Market Information
Europe

Market Brief:
The Organic Food Market In Italy

March 2002

Report prepared by:
Pier Paolo Chicco
Business Development Officer
Canadian Consulate General
Via Vittor Pisani, 19
20124 Milan, Italy
Tel. 02-67583355
Fax. 02-67583900
Email: pierpaolo.chicco@dfait-maeci.gc.ca

EXECUTIVE SUMMARY

During the last ten years the organic food market in Italy has developed much more than any other in the agri-food sector. This trend has been boosted by several factors: consumers are more and more conscious about what they eat and pay attention not only to taste, but also to genuineness, and consider the environmental-related issues. The importance of preserving local produce and diversity is also becoming a key influence.

The objective of this report is to summarize organic food production and consumption in Italy to assist Canadian businesses interested in this market.

MARKET OVERVIEW

Italians like organic food more and more. To keep up with the increasing demand, the number of organic producers and cultivated areas has increased notably in the last few years.

Some interesting figures put this trend in perspective:

Today 30% of organic food in Europe is Italian.
At present organic food in Italy accounts for 2-3% of all agricultural production
In 2000 producing companies totalled 54,674, an increase of 11 % from the previous year.
In 1999 Italy produced organic food valued at €1.446 billion Euro, of which €1.03 billion Euro were destined for the national market. Exports and imports accounted for 309.87 million Euro each. In 2005 consumption of biological products is projected to reach €5.165 bill. Euro, almost 4 times the current turnover. It is estimated that consumption of biological products will equal, in 2005, 3.3% of total food consumption compared to the current 0.8%.
The number of hectares dedicated to organic cultivation is almost 1.000.000 (1/3rd of the organic lands in Europe) against 70.000 in 1993, clear proof of Italian leadership in Europe.
Over 4.000 Italian businesses claim to be processing organic food, against 2.800 in 1998.

Key Factors Shaping Market Growth

The demand of organic products registers a sudden rise each time a new food problem occurs (mad cow, dioxin chickens, herbicides, etc.) This trend affects catering as well: Article n° 59 of last year's Italian Financial Law ordered the use of organic products in canteens. Every day, in fact, all over Italy almost 150.000 children eat organic menus. This provision will gradually extend to hospitals too.

Restaurants employing organic products in Italy are about 100, present mainly in the North. Restaurateurs who grow organically their own products are still a rarity, but in an increasing number of quality restaurants organic wine, olive oil, cheese and vegetables are now available. "Organic & typical" seems to be a successful combination.

In April 2001, INRA Demoskopea led a "face to face" survey, taking in exam a sample of 1,000 Italians between 14 and 79 years, representative of 47.4 million adults. Object of the research was Italians' relation towards organic food. Recent food alerts such as mad cow disease, GMOs, and herbicides have pushed many consumers to look for safer and more natural products, and to be more informed. .In fact 73% of the interviewees give generally correct definitions about organic products, describing them as "herbicide-free" or "naturally grown", while only a tiny minority has completely no idea.

This research shows that 38% of adults has used at least once an organic product. While just one out of six was disappointed by this choice - the major reason of dissatisfaction being poor taste - the great majority have become regular consumers (23% of adults). The potential market for organic food seems to be very big: if we put together those who have tried organic and think to buy again in the future (27%), and those who are willing to try, we reach nearly half of the total number of adult consumers, a figure that has increased of 10% only during the last year.

One Italian in four declared never to have heard of biological products, while only one Italian in seven declares to have sufficient information concerning biological products and those consumers with a greater level of awareness and knowledge of biological products have the following profile: male, single, with higher education, aged between 40-49 years, resident in the north of Italy, professional or self-employed and in the high disposable income bracket.

Generally speaking women are more likely to buy organic than men. Typical organic food consumers are between 25 and 44, belong to the upper-middle class, have a higher education degree and live in the Centre-North. Adults with children up to eleven years of age seems to be particularly aware. There is generally a high concentration of consumers in more industrialised geographical areas. Consumers shop organic more than once a week and plan in advance what to buy (64% of the interviewees).

