

BARBARA FRENCIA

I see. What strategies has Barilla found most effective in building and maintaining its trusted brand with the consumers globally, particularly in the context of increasing scrutiny on sustainability practices and ethical sourcing within the food industry?  

LUCA RUINI

Transparency, I think, is one of the things that is important because we need to explain what we are doing. Also explain that something we try to do does not reach the expectation that we had in the past. This sometimes happens because sometimes we have done things that were expected to work in one way and it goes in a different way.

All the new CSRD European legislation give an help to all the companies in order to try to make this kind of activity quite transparent in the same way. So from my point of view, this is quite important because otherwise everyone is telling in a different way. Sometimes it's not easy.

When we try to make some comparison in this moment, it's not easy to do that because there are different metrics, different scope on that. And so I think that there are more and more requests of transparency from the consumer and the capacity in order to explain in an easy way, it is the other path, the other way that we have to face. Because when we talk about sustainability, the real issue is that it is a complex topic. Because when you talk about sustainable sustainability, you need to find one solution that it is adapt to that context. So you cannot find one solution that it is the best solution everywhere for everything that it is easy to explain also to the consumer, I found this, it is the best. If you find this, this is the best. When we talk about sustainability, it doesn't work in such a way. So because it is complex, because the solution is different normally for the different context. And this is, I think, one of the most difficult things that we have to face for the future because we have to we have to try to find a way make some nice storytelling that it is able to tell the complexity that they are behind that because otherwise the risk it is to find some easy nice solution that it is not repeatable or it is valid in one context, not in the other. And this is the real difficulty that we have for the future.  

BARBARA FRENCIA

I see, that's quite challenging, I would say.

How does Barilla embody its trust values in its daily operations and decision-making process, especially when navigating challenges such as sustainability, product quality, and consumers' expectations, all the three together?

LUCA RUINI
The real exercise is exactly to put all together, to sometimes to try to anticipate something because the real issue and to explain transparency and to the way to talk about that. It is something that you need to do more than in the past. I think that one of the quite interesting experience that we do every time that we make the open our plan to the visit, we do with the family days, with the family, because we open them to the town or to the city when we…

It is quite interesting to see people that come, go inside, see how we produce, because when we do this kind of visit, in any case, the lines are running. So it is very interesting to see the expression, the comment that people, that people come in do it because when they see, they understand how it is all the activity that we do is the passion of the person because that issue is the passion of the person who works inside the plant and how they are able to tell to them what they are doing and hearing them in the way they tell the work that every day they do. It is every time amazing.  

BARBARA FRENCIA

This is so true. They are the best ambassadors for you, I'd say, because it's a genuine way of communicating.

How does Barilla foster and maintain trust throughout the global supply chain, especially when ensuring sustainability, ethical sourcing and reliable delivery, amidst global challenges and disruptions? And we have seen more of them in the last years.

LUCA RUINI

When we managed the COVID crisis during the first, one thing that surprised all of us, that we were focused on being able to plant, to produce and to produce food because it was essential in order to feed the people around the world. When we stopped after two months, that was, and one thing that surprised all of us, it is, hey guy, we have done, we have not done no problem with all our raw material and packaging. How was possible? Because when we ask to our colleague, they were able, even if there was a lot of problems also from the supply, to give all the raw material and the packaging that we need. We never had problem linked to that. So we were able to focus on how it was possible to produce the product in the plant.

The way to be able to maintain the raw material and the packaging in order to produce it during the COVID time was quite impressive. How was able to our colleague and the supplier to manage correctly, even if there was a quite complex time.  

 

BARBARA FRENCIA

Definitely, definitely. All right, we are reaching the end of this interview and I would like to ask you a closing question, Luca.

So what advice would you give to leaders in the food industry who are seeking to initiate and navigate transformative changes within their organizations?  

 

LUCA RUINI

To be optimistic because I think that every time we change it is complex. There's a lot of barrier, difficulty, etc. But I think that the optimism and to be optimistic to say is possible, let's find a way. Normally you define the route, define what will be the path and the path will be completely different. But in any case, you are able to reach, you reach your target and sometimes you have a lot of surprise because as I said when we talk about sustainability for me it is also a topic of innovation because you are looking at the same problem from a different point of view and when you look at the problem from a different point of view you find a different solution because the point of view is different. I think that sustainability is exactly this, looking at the same problem from a different point of view. But in order to reach the goal, you need to be a lot of optimistic. And don't stop when something goes wrong, because it is normal on that. So be optimistic.  

BARBARA FRENCIA

And never give up, right?

 

LUCA RUINI

Yes!

That's great. Thank you so much, Luca, for attending this DNV Trust and transformations podcast. It has been fantastic from my side to hear all what Barilla is doing and it's great for us to have Barilla as one of our key customers. Thank you very much.

 

LUCA RUINI

Thank you to you all.

BARBARA FRENCIA

Thank you.

REMI ERIKSEN

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