Nestlé forms strategic alliance with Pastificio Rana to grow Buitoni

08-Jan-2018 - Last updated on 08-Jan-2018 at 14:07 GMT

Buitoni remains "central" to Nestlé's portfolio

Swiss food giant Nestlé has reached an agreement with fresh food group Pastificio Rana that will extend its Buitoni Italian sauces and pasta business into new European markets.

Nestlé has struck a preliminary deal to sell its 25,000 square foot Moretta production plant to Verona-based Pastificio Rana. The acquisition includes all of the Piedmont plant’s assets. It will “safeguard” the jobs of the 190 people employed at the site, Nestlé said.

The facility, which was built in 1922 and renovated in 1990, will continue to produce fresh stuffed pasta and pasta sauces for the Buitoni brand.

Extending Buitoni’s market reach

Nestlé and Pastificio Rana also inked an “important” commercial agreement that will see the Italian group take over the sales and marketing function of the Buitoni business in Europe, Middle East and North Africa region, which the exception of Italy and Spain, where Nestlé will continue to operate the brand.

“The agreement foresees that Pastificio Rana will distribute the Buitoni products made in the factory in Moretta, Cuneo (filled pasta and fresh sauces) in the EMENA countries where those products are not already present, while Nestlé will keep the sales and distribution where already there (Italy and Spain),” a spokesperson for Nestlé revealed.

“The list of the new countries is not ready for disclosure yet,” the spokesperson added.

Pastificio Rana is present in 38 countries worldwide. The family-owned group, which already operates six factories, generated turnover of more than €600m in 2017, with overseas sales representing more than 60% of the total. The Rana brand ranked fourth in the Cohn & Wolfe Authentic Brands ranking for the Italian market behind Amazon, Ferrero and Ferrari.

Gian Luca Rana, CEO of Rana Pastificio, said that the agreement will provide Rana with additional capacity to support continued growth, which has averaged “above 15%” for the past 25 years.

Buitoni not on the block

The Swiss company has been adjusting its portfolio and selling off underperforming brands. In Italy, recent disposals have included the sale of its La Valle Degli Orti, Mare Fresco and Surgela frozen brands to Germany’s Frosta. Nestlé also sold its Italian confectionery brands, including Rossana and Fondenti, to Italian manufacturer Fida last year.

Speaking at Nestlé's investor summit last year, Marco Settembri, CEO Zone EMENA, said that the company intends to improve its growth trends and return on investment in the region.

The group will make "clear choices" by focusing two-thirds of its capex on businesses that generate 40% of its EMENA sales - namely coffee and petcare, Settembri explained.

In order to "unlock" the potential of its locally managed food brands, Settembri said that the company will "streamline and simplify" its food portfolio, address "dilutive cells" and focus on "growth platforms".

In particular, the executive flagged a need to "reduce structural costs" and strengthen the group's "industrial and logistics infrastructure".

However, Nestlé today insisted that the Buitoni brand remains “central” to its portfolio and the Buitoni brand will remain the property of the company.

Suggesting that this strategic tie-up is about growth as well as cost control, the company said it will continue to invest in innovation, research and marketing.

“This agreement will contribute to strengthen the Buitoni brand overall in the EMENA area, as a further benefit,” the spokesperson told FoodNavigator.

Leo Wencel, Head of the Nestlé Group in Italy, elaborated: “The commercial partnership with Rana will allow it to seize growth opportunities abroad while ensuring development and continuity of employment at the Moretta site.”

The agreement is pending final regulatory clearance.