The peanut market - Italy

1.2 The Global Marketplace

Global peanut production has increased by more than **% since ****, or nearly *% each year. Peanuts are increasingly being consumed on a global scale. In fact, in ****, the world market for peanuts is valued at $*.* billion and is expected to reach $*.* billion by the end of ****, growing at a CAGR of *.*% during ****-****.

Evolution de la production mondiale d'arachide Monde, ****-****, en million de tonnes métriques Groundnuts

China is the world's leading peanut producer, accounting for nearly **.*% of total production. In ****, China was the largest peanut producer with a production of **.* million metric tons. India, Nigeria, and the United States followed with approximately *.*, *.*, and *.* million metric tons, respectively[***].

1.3 The Italian market

By ****, consumption in Italy has been estimated to be ** million peanuts[***]. The demand is mostly covered by foreign products, generally imported from Israel, Egypt and United States of America. However, we are witnessing a rebirth of Italian production with the launch on the market of ***% Italian peanuts thanks to the collaboration between Coldiretti, Noberasco and SIS. This could lead to the cultivation of more than **,*** hectares on the territory. The main differences of the Italian peanuts are the smaller size, darker and the particular taste compared to the conventional types. Peanut is deposited in the field in April and harvested towards the half/end of September; it needs peaty soils, high temperatures and many hours of light. Because of these characteristics, the region which has mainly developed this cultivation is Emilia-Romagna and in particular the area of Ferrara.

An estimate of the size of the Italian peanut market can be made by taking into consideration three main determinants: domestic production, imports and exports. The size of the market is then established by adding production and imports and subtracting exports. Therefore, the result of the graph can be explained by the values of the three different variables in the three different ...

1.4 Exports and Imports

In ****, peanut exports amounted to $*.* million while imports amounted to $**.* million for a total of **.* million kg. Italy is therefore a net importer of peanuts even if the value of national production, as seen, is growing year by year.

Peanuts Import and Export Italy, ****-****, values in millions of euros COMTRADE

Half of Italian imports come from Egypt (***), only *% comes from China despite this being the world's top producer.

Main countries of origin of Italian imports Italy, ****, percentage COMTRADE The main commercial partners, in terms of exports, are the UK and Germany, which together account for **% of exports. Main Countries of Destination Italian Exports Italy, ****, percentage COMTRADE

2.1 Dried fruit consumption is on the rise

In ****, there was a strong increase in the consumption of nuts (***). According to Nielsen data, walnuts, peanuts and almonds concentrate **% of spending and **% of quantity purchases [***].

Specifically, walnut, in **** aggregated about **% of the purchases in value of the category and **% in terms of quantity. The almond, on the other hand, stopped at the shares of **% in value and **% in volume. However, it should be noted that the purchases of this product recorded a strong growth, close to **%, compared to ****. Finally, on the third step of the podium is peanut, which generated about **% of the turnover of the category, for a volume share of **% of the total[***].

Moreover there has been a strong change in consumers' consumption habits, in particular there is an increase in daily consumption or */* times a week and a reduction in sporadic consumption of dried fruits.

Frequency of Dried Fruit Consumption Italy, ****-****, percentage FreshPoint

Peanuts can be used mainly in the food and beverage industry: To be consumed as a snack To be processed into a product/meal (***) Oil The three consumption methodologies correlate with different consumption behaviors, which allows for the identification of a number of demand trends that may influence one and not the other. ...

2.2 Consumption Modes

Changing consumer preferences and shopping habits are leading to an "anytime" food search, which in turn is driving companies to offer products that cater to these transformations as snacks or ready-to-eat products.

The two main factors are:

More active lifestyles: in Italy in ****, *% of workers reported that their work-life balance had worsened significantly and dramatically. More Italians (***) are working night, weekend or holiday shifts to keep working. Thus, one can see the effect of longer hours and busier schedules on attention to personal care. The increase in eating out. Italy is the third largest country in terms of out-of-home consumption, with an expenditure value of ** billion euros[***].

Besides the change in eating habits, another variable that plays a role in the consumption of snacks, and is specifically related to peanuts, is the consumption of alcohol, a beverage to which in Italy snacks such as peanuts are often added.

Alcohol consumption: there are increasingly significant differences between men and women in the consumption of alcoholic beverages. In ****, according to Istat, just over **% of men consumed alcohol year-round, compared to **% of women. Although, both statistics show an increase from the previous year.

Salty Snack Consumption Italy, ****, percent Food and Beverage

Moreover, only *.*% of ...

2.3 Healthy effects boost sales

As mentioned, many Italians consider snacking a healthy habit. There is no general consensus on this last point, as some researchers suggest that eating between meals speeds up metabolism, while other studies have shown the opposite. Despite the role of snacking in general, there is agreement that peanuts make a positive contribution. In fact, many studies have suggested that peanut consumption reduces the risk of disease. A study conducted by the Loma Linda University School of Public Health and the International Agency for Research on Cancer (***) on more than ***,*** participants from ten European countries found that people who include peanuts in their diet are more likely to reduce weight gain and lower their risk of overweight and obesity.

