An interview with Ennio Ranaboldo | CEO/Local leader, CONSUMER GOODS
Born and raised in Italy, almost 20 years in NYC, an Italian and American citizen, you are familiar with both sides of the pond: what’s your take on the new specialty food and beverage trends, locally and globally?
Well, it’s a well-known fact: many “traditional” food and beverage companies are struggling against elusive growth, while smaller and more agile outfits are booming at an unprecedented pace. The reasons are deeply rooted in the seismic change brought about by demographics, changing consumer expectations, and the great enthusiasm fueling innovation and adoption of new eating and drinking habits. It is also a well-known paradox: an increasingly globalized world that – far from having eclipsed local cultures and “product expressions” of those cultures – actually relies on their resilience, agricultural and manufacturing resources, to generate new consumer landscapes, and tremendous, if partially yet uncharted, business opportunities. Think of the constant buzz, the ongoing newsworthiness of the artisanal and “better for you” food and beverage movement in the US. It’s clearly not just about less sugar and fat, clean ingredients, or ethnic flavors, or sustainable practices, although all of that is crucial and will matter more and more. At its core, it also speaks subliminally to a “back to the roots/back to the earth” longing, an authenticity nostalgia deeply embedded in the zeitgeist, which resonates especially with millennials, and fuels their vocal distaste for so-called conventional products. Essentially, I think it is a great time for the industry at large, for manufacturers – both “traditional” and innovative, if that distinction even makes sense – distributors, and consumers alike. Disruption will regenerate for the best, and will set the course for more sustainable, better tasting, incredibly more diverse, and healthier products. And for growth, of course: there is enormous potential not only for startups, but for smaller brands the world over, as long as their products show superior quality in taste, distinctiveness, make use of natural ingredients, and depend on a sustainable procurement and supply chain. And, naturally, they must deliver on the promise, and the experience. The “regional” products of the world, too, stand a fighting chance of success on such global stage. And the stats confirm it: sales of specialty food in the US and beverages hit $127 billion in 2016, growing 15% between 2014 and 2016, and representing about 15% in value of all food sales!
Who are the likely winners (and losers) in this scenario, and what is the dynamics between global growth and regional strengths?
On one hand, you clearly see consolidation everywhere you turn, driven by the food and beverage conglomerates that are constantly trying to streamline and complement their brand portfolio, with a global footprint as strategy, a drive for market synergies and economy of scale, and a relentless push for occupation of as much competitive space as possible. On the other, though, the shakeup of “legacy” brands and products has long-term and wide-ranging effects. And that is obviously matched by a terrific momentum in innovation, and endless launch of entirely new categories and products, rushing in to fill the void, trying to replace the old with the new, forming new habits and tending to new needs. It’s happening with all type of beverages, as much as with food. In this context, fortunately, it’s not just an acquisition game played by Big Food and Beverage. Sure, they are gobbling up specialty brands and startups by the dozen, and they generously fund their own new product incubators and accelerators. But that certainly does not staunch a vast grass root entrepreneurial movement, lively occurring from coast to coast – not to mention Boulder, Co.! – that is designing, manufacturing, and distributing more broadly than ever in all channels (and in foodservice, of course), many of the products that Americans will consume in the next decades. And such a fast-paced dynamic is attracting tons of private equity money, naturally. It’s all very fluid, and the mortality rate of startups is still around 90%, but the trend is unstoppable, and, in my opinion, very promising from a value-creation perspective.
The dynamics you describe underlies increased trade between “countries and territories of origins” and consumer markets, whose role is, in fact, mutually reversible: partnerships between, say European and American companies, are expanding. How do you see the role of corporate cultural integration, and that of a local market leader, if the goal is to foster unity of business intents, build efficiency and, ultimately, drive performance?
In the case of a transatlantic partnership between two organizations coming from wildly different cultural spaces and cultures (i.e.: European principal, US distributor; or, even, European parent company, US-based joint-venture or owned subsidiary), what does get lost in translation is not usually the letter of the agreement, or the operational understanding about the execution of any given plan. It is the immaterial aspects of the relationship, the drifting apart of the momentum that generated the deal in the first place, the dissipation of the goodwill, the subtle insinuation of ambiguity and distrust, the “us vs. them” mentality, even in the case of strongly regulated and well-functioning alliances. And that obviously hurts not only the long-term chances of success of the venture, but it embitters the day-to-day operations and the interaction among team members, supposedly wearing the same colors but in fact trying to score for their perceived (tunnel vision indeed!) side of the field. Trust in and between partners, if not deeply felt by the senior leadership as a fundamental and truthful force and constantly fed downstream, will never effectively percolate the echelons of the organization, bringing instead unease, divisiveness, and a lot of unnecessary stress among the rank and file. On the other hand, if leaders on both sides truly respect and nurture the partnership, and make clear that power games will not be tolerated, and consistently prove that belief in very public and convincing shows – in another words, they create a culture of unity and fair play – that will send shocks of energy and positive thinking across the entire organization. And performance, overall, will tremendously improve. In this context, “mediators” and “translators” are of paramount importance. They can be in either field, with or without such roles as “facilitators” or project leader formally assigned to them, but regardless of their place in the hierarchy, and their job description, their distinctive skills will be fundamentally human, not corporate; and they go by the known names of empathy, sympathy, fairness and open-mindedness; also, they are usually extraordinary listeners, in the sense that they listen to understand (and to fix problems), not in order to “respond” with the affirmation of their own worldview. These are the people that will bridge – culturally, operationally, and linguistically, if need be – not only the water expanse between Europe and the U.S. but any other chasm, real or perceived, that is disrupting, or downright, impeding good work and long-lasting value creation, that, as we all know, starts with people, good people.
About Ennio Ranaboldo
Ennio Ranaboldo is a bi-cultural (Italian and American) FMCG executive, and local leader. CEO of Lavazza North America for sixteen years, he has built the business and the brand virtually from scratch, by means of organic growth and long-term commercial alliances. Involved in every aspect of strategy and operations – from product development to marketing and sales – Ennio has developed Lavazza’s penetration in a variety of consumer and trade channels, challenging the supremacy of local market champions. He has also expanded the philanthropy efforts and enhanced the reputation of the brand, by fostering partnership, with the Food Bank for New York City and the Guggenheim Foundation, among others. With a master degree in American literature from the University of Turin, Ennio is an author (book on J.D. Salinger), a board member (for profit and NFP), and a regular contributor to leading literary magazines. Ennio lives in Williamsburg, Brooklyn, with his family.
Published: 14th July 2017