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Massimo Zanin - Essential agribusiness in Italy

May 28, 2020

Massimo Zanin believes that the only way for the agricultural sector to be able to face the worst is for everyone involved in the food supply chain to work together.

Italy was one of the first countries hit by COVID-19, and after an eight-week lockdown, the next phase of reopening businesses has begun. Massimo Zanin of Veronesi, a major Italian animal feed company, details how Veronesi was able to safely help maintain the food supply chain throughout the lockdown and what he is hoping will happen for his country and the agriculture sector in general beyond the pandemic.

This episode is part of a special AgFuture series on the impact of COVID-19 on the food supply chain. Join us to hear how those on the frontlines of the global pandemic are working to overcome adversity and feed the world.

The following is an edited transcript of Michelle Michael's interview with Massimo Zanin. Click below to hear the full audio.

Michelle:       Hello! I'm Michelle Michael. In this special series of AgFuture, we're talking with those working along the food supply chain about the impact of COVID-19. My guest today is Mr. Massimo Zanin. Thank you so much for joining us today.

 

Massimo:       Good morning! Thank you for inviting me.

 

Michelle:       And I guess it would be good afternoon to you; you're in the northeast part of Italy, right? Near to Venice?

 

Massimo:       Yes, close to Venice, about one hour by car from Venice. Verona is the name of the city where we are based.

 

Michelle:       Italy was hit quite hard by the coronavirus pandemic, but you're starting to see a glimmer of hope, I think, right? What's life like for you right now?

 

Massimo:       Well, personally, let's say that, now — we had these eight weeks (of) lockdown. That means that in the last eight weeks, the only things we were able to do was come from home to the office and from the office going home. The other thing was shopping, but not so often. That's all. The rest of the things were not allowed, really. I think what the Italians in general demonstrated in these last eight weeks was (that) they were able to follow the rules given by the government, so really, they stayed home for eight weeks, (which is) incredible for the Italians.

 

Michelle:       It is incredible. Are things now starting to open back up slowly, though?

 

Massimo:       Yes, we are starting to go out. Today, after eight weeks, we begin the so-called phase two. That means that more industries are going to start, to restart, to produce, so that means that around four and a half million people are going out every day from today. I think that we (will) begin to see a sort of light at the end of the tunnel and we hope, really, to see a better time in the next (few) weeks, and “a better time” means more freedom to go out — and also from an economic point of view, because we cannot forget that not only the industry but all the shops, all the small activities (that) are here now, (were) shut down, so really, we hope to see all these activities starting again, because it's important for our people and for the economy of Italy to start again.

 

Michelle:       Speaking of business, Massimo, you're with Veronesi, one of the biggest poultry, swine and rabbit integrators, and you have a feed mill there as well. On a very basic level, can you explain what that means? What does a poultry, swine and rabbit integrator do?

 

Massimo:       Well, as an integrator, we are involved in all the activities along the supply chain. That means producing feed. We are in the market of raw materials. We breed many, many different kinds of animals — chicken, poultry, but also cattle, pigs, rabbits and so on, and then we slaughter and we transform these meats into products that we sell in the supermarkets. That means that we are involved in the whole supply chain.

 

                        At Veronesi, I imagine that Veronesi is, nowadays, a company that employs directly almost 9,000 people, but if we go also to the people working for us, even if not directly employed (by us), we are talking around 15,000 people working for the group. It's one of the most important agribusiness groups in Italy, one of the biggest in Europe, (with) a consolidated turnover of over €3 billion, or US$3.3 billion. And because Veronesi was founded 62 years ago in 1958, I have to say that it started on the first of May, and a few (weeks) ago, we celebrated our 62nd anniversary.

 

It was founded by Apollinare Veronesi, our founder, but in 1958, he was already 47, so not exactly a young guy starting this new adventure after the Second World War. He was already married and was the father of five children when he saw that animal feed was a new, important sector for the growth of the country at that time. At that time, we have to imagine that, in Italy, animal breeding was not exactly what we see today. Every family had, at that time, a couple of pigs or ten chickens to feed, but what did the people give to the animals at that time? Probably the waste of their meals, their family meals, so Apollinare Veronesi saw how important it could be to improve the quality of the feed given to the animals, so he started in 1958 with the feed production, and ten years later, in 1968, he began his involvement in the poultry sector, breeding first chickens and then turkeys, importing the turkeys from the U.S., because turkeys were not present at all in Italy. Then, later on, in the '80s, he expanded his activity to pig breeding and slaughtering.

 

                        Over the years, I'd have to say that this remained as the main sector, but the activity has been integrated or completed via internal growth and also acquisitions. Nowadays, we are involved in many activities, but we can, let's say, organize all the activities in three large areas. We call them the three Fs: feed, farming and food. We farm thousands and thousands of animals, and we go down after slaughtering, after processing the meat, to the market with two main brands, which are AIA and Negroni. AIA is the brand we use for fresh — even if processed, but still fresh — meat products. AIA is a product sold mainly in Europe, North Africa and Europe. Negroni is our brand for salami, ham, these great, typical Italian products. Negroni products, you can find all over the world, from Japan to the U.S., so everywhere. Now, our consolidated turnover is €3 billion, and almost 15% of our turnover is export.

