Cremonini Emerges as Billionaire Making Burgers in ItalyTom Metcalf
Luigi Cremonini’s first abattoir could slaughter 20 cattle a week when it opened in 1963. Today, his slaughterhouses have a weekly capacity of more than 12,000, making Inalca SpA, his production arm, Europe’s largest beef producer, processing half a million tons of meat every year.
Inalca is just one piece of Cremonini’s food empire. Through Modena, Italy-based Cremonini Group, he also owns 50.4 percent of publicly traded distributor Marr SpA, as well as a catering division that operates aboard 300 trains a day across Europe. The businesses have made the 75-year-old a billionaire.
“The future was in the meat industry,” Cremonini said in a press release celebrating the 50th anniversary of Inalca. “From here you can reach all over the world.”
Cremonini Group had revenue of 3.5 billion euros ($4.6 billion) in 2013, up 2.1 percent from 2012, according to its website. Inalca makes a billion hamburger patties a year and supplies clients such as McDonald’s Corp. in Italy, Denmark, Greece, Malta, Cyprus and Russia. Its cured meat brands, including Ibis Salumi and Salumificio Cortebuona, market Italian specialties such as bresaole, parma ham and salami.
“Inalca’s a good business with well-invested factories which are much bigger than its Italian rivals,” Richard Brown, a director at food consultancy Girag & Associates, said by phone. “They’ve got a very good relationship with McDonald’s, which is a huge compliment as they’re an exacting customer.”
Publicly traded Marr also has performed well, even as meat consumption in Europe has declined since the 2008 financial crisis, according to Brown. Revenue surged 8.3 percent last year to 1.3 billion euro, making it Italy’s largest food-service distributor.
“Marr is the clear leader in Italy’s highly fragmented distribution market,” said Matteo Bonizzoni, a Milan-based analyst at Kepler Cheuvreux. “It’s a cash cow for the Cremonini Group and is distributing a lot of dividends.”
Cremonini is credited with owning 79 percent of his namesake conglomerate, based on a prospectus filed before its 1998 initial public offering. The document showed that Cremonini owned 28 percent of the company directly and 51 percent indirectly through his 72 percent stake in family holding vehicle Immobiliare Ci-Erre Srl. The company was delisted in 2008 and today is wholly owned by the Cremonini family, according to its website.
Inalca is valued using the company’s reported financials and the average enterprise value-to-sales and enterprise value-to-earnings before interest, taxes, depreciation and amortization multiples of three publicly traded peers: Cranswick Plc., Hilton Food Group Plc., and Campofrio Food Group SA.
The catering arm is valued using the average enterprise value-to-sales and enterprise value-to-Ebitda multiples of publicly traded Autogrill SpA.
Including his stake in Marr, Cremonini has a fortune of $1.1 billion, according to the Bloomberg Billionaires Index. He’s never appeared on an international wealth ranking.
Luca Macario, a spokesman for Cremonini, said the billionaire declined to comment on his net worth.
Cremonini founded Inalca with his younger brother, Giuseppe, and Luciano Brandoli. They developed it into the Cremonini Group as they diversified into cured meats, food distribution and catering.
“We have always tried to enhance our product and also have in hand what is downstream,” Cremonini said in the 2013 press release. “These first fifty years have fully demonstrated the validity of business models applied in three business sectors.”
Marr has traded on the Milan Stock Exchange since 2005 and generates 94 percent of its sales in Italy. Its domestic focus isn’t shared by the rest of the group. As with Inalca, more than 50 percent of the catering business’s revenue came from overseas in 2013, much of it from concession sales aboard the English Eurostar trains, Belgium’s Thalys service and France’s TGV rail network.
The group first started operating on trains in 1990, six years before Cremonini bought his younger brother’s stake, amid disagreements over the company’s strategy, with Giuseppe pressing for increasing diversification away from the meat processing operations.
As part of the split Giuseppe, who died in 2008, received real estate assets and olive and vegetable oil packager Olitalia. Later he established balsamic vinegar maker Acetaia Giuseppe Cremonini.
“I made a choice for the interest of the group. A business is unproductive where there is tension,” Giuseppe Cremonini said in a translated interview with food magazine Premiata Salumeria Italiana in 1997. “I chose to leave. It was a difficult step, but now I feel no regret.”