“Prices will rise, let’s save purchasing power by cutting VAT and the tax wedge” – Corriere.it

For Italy, to quote the Fratelli Carli di Oneglia, the near future will not go smoothly. Therefore “Effective income support interventions” are urgently needed. And family businesses must be supported, backbone of national entrepreneurship, where they contribute to the stability of the economic system. Because inflation will rise again, notes Carlo Carli, general manager of the Ligurian oil company. «Up to now, industry and distribution have acted as a buffer – he says -. There has been no proportional transfer of price increases to consumers. But this is a situation that can be managed in the short term. We have been willing to make sacrifices on the bottom line as long as possible, but structured interventions are needed in the medium term to avoid the inflation spiral. The recession hypothesis is well founded if there is a strong reduction in consumption. It is essential to be able to preserve purchasing power“.

The proposals

Proposals? “VAT cut for consumer products that do not have the preferential tax, such as canned goods which could drop from 10% to 4%. And intervention on the tax wedge, to bring more money into the pockets of the workers ». As for the centrality of family businesses: «Now the ability to adapt is fundamental and family businesses have always been able to react to external factors. Because the entrepreneur is always engaged in business, the chain of command is short. You can read the market and decide in a short time ». Key role, therefore.

Transformation

Fourth generation, 45 years old, with a degree in Economics from Pavia and a masters in business administration from Bocconi, Carlo Carli has two daughters aged 8 and 10, he defines himself as “an inveterate skier” and in recent years he has contributed to the transformation of the company. «Being monolithic is dangerous – he says -. I joined the company when I graduated, it was based only on the Italian market and on home sales, it was necessary to change. I was lucky enough to find autonomy ». He was not taken for granted. Founded in 1911, with 390 employees, Fratelli Carli is still fully controlled by the Carli family, which expresses its managers. C.arlo, as well as general manager, is CEO of Fratelli Carli Usa; his father Gian Franco is president and CEO; her sister Claudia is head of corporate communications. And Lucio, Gian Franco’s cousin, is the director of the Cosmetics division.

The brand

The company has a strong brand, known above all by those over 45 years old. To reach other consumers, it has launched a strategy in three directions: a) diversify products (in addition to oil, also preserves and gastronomy, wines and cosmetics); b) internationalize; c) investing in sustainability (BCorp since 2014, the first producer in Italy, is now also a Benefit Company).

The single-brand stores

Fratelli Carli, which adheres to Aidaf (the Italian association of family businesses), produces and distributes olive oil but no longer only with green and yellow vans. Of the 155 million revenues in 2021 (with a profit of 1.7 million and an EBITDA of ten million, 50 million reported in net debt) 30% came from online sales, 45% from orders over the phone, 15 % is still in the mail (“Especially from France”). 10% comes from single-brand stores, 20 so far, after the pilot project started ten years ago in Turin. On the retail chain is pushing the business plan to 2026, in preparation with the Boston Consulting Group. Four-year goal: 200 million in revenues (after + 31% in 2020-2021 and an expected 2022 in line with last year), 15 million investments. Since January, two stores have been inaugurated in Vicenza and Treviso. «The goal is to bring single-brand stores to 20% of turnover in four years – says Carlo Carli -. We intend to open a dozen of them in Italy over the next four years and then expand abroad, replicating the model in Germany and Switzerland where we expect to double local revenues by 2026 ».

Beyond the “delivery”

For the company born with the axiom of home delivery only, it is a revolution, almost in contrast with the explosion of “delivery” during Covid (which has now stopped). Why didn’t they think about it before? «We feared that retail could cannibalize home sales – says Carli -. But the Turin experiment told us that online and brick-and-mortar stores gather two different types of shoppers. By opening stores, we add customers. The dual channel then allows us to continue with the traditional multiple packs, of six bottles, which help maintain profitability and build loyalty.. We keep them at home, not in retail ». Cross-border growth is the second lever of the plan, after the shops. «Today 30% of our turnover comes from abroad: Germany, Switzerland, France, Austria, Belgium – says Carli -. It was 5% ten years ago. We want to reach 50% in 2026, with a focus on Germany and Switzerland ».

The market

Third and last part of the plan is the efficiency of the processes. «Not with a cut in costs but with the quality of the service, from customer focus to logistics. The oil market has changed radically from the 1960s-70s to today. We have gone from the consumption of olive oil to extra virgin and more protagonists have entered in the market (such as the Spanish multinational Deoleo which has Bertolli, Carapelli and Sasso, but a direct competitor of Fratelli Carli is Monini ed.). Now more than a strengthening of the brand the plan expresses the will to reach as many consumers as possible“. With a quality product and the “blend” model, the blend of oils (the cost of which as a raw material “has grown by 20-21% in one year”) from Italy, Spain and Greece.

Blend and investors

«DOP or monocultivar oils are market niches, the vast majority of the oil sold is the result of blends – says Carli -. We have seven extra virgin olive oils in our portfolio, we create blends like in wine, to obtain a certain type of organoleptic product: sweeter, fruity, spicy. Or with proposals on the territory, 100% Italian or monocultivar from the region ». The listing on the stock exchange is not yet contemplated and the acceptance of a financial partner is not pursued. In any case, “it would be subordinated to skills, especially on retail.”

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