Market

With a turnover of more than 16 billion euros, crisis is an unknown word to the leadership of Italian handmade gelato. A supply chain that includes the producers of raw ingredients and semi-finished goods, machine manufacturers, and finally the finished product prepared and served by the master ice-cream makers, with Made in Italy on top of the world at all such stages. An estimated 100,000 ice cream parlours exist worldwide, and the business continues to grow by 5% every year.

Italy is the undisputed home of handmade gelato and the world’s greatest consumer. It boasts 19,000 production and sales enterprises that hire about 75,000 employees. The numbers increase to 40,000 businesses and 150,000 workers if you consider all the non-exclusive gelato retailers. Italy hosts 18% of the global business, amounting to around 3 billion euros as at the end of 2018, out of the 9.6-billion turnover recorded in Europe (60% of the world total).

Germany, Spain, Poland, Japan, Argentina, Australia, and the United States are, in this order, the other Italian gelato meccas, although it is other markets the likes of India, South Korea, Vietnam, as well as Eastern Europe, which attract new investments. It is so that the market penetration of handmade gelato reaches the best Michelin-starred restaurants.

Such numbers and trends have been summarized at SIGEP – international salon of handmade gelato, patisserie, bakery, and coffee, the top sector-specific event on its 41st edition, held in Rimini from 18 to 22 January 2020.

The agri-food sector is the number one driving force behind Italian industry. Compared to the contraction seen in two longstanding sectors of its manufacturing industry – fashion (-4.6%) and the automotive sector (-4.4%) – the latest report issued by Coldiretti, the Italian national farming federation, has announced an increase of 3% in the agri-food sector, based on ISTAT national statistics.

Coldiretti stresses how food has become Italy’s main source of wealth thanks to its extensive agrifood supply chain, which stretches from fields to shelves to catering businesses and is worth €538 billion, the equivalent of 25% of the country’s GDP, employing 3.8 million people. Never before has so much Italian food and wine been consumed abroad: Italian food exports are at a record high, up 4% in 2019 compared to the previous year’s €41.8 billion.

The success of the agri-food sector is mostly due to Italian agriculture’s supremacy in various aspects: currently the ‘greenest’ in Europe with 297 PDO-PGI certified specialities recognised at an EU level and 415 DOC-DOCG certified wines. But that’s not all. No less than 5,155 traditional regional products have been recorded along the length and breadth of the Italian peninsula, which leads the organic sector with over 60,000 organic farms. There are currently 40,000 farms committed to preserving seeds and plants at risk of extinction. Italy is also number one when it comes to world food safety, with the lowest number of foodstuffs containing unauthorised chemical residues. If you take biodiversity, no one else comes close: there are 504 varieties of grapes on its vine stock register compared to the 278 varieties boasted by its French cousins and 533 varieties of olive compared to Spain’s 70.

‘Italy’s record achievements when it comes to food demonstrate the role that the agricultural industry plays in this country’s sustainable growth,’ commented the chairman of Coldiretti, Ettore Prandini. ‘We should therefore protect such a key industry if we want to ensure food safety and its national dominance, particularly at a time when food has once more become a strategic factor in international relations: from free trade agreements to trade wars such as President Trump’s tariffs, Brexit and the Russian embargo.’

With an estimated turnover of 15 billion euros per year, pizza confirms its reputation as a Made in Italy goldmine. The data recorded by Coldiretti – Italian federation of independent farmers – confirms the growth trend of one of the pillars of the Mediterranean diet.

Pizza has established itself as one of the most versatile dishes in Italian cuisine, and the cornerstone of an economic system including 128,000 pizzerias nationwide. Its growth supports the employment of 110,000 full-time staff, and the same number of part-time weekend staff. “Passion for pizza is a global matter”, states a Coldiretti memo, “with the top consumers being North Americans, eating 13 kg (28.7 lbs.) annually per capita, whilst the Italians lead pizza-loving Europeans with 7.6 kg per capita, ahead of the Spanish (4.3 kg, 9.5 lbs.), French and Germans (4.2 kg, 9.3 lbs.), British (4 kg, 8.8 lbs.), Belgians (3.8 kg, 8.4 lbs.), Portuguese (3.6, 7.9 lbs.), and finally the Austrians (3.3 kg, 7.3 lbs.)”.

