Italy arouses great fascination around the world. Few countries can compete with its classical origins and its musical, literary, architectural and artistic tradition, as well as, of course, the pleasures of its unmistakable cuisine.
It is also one of the main countries with which we Brazilians have ties. The massive arrival of Italians in the second half of the 19th century and the first decades of the 20th century contributed not only to the development of our economy and the industrialization of the country, but also to shaping cultural aspects of our society, especially in the Southeast and South of Brazil.
Iconic brands also originated there. Ferrari, Gucci, Diesel, Prada, among others, set consumer trends and are objects of desire on every continent. Events such as Milan Fashion Week have a worldwide impact and inspire other brands.
Through Makers, I had the opportunity to meet Ricardo Piccoli, who is currently Category Director for The Kraft Heinz Company, based in Italy. We talked about our professional experiences and the possibility of writing something together for our columns. That's how we decided to prepare a chat to share Ricardo's experiences in this incredible country.
Eduardo: Ricardo, tell us more about your professional background and how the opportunity to work in Italy came about?
Ricardo: The offer to work here came at the end of 2018. I was close to completing 10 years at Red Bull and felt it was time to see something new. I've always tried to connect my career and my life to a thirst for learning new things and always challenging myself, which in this incredible company had led me to 7 different positions in the four corners of Brazil. My last position there was as Northeast and North Regional Director, where I got to know areas of our country that few people know about. When the opportunity arose to go to Kraft Heinz, I saw the possibility of having a real impact on the company's major transformation project, as well as interacting with different geographies, consumers and product categories. I joined the company as category and marketing director for Italy. Then, in 2020, we changed the structure and I took over the Children's and Medical Category for Continental Europe, in 2021 our disruptive innovation hub (New Ventures) for the same region and now, new in recent weeks, I'm in charge of our Foodservice business (the business unit of products for restaurants, bars, cafeterias, hotels - everything where consumption takes place on site) for the same region of Continental Europe.
E: What's it like living in Italy? I imagine it's an incredible experience, but it must present challenges like in any other country, especially for expats.
A: Well, the summary is that it's amazing haha. I love nature, sports, culture and history, and of course Italy is off the beaten track when it comes to these things, so it's a perfect fit for me. Eating and drinking well is also something I've always valued and, of course, this country also goes without saying. So I really think this is a special corner of the world.
But, of course, not everything is perfect. Language is definitely an important factor. It wasn't a problem at work, in our company everything happens in English due to the very international environment. But in everyday life, Italy is different from what we're used to in other countries in Europe, where everyone interacts well in English as a lingua franca. Perhaps the Italians and French are the "least enthusiastic" (heavy euphemism alert) about expressing themselves in English, even when they know the language. Today I think this was a good thing, as it forced me to learn the language very quickly, but the beginning was difficult. There comes a point when you need to do simple things, like calling a plumber, and you find it very difficult to do them without speaking the local language. There's also the bureaucracy of public agencies, which sometimes makes the country very difficult to navigate for foreigners. But with a little (a lot) of patience and a basic command of the Italian language, everything becomes easier.
E: Italy was one of the first countries to face the COVID-19 pandemic. The images of the quarantined population frightened the world, announcing what other nations would go through next. What impact has the pandemic had on consumer trends in the country and the relationship between consumers and brands?
A: Wow, it was really chaotic, as it was the first country to experience the pandemic outside of China. We were taken by surprise when no one expected it, let alone knew how to deal with the crisis. The business impacts for the company here were huge and it was a very stressful period. Relatively simple and stable things, such as demand planning, became a huge challenge: in the week before the lockdown, families rushed to the supermarkets and here our main product line is the famous "baby food" and powdered infant milk. We were obviously very affected, because of course in the imminence of a lockdown, the first thing on the shopping list of new parents was food for their children during the period. However, after the initial explosion in demand, it was very difficult to predict what the real impact of this would be in the long term - by having more product in stock, families might start to consume more of it. On the other hand, they would have more time available to cook their own homemade porridge. With the factory experiencing severe difficulties in maintaining safe operations, we couldn't go wrong in the most difficult demand planning scenario possible. It required a lot of communication between all areas of the company (from the sales teams in stores observing demand in real time, to the retailers, to our marketing team, demand planning and factory staff) but we managed to overcome this challenge well. This is just one example of the many complexities we had at a time when there was no "instruction manual" for dealing with the crisis or managing teams during Covid. We learned by trial and error. At the time, I confess it wasn't easy, but this experience taught me some good lessons about how to manage crises and "black swans".
