The organic fruit and vegetable market - Italy

1.2 A Global Market in full Expansion

The Research Institute of Organic Agriculture (***). This study provides an overview of the global organic agriculture market, in which fruit and vegetables play an important role. 

In ****, the global organic farming market was worth ** billion euros, with an average annual growth rate (***).

Main organic farming markets by value of sales World, ****, in billion euros Source: ****

The report also indicates that the number of producers increased by **% from **** to ****, reaching *.* million producers in ****. These producers were spread across *** countries in ****. The countries with the most producers are India with *.** million, followed by Uganda (***). It is interesting to note that these countries do not coincide with the countries with the largest agricultural area dedicated to organic farming, as shown in the graph below [***]. 

Distribution of organic agricultural area by continent World, ****, in % Source: FIBL organi-world.net From **** to ****, Oceania has seen the largest increase in organic farmland, with a ***% increase. Europe saw a **% increase in organic land, while North America saw a **% increase over the same period [***] The organic market thus seems to be experiencing unprecedented growth.  According to bio-addict.fr, it will be worth *** billion euros by ****.

1.3 An Italian Market which Does Not Disappoint

The most recent data show that Italian organic farming has a very important position in the European Union, both in terms of number of companies and of surface area, and the evolution of size indicators over time also show the growing interest of operators and the market in this production method, which has kept up with the increasing attention paid by Italian consumers on health concerns and the environmental impact of food products.

Value of sales and exports of bio products Italy, ****-****, in billions of euros Source: ****

In ****, the Italian sector of organic fruit and vegetables indeed recorded an *% increase in value compared to the previous year, with a turnover of *** million euros, divided in half between fruit (***). Even the small free service and discount stores recorded +*% and +**% growth respectively [***].

To date, organic sales account for only *.*% of total fruit and vegetable sales (***), a segment that in **** also posted strong growth figures, with sales in modern distribution up *.*% in volume compared to **** and +*% in value for more than *.* billion euros [***].

Organic arable land areas, by type of product Italy, ****, in thousands of hectares Source: ****

1.4 Imports and Exports

Imports  

The following graph shows the Imports volume of fruits and vegetables in **** and ****. As we can see, the volume of fruit imports is more than double the size of the vegetables', although it suffered a slight decrease in ****. 

Imports volume of fruits and vegetables Italy, ****-****, in thousands of tonnes Source: ****

 Most of the fruit imported in Italy comes from Latin and Central America, in particular from Perù (***). Turkey also plays a relevant role with a share of *.*%.

Countries of origin of imports, bio fruit Italy, ****, in % Source: ****

Regarding vegetables, almost half of the products imported come from China, and another **% are exported by Turkey. The other two relevant countries are Turkey and Egypt, which, however, only take up *.*% and *.*% of the pie.

Countries of origin of imports, bio vegetables Italy, ****, in % Source: ****

 Exports

 Unfortunately, exports are harder to break down due to the lack of data. However, because of the relevant role of fruit and vegetables in the organic industry, data regarding the industry as a whole can be useful as well.

The following graph shows the evolution of exports of organic food in Italy. As we can notice, the growth is constant and very fast: ...

1.5 COVID-19 Impact

The COVID-** pandemic has had devastating effects on many markets and industries. Due to the nature of the virus (***) sanitary measures were put in place, the most significant of which were mandatory, government-mandated closures that kept people home and halted the most economic activity. Italy, being the first European country affected by the virus, was the first to shut down, with the first national closure lasting from late February **** to early May of that year. Other more localized closures took place throughout the year through May ****.

Many bioproducts, and in particular fruit and vegetables, reacted positively to the situation. The graph below shows the change in sales between March and May ****, compared to the same period in ****. Bioproducts as a whole experienced an increase in sales of **%, a remarkable growth driven by the increased attention of consumers to the quality of their food during lockdowns. 

Fruits overall rose by *%, an increase driven by the popularity of fresh fruit (***). Shell fruit, instead, decreased by -**% probably due to the higher cost of the food in a moment of economic uncertainty. 

Regarding vegetables, the growth was altogether impressive, +**%. Processed vegetables rose to **% compared to ****, and fresh vegetables also increased sharply. 

Consumer sales trend ...

2.1 Demand Characteristics

Italy is one of the countries where the propensity to consume organic fruit and vegetables is highest, compared to other European countries. In fact, **% consume at least one portion of fruit or vegetables a day, and in ****, according to Nomisma's calculations, the annual per capita consumption of fresh fruit and vegetables was *** kg, whereas Germany stops at *** kg and the United Kingdom at *** kg.