The estimated 8 million pizzas baked in Italy every day also impact the nation’s food and agricultural output in terms of ingredients used, amounting to 200 million kg (about 441 million lbs.) of flour, 225 million kg (about 496 million lbs.) of mozzarella, 30 million kg (about 66 million lbs.) of olive oil, and 260 million kg (about 573 million lbs.) of tomato sauce every single year. It is a success for the symbol of traditional Italian cuisine, although it multiplies the risk of use of ingredients that have nothing to do with Made in Italy. “In fact”, states Coldiretti, “there are more and more initiatives launched to guarantee the Italian origin of the ingredients and provide consumers with full and transparent information. These include the obligation to specify the origin of the extra virgin olive oil (established by the European Union) and dairy products (established following national decrees requested by Coldiretti), in force as of April 19th, 2017, as well as tomato product labelling legislation, in force as of 2018. The next aim is to bring transparency from the supermarket shelves to pizzeria menus, making customers aware of the origin of every ingredient used”.

Following the year 2017, penalized by the unfavourable weather trends, in 2018 Italian agriculture has regained a positive role in contributing to the national economy (+0.9%): this is what emerges from the 2018 report drafted by ISMEA (the Italian institute for food and agricultural market services).

Employment in the sector has also grown in 2018 (+0.6% compared to 2017), as a result of a 1.6% increase in employees and a slight decrease in freelance workers. The number of agricultural businesses registered in the Italian Company Register has slightly fallen – about 750,000 as at the end of 2018 – which may be ascribed to a medium/long-term process of sector rationalization.

The data related to young farming businesses (run by managers under 35), recording a 4.1% growth, is also quite intriguing.

The food industry sector is even more dynamic, with a 2.7% increase in added value, though slower than 2017 when it recorded +3.8%. Employees in the sector have also grown (+3.1% in 2018, following a 1.9% increase in 2017), as opposed to the number of businesses remaining essentially equal to the 2017 figure, just under 71 thousand.

Foreign food and agricultural trade has suffered strongly due to global uncertainty and the slowdown of the world economy. After a +7.4% growth recorded in 2017, Italian food and agricultural exports – worth close to 41.8 billion euros – have only increased by 1.2% in 2018.

Italians drink beer more and more frequently, and above all, they regularly choose beer produced in Italy, giving life to a trend that is revolutionizing the market.
It is craft beer that is growing in particular, to the detriment of industrial beers. The data collected by Unionbirrai – the organization of Italian microbreweries – highlights, over the 2015-17 triennium, a shocking 55% increase in the number of breweries – from 649 to 1,008 – and a 16% increase in employment – from 7,893 to 9,126 employees, many of whom under 35 years. Medium-term predictions are equally positive: a 10% growth in employment is expected over the next three years.

Development in the craft beer phenomenon was recorded, in particular, in Lombardy, Veneto, and Piedmont, followed by the regions in central Italy, Tuscany, Emilia-Romagna, and Lazio. The sector has brought a number of innovations to the table: farm-to-table certification of origin; a direct link with the farms; production of highly distinctive specialties; and innovative forms of
retail such as brewpubs.

According to the data published by Coldiretti – the confederation of directly-selling Italian farmers – in 2018 the consumption of beer per capita was 32 litres, with a turnover exceeding – for the first time ever –1 billion euros. Revenue from export recorded by Italian breweries was equally positive: in 2018, it amounted to 200 million euros – an 11% increase compared to 2017.
A strong push was given, indeed, by craft breweries – a grand total of 860 – producing 55 million litres of beer annually.

The Italian market continues to be attractive in terms of opportunity and development: per capita consumption is still below the European average, even compared to countries with an equivalent winemaking tradition, such as France.

For decades, grappa has been little more than a form of pocket heating for farmers in Northern Italy. The ‘cool’ Italians and most foreigners disdained it”, wrote R.W. Apple Jr. on the New York Times in 1997. Things have changed a lot since then. Today, the grappa market is quite solid indeed. In 2017 the top-10 Italian companies achieved a total turnover of 211 million euros, with an average growth by 6% compared to 2016.

