Barilla is an Italian Family company founded in Parma more than 130 years ago. It is now the leading company in the world pasta market. Durum Wheat is the main raw material with a total consumption of around 1.5 Million tons per year. Due to the limited world production of around 30 Million tons the durum wheat market is susceptible to specific risks regarding Supply Security, Quality Security and Price Volatility. Barilla has developed a detailed analysis of these risks and specific tools to mitigate them: Geographical diversification of Durum wheat origins, Stock management, Cross Financial hedging with other cereals markets, and Cultivation Contracts. This last tool consists of a vertical integration in the supply chain starting from plant-breeding companies, through farming organizations, offering farmers specific premiums in order to improve the quality and safety of the durum wheat grown close to Barilla mills, creating value along the whole supply chain. This approach also helps to improve durum wheat cultivation practices and sustainability of the crop from the economic and environmental standpoints.
Keywords: Barilla, durum wheat, cultivation contracts, sustainability
Jel Code: Q11, Q13, Q14