Barilla Group overview summaryBarilla became the world’s largest pasta company through scale and expansionFounded in 1877, Barilla combines heritage with global manufacturingFamily ownership supports long-term investment, quality and brand consistencyClean-label credentials and protein products help address changing trendsBarilla remains competitive through Italian provenance, distribution and affordability
Barilla Group, the world’s largest pasta company, has existed for over a century. The Italian giant has a long history, but how does the pasta mainstay fit into today’s changing food landscape?
History of Barilla Group
“Barilla’s rise was not the result of one transformational acquisition”, says Nandini Roy Choudhury, principal consultant for food and beverage analytics group Future Market Insights. “It came from combining early industrialisation, strong brand-building, large-scale manufacturing and carefully selected international expansion.”
The company dates back to 1877, where Pietro Barilla opened up a pasta and bread shop in Parma, Italy. The company opened its first factory in 1910, and in 1936, introduced continuous pasta presses to make production more efficient. In 1950, it introduced its cardboard packaging, which is still in use today.
In 1952, the company closed its fresh bread bakery, choosing to focus more on the pasta market.
Barilla Group originated in 1877 in Parma, Italy as a pasta shop. (Image: Getty/Fani Kurti)
The company achieved major economies of scale in 1969 when its new Pedrignano factory in Palma, which was (and remains) the world’s largest pasta plant and could produce 1,000 tons of pasta per day, was opened.
Its production has grown internationally as well. It opened its first US plant in 1999, followed by a second in 2007.
Barilla Group hasn’t been family-owned for its entire history. In 1971, it was bought by US company WR Grace, but the Barilla family bought it back in 1979.
The company now owns an array of pasta brands across the world, including Voiello in Italy, MISKO in Greece, Filiz in Turkey, Catelli in Canada and Yemina in Mexico.
It has also diversified into bakery products with Pavesi and Mulino Bianco, crispbreads with Wasa, French bread with Harrys, and foodservice with the UK’s Pasta Evangelists.
Today, the company has 30 production facilities and 21 brands worldwide.
Barilla’s strengths
Barilla Group is now the world’s largest pasta company. What gives it an edge over its competitors?
Firstly, it is Italian, while many of the world’s biggest pasta companies are not. This Italian provenance, argues Choudhury, positions it somewhere between private label and more specialist brands; widely available and affordable like the former, but recognisably Italian like many of the latter.
As well as its national origin, its brand recognition, nearly 150 years after its founding, is another key advantage.
Manufacturing scale provides a key advantage to Barilla Group. (Image: Getty/Fani Kurti)
Scale is also key to Barilla’s success, both in manufacturing and distribution. In the case of the former, Barilla has manufacturing plants around the world, including the aforementioned world’s biggest pasta manufacturing plant. This gives the company economies of scale, and allows it to invest in innovation. In the case of the latter, says Choudhury, it has high supermarket penetration, and its other categories, such as sauces and bakery products, give it “deeper relationships with major retailers than a single-category challenger would possess”.
Furthermore, its slew of local brands also complement its global ones, which is more effective than simply putting a global brand into every market.
Barilla has been able to cope with recent periods of wheat and energy inflation thanks not just to its scale but also its procurement relationships, its mills and its agricultural programmes, Choudhury explains.
Family ownership
Barilla, much like Ferrero, is one of Italy’s family-owned food companies. Being a privately owned, family-run business gives Barilla Group certain advantages, suggests Choudhury, allowing it to operate on a “generational rather than quarterly timetable”.
Such advantages are especially clear for a pasta company, she says, as pasta depends on “patient investment in factories, agricultural supply chains, product quality and brand-building rather than rapid portfolio turnover”.
Private ownership protects the consistency of the brand’s positioning, says Choudhury. The family name is also the brand name, meaning the reputation of the owners themselves is bound up in the reputation of the brand. Therefore, they have a stronger incentive to protect it. In practical terms, this could discourage excessive cost-cutting which might damage product quality and weaken consumer trust.
Family ownership also gives the owners greater freedom. For example, according to Choudhury, family ownership has allowed Barilla to accept temporary margin pressure as costs of wheat, energy or packaging increase. It has also been able to reduce prices when raw material costs ease, invest in farmer relationships, traceability and lower-impact agriculture even when returns develop only gradually, and make acquisitions with an eye to long-term strategy rather than immediate earnings.
Of course, the advantages of private ownership are still balanced by limited access to public equity.
Barilla’s place in the modern (pasta) world
The world of food is changing. Trends such as clean label and functional foods now dominate much of the innovation within F&B, and brands must, if not entirely comply with the demands of these trends, then at least understand their place in relation to them. Barilla is no different.
When it comes to clean label, says Choudhury, dry pasta has an advantage; with a simple formulation of durum-wheat semolina and water, it fulfils clean-label requirements.
Pasta is versatile, and can be used as a base for fish, lean meat, vegetables and legume.s (Image: Getty/Diana Miller)
It has also responded to the popularity of functional ingredients through its Protein+ range, which uses protein from familiar ingredients such as lentils, chickpeas and peas. “This provides additional protein and fibre while attempting to retain traditional pasta taste and texture”, says Choudhury.
Pasta as a whole has remained resilient, as it is low-cost, shelf-stable, versatile, and associated with comfort. Furthermore, it can be used as a base for other ingredients, such as fish, lean meat, vegetables and legumes.
Conventional pasta does face its challenges; on the one hand, competition from private label persists, while on the other, pastas made from chickpea, lentil and vegetable provide alternatives to consumers.
In this context, Barilla is not an outlier, yet it has remained “better positioned than many competitors to manage changes within the category”, suggests Choudhury. The brand can appeal both to consumers who want affordable pasta, and those who are after more specialist, premium pasta or pasta with functional ingredients.
Barilla has succeeded because it has the best of both worlds. On the one hand, a strong heritage and Italian provenance, and on the other, global scale and a good price point. Nearly 150 years after its founding, it remains the biggest pasta company in the world.
Dining and Cooking