But let’s take it from the top. What exactly is grappa? Grappa is the par excellence national spirit, 100% Italian in terms of historic tradition, culture, and production techniques. It is obtained by processing a solid raw ingredient: pomace. Pomace is what is left over from wine pressing: the grape skins are placed inside copper stills (alembics), in which the water vapour extracts the alcoholic component contained in them. The aim of the distillation process is not only to concentrate the alcohol in the pomace, but also to extract its aromas and its distinguishing substances. In fact, a good grappa is able to capture the essence of a grape variety, to the point that the original terroir may be identified. Although hints of the distillation process have even been found in 1st century A.D. manuscripts, it is likely that grappa making from distillation of the pomace began in the 17th century.

Today, thanks to European Council regulations, the grappa denomination is exclusive to spirits made from Italian pomace, and may also be assigned the indication of geographic origin. Leading regions in grappa making are all in Northern Italy: Piedmont, Aosta Valley, Lombardy, Veneto, Trentino-Alto Adige, and Friuli- Venezia Giulia.

The sector is living a positive moment. In 2018, top players consolidated their international growth – even in a rather complicated year – and have gained strength by means of three levers of success: increase in export, launch of increasingly aged products, and entrance in the mixology (cocktail mixing) world.

To lead the ranking, there is Umberto Bonollo, the company owning the Bonollo Of brand, boasting a double-digit growth (+12%) which brought its turnover to nearly 42 million euros. In second place there is Distillerie Franciacorta, purchased in January by the Stock group, which through such operation – paired with its existing ownership of the brand Julia (from Brescia) – aims to become the national leader. In third place, we find Distillerie Bonollo (Modena), and finally there are Marzadro (from Trentino) in 4th place, and Bonaventura Maschio (Treviso) in 5th. Since 2016, all the top-10 grappa makers have increased their turnover.

The sparkling wine born just over 50 years ago on the hillside around Lake Iseo (Brescia) is the result of the project by a group of 11 pioneers, who – in the postwar period – began experimenting wine production using the champagne-making technique.

The name derives from Franzacurta, a toponym mentioned in 1277, referring to the monasteries founded by the Cluniac order, which were exempt (in Latin, francae) from payment of the tithe owed to the bishop on goods being delivered to the city of Brescia.

Franciacorta is obtained by means of bottle refermentation and disgorging techniques. Its base is Chardonnay and/or Pinot Nero grapes. It may contain small percentages of Pinot Bianco and Erbamat, an ancient indigenous vine from the Brescia area. The ageing on lees lasts 18 to 60 months, depending on the version.

In 1967 the Franciacorta was awarded the designation of controlled origin (DOC), and its first production guidelines were issued. Only 9 winemakers sold it, in just a few thousand bottles.

In 1995 it earned the designation of controlled origin (DOCG), namely the highest level of safeguard possible.

Today, thanks to 2,800 hectares (about 6,920 acres) of vineyards in 18 townships, 17 million bottles of Franciacorta are produced in the Satèn, Rosé, Millesimato, and Riserva versions.
According to Tom Stevenson, author of the World Encyclopedia of Champagne and Sparkling Wine, “The right place for Franciacorta is a high-end restaurant. Its quality is surprising”.

In 2018 Massimo Bottura and his Osteria Francescana claimed first place in The World’s 50 Best Restaurants ranking. The restaurant in Modena is one of 8 Italian restaurants boasting the three Michelin stars. 41 Italian restaurants earned two stars, and 306 earned one.
But what is the benefit of being awarded by the French guide in terms of turnover?
According to research by JFC, in 2017 the total turnover for Italian starred restaurants was about 400 million euros, with a 10.3% increase compared to 2016.
JFC has calculated that in 2017 Italian restaurants awarded by the Michelin guide have hosted a total of 6,318 customers, with an almost equal portion of Italians (52.6%) and foreigners (47.4%), and generating 2,770 annual room bookings in the surrounding areas. At a 1-Michelin star restaurant, a full-course meal costs at least 112 euros; at a 2-star restaurant the bill rises to 178 euros, while at a 3-star restaurant your budget will be 250 euros.

On average, being a 1-Michelin star restaurant in Italy generates a turnover of about 708,200 euros per year (with a 53.2% increase in earnings compared to before being awarded the star), whilst a 2-Michelin star restaurant earns 1.12 million euros (18.7% more than before achieving the second star), and a 3-Michelin star restaurant earns 1.54 million (+25.6% turnover in the shift from 2 to 3 stars). Of course one must subtract the considerable costs of a starred restaurant from such turnover sums: 17 employees on average absorb about 32.6% of the turnover; raw material erodes an additional 32%; rent and management costs absorb about 24%.

