Rising sales figures for organics in Italy

According to the last ISMEA/AC/Nielson panel, the Italian organic market may be currently estimated to be worth between 2.8 and 3 billion euros. Organic products worth 1.8 billion euros are sold in specialised stores and supermarkets, by home delivery, via purchasing groups and marketed direct by farmers. Supermarket sales of organics in Italy increased by 7.4 % in value and by 8.5 % in quantity in the first six months of 2009 compared with 2008, equal to about 350 million euros.

In the first 6 months of 2009, trends showed that there was a strong increase of sales in the north eastern regions of Italy (+ 12 %), the regions in the north west and in the centre of the country (+ 8 %). The market experienced a decline of 10.7 % in southern regions (including Sicily), which are less affluent areas. The value of the total food market in Italy rose by only 0.2 % in the same period of time.

Sales of PDO Protected Designations of Origin and PGI Protected Geographical Indications products, of which Italy has the largest amount in Europe - a good 175, among them Parmigiano Reggiano, Gorgonzola, Buffalo Mozzarella, Parma Ham, mortadella, balsamic vinegars, many extra virgin olive oils, many fruits & vegetables etc -  decreased by 1.8 %, and Controlled Denomination of Origin wines fell by 4 %. Only organic food sales have a positive trend. Organic sales are strong in north western Italy (the industrial regions of Turin, Milan, etc.) with a market share of 43.8 %, followed by the north eastern regions (with the cities of Venice, Trieste, Bologna, etc.) with 28.0 %. The central regions, Sardinia included, (with cities like Florence and Rome) have a 20.4 % market share, and the southern regions (Sicily included) 7.8 %.
 

The following table shows the change in domestic sales of organic products processed in Italy in the first three months of 2009 compared with the same period in 2008. 
 

Source: Ismea/AcNielsen

Superettes, which are small supermarkets, reported a rise in sales of 39.7 %. Discounters increased their sales by 15.7 %, and hypermarkets by 13.5 %. Supermarkets achieved growth of 5.4 %, but absolute values in discounters and superettes are less significant than their market share. In Italian supermarkets, the products that sold best were fruit & vegetables, which are not included in the following table, as AcNielsen collects only aggregate data for them and not as single products. The table contains data for single products. It shows that eggs, with a share of 8.3% of the organic market, are the most important product, followed by fresh milk (6.6 %), yoghurt (5.7 %) and fruit juices (4.9 %). Organic juices have a share of 2.6 % in the whole fruit juices category in the Italian market.
 

Table: processed products for domestic consumption in Italy in the first half of 2009
 

Source: Ismea/Nielsen

The drop in the bread, pasta and rice category is mostly related to pasta and bread, while sales of rice were growing. Bread has a small share in the overall organic market in supermarkets, and its decline is due to the recent success of breadmakers in Italy. Home-made bread is cheaper and custom-made, and sales of flour have been increasing. Regarding baby food, the sale of food processors and blenders for use in the home are considered to be important. Home-made homogenized food is cheaper and lets parents control the full supply chain.
 

The share of organics in total sales in Italian supermarkets is 3 % (4 % in the Coop chain). According to Coop, this is thanks to the excellent quality/price ratio. Coop  is the most important mainstream retailer and also the main organic retailer in the Italian market, with a 76.4 million € turnover in 2008, equal to plus 7.3 %. The company is re-branding its former “Bio-logico” range as the new “Vivi verde” private label that includes organic food and eco-labelled items like detergents, low-energy light bulbs, etc. The chain runs a private label range comprising 339 organic products, 23 of which are baby foods (“Crescendo”– the ”Growing” brand) and 5 fair trade products of the “Solidal” brand. Coop’s organic sales consist of 38 % fruit, vegetables & dry pulses, 40 % grocery, 18 % industrial produce like yoghurt, milk, and cheese; 3 % meat & poultry, and 1 % seeds. Commercials about organic products are broadcast daily on Coop’s in-store radio, but in the last leaflet advertising special offers available from 27 August to 9 September the focus is on about 150 food items and only one (a jam) is organic.
 

Esselunga  launched its brand Esselunga Bio in 1999. But in its leaflet with special offers from 3 September 3 to 16 September, only one organic product can be found, which is an organic jam. With regard to jams, in the last two years the best seller on the whole Italian market is an organic jam processed by Rigoni di Asiago. This may be the only case worldwide of an organic product being leader in its category.

Carrefour in Italy doesn’t supply its French private brand “Carrefour Bio” but the Italian version “Scelgobio” (“I choose organic”). Without eye-catching campaigns, this multiple retailer has nevertheless increased its sales in the first four months of 2009 in its 794 supermarkets in Italy: sales of organic fruit & vegetables rose by 42,7 %, organic dairy by 23 %, cereal products like pasta, rice, flour by 12 %, eggs by 7,2 %, and tinned goods by 5 %. Meat & poultry have been growing by 5 % month after month. Conad  is another national chain with 2,826 supermarkets, a consortium of independent retailers under an umbrella brand. This company hasn’t run any notable campaigns either. The share of organic products in total sales is 2 %. According to the marketing manager for organics: “2008 closed with double digit growth” and “In 2009, sales are growing again”.

Last month, organic and fairtrade cocoa, coffee and green tea were added to the range. Despar  started an important marketing campaign in 2009, with prizes for customers like 1,000 jars of honey and 1,000 jars of jam, which were handed out to customers buying three organic products and sending an e-mail to at least three friends with a link to the campaign website, where a humorous commercial about organic food could be found. The campaign was successful, with some dozen thousand contacts made.
 

If results were good in supermarkets, they were even better in organic shops. There are more than 1,100, especially in Northern and Central Italy. Different from in many other European Countries, in Italy the leading sales channel is not supermarkets but specialized shops, where consumers can find a range of up to 4,000 food items. Also farm-gate sales are an important channel involving more than 2,000 farms, plus many occasional open-air markets.
 

The project B’io is a marketing programme promoted by Ecor , the main Italian wholesaler, involving 260 organic shops with 500 employees and a turnover of 100 million €. From January to July 2009, growth of 16.6 % was reported compared with the same period in 2008. B’io runs many initiatives, like “open doors” on farms and in processing units. For example, a dairy farm was visited by 1,600 consumers in one day, thanks to coaches provided by Ecor NaturaSì. Other initiatives are price-cuts, special offers, magazines and web sites, the programme “company of the month” and further events.

NaturaSì, which merged with Ecor in the Ecor NaturaSì Group at the beginning of 2009, runs 67 organic supermarkets all over Italy. The company’s results were even better: growth of 18.92 % was reported in the first seven months of the year. NaturaSì publishes the quarterly magazine “InformarSì”, free for customers, and runs a loyalty card programme with more than 200,000 card-holders. There are many prizes to be won – among them is a designer aluminium bike, which is made of recycled cans but even hand-made candles coming from Swaziland are available, where NaturaSì funds a project for food self-sufficiency.

Baule Volante, another major wholesaler which has recently been incorporated into the Ecor NaturaSì Group, had 15.81% growth in the same period. Altogether, the whole Ecor NaturaSì group had an increase in sales of 18.42 % in the first seven months of 2009. Ki Group, another big player in the Italian market, reported growth of 14 % in the first 6 months of 2009, thanks to its “Grandi Marche Bio” (First Class Organic Brands) programme, involving 260 organic retailers using leaflets, price-cuts, shelf talkers, posters, shopping bags, etc.