Encourage partnership, or at least close cooperation, with suppliers in strategic networks.
Barilla purchases 2,030 raw materials and 1,880 packaging materials from 980 suppliers
worldwide. We control 80 raw materials’ supply chains and 5 packaging materials’ chains in
total.
SUPPLIER RELATIONSHIPS
Our relationships with suppliers of raw material and services are fundamental to us. Through mutual collaboration we aim to manufacture safer and superior products through a continuous improvement. The relationship with our suppliers is of particular importance in those supply chains that are strategic for economic, quality and product safety reasons or where specific problem areas exist such as environmental or social issues.
BARILLA STRATEGIC SUPPLY CHAINS
The most important supply chains are durum wheat, soft wheat and tomatoes. These represent strategic raw materials because semolina, flour and tomato products are the main ingredients in pasta, bakery products and sauces. We play a prominent role in the worldwide durum wheat market, the European soft wheat market and the Italian tomato market.
BARILLA “INTEGRATED SUPPLY CHAIN” MODEL
We have created what may be considered an “Integrated Supply Chain” model, in which we
have established partnerships with various players that operate at different chain stages
starting from the research programmes in collaboration with enterprises specialising in seed
selection.
Our aim is to create and select, using traditional methods, dedicated varieties suited to specific pedoclimatic conditions that meet the production requirements of the farmers and Barilla’s quality standards (e.g. Zenit, Svevo, Normanno and Aureo for durum wheat in the Mediterranean and Scarpariello for tomato crops in Emilia Romagna). The developed seeds are multiplied and supplied to agricultural producers as part of a cultivation agreement with Barilla.
Three agreements have been entered into: the first with the Emilia Romagna Region,
manufacturing organisations, farming consortium and cooperatives for the production of high quality durum wheat in Emilia Romagna, a second with the SIGRAD Consortium (Società Interprofessionale Grano Duro) in relation to production and trials in the durum wheat industry in the Central and Southern part of Italy (Puglia, Marche and Tuscany) and finally the agreement with the Interprovincial Association of Fruit and Vegetable Producers (AINPO) for the supply of tomatoes in the provinces of Parma and Piacenza.
Further results arising from industry research relate to a number of recently finalised projects including those to forecast agronomic yields and quality before harvest (DELPHI) and food safety (SINSIAF, Integrated System for food safety management in the durum wheat industry - MIUR Project n. 12792 National Operating Plan 2000-2006).
Through the first project, in collaboration with the National Research Council (CNR-IBIMET in Florence) it is possible to apply a deterministic model to identify the yields and protein content in the main durum wheat farming areas in Italy, several weeks before harvest.
The second project anticipated many of the food safety issues that were later to become the subject of European Regulation, through implementation of innovative technology in the area of prevention, analysis and management of contaminants at various stages in the supply chain.
PARTNERSHIP RESULTS
In 2008, 30% of the durum wheat requirement in Italy was satisfied using these integrated
supply chain partnerships. This amounted to 20% in Greece and 10% in Turkey, where this
model was only recently introduced. With regard to the supply of tomatoes, the integrated
supply chain model accounted for approximately 20% of requirements in Italy as the
Scarpariello variety is only used in certain sauces at present.
SUPPLY CHAINS WITH CSR ISSUES
Some supply chains are critical as they present environmental and social sustainability issues.
The main Barilla supply chains with CSR issues are palm oil and cocoa derivatives. These
are complex markets where the basic raw materials are produced in developing countries:
Indonesia, Malaysia, and Papua New Guinea (for palm trees from which oil is extracted from
the fruit) and the Ivory Coast, Ghana and Cameroon (for cocoa plantations).
The major risks surrounding the cultivation of palm oil relate to deforestation that causes
significant damage linked to global warming (the CO² cycle) and the loss of biodiversities.
Cocoa production largely gives rise to social issues involving working conditions in the
plantations and the initial manufacturing processes that take place locally (e.g. wages, safety and child labour).
OUR RESPONSE
In these situations we follow our commitment to social responsibility by identifying high
profile suppliers that are able to guarantee (thanks to the sharing of objectives and a strong
local presence) supply methods in line with the principles of sustainability.
From 2008, 90% of our palm oil requirements come from suppliers that are members of the RSPO (Roundtable for Sustainable Palm Oil), an international organisation that defines regulations to safeguard the environment in the production areas and certifies their implementation. Moreover, 70% of these requirements is guaranteed by oil produced in Malaysia and Papua New Guinea.These countries offer greater guarantees in respect of these regulations.
Also commencing in 2008, 80% of our cocoa based ingredients is sourced from suppliers that are members of the ICCO (International Cocoa Organization) and the WCF (World Cocoa Foundation). The first organisation, which consists of either cocoa producer countries and cocoa user countries, defines and controls jointly the various standards (including guarantees regarding working conditions), while the second promotes socio-economic development projects in the developing countries.
In 2008 we checked 50% of the African cocoa processors used by our suppliers: all of the
processors visited conform to the Barilla Code of Conduct prepared in accordance with the
principles established under the SA8000 certification.