Sales Channels: the Italian Wholesale Market and the Up-and-Coming Box Scheme

In the past, Italy was not a classic country for the sales channel known as the box scheme. The system that has been successfully operated in Denmark, Germany, Holland and Austria for years to get organic produce to the people seems now to be getting a foothold in Italy. It is one way in which farmers and the trade are reacting to a somewhat stagnating demand in the retail trade. They hope to be able to improve the marketing of their products by shortening the sales route and by establishing direct contact with the customer.

Picture: Franco Zecchinato

“It is not just a question of selling organic food - we want to introduce people to an alternative approach to life and culture. With this in mind, the subscription box scheme is ideal,” says Franco Zecchinato (picture), the founder and managing director of the cooperative El Tamiso in Padua. Since December 2004 El Tamiso has been running a packing facility for the subscription boxes next to its stand in Padua’s wholesale market. By the end of 2005, Franco Zecchinato aims to reach 200 customers within 200 km in the provinces Padua, Veneto and Treviso. For Zecchinato the box scheme is also a way of again concentrating more intensively on the regional level and thus shortening trade routes.  After all, El Tamiso has its roots in the region: half of its goods come from the region; about 35 farmers from Veneto deliver their fruit and vegetables daily to the market in Padua. “We have to develop greater awareness of our customers; we have to communicate more effectively to them the value of organic food,” says Zecchinato. He finds weekly markets are a good way of doing this, but information can also be distributed in the boxes themselves. Many people find home deliveries very convenient.

Zecchinato is constantly searching for new sales routes for the 50 member companies of the cooperative El Tamiso, and the box scheme is the latest initiative. El Tamiso is also the name of a farm in the vicinity of Padua. The weekly markets in the surroundings of Padua are another sales channel for the harvest of the farms in the cooperative. El Tamiso has been operating at the wholesale market since the end of 2000. Around 30 stores in Padua and the vicinity collect their goods direct from El Tamiso. Other customers include catering kitchens, restaurants, other wholesalers and purchasing associations, although some families, too, buy their fresh produce from El Tamiso at the wholesale market. He is the only supplier of organic food at the Padua wholesale market (picture). As well as the range of fruit and vegetables (80 %), the stall also sells dry goods like cereals, pasta, wine and bread and much else besides. In April 2005, the cooperative introduced its own brand under which grain, flour, bread and tomato puree are currently being sold. The annual turnover of El Tamiso amounted to 2.5 million Euros in 2004. Suppliers of organic produce can be found at the wholesale markets in Bologna and Turin, too.

As well as operating regional marketing, El Tamiso exports. Cooperation with the English project Eostre produced a turnover of about 130,000 Euros. There has been a link with England for 10 years. Eostre started as an EU project (eastangliafoodlink). Franco Zecchinato regards Eostre as an important partner that has adopted a similar regional philosophy to El Tamiso and has also been operating a box scheme and direct selling. Besides this link, there are contacts with cooperatives in Ireland, Estonia, Spain and France.

The cooperative El Tamiso is a foundation stone of the organic industry in Italy, and its 20th anniversary was celebrated in 2004. The founder Franco Zecchinato has been involved since 1978 and he is among the initiators of various associations and enterprises. The fruit and vegetable trade El Tamiso is just one of his initiatives and Zecchinato is still running the business as managing director today. In addition to his other activities, he contributed his ideas to the founding of AIAB (Association, Brand Marks, and Certification), ICEA (Association, Consulting and Marketing) and Brio (1993), which is today Italy’s second biggest organic fruit and vegetable wholesaler.

“The organic market is in a transition stage,” says Zecchinato. In his opinion, the wholesale trade has to reduce its margins and make it possible for the retail stores to sell their goods at more favourable prices. He regards it as important in this context to establish a new trading philosophy. “First, all players have to be clear that the individual strata of the trade bear responsibility for each other,” is his argument for fair trade relations. “Second, we have to make more effort to ensure that consumers recognise the high value of organic food.” This is the reason why El Tamiso has set itself the objective of widening the basis of its marketing more and more. As well as operating the wholesale business, markets and the box scheme, a shop is planned to open in the spring of 2006 near Padua.