Italian Food Industry Review

The Italian food industry is increasingly devoted to exports: it is the world's leading exporter of pasta, in second place for wines and third for chocolate and prepared with cocoa. The food processing of the country expresses 170 thousand billion turnovers, 30 thousand companies, 350 thousand employees. The sector is in third place in terms of turnover, among the large national manufacturing sectors, after the metalworking and textile-clothing sectors. At Community level, it represents more than 15% of all European industrial production. It is the first industrial sector of the Community, with a turnover close to 1 million 300 thousand billion and a number of employees of over 2.5 million units. The European food industry largely surpasses that of the United States and is by far the world's leading food industry.

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The food industry is, together with fashion, the emblem of the Italian way of living. According to the index of Italy's competitive excellence by the Edison Foundation, Italy country holds the top position in world pasta exports ($ 1.8 billion), the second in wine exports (3.9 billion dollars), the third in chocolate exports and other food preparations containing cocoa (890 million dollars). From the wines of the Langhe, to the salami of Modena and Parma, through the preserves of Nocera, the sparkling wines of Trento, the chocolate of Turin, up to the buffalo mozzarella of Campania and the oil of Puglia, the rich production chain Italian food farming has its roots in the traditions and history of the country. The 55 thousand companies active in the sector, organized mainly by districts (there are 41 of those surveyed by the Monitor of the Districts of Intesa San Paolo), are in the majority of small cases. So the more structured food companies represent a very small number (examples are Nestle, Barilla, Unilever, Ferrero, Illy, Orogel, Rana, Parmalat, Perfetti, Conserve Italia) and the average value of employees per company is just over 7, less than 9.5 average workers in manufacturing companies. Despite the concentration processes that took place in the mid-80s and early 90s, the Italian food industry continues to be characterized by great fragmentation; a condition that inevitably negatively affects the propensity to export, the managerial footprint of companies and above all the balance of power with the powerful purchasing centers of large-scale retail trade.

B.1 Trends affecting the sector

The new consumption trends, understood as manifestations of the main criteria that seem to guide consumer behaviors, have been schematically brought back to two large categories based on the group of variables that seem to determine the most: the first was more directly related to the change of social organization of work and demographic changes (socio-economic variables), and includes high research time-saving service content and the tendency to deconstruct meals; the second, which is more imputable to the operation of socio-cultural variables, has instead been divided into two fundamental dimensions, depending on whether the trend is focused on attention to the external context of the consumer or on the pursuit of subjective well-being. The tendency towards renewed attention to price can be placed across the two categories.

On the other hand, it was not decided to highlight a specific tendency towards quality: in fact, if by quality we mean the correspondence of the product attributes (in a broad sense) to the needs of the consumer, it is evident that every consumer, through consumer activity, aims at satisfying one's needs according to the personal priority scale. In this perspective, therefore, the search for quality constitutes the very essence of consumer behavior, not of some consumers. Therefore, each of the trends examined below constitutes a manifestation of a particular meaning of quality for the consumer, represented by the fact of choosing a consumption criterion that assigns a value higher than a characteristic of the product/service rather than another. This tendency is aimed at coping with the increase in the opportunity cost of family work, which is also attributable to the extension of the employment aspirations of extra-working time and manifests itself on various aspects of the consumption process.

Perhaps the most obvious aspect is the orientation towards products that allow a simplification of the preparation activities: on the one hand a shift towards simpler foods, which by their very nature require less cooking time (for example, dairy products). and fruit, to the detriment of fresh meat and fish); on the other hand, a substitution, without prejudice to the "complexity" of the consumed foods, of the domestic preparation with the transformation and adaptation services carried out within the phases of industrial and / or commercial transformation, for which we purchase not ingredients but segments of ready meal in whole or in part, by outsourcing a series of activities ranging from cleaning up to pre-cooking or cooking. The search for a greater degree of processing does not necessarily imply an intervention by the industry on the product as such, but often implies only a differentiation based on the type of packaging and/or portioning: it assumes great importance the presentation of the produced in the forms, dimensions, and formulations best suited to specific purchase-preparation-consumption occasions, but according to modalities that allow a mediation between the needs related to practicality and the need to maintain a certain link with tradition and / or to respond to other trends that originate more directly from socio-cultural variables.