In 2017 the value of organic Made in Italy production was equal to 5.6 billion euros. Italy is the top European country in terms of export, and second in the world after the United States. Export of organic products generated 2 billion euros, equal to 5% of Italian agri-food export.

What is an organic product?

A product certified according to EU criteria in terms of land treatment, respect for the environment and ecosystem, and prohibition to use chemical, synthetic, or GMO products.

How do you recognize an organic product?

It will bear the EU organic farming logo: a green flag of Europe with white stars displayed as a leaf.

Who certifies organic products?

Specialized companies whose ID code is written on the package beside the EU organic farming logo.

How many farms in Italy are EU organic farming-certified?

64,210 farms, with 1.8 million hectares (about 4.5 million acres) of farmed land certified as at the end of 2016: 14.5% of the entire farmed land in Italy. Businesses and surface area grew by 15% in 2017.

How many people work in the organic product business in Italy?

According to an estimate by Assobio – an organization of organic and natural product processing and supply companies – the sector employs about 250,000 farmers, technical specialists, and certifiers involved in processing and supply. 22% of such workers are between 20 and 39 years old. Women manage 30% of the businesses.

Who uses organic products?

According to Nielsen data, 20% of Millennials (born between 1980 and 2000) purchases exclusively organic products, whilst 48% are occasional, but not exclusive, consumers. 45% of Baby Boomers (born between 1945 and 1964) are common purchasers of organic products, while the percentage is slightly higher – 46% – among members of Generation X (born between 1960 and 1980).
Again according to Nielsen data 56% of those who have children under 12 years of age, 53% of those with university degrees, and 58% of those with a high monthly wage are habitual consumers of organic products.

Despite some initial scepticism – especially among Italy’s mass media – Expo Milano 2015 proved to be a great success. A success according to the public, which was both numerous and greatly participative. Successful in its choice of theme: ‘Feed the Planet, Energy for Life’, a topical theme of widespread interest. And finally, success guaranteed by the quality of the organisation, which turned out better than that of previous decades. But besides all this – three years on, what is left of the Expo 2015 Milan legacy?

Not just fashion and design, today Milan is more than ever the international capital of food. For countless reasons. We list a few of them below.

• Thanks to an architectural make-over of entire districts of the city, a number of new restaurants were launched. According to the Chamber of Commerce, after Expo the number of restaurants in the Milan-Monza-Lodi district increased by 1,482, bringing the overall number of eateries in the area to over 22,000, representing a turnover of 2.6 billion, equal to 14.7% of Italy overall.

• Every year in May the city hosts Milano Food City, a week of events, talks and tastings dedicated to food and Seeds and Chips, the international food innovation summit.

• Milan is the best-known and most popular branch of the Italian haute cuisine convention, Identità Golose, and is also home to TuttoFood, an unmissable date for employees and workers.

• With its 24 Michelin stars, Milan is Italy’s most starred city for 2018. Michelin-addicts can choose between four two-star restaurants and 16 one-star restaurants.

• Milan is home to Gualtiero Marchesi’s Academy of Cuisine; the institution was named after a legendary chef.

• You can sample dishes from all over the world in Milan: Chinese, Japanese, Mexican and Indian, but also Russian, Greek, Northern European and South American.

• After Expo, food delivery services multiplied greatly Foodora, Just Eat, Uber Eats, Bacchetteforchette and Deliveroo), delivering all kinds of dishes to anywhere in the city.

• The new metropolitan markets often rise from the ashes of the old ones: born over the past few years today they are an obligatory stop for citizens and tourists, selling food where you can eat as you buy.

• Milan’s food trucks have evolved into a gourmet version: with a wide range on offer which is surprisingly similar to haute cuisine.

Today there is no doubt that the gourmet food and wine sector is one of Milan’s boasting points – in 2017 the city played host to nine million tourists, 10.3% more than the previous year. By tourist numbers alone, over the past few years Milan – the 14th most visited city in the world – has regularly ranked higher than Rome, a capital city of inestimable cultural, artistic and historical legacy.

