Market

Italy’s food industry and its economic potential

16/08/2016
Italian industries potential

The agricultural industry, the food industry and the restaurant industry add up to being  more than 2 million companies nationally, which makes up for 8,7 % of the GDP (gross domestic product). Italian food production methods are admired and imitated worldwide, but it’s undeniable that the Italian food industry still has so many issues to overcome: for example, companies are often small and have a hard time surviving a huge decrease in consumer demand caused by food counterfeiting. The Italian food industry is export-driven, which definitely has huge potential.

A global analysis shows that the future will not be represented by internal markets, but rather, the growth of demand will come from emerging economies. Italian food products’ export numbers still have the potential to grow, but the desire for “Made in Italy” products is diminishing in demand in comparison to other European competitors.

In companies with less than 10 employees, only 7% of the revenue comes from exported goods, while in companies with 20-50 employees this percentage is as high as 24% and finally, in companies with more than 250 employees, it’s 26%.

The picture below shows how much Italian companies export compared to German and Spanish companies.

 

Italian industry report

 

 

The gap is also partly due to Italy’s dependence on overseas agricultural products. As we discussed  in our previous article, the domestic production of items such as sugar, soy, grain, milk and meat is not enough for local consumption, while the country produces more wine and vegetables than it consumes. Additionally, Italy is too focused on mature markets:  67% of exports go to EU countries, 11% to Canada and United States and 6% goes to Asia.

As things are now, there is certainly more that can be done.  According to Confagricoltura (the representative organization for Italian agricultural protection), the priority is to reduce the bureaucracy that suffocates companies. Additionally, the Italian Minister of Agriculture announced a plan to simplify procedures, which can start with new standard methods of accessing EU financing.

Lastly, Italian Sounding costs Italian food export half of its turnover; 27% of it is represented by Italian Sounding products in the USA. Made in Italy products lose 6 million euros in revenue an hour because of products with images, names and colors that imitate authentic Italian products, but have nothing to do with being made in Italy.  This phenomenon is well known but not really even considered by authorities. All products pretending to be Italian truly impede the export of Italian food products.

 

 

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