From a general point of view, the change in consumer trends and relationship with brands, in addition to the more obvious and short-term points caused by changes in routine (more consumption of food products at home rather than in restaurants, for example), I find interesting those lasting impacts that have changed the zeitgeist and accelerated trends that will stay here well beyond the covid. The sense of interdependence has grown a lot, further increasing consumers' already growing interest in sustainability and economic impact on local communities. We see a strong growth in "hyperlocalism" as a consumer trend, including themes such as "zero kilometer" products with the production chain as close as possible to the point of consumption and which have a direct positive impact on the "neighborhood", due to economic issues but also to reduce the carbon footprint of the act of consumption.
Another important theme is the famous "K-recovery" where the more affluent section of the population came out of the crisis faster, since they owned financial assets that appreciated with the flood of financial liquidity from the central banks, or had more stable businesses or jobs. Meanwhile, the most disadvantaged social strata are facing greater difficulties, with less stable jobs that have been reduced or cut, with less security and financial reserves, without ownership of financial assets and suffering the effects of inflation. This increase in inequality will greatly influence consumer choices and have significant impacts on branding, pricing and even innovation.
E: What are Kraft Heinz's main challenges in the country?
A: Imagine how easy it is to sell ketchup to Italians haha! In fact, our sauces and condiments business is doing very well here, with very strong growth and share gains.
The children's category is a big challenge. As we know, Italy has one of the lowest birth rates in the world, which of course has a direct impact on the category. What's more, it's a category undergoing rapid disruption. Every new family goes through a moment of anxiety where they try to absorb as much information as possible about how to look after their baby. The influencer in this decision was once the grandmother who wisely passed on her knowledge, then it became the pediatrician, but today we see Google, blogs, online communities of mothers and fathers, and digital influencers as a vital part of this journey. So nowadays it's not enough just to have a trusted, historic brand, loved by everyone (we have a 120-year-old brand here that is part of the country's history and has a little piece of every Italian's heart), it's not enough just to be part of the medical-scientific community discussing best practices in infant nutrition at a high level and in technical language, but you need to be participating 24/7 in the ongoing dialog between new families on digital. There are many simultaneous capabilities that the company needs to master.
E: What's it like managing categories in an economic bloc like the European Community? How do you balance the particularities and cultural aspects of each country with the possibility of of scale and synergy when working in a bloc?
A: That's an excellent question, because it's the main challenge we have today. In a relatively small environment from a geographical point of view, we have completely different markets. Consumers, languages, Go-To-Market, competitive environments are totally different in each country. This is especially true for a food business like ours, because in Europe each country has a totally different gastronomic and cultural reality. However, the opportunities for synergy are huge, as you have 350 million high-income consumers in a relatively small region that is very well connected logistically.
It's not easy to find a balance, but the path we've been pursuing here is to understand what the big bets, which can be common to all countries, so that we can gain scale with centralized initiatives and give a lot of space to day-to-day local execution. In this way, we combine scale in the major pillars with agility and local fit.
E: Still on the subject of cultural particularities, are there any habits or consumer trends that are very specific to Italians and that set them apart from other Europeans?
A: There are many, but one that's quite interesting is our children's market. In all other European countries, the category is basically ready-made products. In other words, you buy ready-to-eat baby food and use it to feed your child. Families who can dedicate time and are interested in cooking prepare baby food at home and those who want the convenience of baby food have a ready-to-eat product available.
But in Italy, food is something very important, a social ritual, an act of love. The porridge we industrialize is basically made up of inputs: you have the product with meat, the product with vegetables, the baby food and the family puts it all in the pan to cook. In other words, it ends up being quicker and more convenient than cooking everything "from scratch", but without losing what they call the "emotional involvement" of cooking for the child. The ready-to-eat baby food market practically doesn't exist. Incredible, right? I find these differences fascinating.
E: What similarities do you see between the Italian consumer and the Brazilian consumer in relation to the category you manage? And what are the main differences?
A: I think a big similarity in the food sector is the social role of food. We're a social people, and food for us is more than a nutritional act, it's a moment to share, to socialize, a real ritual. Italians are very similar in this respect. The difference is visible when I go to lunch in the Amsterdam office, where the team "swallows" a quick sandwich in 15 minutes of break time, and I remember the long breaks I used to have in Faria Lima to eat barbecue with coworkers at noon. In this sense, Italians are much closer to Brazilians, and of course this is extremely important for a business like ours that sells food.