Italian shoppers, influenced by food scares, are increasingly turning to organic foods but their awareness of such produce is still patchy, 67 percent of consumers are poorly informed about it. The knowledge of Italians (about organic food) is often fragmentary and full of blanks. Many Italian supermarkets now have sections reserved for organically farmed produce, which is more expensive than mainstream foods. Thirty-eight percent of the retailers had imported organic produce, while 46 percent had bought home-grown organic foods. Organic foods were grown primarily in southern Italy and processed mainly in the north. Most of southern Italy's organic food production is fruit and vegetables. Just three percent of the organic food consumers came from the less economically developed south while 80 percent were from the richer north of Italy.

COMPETITIVE ENVIRONMENT

The majority of businesses are small (Italian registered limited liability companies - Srl), plus a small number of co-operatives (15%), with joint-stock companies (SpA) accounting for just 7%. Overall, almost 50% of the companies register an annual turnover of less than €258,000 Euro. Half the companies are located in Northern Italy, and this geographical area registers the concentration of businesses with the higher turnover. The level of de-specialisation is high and almost all concerns process more than one product line. The reasons given by processors for choosing the biological sector are the search for new market niches (48%), international - oriented strategies and the need to qualify products.

The main distribution channels used are wholesalers (33%), with only 9% selling-in direct to supermarket chains, and 18% of the companies interviewed not trading under their own brands but processing for third parties. Compared to the farm businesses, a good 60% of processing concerns declare to have overseas sales activities. For companies involved in processing biological products, there is a need for information on new production and processing technologies, marketing and export strategies and information exchange with other companies. The Italian organic market has grown and is expected to grow further in the next few years, but margins are not high. In particular in the cereal sector, where of the approximately 1 million of hectares of the total area dedicated to organic agriculture, only about 200,000 hectares are dedicated to cereals, of which about 71,000 for soft wheat and 74,000 for durum wheat. This makes it a potential niche market for Canadian export commodities, with margins slightly higher for soft wheat than for durum.

Currently most organic production is concentrated in Southern Italy, especially in Sicily and Sardinia (more than 50% of total production). They are usually small businesses that produce for their own consumption, sell directly or to stalls in local markets. Only a few have the right characteristics to be large-scale suppliers to larger distribution networks. Although production is concentrated in the South, 80% of consumption takes place in the North.

CANADIAN ORGANIC EXPORTS TO ITALY?

There are some opportunities for Canadian organic food exporters that take the time to develop the market. Many may want to show a profit after a year or two. This is practically impossible in today's Italy. Any Canadian company selling food products to Italy must keep the following in mind: Work with a reliable Italian distributor, and/or expect your Canadian distributor to be on the ground for a year or two before you start seeing many results. Some distributors are known for representing many companies but their emphasis is on selling their own products. Italian businessmen want to see you a few times probably before they are willing to commit to business with you. They are going to wait to see if you and your company have the determination to stick it out in their market. The Italian market and its intricacies are confusing and illogical to most Canadians. It is a very steep learning curve for foreigners. Italian business people already know how things are done. Importing is undertaken exclusively by small to medium size packers and canners, usually relying on the services of specialized brokers. Product is purchased by container loads, shipped via the major seaports of Genova, La Spezia, Livorno, Napoli. Both dry pack and canned form products are sold in both supermarkets and in traditional food shops. There is little advertising. Given the fragmentation, lack of transparency and very poor payment enforcement mechanisms, it is highly recommended to deal through local Italian brokers and to take care in extending any special payment terms. Contact the Canadian Consulate General in Milan or the Canadian Embassy in Rome to request the services of Trade Commissioner Service.

MARKET LOGISTICS

Specialist Outlets

There are an estimated 100 specialist outlets in Italy selling organic food. The vast majority are in Northern Italy (67%). These retailers are usually found in the wealthier sections of town and have a selection of natural cosmetics too. Two of the leading specialist outlets are:

NaturaSì
(27 outlets in Northern Italy,
15 more to open very soon)
Via Pisacane 2
Verona
Phone: 011.39.045.8030021
fax: 011.39.045.8031371
Web site: www.naturasi.com
E-mail: naturasi@naturasi.com

Bottega & Natura
(14 outlets in Northern Italy,
7 more to be opened within 2001)
Via Marchesi 9
10093 Collegno (To)
Phone. 011.39.011.7176876
Fax: 011.39.011.7176866

Internet Sales

A fairly new way of shopping in Italy, e-commerce will develop significantly in the next few years. The major Italian organic food web sites, selling mainly long life products such as wine and oil, are:

Bio Store: www.agricolturabiologica.com/

Bioshop: www.bioshop.org/

Biorolli Shop: www.biorolli.com/

Large Distribution Networks

Supermarkets selling organic fruit and vegetables grew from 130 in 1996 to 500 in 1999. In 2005, 60% of biological foodstuffs in Italy will be purchased through supermarket retail channels (compared to the current 27%), 33% in specialised deli stores (compared to 67%), and 7% of via caterers (compared to 6%).

