Lavazza’s Response to the Great Challenge

The pandemic upon us has caused an emergency that will have a very significant impact on the international economy. Our country and its business and productive fabric will have to go through a test of resistance, just a short time after the one already passed after the financial crisis of 2008. This event - whose unforeseeability and rapid spread found us unprepared nationally and globally - forces us to rethink and reconfigure our way of approaching business, our relations with society, and our way of belonging to a community.

Lavazza decided to act immediately, in the initial days of the crisis, on two indispensible assets for our way of doing business: people, and relations with the communities in which we operate.

Precautionary measures were taken rapidly. We extended smart working and adjusted our operations to comply with public orders. In cases such as this it is essential to act with transparency, pragmatism, and maximum effort to ensure that everyone - from employees to suppliers, passing through customers and everyone else in the value chain - benefits from the greatest safety possible.

This emergency has been confronted focusing on our priorities: first of all, health, of course. From this standpoint we prepared a coordinated action with all of the Group’s facilities around the world, to give everyone the same instructions. Not only smart working for employees, but also the cancellation of trips, the increase of health/hygiene treatments, and the preparation of an internal communications strategy to provide precise and exact information on the preventive behavior to always follow (both inside and outside the company). We thus tried to act in advance, including outside of Italy, anticipating the measures that were then adopted in various countries.

The other priority was the protection of jobs. Not only because of how important people are for our company, but in order to defend the communities that for us, are essential in creating shared value. We believe that contemporary companies have a collective responsibility and must be a point of reference for the community; an economic, but also relational and social accelerator.

So it was natural for the Lavazza Group to decide to intervene immediately by allocating 10 million euros for projects supporting the health system, schools, and vulnerable portions of society in the Piedmont Region, one of the areas in Italy hit hardest by this pandemic. We did this because we are firmly convinced of the need to send a concrete signal to put an end to the crisis as soon as possible and restart Italy. We are aware that only a joint, immediate contribution from everyone will allow us to overcome the emergency.

The last priority, naturally, regards the second phase, that of recovery. It is necessary to begin to prepare an intense action plan aimed at restoring business continuity. The public and private sectors must work in concert (as before, but even more) and I am convinced that businesses will have an even more central role in the reconstruction of both the economy and society. As business leaders, we will be called on to plot the course to get the country moving again.

Lavazza is a very solid global group that closed 2019 with turnover of 2.2 billion euros. We are already working to go beyond this discontinuity, facing the unknowns of a 2020 that had started very well. For this reason it is crucial to redefine goals and processes for the second half of the year, giving priority to investments aimed at immediately returning to rapid, solid, and healthy growth, able to provide the greatest degree of protection and fluidity to the entire production chain. It is our duty and responsibility to look towards the medium to long-term, to lead the Group - and its entire universe made up of people, families, outside companies, professionals, producers, and partners - towards an increasingly international scenario spread out among multiple channels, reducing the level of risk in our business model risk, being fully aware of all of the dangers and uncertainties, but also the opportunities that this will entail.

We are moving forward with responsibility, attempting to keep a constructive attitude as much as possible in order to deal with the emergency without taking our eyes off the future, but preparing for an exit scenario that could potentially be very different than the scenario upon entry.

We are aware of the difficulties we will meet along the way, but we are also certain we will have the strength, determination, and economic and financial solidity to overcome them. Our view towards the future must put us in a condition to go beyond this emergency and seize every opportunity to strengthen our strong ties to our various stakeholders. We must organize a supply chain that is increasingly innovative and integrated, supported by a massive research program in which all of the Group’s investments and goals are aimed not only at an acceleration of sustainable projects, products, and processes, but also adequate levels of protection and mitigation of the impacts of a potential global crisis, so as to anticipate and attempt to adapt to the new times that await us.

Giuseppe Lavazza is Vice President of the Lavazza Group