Fruits and vegetables also dominate the organic industry and consumption habits. The graph below shows the breakdown of expenses in organic produtcs:  as we can notice, fruits and vegetables are both one of the first foods in terms of share, with respectively **.*% and **.*%. 

Breakdown of expenses in organic products, by product category Italy, ****, in % Source: ****

In Italy, the consumption of organic food products has increased have grown in the last year by +*.*%, exceeding *.* billion euros (***); a value that rises to **% if we consider the families that have done it at least once.

Ismea Nielsen data show an increase both for consumer packaged goods, to which most attention was focused in the first weeks of the Covid emergency, and for fresh bulk fresh products. 

2.2 Consumer Profile and Habits

A report published by Nomisma shows the results of the survey, which allows us to define a consumer profile and its consumption habits. 

According to the survey, **% of buyers are university graduates and **% are under ** years old. Regarding families, in the last year, * out of ** families have bought organic fruit and vegetables, and **% of Italian families have bought organic fruit and vegetables at least once. In particular, **% of them purchased the products at least once a week and **% two-three times a month.

Shopping habits of families Italy, ****, in % Source: ****

 The report also provides an overview of the motivations that drive consumers to buy, showing an increasingly eco-sustainable approach to food: organic fruits and vegetables are perceived as synonymous with health and well-being, they are a guarantee of product safety and quality, and respect for the environment. To influence the choices are also the taste (***).

Reasons of purchase of organic fruit and vegetables Italy, ****, in % Source: ****

 In general, when buying fruits and vegetables Italians give a lot of importance to zero km or local fruit and vegetable products (***).

All of these elements have a positive effect on bio fruit and vegetables, as these products synthesize most of these preferences.

Decisive ...

2.3 Demand Drivers

The yearly report published by Italiani Coop synthesizes Italians' priorities for ****. These main trends represent huge drivers for the characteristics that consumers typically attribute to bioproducts: health, sustainability, and focus on the territory (***) were all trends underlined in the previews section. 

Local products

According to the survey, more than **% of the respondents will buy more local products and products with local ingredients. In addition to this, more than **% of the respondents will increase their purchases of traditional and Km * products. Bio products usually represent cost of these characteristics, and more importantly, are associated by the consumer to concepts like "local" and "Km*". 

Another interesting piece of data to notice is the low share of the population that plans to decrease these shopping habits, between * and *%.

In ****, how do you think your food purchase will change, origin-wise? Italy, ****, in % Source: ****

Sustainability

Sustainability is at the core of the bio concept, in fact, when asked about their intentions about consumption habits, **% of the population appeared to be interested in bioproducts. Other trends included the purchase of products with sustainable packaging and generally sustainable products.

In ****, how do you think your food purchase will change in terms of sustainability? Italy, ****, in % Source: ****

Rising attention ...

2.4 New Trends of the Industry

The regenerative trend

The conversation is expanding as producers adopt and brands demand regenerative agriculture practices, those which “regenerate” soil that has been stripped of its nutrients and biodiversity by synthetic fertilizers, pesticides, and herbicides. The marketplace hasn’t yet caught up with the regenerative movement, but such movements do take a while to make it to the wider consumer market.

Regenerative agriculture is a farming approach that has some similarities to organic agriculture, with the primary goals to build up soil health, sequester carbon, conserve water and improve air quality. Such farming methods also seek to decrease the consumption of fertilizer, fuel, and other resources used widely in modern agriculture. 

3.1 Structure and Dynamics of the Market

The organic production system is the most modern one in the Italian agri-food sector.

It employs more than ***,*** people in farms, processing and distribution companies, control activities, technical assistance and the rest of the complementary industries.

In **.*% of Italian municipalities, there is at least one organic farm, with a higher concentration in the central and southern regions. In ** municipalities there are more than *** organic farms: there are *** in Noto (***).

In ** municipalities the organic agricultural area exceeds **% of the total area, and in ** (***) [***].

About **% of Italian organic farms are engaged in related activities (***).

Characteristics of Italian Organic Farms versus Traditional Farms Italy, ****, in % Source: ****

3.2 Value Chain

Source: ****

3.3 Geographical Distribution of the Organic Areas in Italy

As the graph below and the annexed table show, the greatest portions of organic arable land in Italy are concentrated in the south of the country, more specifically in Sicilia, Puglia and Calabria. For organic fruit and vegetables in particular, Puglia presents the greatest portion of arable organic areas with, respectively, **** and **.*** hectares. 

