Inside Barilla SpA's New Plant For Italian Pasta Manufacturing
Alessia Pierdomenico/Bloomberg via Getty Images
A public relations disaster for Italy-based pasta maker Barilla may be cooling off. Six weeks after CEO Guido Barilla's fumbling anti-gay comments on Italian radio, his company is acting decisively.

After holding discussions with gay groups in Italy and the U.S., the world's largest pasta-maker announced that it has formed a diversity board, appointed a chief diversity officer, and agreed to put same-sex families in its advertisements.

This is a 180-degree turn on wet noodles. On Sept. 25, Barilla, 55, started a firestorm with his radio comments: "I would never do [a commercial] with a homosexual family, not for lack of respect but because we don't agree with them. Ours is a classic family where the woman plays a fundamental role."

It didn't matter that, elsewhere in the interview, he said that he supported same-sex marriage. Gay groups and their supporters called for boycotts because of CEO Barilla's clumsy ousting of gay families from company marketing.

With Barilla net profits down 20 percent last year, the company could hardly afford the CEO's al dente foot in its mouth.

Apologies Made It Worse

Barilla acted in the next two days with two press releases and a Facebook (FB) video. Each contained profuse apologies, but sometimes stretched to the absurd.

Barilla couldn't seriously mean it had "the utmost respect for anyone, without distinction of any kind." Wouldn't a valid distinction exist for an incompetent pasta maker or pasta thief?

Despite the releases' further comments about love and respect and "everyone's right to express themselves," Barilla missed the point. Boycott calls came because he said he wouldn't feature same-sex couples in his advertisements. They persisted until now, when the company addressed the ad issue.

Insular Peninsula

According to the company, it doesn't operate out of the most cosmopolitan region. A company spokesperson pointed out that Parma, Italy, the location of the company's worldwide headquarters, is an even more insular city in a "very insular country."

ITALY-FOOD-BARILLA-GUIDO BARILLA
Gabriel Bouys, AFP/Getty ImagesBarilla CEO Guido Barilla
That might explain Barilla's old-fashioned advertising, with women, in the CEO's words, in a "classic family." After all, Italy may have the ninth largest GDP in the world, according to the International Monetary Fund and the World Bank, but it doesn't make the list of the top 10 countries where men come close to women in the hours they spend on chores.

Now, CEO Barilla tells Reuters that, after meeting with U.S. and Italian gay and lesbian groups, "The meetings have helped open our eyes and ears to the evolution taking place in the world outside Parma," and, "We are already working on new advertising concepts that will be much more open and much more inclusive."

Behind the Business Times

Barilla's stance stood at one extreme on advertising, but LGBT families are far from routine in mainstream advertising in the U.S., pasta maker's second largest market. Mike Lescarbeau of the Carmichael Lynch ad agency told Minnesota Public Radio that ads follow cultural changes; they don't lead them.

In that same piece, Bob Witeck, who works with Fortune 500 companies to market to LGBT consumers, noted that, "When same-sex couples are incorporated into a strategy, they're almost invariably focused in channels where there's a higher proportion of gay people seeing them." He compared this to pharmaceutical companies spending marketing dollars on TV shows most likely to attract older viewers.

Still, companies have come a long way from when bomb threats to its stores caused Ikea to pull ads showing a gay couple shopping for a dining room table. Last year, when the American Family Council's One Million Moms project launched a boycott after JCPenney (JCP) hired Ellen DeGeneres as it spokesperson, the retailer responded with Father's Day ads featuring a real-life male couple and their two children.

No Such Thing As Bad Publicity?

Today, Barilla will have a diversity and inclusion board, and a chief diversity officer. It will participate in the Human Rights Campaign's Corporate Equality Index, a rating of corporate policies relating to LBGT employees.
These efforts will cover not only sexual orientation, but also, the firm says, gender equality and disability rights.

But the change in ad strategy may be most meaningful to people beyond the company itself.

Judging by the way the world works, Barilla's future ads will be targeted where LGBT consumers are most likely to see them. They will likely walk a careful line between bad publicity that threatens sales, and widely distributed ads that may increase sales to some, but lose business from others.

Ironically, the negative publicity barrage may unwittingly have brought more attention to the company's change than it would have were the moves made, say, pre-emptively. If noticed enough, the bad now can make the later good appear better.

No one ever said business is easy. Barilla's CEO has certainly learned that. To his credit, he changed course dramatically in a mere six weeks. Whatever the reasons, Barilla's move is faster and more dramatic than most people -- except politicians -- can make.

Now critics will see whether Barilla -- the man and the company -- have not only thrown pasta to the wall, but if it sticks.

Tom Jacobs is Lead Advisor for Motley Fool Special Ops, a premium investment service concentrating on special situations such as spinoffs. Follow him @TomJacobsInvest. Tom has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned.


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