One difference, which I think should diminish in the future as this issue grows in importance in Brazil too, is the attention paid to sustainability when making purchases. Italy is the country with the highest recycling rate in the European Union, with 79.7% of urban and industrial waste reused. Consumers really do look at product labels to find those that are more sustainable, ecological, recyclable or made from recycled materials.
Another difference is the patriotism when it comes to buying and choosing local products. While in Brazil we actively seek out things from abroad, the famous "imported section" of stores and supermarkets, where we look for products that really have quality, Italy is a country that highly values local production. For a product to bear the Italian flag on its label, the entire production chain, including the raw materials, must be of Italian origin. And this is a decisive factor in the consumer's decision to buy. They literally "hunt" for Italian flag products in the supermarket.
E: Still comparing Brazil with Italy, but now with regard to leadership style. Is there a difference in the way teams are led between the two countries?
A: From that point of view, the Italian is very much like the Brazilian. The real differences in culture at work come when dealing with people from northern Europe.
Italians are very hierarchical (I think even more so than Brazilians). There is a lot of organizational hierarchy and they respect and value it very much. They also use non-linear communication, especially when it comes to giving negative feedback, in a very similar way to us Brazilians, who leave everything that is negative, implicit, implied, attenuated.
Another similarity is our way of managing time. The famous 5 minutes late to start the meeting, 5 minutes of chat to warm up the engines, and the last 5 minutes to say goodbye to the meeting. Very common between Brazil and Italy.
People from further north are much more direct, speaking their minds without mincing their words, with clear and simple feedback even when it's negative. They are also much more transparent, direct and challenging in the way they present their ideas, regardless of the organizational hierarchy. In terms of time management, they are much more punctual and use meetings as a way of "getting things done" rather than as an instrument for strengthening social bonds.
E: Is there a project you're most proud of during your experience in Europe? And what would you have done differently?
A: Something I'm very proud of is the ingredient origin transparency project at our Italian baby food brand. We have our entire supply chain mapped and traced, so we can track 100% of the origin of our raw materials, from the farm to the consumer. However, in recent years we have done a huge amount of work to improve this chain, so that 80% of our products have Italian ingredients, i.e. with a much lower carbon impact, because production and consumption are in the same geographical area and with extremely high quality and environmental control. The rest that we don't buy from Italy is because we source the best producers in the world, for example bananas from Guatemala or salmon from Northern Europe.
To share with consumers how proud we are of the origin of our raw materials, we were the first brand in the sector to open up our supply chain transparently, publishing a map of our production on our website. This was also linked to the communication campaign and POS materials, inviting our shoppers to learn all about the origin of our raw materials, integrating the physical point of sale with the digital tracking of the supply chain.
I like this project because it illustrates a few things that I really believe in. Firstly, the integration of the organization and 360 objectives: it wasn't a marketing project, but also an operations, procurement, factory, sales, trade marketing project, all working together to bring differentiation to the consumer. Secondly, because I think that powerful communication is the tip of the iceberg of real product differentiation, operations and company values. I think these make a real and lasting difference to the consumer. And thirdly because of the agility we had in the project and our willingness to take risks.
What I would have done differently, I would certainly have taken even more risks. Yes, Baby Food is a complex category, highly regulated and clearly a serious issue for moms and dads. But that doesn't mean you have to "play for keeps", on the contrary. It's a shopper base that is renewed every 10 months, so you need to be constantly recruiting. I think we could have accelerated some of the brand, commercial, route-to-market and digitalization transformations even more. When in doubt, it's better to do it and regret it than to let the opportunity pass you by. I've always had this instinct in my career and I came out of this experience with this conviction reinforced.
E: Finally, what were the main professional learnings from your experience and what will you take with you into your next steps?
R: Managing countries you don't know, you don't understand the culture, the customers, the language, in completely new categories is always a painful exercise but it reinforces a very important conviction: the role of the leader is not to make the decisions, to have all the answers, to have all the cards up your sleeve. It's about having good, aligned people in a strong culture with a clear vision. By "not being able to do it any other way", by not being able to make all the decisions yourself and still deliver results, this conviction and confidence only grows. I'm a great believer in non-hierarchical leadership, collaborative, agile leadership, with a strong culture and the confidence to take risks and make mistakes, and this experience has only made me value this even more.