Geographical Distribution of Organic Areas

Italy, ****, in hectares

Source: ****

Region Organic Surface (***) Sicilia ***.*** Puglia ***.*** Calabria ***.*** Emilia-Romagna ***.*** Lazio ***.*** Toscana ***.*** Sardegna ***.*** Marche ***.*** Basilicata ***.*** Campania **.*** Lombardia **.*** Piemonte **.*** Veneto **.*** Umbria **.*** Abruzzo **.*** Friuli-Venezia Giulia **.*** Molise **.*** Trentino **.*** Liguria **.*** Valle d'Aosta *.***

3.4 Distribution

For what concerns the distribution channels of Italian organic fruits and vegetables, two m ain trend are worth noticing: the surge in popularity of the online channel due to the COVID-** pandemic and the related restrictions put in place by the government and the primacy of the GDO distribution channel accompanied, on the other hand, by a strong growth of small service providers and discounters.

In ****, one in four households indeed bought fruit and vegetables online from supermarket websites, with an even higher potential demand not being met due to a high intensity of requests (***). For fruit and vegetables, the online channel does not end with the large-scale retail trade: a further **% bought from producer sites or online farmers' markets.

Moreover, as already mentioned, sales of fruit and vegetables though modern distribution (***) [***].

In general, the best performance registered in terms of distribution channels has been that of small service providers (***) [***].

From the graph below, we can see that traditional distribution is more predominant for organic vegetables compared to organic fruit. This distribution channel accounts for **.*% of organic vegetables in ****, while it only represents **.*% of organic fruit.

Breakdown of sales of organic products, by product category and distribution channel Italy, ****, in % Source: ...

3.5 Top Players of the Organic Agriculture in Italy

The first Pambianco study on the turnover of the leading Italian companies in the processing of organic farming products highlighted the following ranking (***):

Rigoni di Asiago Alce Nero Brio Damiano Natura Nuova

The graph below shows the turnover of these leaders of the sector. Most of these companies are not specialized exclusively on organic fruit and vegetables, but produce and sell also other organic products. Nonetheless, they remain relevant for the scope of this study. 

Turnover of the main players of organic agriculture Italy, ****, in million euros Source: ****

4.1 Typology of the Offer

In Italy, as in the rest of the world, the offer of organic fruit and vegetables is extremely varied and comprehensive. It is thus difficult to present an exhaustive description of the typology of the offer of this market.

Nonetheless, Ismea, provides some useful information about the typology of the offer in the GDO distribution channel, providing us with a relevant snapshot of the Italian offer since, as mentioned above, modern distribution is by far the preferred distribution channel of Italian customers when it comes to organic fruit and vegetables. 

The typology is the following:

Fruits

Organic fresh fruit; Organic fruit juices; Organic citrus fruits; Other processed fruit; Organic nuts.

Of these product categories, the one on which Italian households spend the most is the general group of organic fresh fruits (***). Nonetheless, there isn't an excessively significant difference between the different type of organic fruits when it comes to domestic expenses.

Breakdown of domestic expenses on organic fruits in GDO, by product type Italy, ****, in % Source: ****

 Vegetables

Fresh organic vegetables; Processes organic tomato products; Fresh organic vegetables IV gamma; Other organic processes vegetables; Organic frozen potatoes and vegetables; Organic potatoes.

For what concerns organic vegetables, Italian households tend to spend ...

4.2 Pricing

Analyzing the comparison of a basket of reference organic products over a five-years period, we can confirm that the prices of organic products are on average **% higher than those of conventional equivalents. In the fruits and vegetables sector, the gap is narrower, in contrast to cereals and other grain crops whose gap is never lower than **%. 

As we can see from the graph below, for what concern prices at the origin, the average price gap between organic and non-organic products for apples is ***%, for potatoes is **% and for tomatoes is **%.

Price at origin of some of the most important organic products and conventional equivalents Italy, ****-****, in euro/Kg Source: ****

  Analyzing the differences in prices between organic and conventional products for consumer prices, we see how, for fruits and vegetables, the greatest gap is observed in the prices of apples (***). Consumer prices of some of the most important organic products and the corresponding conventional products Italy, ****, in euros and %VAR Source: ****

4.3 Geographical Distribution of the Offer

Once again and inevitably so considering the predominance of Sicilia, Puglia and Calabria for what concerns arable organic areas, most Italian organic operators are concentrated in these three regions with **.*** operators in Sicilia, **.*** operators in Calabria and **** opeators in Puglia.