 

Michelle:       Being one of the largest and most important agricultural companies, what are you facing today because of COVID-19 in your business?

 

Massimo:       Well, I have to say that we have (had) to change completely our way of work. We were, let's say, lucky because agribusiness has been considered, personally (in Italy) but also in other counties, as an essential business. That means that we choose and we're in the position to continue to work, but obviously — you remember that Italy was the first country outside China to be hit by the COVID-19 epidemic. It's true that the first stages were in a small area south of Milan. This area is really small, but it's a high-intensity area for our sector. In this area, there are a lot of farms, mainly dairy farmers, also pigs, and many feed mills. One of our feed mills — we have seven feed mills around Italy, but one of them is close to this area, so our involvement, I have to say, was immediate.

 

                        I remember the first time they came (with news of) the so-called patient zero. The first case of (COVID-19) positivity found in Italy was on February 21. It was Friday evening, and the day after, we had our first talk. They called up the board of the executive committee to decide how to manage the situation. It was really a new situation for everyone, and it was really unexpected, a new situation for everybody. We were afraid about the health of our people because we knew that we could go on with the production, but on the other side, we wanted to be sure to let our people work in a safe and healthy position.

 

                        So, really, we worked a lot that week to define protocols together with the workers, together with the unions, because the unions were afraid about this new situation, so we worked together in order to be able to continue to work without any risks, and so far, we have done it, I have to say.

 

Michelle:       That's great news. What does that mean specifically? What precautions did workers have to take on the job so that they remain safe? What did that look like?

 

Massimo:       Of course, there are different situations in different factories. If we look to the slaughterhouse, we can imagine how many people are working in the slaughtering line, and so the first concern was to give more distance between one (person) to the other. So, we intervened in the number of people working at the same time in that slaughtering line. That means that we have to slow down the rate of the slaughtering. That means that we try to reduce the number of the people involved in every single shift in the slaughterhouse. On the other side, we built a special track to go in and to come out (of the building on). Of course, every one of the people working in this situation was equipped with masks, gloves and all the equipment needed in those situations. I have to say that after two months of work in this situation, we are really — I don't want to say it out loud, but everything went really well.

 

                        On the other side, if we look to the feed mills, the situation is completely different because, thanks to high investments in the last years in automation, in the feed mills, we have limited staff presence, so it's easier to manage them, to make them operate in a condition of safety. Also, the people working in the feed mills were equipped with masks and gloves. Also, in the feed mills, we try to reduce the number of people per shift because the big concern was, from the beginning, to avoid the risk to have a stock shortage, because in the event of (COVID-19) positivity, of course, we should put in quarantine all the people working together, so we reduced the number of people per shift in the feed mills. Also, in the feed mills, I have to say there's (been) no problem until today.

 

                        Also, the truck drivers, looking to the truck drivers, they were the first figures involved in the program because in Italy, there was the so-called red area, the first area, the small area south of Milan, and they had to go there to deliver the feed, so they were the first people involved in the emergency. Also, to them, we gave our procedures. We gave them masks and gloves needed to get in contact with the farmers. They were invited to follow all the safety rules of the group. I have to say that in the last eight weeks, it's (been) really difficult to enter a donation factory, but really, it was necessary.

 

Michelle:       We know the workers were dramatically impacted. What about the customers? Were the customers of the company affected as well?

 

Massimo:       Of course, our customers, which are the farmers, they were involved also in the confusion of the market, but first, in our behavior to the customers, the farmers, we tried to find different ways to maintain this kind of comfort. Really, we invented different ways (to stay connected), like more frequent calls to them.

 

                        Our first concern, also there, was to say to the sellers, to the consultants that would usually have contact with the farmers, to be more frequently than normal getting in contact with them. We invented many ways to make it under a hashtag. The hashtag is #veronesiconvoy, #veronesiwithyou. Under this hashtag, we prepared more frequent newsletters, personalized WhatsApp messages, corporate videos explaining to them what we were doing in order to maintain the same level of service, of quality of the product and of services. We were giving them video messages. Of course, our experts, our technicians, (since they were) not in the position to ever have physical or personal contact, they began to use these platforms — like WhatsApp video calls — to give, in a remote way, their suggestions, the advice that the farmers needed. So I have to say that our breeders, we know that our customers are really our greatest asset, so they cannot think that they've been left alone for even one minute, so Veronesi has to be always there together with the customers, the farmers.

 

Michelle:       As much as it seems impossible to prepare for a pandemic, do you think the agriculture sector could have done things differently? And on that note, what lessons can we learn from this in the way our food supply chain works?

 

Massimo:       To be prepared, to be really prepared for such a pandemic, I think, was impossible. The question is, probably, “What can we do to improve in order to be better prepared for it?” There is not only one answer, of course. If I look to the Italian market, we are, for example, a net importer of raw materials. So, even if we think (we should try) to be more prepared, we cannot change our way of (importing) the crops in Italy. We are trying to increase the quantity of raw materials to grow in Italy, but it's impossible. We are a small garden. We cannot be competitive with the production in many other countries, so we still remain a net importer. I have to say that even if we were not prepared for the pandemic, after the first few days, where we were all afraid about the risks of shortages of raw materials — both macro raw materials, grains and so on, but on the other side, also, of micro ingredients — after the first day, we had to say that everything has come in the right time.

