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An Italian Oven Maker Expands Amid the Euro Crisis

Italy's Bertazzoni, a 130-year-old manufacturer, has thrived by
selling luxury kitchen appliances in its new U.S. market. Now
it's betting on the BRICs—and Europe

By Chiara Remondini and Flavia Rotondi
     June 13 (Bloomberg BusinessWeek) -- The past few years
should have been tough on Paolo Bertazzoni. As chief executive of
Bertazzoni, a maker of high-end kitchen appliances in the
northern Italian town of Guastalla, he has watched as the
financial meltdown and euro crisis battered his key markets. Yet
even as appliance sales in Europe’s biggest countries stagnate,
Bertazzoni remains bullish, expecting revenue growth to top 18
percent this year, to €70 million ($88.5 million), after jumping
23 percent in the first quarter. “We’re optimistic,” Bertazzoni
says. “There is a significant group of customers whose
aspirations and lifestyle give a central role to cooking for the
family. Our products are made to respond to this desire with
     The 130-year-old company has managed to keep growing in
large part by looking to new markets, especially the U.S.
Bertazzoni has redesigned some products to suit American tastes,
including super-sizing ovens so they can accommodate massive
Thanksgiving turkeys. Since Bertazzoni entered the U.S. in 2005,
sales there have grown to about a fifth of the company’s
revenues. “We have developed a product that is suitable for the
American market, yet with a strong Italian identity,” Bertazzoni
     That identity is grounded in a sense of design. The
company’s ovens and stoves come in eight bright colors, including
top sellers inspired by Lamborghini’s yellow and the signature
red of Ferrari. The latter is headquartered in Maranello, just 40
minutes (or less in a Ferrari) from Bertazzoni’s headquarters.
“Proximity to the world of luxury cars allows us to access
special suppliers,” Bertazzoni says.
     Last year Bertazzoni introduced high-definition touch
screens about the size of an iPhone to control its ovens. The
screens let users control “the Assistant”—software with a bank of
cooking sequences such as dehydration, turbo, and Shabbat mode.
“Producing and selling a product that is well-designed or badly
designed costs exactly the same amount of money,” says
Bertazzoni, the fifth generation of his family to run the
company. “Style is part of the products we manufacture.”
     One big hurdle has been soaring prices for raw materials.
While profits still rose last year, their growth slowed as
purchases of stainless steel, aluminum, and copper “strongly
weighed” on expenses, Bertazzoni says. To make up the difference,
Bertazzoni analyzed his prices and concluded that a few items,
such as professional ranges, had enough of an advantage over
rivals’ products that he could charge as much as 8 percent more
for them. For other products with less differentiation from
competitive offerings, he bumped prices up by 3 percent or less.
Further savings came after a team of employees examined the
company’s operations and figured out how to cut waste by 30
percent, helping to bring overall production costs down by 2
percent, Bertazzoni says.
     A bigger issue may be the ability of Bertazzoni’s key
markets to grow if the euro crisis deepens. With continuing
troubles in Europe starting to hurt the U.S. economy, the outlook
for the appliance industry is “quite negative,” says Lorenza
Della Santa, an analyst at Euromonitor International in London.
“Premium, luxury players are indeed much better positioned than
rivals addressing low-end appliances, but they’re in a niche
market,” she says. “They’re not completely sheltered from the
recession, even if they’re better placed to face it.” And
Bertazzoni is facing increased competition for that high-end
market from bigger rivals such as Miele, Viking, Thermador,
Gaggenau, and Wolf.
     Bertazzoni’s strength, says Paolo Morosetti, a professor of
corporate strategy at Milan’s Bocconi University, is that it has
tapped into the tradition of fine food and precision engineering
of northern Italy. The company benefits from “a clear vision of
the business by the owner family, who’s personally involved in
the management,” Morosetti says. Bertazzoni’s children, Valentina
and Nicola—the sixth generation in the business—respectively
serve as brand manager and sales chief.
     Francesco Bertazzoni, an engineer making precision scales
for dairies and pharmacies, founded the company in 1882 to make
wood-burning cooking stoves, which were starting to replace
fireplaces. In the early 1900s, the company built its first
factory with money from Paolo Bertazzoni’s grandmother, who came
from a family of Parmesan cheese producers. (Guastalla lies just
20 miles from Parma, the city that gives the cheese its name.) In
the 1920s, Napoleone Bertazzoni, the founder’s grandson,
introduced a nickel-plated luxury model, using production
techniques he learned while working with Fiat (FI:IM) in Turin.
     Bertazzoni has been hiring through the recession. The
company today employs about 300 people at its two-story brick
headquarters in Guastalla, up from about 220 in 2005. In the main
workshop, laborers dressed in blue working clothes fit together
parts, churning out roughly 15,000 appliances a month—everything
from single ovens starting at €2,000 to the €7,000 Heritage gas
range with six-burners, electric griddle, and two ovens.
     Now, Bertazzoni says, it’s time to turn his attention back
to Europe and to countries such as India, Russia, Brazil, and
China. To do that, he’s investing €9 million through 2015 to
expand his 18,000 square meter (194,000 square feet) plant by 60
percent so he can boost capacity and add new products. “Europe
has a lot of potential, even if the situation is very difficult,”
Bertazzoni says. “Emerging markets are becoming increasingly
important and this has helped us, boosting sales and creating
footholds in parts of the world that are growing very fast.”

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