B.1.1 Income

Lifestyles are closely linked to per capita income, economic availability and the well-being of the population. If we consider the increasing attention from consumers to differentiated foods, high quality, safer, "tailor-made" dietary products, some phenomena are found: The existence in the country of strong levels of income inequality. Italy is one of the European countries to have this index among the highest. The differences in income in the various areas of the country and the most important weight of poverty in the Mezzogiorno lead us to assume that the "price" factor continues to be important in the decision to purchase a food item. The difference in income is one of the elements that characterize the economic gap between the North and the South: the income of families living in the southern regions, in fact, is about three-quarters of the income of those living in the North. The differences between the income levels seem to be mainly related to the types of work prevalent in the different areas: at lower income levels, they correspond to shares of purchases of food minors and different eating habits. This fact leads the consumer to important changes in the type of food acquired, influencing the greater or lesser propensity towards higher quality products. In short, the consumption behavior of food products remains focused on two factors: quality and price. This phenomenon is also linked to the coexistence in the country of simultaneous situations of great comfort and poverty. The consumer has become more demanding but at the same time requires high-quality goods at low prices. This causes considerable pressure on the production sectors but also important challenges in terms of technological progress.

The recovery of the importance of price as one of the main decision-making criteria for a large part of consumers is a relatively new phenomenon after the "euphoric" consumption phases of the '70s and' 80s; this recovery was facilitated by the action of the socio-economic variables (recession of the early 90s), but its origin must be identified in a set of socio-cultural factors that push consumers to a greater rationality in the use of own income availability. This trend does not only manifest itself in relation to the products purchased, with a closer comparison between replaceable merchandise and within the same commodity (reducing the attention paid to the brand), but also with respect to the choice of the place of purchase (preference towards large distribution and the most convenient channels, and the recent growth of the hard discount phenomenon), information channels (for example with greater attention to price promotions, both with respect to the brand and points of sale) and in general with greater attention to avoid any kind of waste at every stage of the consumption process.

Some components of the processing industry and the distribution system (in particular the hard discount types), making extensive use of the price level as an instrument of market penetration, tend to amplify the extent of the consumer's attention to price. These are offset by the strategies of the major transformation and distribution companies: the former, in order to react to the loss of loyalty to the brand, tend to exalt the convenience of their products and/or strengthen advertising investments aimed at strengthening market image and other actions aimed at consumer loyalty (for example through point collections); the large traditional distribution chains tend to strengthen the overall image of the sales outlets, also achieved by increasing the presence of fresh products and assisted sales and the greater care and setting of the sales premises, but at the same time intensifying their presence of private label products and of the "first prices", up to the creation of its own discount store systems.

Considering the increasing attention by consumers towards differentiated foods, high quality, dietary products, safer and more "measured", there are some phenomena: the existence of strong levels of income inequality in the country; Italy is one of the European countries to have a GINI32 index among the highest; the existence of a correspondence between eating habits and income levels. Spending on food products out of total consumption is higher among the population at a lower income level, while the extra-domestic one tends to be less important. The differences in income in the various areas of the country and the most important weight of poverty in the Mezzogiorno suggest that the price factor continues to be important vis a vis the decision to purchase a food item. This is all the truer the more important are the couches of the population in Italy at lower income levels and at the limits of poverty.

B.1.2 Population growth

The main socio-demographic changes observable in Italy that can determine important changes in eating habits are the aging of society; the establishment of mononuclear families and the new multi-ethnicity. As far as the structural evolution of the population is concerned, it is clear that according to the forecast statistics of the last demographic simulation made by Istat up to 2050 (Table 1), the population over 65 will tend to increase, so much so that 19.5 percent of the population in 2005 will grow to around 20.5 percent in 2010 and 33.6 percent to 2050. The phenomenon, moreover, observing the ISTAT forecasts, has a progressive trend. The forecasts indicate a doubling of the index of old age from 2005 to 2050 with a particular acceleration after 2020 (see Table 1).

Year 0-14 15-30 31-64 65 and above Index of

Old age

2005

2006

2010

2020

2030

2040

2050 14,2 18,8...