Demand

The pandemic was a challenging period for Eurostampa, who saw an overall drop in production by about a third. Most of the drop was attributable to the company's spirit section – Eurostampa’s spirit customers required less production during Italy’s lockdown.

Eurostampa also labels food goods (notably pasta sauces, olive oil and chocolate) and these saw an increase of 10% during social distancing.

Despite the slowdown in demand during the pandemic, Eurostampa's customers have moved quickly to order after social distancing measures were lifted. By September, Gian Franco Cillario expects order volume to be aligned with 2019 once again.

Decisiveness

Making decisions quickly was vital to keep the business moving in the challenging circumstances – especially in Italy. The management moved decisively to put new safety and hygiene measures in place as soon as the severity of the pandemic became apparent. 

Eurostampa completely changed the way they ran production and working conditions for their team. The firm continued to run three shifts a day, and they had a strategy to segregate shifts entirely, so there was no physical handover or overlap between employees. There was a half hour pause between every change of workers coming on-site, and the company introduced five new changing areas to ensure fewer people were gathering in a single space. Employees had to wear masks, and hygiene was an absolute priority. Different entrances and exits were also installed. Once a week, the whole factory is sanitized from top to bottom – a measure that continues today.

'These measures were important from a health and safety perspective, but they were also important for the wellbeing of our staff. We wanted to create a feeling of assurance and safety when they came to work. Part of doing that was to create an environment that felt clean and that we were taking the measures necessary to protect everyone as much as possible. We were very, very lucky, and believe that we haven't had any cases at our Italian plant so far,' says Gian Franco Cillario.

 During the pandemic, Eurostampa met all their orders on time, despite the critical situation. Another move was to recommit to service. 'We made service to our customers our absolute priority, and as a result, we were able to meet every demand on schedule,' says Cillario. 

Building better personal relationships over video 

Gian Franco Cillario is a firm believer in the power of professional relationships and being able to speak face-to-face with customers and suppliers to get the most out of partnerships. That said, technology and video conferencing are helping Eurostampa connect better with contacts that they can't meet in person. Videoconferencing is likely to form part of the group's communication strategy going forward, especially for partners located further away for whom visiting a Eurostampa factory is more time-consuming.

'In my opinion, nothing will ever replace the value of face-to-face meetings. To form better relationships and benefit from a more integrated supply chain, we have to be able to share information, understand the different needs of the supply chain and tackle challenges together. In-depth conversations with our customers and suppliers are central to this, and they are always best done in person. Videoconferencing isn't the perfect substitute for physical meetings, but when our clients are far away, or they can't visit our sites regularly, video will become a more integral part of our standard communication practices going forward. It will be a particularly important medium as we look to maintain even better communication in a world with less travel and potentially fewer meetings,' explains Cillario. 

Industry consolidation and opportunity

So, what next for the packaging and labelling sector? 

Gian Franco Cillario believes there will be both consolidation and divestiture as a result of the pandemic. 'I think already we see that Private Equity firms are looking for opportunities and approaching the market quite strongly with a vision to consolidate players in the business. I absolutely think we will see companies merging as a result of how COVID has changed the economy.'

Cillario also urges caution, explaining that what looks like a perfect synergy on paper can be more challenging in reality. 'In our industry, exponential growth via acquisition can be very disruptive for a company, it's culture, for employees and for customers. It doesn't necessarily translate to lower costs or more value for the customer.'

As well as acquisitions, Cillario also expects that there will be divestiture, with companies selling off unprofitable segments. He believes there will be opportunity for those taking them over to make the businesses efficient and profitable again with the right management and leadership.

In the current economic markets, Gian Franco Cillario explains that he believes that Eurostampa has an invaluable position: the firm has the perfect balance of a global footprint but is still a size that allows it to be easily managed. 'We're a family company, and our customers see that as a family, we are very engaged with the operations and running of the business. Our brand is recognized, and we also have a vision which is appreciated by the market and our customers. People know that these are the unique factors that Eurostampa bring to the table, and this presents added value for our customers.'