Currently all supermarkets carry an array of organic products. Coop Italia and Esselunga are the two largest supermarket chains selling organic products, having developed their own organic product brand, but all others (A&O, Auchan, Bennet, Carrefour, Città Mercato, Colmark, Conad, Continente, Crai, Euromercato, Famila, GS, Ipercoop, Pam ,Panorma, Rinascente-Sma, Superal) have at least an organic fresh fruit and vegetable sector. Usually consumers searching for a certain product may notice the organic version only as they look through the different non-organic versions.

Some of the main outlets in Italy are:

COOP ITALIA Soc. Coop. A.R.L.
via del Lavoro 8
40033 Casalecchio di Reno (BO)
Phone: 011.39.051.596111
Fax: 011.39.051.596218
Website: www.e-coop.it/
Contact: Sig. Marco Malferrari
Coop is the largest national chain store.
Outlets: 1.320 outlets
Turnover: about €8.2 billion Euro
Employees: 39.000
Own organic food brand: Coop da Agricoltura Biologica, since November 2000
Organic products sold: 100 (40 fresh fruit and vegetables, 60 packaged food)

ESSELUNGA S.p.A.
Via Giambologna 1
20090 Limito di Pioltello MI
E-mail: elena.lidonnici@esselunga.it
Contact: Dr.ssa Lidonnici
Outlets: 108
Turnover: €2.58 billion Euro
Employees: 10.000
Own organic food brand: Esselunga Bio, since November 1999. Organic products sold: 252 (160 fresh fruit and vegetables, 76 packaged food, 16 dairy products) There is also a specific project concerning childhood with organic pasta, fruit juices and biscuits, fruit and meat homogenised food.

MARKET ENTRY CONSIDERATIONS

European Union Regulations

All organic food entering the EU from a country outside the Union must meet regulation 2092/91. Some countries' national standards meet the EU's set standards, and are allowed to import at will, but Canadian companies are not included in this list. Exporters must contact an Italian importer and register under a recognized certification body (see below) and meet the certifying body's standards.

Classification of Organic Products

According to the percentage of organic ingredients present in each product, three categories are established:

1.Products containing at least 95% of the ingredients grown according to organic procedures for at least two years. These products can obtain the European label "Agricoltura Biologica" ("Organic Agriculture").

2. Products with at least 70% of the ingredients grown according to organic principles for at least two years.

3. Products that are shifting to organic growing (i.e. products that have been grown according to organic methods for at least a year).

Italian Regulatory Organisations

In Italy there are nine organic certification agencies recognised by the Ministry of Agriculture. A product cannot be named as organic without certification from one of these agencies. These agencies are centred around Bologna in northern Italy, where most of the commercial organic production occurs. These organic certifying agencies are:

AIAB
Associazione Italiana per
l'Agricoltura Biologica
Strada Maggiore, 29 - 40125 Bologna (BO)
Phone: 011.39.051/272986
Fax: 011.39.051/232011
E-mail: aiab@aiab.it
Web site: www.aiab.it
President: Vincenzo Vizioli
Year of establishment: 1988
Number of certified companies: 12.268Certified
hectares: 263.888

SUOLO E SALUTE SRL
Via Abbazia, 17 - 61032 Fano (PS)
Phone: 011.39.0721/830373
Fax: 011.39.0721/830373
E-mail: suoloesa@tin.it
Web site: www.suoloesalute.it
President: Augusto Mentuccia
Year of establishment: 1969
Number of certified companies: 10.337 Certified
hectares: 163.148

BIOAGRICOOP
Via Fucini, 10 - 40033 Casalecchio
di Reno (BO)
Phone:011.39. 051/6130512
Fax: 011.39. 051/6130224
E-mail: bioagri@bioagricoop.it
Web site: www.bioagricoop.it
President: Riccardo Cozzo
Year of establishment: 1984
Number of certified companies: 7.679
Certified hectares: 181.164