 

                        What we need is a better dialogue between the producer of the products like milk, like animals, and the final market, the consumer market, because the problem, for example, for some sectors was where to sell the product that usually went to export, went to foreign countries. When the flights were stopped, of course — for example, the wonderful mozzarella di bufala, the buffalo-milk mozzarella, had no more market, or the part of the market (where it sold the most), which was the export market, was stopped, so we had a surplus of production. We probably need a better dialogue between the first part of the production and the transformation, processing and distribution. This is what we need. For the future, what I see is a better dialogue along the supply chain.

 

Michelle:       That certainly could hold a lot of positives. How long do you think the agricultural sector could feel the impact from COVID-19?

 

Massimo:       When we talk of the agriculture sector, we are talking of so many different products. Look to the wine. Look to the vegetables. Look to the tourists and so on. Look into our sector, the sector we are involved in, the meat sector and the dairy sector — meat because we process and sell meat products, and on the other side, the dairy sector, because we sell feed to the dairy farmers. Probably the impact will be, for Italy, relatively long.

 

                        I'm positive about the future. I'm for sure positive about the future, but I have to say that remember that the tourism, for Italy, represents 13% of our GDP. Imagine that only in the last two and a half months — that means the beginning of spring, Eastern time — we have, usually, in Italy, 80 million tourists present. If we consider that they eat usually twice a day, that means that we lost, in the last weeks, around 160 million meals. This means, of course, meat, cheese. It means processed products like ham. It means wine, too. What we lose with tourists, we cannot recover with the consumption of the Italians. That's why I think that we need time to go back to the normal situation, to the situation before the pandemic.

 

Michelle:       As every economy has struggled around the globe, when things are safe again, I'm sure you want those tourists back.

 

Massimo:       Well, sure. That's for sure. This new experience, the experience of the pandemic — which is a first for everyone, I think, in the world — tells us that we can't wait to do things. As Latins say, "Carpe diem." So, the message for all the people listening to us today is: don't wait. For the next year, plan to visit Italy. We need everyone's support, really. Here in Italy, you'll find culture, history, nature, people who know how to work with you and push you, and the best food in the world, so we'll wait for you.

 

Michelle:       What do you want consumers to know about you, about the food supply chain?

 

Massimo:       As I said before, our business, our activity, has been considered as essential. I think that, really, they gave us the awareness of how important we are for the entire supply chain. We are important because we are preparing the food for the Italians. I say Italians because we are based in Italy, but it's the same for the industry working in the same sector in other countries. We were allowed to work because it was important to bring the food to the people staying home.

 

                        I remember, I served in the U.S. a few years ago on a farm, on a big farm, and we had shirts, and it was written on this shirt, "Our family is proud to feed your family." It is really important that our work or our job is to feed people. We are open to the people. We want to be transparent with people so that they know what we do and how we do it. It's really important. We invested, in the last year, a lot of money in animal welfare because we believe that better welfare breeds better animals and shows better results. As I said before, to work together with the supply chain, with all the players of our supply chain, is the only way, I think, we can really face the worst.

 

Michelle:       I want to go back to talk about empathy and a sense of family, a sense of community. Is there a stronger feeling now that we are all in this together, the agricultural supply chain, the consumers? Is there more of a connection now?

 

Massimo:       Well, a sense of family, I think, is, for us as Italians, at the top of our thoughts. We have seen in the last few weeks that everyone is facing the same problem, and probably the mistake we did (make) was to think, at the beginning, that the coronavirus was the Chinese (people's) problem; then we found it in Italy. Still, everyone thought to close Italy. Then, in a few days, we found it all over Europe, the U.S., South America, and all over the world, so we probably need to share more information. Sharing more information probably could have (been correlated to) less victims, so the method is, when we have difficulties like this, we need to face the difficulties together.

 

                        What we have seen in Italy is that we have a lot of volunteers helping families, helping other people living alone without having the possibility to go out or to go shopping. Really, what we noticed in the last few weeks is this kind of mutual help to other people, so at different levels — family level, private level, or at the highest level, between different countries. I think that we have to see all these things more in a community way.

 

Michelle:       Veronesi is a family company. Is that correct?

 

Massimo:       Yes, it is. It is. Still now, after 62 years, it's still a family company and was founded by Apollinare Veronesi, managed by the five sons after his death, and now we have the third generation in charge. Actually, the president is one representative of the third generation of Veronesis, but they're still now a family company. Yes, it is.

 

Michelle:       Alltech is also a family company, so we certainly have that in common. Mr. Massimo Zanin, thank you so much for joining us today. Stay safe. Stay well.

 

Massimo:       Thank you. Thank you so much, too.

 

Michelle:       For additional resources on COVID-19, visit alltech.com.

 

 

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