The paper journey | Mondadori

Paper is, still and despite the changes that digital evolution has imposed on the publishing business, our main and indispensable raw material.

The life cycle of the paper product begins within the paper industry where the paper is made and then sent to the printing company. Subsequently, after being stored inside the warehouses, the printed paper product is delivered, through special logistics systems, to distributors and end customers.

Once the book/magazine is in the reader’s hands, the life cycle of the printed product continues in one of the following three ways:

the book/magazine remains in the reader’s home and can then eventually be reused (for example, re-read, given as a gift, donated to schools and/or libraries);
the book/magazine is sent to the collection and recycling of paper waste, which becomes a valuable raw material that can be reused in paper mills (waste paper);
the book/magazine is disposed of in an undifferentiated way.

Around paper, its production and its use, a very articulated supply chain develops, with important impacts also for the environment. For many years the production industry, the paper mills, have been at the forefront to transform the production cycle in sustainable ways, also thanks to international bodies whose mission is the protection of forests – paper is produced from the cellulose of trees – such as FCS, PEFC and Greenpeace.

As publishers, in response to Greenpeace’s invitation in 2010, we are committed to using certified paper throughout our production. We have joined the initiative launched to companies in the Italian paper industry to safeguard primary forests. In particular, we have undertaken to define a path to progressively increase over time the percentage of “forest friendly” paper.
In this sense, the data for the period 2010 – 2019 testify our commitment to progressively increase the sustainability of all our publishing houses.

Certified paper as a % of total printing paper - Italy

In 2020, the total amount of paper purchased for the printing of editorial products in the scope of continuing operations (Italy and the United States) amounted to approximately 52,760 tonnes (-20% versus 2019). Leveraging on the strategy of purchasing goods and services that started in 2014, Mondadori has strengthened its commitment to rationalizing the use of paper in the printing of its products, and to have greater control over the supplier selection process, to ensure that their work is consistent with the sustainability principles of the Group. Supplier selection criteria require that paper is certified by the PEFC and FSC, the two main certification schemes adopted worldwide, in order to gradually increase the percentage of certified paper used over time.

Italy

The table shows details of paper consumption by type (certified, classic and recycled) for the period 2018-2020.

Paper consumption - Italy (tonnes)

	2020		2019		2018
Type	tonnes	%	tonnes	%	tonnes	%
Certified paper	49,256	99.99%	62,643	99.98%	67,325	99.94%
Recycled paper	1	0.00%	5	0.01%	32	0.05%
Traditional paper	6	0.01%	7	0.01%	11	0.02%
Totale	49,263		62.655		67.367

United States

Rizzoli International Publications indirectly purchases raw materials through printing suppliers, mainly operating in China and, to a lesser extent, in Italy. Due to the type of products published and the international markets in which the company operates, to date the attention paid to the use of certified paper is limited. However, since 2018, the emphasis on the use of certified paper has grown to bring the company’s commitment into line with that of the Group. It is estimated that in 2020 about 85% of the paper used is certified, an increase compared to last year (in 2019 about 80%).

Below are estimates of paper consumption for the period 2018-2020.

Paper consumption United States (tonnes)

	2020	2019	2018
Tonnes	3,500	3,500	3,249

¹ Figures on RIP 2018, 2019 and 2020 paper consumption are estimated on the basis of the copies produced and the average weight per copy, as detailed figures on actual consumption of paper for printing are not available in the documents received from suppliers, nor was it possible to trace the cost of paper alone in the figures appearing in the purchase invoices.

Logistics and the end of life of editorial products

The distribution logistics of the Mondadori Group is developed through a series of overlapping networks that cover the entire national territory and differ in channels for the type of items managed and transported: magazines (newsstands, subscriptions and newspapers), books (trade and school), clubs (Mondolibri products) and e-commerce.

Many of the logistic processes include both a direct shipment to the destination points of the reference channel and a return shipment of the unsold product. Depending on the specific channel, the unsold product may be destined for storage, subsequent reprocessing for recycling or pulping (if paper), destruction or disposal.

Magazine – Italy

Logistics for the Magazines Italy Area is managed by Press-di Distribuzione Stampa e Multimedia S.r.l., a wholly-owned subsidiary of the Mondadori Group, which manages the distribution of Mondadori magazines and the magazines and newspapers of other publishers for the newsstands channel and subscribers. Press-di’s logistics processes, including transport management, are all outsourced to select suppliers. Specifically, the logistics processes for the magazines were entrusted at end 2019 to Di2, of which Press-di Distribuzione Stampa e Multimedia S.r.l. is a 50% partner.

With regard to magazines, in 2020, approximately 55,027 tonnes of product were transported (-15% versus the prior year), entirely by road transport (with the additional use of ship transport for distribution to islands, involving the roll-on/rolloff of vehicles onto ships). The strong cut in the number of pallets transported, from 114,355 to 85,145 (-26%), is more than proportional to the drop in weight (-15%), thanks to the logistical efficiencies in warehouse and load management brought by Di2, with resulting benefits in terms of environmental impact due to the reduction in the
number of vehicles required for transport.

