Wednesday, March 12, 2014

Carozzi Blog - Agriculture 2

Agriculture #2 Site Visit
By: Robert Genduso

Carozzi S.A. (Carozzi) is a 115 years old family owned international food production company that operates through its three business divisions: Corporate, Chile and International division. It produces, distributes and sells pastas, salsas, drinks, desserts, cereal, juice and soft drinks, snacks, sauces, flour, biscuits, tomato paste and fruit pulp, through its subsidiary Empresas Carozzi SA. Carozzi markets and exports its products through brands, namely, Trattoria, Carozzi, Rizzo, Pomarola, Caricia, Costa, Costa Kids, Ambrosoli, Sprim, Parma, TG Mariposa, Bonafide and DRF Billiken. The company sells its products in Brazil, Japan, Central America, Mexico, Peru, Paraguay and the US. It operates through commercial and distribution offices in the US, commercial offices in Mexico and Paraguay, manufacturing plants in Argentina, Chile and Peru. Carozzi is headquartered in San Bernardo, Santiago where the newly constructed production facility is situated.
The EMBA visit was scheduled by Prof Suarez on behalf of an Agg2 request to visit a food production facility to get a better understanding of Chilean food company capabilities.  One of the Agg2 business “sparks” was to create and/or grow an existing specialty artisan food line for either domestic or export sales. This was a big pull by Prof Suarez!
Upon arrival, we were met by Peter Pickett, former CEO of Carozzi US and now GM of the 130 hectares complex which includes the new 350M production facility employing close to 4,000 people. We started in the employee store which carried the entire products- eye opening from pasta to pet food. As we walked across the campus to the conference room prepared for our visit, it was obvious that this was a fully vertically integrated campus from the abutting railway for raw material delivery to finish goods production and distribution warehouses. When we arrived to the conference room, we were met by Jose Juan Lugany Rigo Righi, the number two in the Carozzi C-types.  Today, EMBA26 had exclusive access to the number two and three at Carozzi. We sat for a presentation on the company history, product lines, and recent accomplishments. By recent accomplishments I am referring to one of the greatest comeback stories in business history. In late summer 2010, the Carozzi site experienced a devastating fire which wiped out more than half the campus and all of the pasta production (largest seller) capabilities. This is the same year Chile experienced a major earthquake requiring huge infrastructure rebuilding.  However, Carozzi and the leadership team were able to map a path, execute and complete rebuilding of a state of the art production facility in less than 15 months without a single pasta stock out. The mission was to prevent the competition from gaining a single inch on the supermarket shelves. They succeeded and two years later have actually gained in market share. How did they do this? Dedication & loyalty (paid all during rebuild), vision (rebuild bigger/better), strategy (how, versatility, flexibility) leadership (hands off site based), operational expertise, risk assessment and risk acceptance. We were so impressed with how all the tenets of our EMBA education were tied into the story, we offered to write a case on Carozzi and the recovery. Prof Suarez will close the case study particulars etc.. The purpose of this visit was to confirm what we expected about Chile and Food production capabilities: They are Fully Developed. What was surprising was their position on vertical integration-a must to ensure quality. Whether this was out of necessity due to void in intermediate services or the true desire to control quality is unknown at this juncture….but VI is alive and healthy at Carozzi.

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