BIOS srl
Via Monte Grappa, 37/C
36063 Marostica (VI)
Phone:011.39. 0424/471125
Fax:011.39. 0424/476947
E-mail: itbios@tin.it
President: Vittorino Crivello
Year of establishment: 1996
Number of certified companies: 1.252
Certified hectares: 14.544

CCPB
Consorzio per il Controllo dei Prodotti
Biologici
Via J. Barozzi, 8 - 40126 Bologna (BO)
Phone:011.39 051/6089811
Fax: 011.39. 051/254842
E-mail: ccpb@ccpb.it
Web sitet: www.ccpb.it/
President: Lino Nori
Year of establishment: 1988
Number of certified companies: 3.213
Certified hectares: 47.904

CODEX srl
V.le Partigiani d''Italia, 35 -
43100 Parma (PR)
Phone: 011.39. 0521/775901
Fax: 011.39. 0521/775900
President: Ivo Bertaina
Year of establishment: 1995
Number of certified companies: 1.349 Certified
hectares: 24.006

ECOCERT ITALIA
Corso delle Province, 60 - 95127 Catania (CT)
Phone: 011.39. 095/442746
Fax: 011.39. 095/505094
E-mail: ecocertitalia@ctonline.it
President: Angelo Maugeri
Year of establishment: 1992
Number of certified companies: 4.346
Certified hectares: 62.711

IMC
Istituto Mediterraneo di Certificazione srl
Via C. Pisacane, 53 - 60019 Senigallia (AN)
Phone: 011.39. 071/7928725
Fax: 011.39. 071/7910043
E-mail: imcert@tin.it
Internet: www.imcdotcom.com
President: Remo Ciucciomei
Year of establishment: 1995
Number of certified companies: 4.545
Certified hectares: 88.328

QC&I
International Services sas
Villa Parigini - Loc. Basciano -
53035 Monteriggioni (SI)
Phone: 011.39. 0577/327234
Fax: 011.39. 0577/329907
E-mail: lettera@qci.it
President: Marco Piccirilli
Year of establishment: 1992
Number of certified companies: 4.024
Certified hectares: 106.485

PROMOTIONAL EVENTS

International Food Shows in Italy

CIBUS
International Food Products Fair
Parma, May 2002
Organizer: Alimentare Servizi s.r.l.
Via M. Polo 43 - 00154 ROMA
Tel: 06-5903534
Fax: 06-5903342
Website: www.fiere.parma.it

CIBUS is an international trade show which is held this year in May in Parma, Italy. Cibus is the most important food products exhibition in Italy with more than 2,200 exhibitors from 21 different countries and about 100,000 visitors of 87 different nationalities. Main product areas are: pasta, vegetable preserves, meat preserves, sweets, as well as in the most recently developed areas, such as frozen products, dried fruit, drinks, new dairy line and typical products.

EXPO FOOD
International Food Products Show
Milan, 9th-12th November 2001
Organizer: EXPO CTS
Via Londonio 2
20154 MILANO (MI) Tel: 011.39. 02.349841
Fax: 011.02.33600493
Website: www.expocts.it/food

An International Food Exhibition, a privileged observatory of market trends, which dedicated the 2001 edition to the safety and quality of food products. The exhibition proposes a focus on traditional, certified, typical and organic/natural products, and offers visibility, promotion and business opportunities for manufacturers and distributors of quality products, to provide consumers with full guarantees on product origins and processing.

MIA
Rimini, 23rd-27th February 2002
Organiser: New Expo Center
Via Emilia 155
47900 Rimini (RN)
Phone: 0541.744111
Fax: 0541.744200
Visitors at the previous edition: 44,370 - of whom 2,294 were foreign

Macro trade sectors: Beverages, Pasta, Bread and flour products, Meats, sausages & cold cuts, Coffee and colonial products, Oils, Milk and by-products, Preserves, Fruit and vegetables, Frozen food, Refrigerated food, Seafood, Wines, Typical Produce, Biological foodstuffs, Food shop.