Geographical Distribution of Organic Operators

Italy, ****, in number of organic operators

Source: ****

4.4 Profile of Italian Organic Operators

**.*% of Italian organic farm managers have a university degree or diploma (***), and **.*% have a high school diploma, almost double the average.

Organic farm managers not only have a higher education, but are also younger than traditional farms operators: **% of farm managers are between ** and ** years old (***), only **.*% of organic farmers are over ** years old, while the Italian average is **.*% [***].

Therefore, in general, the average Italian organic farm manager is more educated and younger than the average of traditional farmers. This should not come as a surprise as, being organic farming a relatively new or at least newly popular trend, the fact that it attracts the new generations can be considered normal, if not inevitable. 

Another way in which we can break down Italian organic operators is by category. The main categories identified for this type of sector are:

Exclusive producers Exclusive preparers Producers/preparers Importers

In Italy, the largest percentage of organic operators are exclusive producers, which represent **.*% of the total.

Breakdown of organic operators, by category Italy, ****, in % Source: ****

4.5 The Biodistricts

In recent years, a growing number of Italian rural areas have spontaneously organized themselves into organic districts, a form of territorial aggregation that was first experimented with by AIAB in ****, and has been expanding in Italy in a way that has no equals in Europe or in the world, where similar experiences have been taking place since the early ****s.

The reasons for this success can be found above all in the growing value assigned by consumers, farmers and public decision-makers to organic farming, which is perceived as a valid tool for the development of rural areas.

It should also be borne in mind that the growing consideration of organic products on the markets and, above all, the economic support for this type of agriculture, the only form of sustainable production to be recognized by European and national legislation, have generated a considerable increase of certified surfaces. 

The organic production method, by virtue of its desire to legitimize the entire supply chain through a systemic approach, recognizing interdependencies and partnerships along the value chains (***), organic farming therefore also introduces the social aspects of district production into the definition of the district which enrich the concept, to the point of making it ...

5.1 The Italian Regulation

The Minister for Agriculture, Stefano Patuanelli, is pushing for the process of approving the law on “organic” to continue in Italy. The bill's guidelines, presented to the Senate's Agriculture Committee, focus on more sustainable systems and on the centrality of the ecological transition of Italian agrifood policies, with the aim of increasing the number of companies, strengthening research, innovation and training. In this way, the potential of organic farming would be further increased [***]

5.2 The European Regulation

The EU Regulation on Organic Production and Labeling of Organic Products ensures that the same high-quality standards are met throughout Europe. The rules relate to farming and aquaculture practices, food processing and labeling, certification procedures for farmers, and importing organic products that come from outside the EU.

EU farmers who produce organic products use energy sources and natural resources responsibly, promote animal welfare, and help maintain biodiversity, ecological balance, and soil and water quality.

Organic farming techniques include:

Crop rotation for efficient use of resources Prohibition of the use of chemical pesticides and artificial fertilizers Very strict limits on the use of antibiotics for farm animals Ban on the use of genetically modified organisms (***) Use of on-site resources for natural fertilizers and feedstuffs Free-range and free-range farming and the use of organic feeds Use of animal husbandry practices suited to the specific needs of the animals

The Organic Logo

The EU organic logo on food products guarantees compliance with EU rules in organic production. The logo is mandatory for pre-packaged food. In the case of processed food products, it means that at least **% of the ingredients that come from agriculture are organic. Large retail chains and other retailers can only label ...

5.3 Next step in the Regulation

MEPs approved in April **** the amendment of the regulation on organic production and labeling of organic products. In October ****, the Parliament approved the postponement of the application of the new regulation by one year, which will then be scheduled for January *, ****. The decision was made to help agricultural entrepreneurs and local authorities, worried about the effects of the Covid-** crisis, giving them more time to adapt.

The forecasted changes will include the following:

Stricter controls are envisaged, carried out at least once a year for all operators involved in the production chain (***). Checks are reduced to once every two years if no infringements are found for three consecutive years. Fairer competition must also be ensured: producers from third countries who want to sell their products in the EU must comply with the same rules that apply to producers within the EU (***), will be phased out. Contamination with pesticides must be controlled: farmers must take precautionary measures to avoid "accidental" contamination with unauthorized pesticides or fertilizers, for example due to proximity to conventional crops. A product loses its organic status if the contamination is due to fraudulent or negligent behavior. Member states that have thresholds for the presence of unauthorized substances in ...

6.1 Segmentation

• Rigoni di Asiago
• Alce Nero
• Brio S.p.A
• Natura Nuova
• Cortobio
• Almaverde Bio
• Natura Iblea
• Paniere Bio