Italian wine in numbers
In 2017, Italy exported a total of 1,644 million Euros worth of wine, an increase of 1.44%. It has to be said that the French cashed in a bit more (1,649 million), but we beat them by quantity: Italy exports 3.3 million hectolitres while the French merely reach a total of 1.6 million, putting them behind Australia (1.9 million). In the first two months of 2018, Italy roared ahead in value: 243 million Euro ended up in the country’s coffers, while the French had to make do with 227 million. Why? Mainly thanks to Prosecco.

The rising success of the bubbles
The growing success of Italian wines is largely due to its bubbles, at least if we consider Nomisma’s “Wine Monitor” research which, in 2017, marked a very impressive trend in sparkling wines. Just think that Italy contributes 23% of the world’s export in sparkling wines, a percentage that just ten years ago was less than half (10%). The explosion of bubbles is thanks to the Prosecco phenomenon which, over the last five years, has grown by 117.5%. In fact, Prosecco has paved the way for all Italian bubbles, showing the more mature markets such as the USA and the UK that there is more to this product that champagne, and that you can enjoy a good sparkly without spending an arm and a leg.
But as well as sparkling wines, the entire white wine industry has grown and conquered: in fact, according to the Wine Monitor, Italy is the world leader in the export of white wines, beating the French, Spanish and the Australians. Italian biodiversity is paying off: the most important global markets have tired of sipping Chardonnay and Sauvignon, variety is the spice of life and interest has been sparked for the lands behind a successful wine. Something that seemed almost impossible a few years ago when the Australians, New Zealanders and South Africans were seen as the future conquerors of the white wine market.

The main players of the market
At the turning point of 2017, the list of Italian wine-producers gained two positions with a turnover of more than 100 million Euro. Two leading brands entered the prestigious Over 100 Club with an above average growth: the Mondodelvino Group, a young business based in Forlì which ranked 17th with a turnover of 106.84 million and Ruffino, the Italian branch of the American company Constellation Brands which entered number 18 with a turnover of 106.83 million Euro. Bringing the market’s “big brands” to a total of 19, two more than the year before and five more compared to 2015.

Together, these 19 big players represent a turnover of more than 3.3 billion Euro, with exports exceeding 2.3 billion and a production of more than 1.2 billion bottles.

Production down 25%
When it comes to the weather, 2017 was a strange year: the spring frosts were followed by a hot summer and drought. The sudden changes in climate hit Italian vineyards and the resulting harvests very hard. According to Assoenologi (the Italian association of oenologists and oenological technicians), the 2017 harvest was the earliest of the last decade due to the stress placed on vineyards, approximately ten days earlier than usual and one of the poorest in terms of quantity since 1947, with a 25% drop in the production of wine and must. It is estimated that total production was 41 million hectolitres. More specifically, the statistics point to a 40% drop in the harvest in the Lazio region, a 30% drop in Tuscany and Puglia, a 25% drop in Lombardy, a 15% reduction in the Veneto and Friuli regions and a 10% drop in the autonomous region of Trentino Alto Adige. Alongside such a string of negative figures, the only region that increased production was Campania, which bucked the trend with a 5% bigger harvest. According to Coldiretti (the Italian farmers’ association), the yield also went down, i.e. the amount of juice produced by each bunch of grapes. While in the past, each kilo of harvested grapes produced around 0.77 litres of wine, this year’s yield was less than that.

Quality, not quantity
While this year will come to a close with reduced quantities, experts believe that quality will, on the contrary, be better. The lack of water forced vine roots to dig deeper into the soil, an important factor affecting the end product’s quality. When vines do this, they extract the best characteristics from each terroir of origin, reaching the peak of perfection.

Rising prices
According to Assoenologi, DOC and IGT certified wines could become between 10-20% more expensive, increases that will also affect ordinary undesignated wines. A considerable price hike is expected for Franciacorta sparkling wine from Lombardy, which lost almost 50% of the grapes produced compared to last year, due to frost. A bargained increase is also underway for Ribolla Gialla and Sauvignon produced in the Friuli Venezia Giulia region. In Tuscany, Merlot and Sangiovese grapes were particularly hard hit, so one can easily imagine higher prices for famous DOC red wines such as Chianti and Brunello di Montalcino. The 40% reduction recorded in the Lazio region is ominous for the price of wines from the Castelli Romani area. In Emilia Romagna, higher prices are expected for Malvasia and Grechetto. In the south, we can expect price hikes for Sicilian Zibibbo and Sardinian Vermentino, among others. In contrast, the prices of wines produced in Piedmont and Veneto have remained stable.