MACFRUT
Pievesestina di Cesena (FO), 9th-12th May 2002
Organiser: AGRI CESENA
Via Dismano, 3845
47020 Pievesestina di Cesena (FC)
Phone: 011.39.0547.317435
Fax: 011.39.0547.318431
Web site: www.macfrut.com/
E - mail: info@macfrut.com
Visitors at the previous edition:32,000 of whom 5,000 foreign, coming from 66 countries

It is one of the most important trade fairs in Europe concerning the fruit and vegetable sector (production, exchange, plants and services).

Macfrut is divided into the following specific areas:

Macfrut :
International exhibition of plants, technologies and services for the production, conditioning and transport of fruit and vegetables;

Trans World
Exhibition of agro-food transport;

Agro Bio Frut
Exhibition of new technologies and seed productions;
Exhibition of Mediterranean organic productions;

Frutta in Fiera
Exhibition of the fruit and vegetables sector

FIERAGRICOLA
International Agriculture and Livestock Fair
Verona, March 2002
Organiser: E.A. Fiere di Verona
Verona Fair Ground
Viale del Lavoro, 8 - I
37100 Verona
Phone: 011.39.045.8298111
Fax:011.39.045.8298288
Web site: www.fieragricola.com/
E-mail: info@veronafiere.it
Visitors at the previous exhibition: 113,708 of whom 4.487 from 68 foreign countries.

The exhibition is totally dedicated to agriculture and presents its own products and services. This edition will focus on the finished product and on everything that agriculture is able to produce, elaborate and present as far as services are concerned.

SANA
Bologna, September 2002
Organiser: Fiere e Comunicazioni Srl
via San Vittore, 14
20123 Milano
Phone: 011.39. 02.86451078
Fax: 011.39.02. 86453506
Web site: www.sana.it/
E-mail: info@sana.it
Visitors a the previous exhibition:

SANA, the most important exhibition in Italy on natural products - and one of the main in the world - presents all novelties for health and well-being. Organic and biodynamic products, typical products obtained with traditional methods and quality products, dietetics products from integrated cultivation, equipment and packaging for food industry, seeds, plants and fertilizers for environmentally friendly agricolture. There are other two sections dedicated to Health and Environment.

SALONE DEL GUSTO
Turin, October 2002
Organiser: SLOW FOOD
Via Mendicità Istruita 14
12042 Bra (CN)
Phone: 011.39.0172.419611
Website: www.slowfood.it/
Visitors at previous exhibition: 130,000 from all over the world.

More than just a fair, the Salone del Gusto is an exhibition of prime-quality food and drink with delicacies from all over the world, attracting curious visitors, members of the trade, and journalists.

KEY CONTACTS AND SUPPORT SERVICES

THE CANADIAN CONSULATE GENERAL
Via Vittor Pisani, 19
20124 Milano, MI
Tel. 02-6758-1
Fax. 02-6758-3900
e-mail: milan-td@dfati-maeci.gc.ca
Website: www.canada.it

THE CANADIAN EMBASSY
Via G.B. de Rossi, 27
00161 Rome
Tel. 06-445981
Fax. 06-44598.754/752
email: rome@dfait-maeci.gc.ca

OTHER REFERENCE MATERIAL

The Italian Agriculture Federation (FIAO) acts as a self-regulatory body for its members (16) and represents the organic food sector in national and international forums. It is an umbrella organisation for all the other organic organisations.

AMAB
Associazione Mediterranea Agricoltura Biologica
via Po 25/C
00198 Roma (RM)
Phone: 011.39.06.84497423
Web site: www.amab.it
President: Luigi Guarrera

AMAB is the Mediterranean Association of Organic Agriculture and co-ordinates all the regional organisations founded in recent years. Its aim is also to represent them at both national and international level, offering the members specific services (such as technical assistance, promotion and marketing of products, legislative information).

SLOW FOOD
Via Mendicità Istruita 14
12042 Bra (CN)
Phone:011.39.0172.419611
Web site: www.slowfood.it
President: Carlo Petrini

Slow Food is a movement founded in Italy to protect and promote traditional food, as opposed to fast food. It has over 60,000 members in five continents and stages events, including the Salone del Gusto, an annual conference and food/wine tasting initiative (see above) in Piemonte that has developed into a major reference point for international food lovers, chefs and restauranteurs. Slow Food also boasts a publishing company, Slow Food Editore, which specializes in tourism, food and wine.

Date Modified: 2004-05-10

Important Notices

Market Brief: The Organic Food Market In Italy