The magazines logistics process in Italy involves four steps:

film wrapping and shipment preparation: in 2020 this process was applied to approximately 28.36 million copies, using 116 tonnes of cellophane wrapping, approximately 85,145 pallets (equal to 553 tonnes of wood), and 21 tonnes of film; the activity was discontinued in November 2020 by Press-di and returned directly to the user companies (captive and third parties) through an agreement managed centrally by the Group Procurement Department.
primary transport: from distribution logistics centres (Cinisello Balsamo, Milan, Rome) to local distributors (43 local distributors in 2020);
last mile (delivery to the point of sale): local distributors deliver copies to newsstands and carry out the “last mile” transport service to the point of sale. Local distributors are responsible for collecting unsold products at newsstands every day and processing returned products for return delivery to the Press-di national returns centre or for local pulping;
transport of returned products: unsold products subject to return to the publisher are transported to the national returns centre of Bregnano (Como) through the Press-di primary transport network.

The distribution of newspapers of third-party publishers (including Il Giornale, Libero, Avvenire) is developed on a logistical grid different from that of periodicals. The newspaper network starts from a series of press centers located throughout the country and has as its destination point the local distributors. This network, short and fast, is optimized on delivery times and shared with other distributors for greater volume efficiency.

The reduction of operating costs (deriving from the progressive decrease of transported weights) corresponds to a proportional reduction of emissions due to the use of transport carriers. This result is added to the effect of the certified yield, i.e. the local pulping of unsold copies carried out by local distributors. The process, while guaranteeing the publisher the treatment of returns for statistical and accounting purposes, does not require the return of unsold copies to the warehouse, with a clear reduction in costs and emissions.

As far as the management of returns is concerned, Mondadori has an extremely high rate of local waste disposal: Press-di (in agreement with the Group and the third-party publishers distributed) has, in fact, encouraged the maximum possible diffusion of the certified return processes of local distributors. However, the constant decline in the circulation of newspapers and magazines, in addition to determining a general decrease in returns, has had repercussions over the years on intermediate economic entities (local distributors and newsstands) with a consequent reduction in the total number of local distributors and those that guarantee certified returns.

Trade books

The trade books logistics business (for the Mondadori, Einaudi, Electa, Frassinelli, Piemme, Sperling & Kupfer brands, until April 2017 managed by Mondadori Libri S.p.A. at the Verona logistics center) was sold as a business unit to Ceva Logistics S.p.A. in May 2017. The new supplier, through various phases, transferred the supply, counting and selection activities to its logistics hub City of Books in Stradella (in the province of Pavia), where it already managed the editions of Rizzoli Libri. The launch activities, also managed by Ceva Logistics, are entrusted to an external provider located in the Verona area.

November 2020 saw the start of the relocation of supply activities from the Stradella warehouse to a new dedicated warehouse located in Broni (PV). This transfer will end in March 2021. In this context, the returns process (see the corresponding table for figures relating to shipping volumes, pallets and copies handled) is worthy of attention: returns are registered, classified based on quality, recorded, and stocked. The owner of such stock, i.e. the publisher, pays for storage and decides when to pulp the product.

All the packaging used for the distribution of Trade Books is made of corrugated cardboard, with 90% recycled paper. These packages are then in turn 100% recyclable and the source of the recycled material comes from national waste paper binders.

School Publishing
In 2020, Mondadori Education distributed approximately 5.53 million textbooks and teachers’ guidebooks. In 2020, distribution operations for all Mondadori Education publications were performed at the Verona logistics hub, managed by Ceva Logistics.

The logistics of the products of Mondadori Education and Rizzoli Education are linked to the peculiar activities of the school (propaganda, adoption and sale of books):

through a network of propagandists, in the months from January to May, the texts are presented to the teachers in order to obtain their adoption; the logistics is in charge of sending the volumes from the central warehouse to the propagandists; finally, the propagandists deliver or send to the teacher the essay copy(s). It is pointed out in this regard the introduction of the digital essay copies (linked to the development of multidevice digital school texts), which in perspective will reduce the production and shipment of the paper essay copies;
starting from May and, with different intensity, until the end of October, Mondadori Education and Rizzoli Education supply the retail distribution points for the sales campaign, reaching approximately 20 destinations; moreover, at the reopening of the schools, the propagandists are provided with volumes and guides to be distributed to teachers as essays;
in addition to shipments to peripheral distribution, the central warehouses in Verona and Stradella directly supply some directional customers and about 800 bookstores for the university and L2 (Italian for foreigners) volumes;
although returns are less frequent for school textbooks, total returns in this segment came to approximately 591,000 copies in 2020.

The distribution processes adopted by Rizzoli Education are similar, with the exception of the relevant logistics hub, which in the case of the publisher is Stradella.

As for the number of copies transported, approximately 6,217,000 copies were distributed in 2020, while returns amounted to 901,062 (both figures refer to sale copies and to classroom trial copies).

Bookclub
Also for the products of the bookclub sales channel the management of logistic flows (warehouse and order picking) and of all business support processes takes place from the logistics hub in Verona. Orders are shipped through the postal channel.
The cardboard boxes used for shipping are of the same type as those used for Trade Books. The material that returns in postal return is subject to recovery operation.

E-commerce
With regard to the products purchased on the website www.mondadoristore.it, the logistics activities related to the B2C channel include product management (both by Mondadori and third-party publishers) within the logistics hub of Verona (now Ceva Logistics); the preparation of the product is based on the customer’s order and shipment by express courier directly to the end customer’s address. On this type of product there is practically no return flow.