“We are transitioning towards a new concept of luxury” Matteo Lunelli, Altagamma President

The global crisis triggered by the Covid-19 pandemic has hit the world of luxury hard. Drastic decisions had to be made to save the sector, including the absolute necessity of rethinking the system in more sustainable terms.

How is this new "Green Mentality" philosophy perceived by the man who presides over the destiny of Italian excellence – that is, the Altagamma Foundation’s 107 brands (including Gucci, Brunello Cucinelli, Ferrari and Bulgari)? Every day since he took office in January 2020, Matteo Lunelli has been reflecting on how to develop synergies between the major Italian brands in fashion, design, jewelry, gastronomy, hospitality and wellness, in order to enhance their competitiveness on a global scale.

An economist by training, Lunelli worked for the investment bank Goldman Sachs in Zurich, New York and London, and he is currently CEO of Cantine Ferrari, a premium sparkling wine label, and President of Surgiva mineral water. In this exclusive interview with Luxury Tribune, he illustrates his concept of sustainable luxury and points out the challenges facing Made in Italy today.

According to Stella McCartney, the celebrated British designer, sustainability in fashion is above all "a state of mind". What does that mean for the Altagamma Foundation?

Sustainability has become a core value across the board for all the cultural and creative industries that Altagamma represents and it is one of the pillars of my strategy as President, which I have shared with our members. For an industry that operates in a continuous dialogue with society, from which it draws inspiration and which helps to shape tastes and lifestyles and consumption habits, macro-cultural and behavioral changes are the strategic framework to which all creative and entrepreneurial efforts must adapt. One of these changes is undoubtedly the growing attention to sustainability. Consumers of high-end luxury goods, who generally have a medium-high socio-cultural profile, are among the most sensitive to these issues, especially young people. The central theme is certainly the environment and the problem of global warming: a recent worldwide survey conducted by the international trend forecasting company WGSN showed that the environmental crisis is generating anxiety and concern in 90% of respondents. But sustainability does not only mean "Green Mentality", it also refers to economic and social sustainability in a much broader sense: it means care and respect for one's own territory, for workers' rights, for corporate welfare, for the affirmation of gender equality. I therefore agree with Stella McCartney's definition that sustainability is above all a state of mind. It has certainly become the yardstick for all our choices.

In your view, how has the concept of luxury evolved in recent years?

The concept of luxury is still evolving and is getting closer to the values that characterize Italian high­end production. Luxury is now less about ostentatious consumption and more about the experience rather than possession, sharing rather than exclusivity, the intrinsic quality of products rather than the status they represent. Italian high-end products are traditionally characterized by certain aspects that are in line with this new mindfulness: Italian products of excellence carry with them a significant element of manufacturing quality, combined with a high degree of technical and aesthetic innovation, as well as boundless creativity. I am also convinced that the crisis we are going through will further consolidate the trends that we have seen emerging in recent years. In short, I believe that we are living the transition towards a new luxury, one that is more mindful and more sustainable. Dutch trend forecaster Li Edelkoort recently stated that the virus is teaching us to slow down and change our habits. I believe that this "new slow" will make us appreciate products that reflect a more conscious lifestyle, that are more about intrinsic and lasting value. And against that background the new Italian luxury brands have a leading role to play.

French President Macron endorsed the "Fashion Pact" that was signed last August. What will Italy do?

Italy is the cradle of manufacturing excellence, there is no doubt about it. We are the only country that can boast vertically integrated supply chains in almost every traditional high-end sector. This allows us to control the supply chain, which is already a guarantee of high standards in so many aspects including sustainability. The sustainability of high-end companies also lies in their ability to keep the traditions and know-how of a community alive with a clear focus on supply chains, because high-end brands function in ecosystems that represent the main strength and the excellence of Made in Italy. I believe that a new sensitivity towards these issues is taking shape at all levels, including the institutional level. Many Italian companies have signed the "Fashion Pact". Altagamma, in line with the sustainable development goals defined by the United Nations, has placed sustainability at the center of its plans for 2020-2022. We are aware that today our companies are called upon not only to generate profits for their shareholders, but also to increase the well-being and safety of our employees. To this end, in collaboration with our partner McKinsey&Company we are developing a Charter of Values that will be accompanied by impartial consultancy, based on methodologies and programs that reflect the priorities of the global agenda on the subject, broken down by sector and company size.

Do you think that the Covid-19 pandemic has intensified the focus on sustainability?

I think so, among both consumers and businesses, even though their attention may now be focused on solving short-term, immediate problems. However, the crisis has highlighted the need for trust, both among individuals and towards brands, and companies will have to take this into account. Specifically with regard to social sustainability, I am proud to say, for example, that in this time of emergency, the 107 members and partners of Altagamma have been very engaged with the community, donating more than 43 million euros to fight Covid-19 and converting their production to masks, sanitizer gels and medical devices.

Do you think that digital solutions will be central to advancing sustainability?

Absolutely. Digital solutions can and must facilitate the transition towards models that are increasingly compatible with a new understanding of our relationship with the environment and with other people. Innovating products, services and internal business processes through technology can bring benefits both in terms of productivity and the overall sustainability of our development model.

Generally speaking, how do you see 2020 evolving and what should luxury brands focus on for a speedy recovery?

I’m afraid 2020 is not going to be a good year, there's no point in hiding it. According to estimates by Monitor Altagamma/Bain & Company, in 2020 the turnover for luxury goods brands worldwide is expected to decline by 20 to 35% on average. Hospitality and design, however, are bracing for even steeper drops, 70% and 35%/40%, respectively. Pre-crisis levels should be attained in 2022-2023, returning to positive trends - between +2% and +3% - by 2025. Luxury brands will have to keep focusing on three core aspects: creativity and innovation, digital transformation, and commitment to sustainability. This will not only ensure their survival and enhance their competitiveness, but it will also contribute to the growth of the country's economy.