Many organizations and nutritionists are promoting the positive results of peanut consumption, in Italy for example Nucis is among the institutions promoting research on the beneficial effects of peanuts at an international level. Its project "Dried fruit is wellness" proposes to eat **g of dried fruit per day. Italians are increasingly aware of the associated benefits, a knowledge that has increased sales of nuts since **** [***].

Consumers are increasingly aware of the health benefits associated with certain products and then, at the same time, ...

2.4 Use in the kitchen

Peanut seed oil is subjected, in Italy, to intense competition from olive oil, the Italians' favorite for seasoning. However, the role of this alternative is becoming predominant in a particular phase of cooking, frying, where peanut oil is the most used in Italy, even more than olive oil. In fact, a survey conducted by Doxa on oil consumption habits shows that the use of peanut oil for frying is much more relevant than that of olive oil, with **% of respondents saying they use it.

Preferred Oil Type by Category Italy ****, in % DOXA

According to the European Nut Association in Europe, about *** thousand tons of peanuts are consumed each year. In ****, about ** thousand tons of peanuts were ground in Europe, **% in Italy, which leads the EU ranking with ** thousand tons of ground peanuts [***].

World peanut oil production showed slight variations from ****, but overall remained stable over the ****-****/**** period

Evolution de la production mondiale d'huile d'arachide Monde, ****-**** Source: ****

3.1 Production Chain

In Italy, the peanut market is very fragmented due to the long production chain. The phases are identified as production, wholesale and retail. Although easily identifiable, the different phases involve a number of actors and do not follow a coherent path. The following is an overview of trade flows, taking the entire sector as an example. Italy still remains highly dependent on imports, with imports amounting to ** thousand tons[***].

Domestic production has been estimated at *.*t, this figure is due to the presence of ** hectares of land in Italy dedicated to peanut production[***] for a total annual production of *.*t.

Source: ****

Imports and domestic production are therefore the two determinants of the available domestic market. Dried fruit, originally grown in Italy or supplied by another country, can be destined for consumption or re-introduced into the processing process. It is estimated that more than half of the market is reintroduced into industrial processing, while only **% is destined directly to end users.

The industrial flow is also valuable to understand peanut processing specifically, as statistics on the quantity of peanuts consumed in Italy and the size of the market do not allow to differentiate the different consumption methods and, consequently, the end users. ...

3.2 The Peanut Plant

Peanut despite it is often placed side by side with dried fruits such as walnuts, peanuts and pistachios, is a legume. Peanuts are in fact obtained from the underground seeds of its plant, which is believed to be from South America and currently cultivated in tropical and warm temperate regions of the world. Peanut cultivation is strongly influenced by climatic conditions, which is why the plant cannot be produced in all countries.

Temperature requirements: high temperature (***), suitable growing temperature is ** °C to ** °C. Soil requirements: well-drained, loose, friable, medium-textured soil with a pH range of *.* to *.*.

[***]

Sowing

Sowing peanut plants begins by placing the seeds in the soil; although obvious, the seeds are not the same as those bought at the supermarket, as they are already roasted. The seed is buried with its reddish film intact and without any previous treatment. The plants need a space of ** cm between them and between rows, they need at least ** cm. Some growers using techniques to anticipate the harvest, use jars in protected culture in February and then transplant in March/April in the vegetable garden[***].

Growth and harvest

In the operational aspect, the cultivation of peanuts is pretty simple because it is ...

3.3 Large-scale retail trade and vending machine sales

The category of dried fruit, which also includes peanuts (***) have always been a market product which is easily sold in large-scale retail trade and also in retailers which do not have the structure to maintain the cold chain.

In the last few years, these products, both for the taste they have and for the ease of preservation and consumption in everyday life, have grown in consumer demand and distribution channels have adapted to the growing trend, giving more space on shelves and being in more and more retailers. Explosive growth has been seen primarily through two channels:

Discount (***) GDO (***)

According to Sgmarketing, dried fruit consumption by channel in Italy trended positively on a more frequent basis for GDO channels and on a less frequent basis (***) for discounts in ****.

Consumption of Dried Fruit by Channel Consumption of Dried Fruit by Channel Source: ****

The outlook for the next three years shows a gradual emphasis on more frequent purchases in both sectors at the expense of monthly consumption. The categorization of peanuts provides additional insight. For salty snacks, three channels dominate consumer offerings with a market share of about **.*%:

Supermarkets (***) Convenience stores (***) Hypermarkets (***) [***]

4.1 Beneficial contribution of peanuts

Throughout the study, we have repeatedly referred to the beneficial effects of nuts on the body, which gives us a deeper insight into the most important nutrients found in peanuts. Peanuts are high in calories due to their high plant protein content, are full of vitamin E and fiber, and are therefore a great source of energy and minerals (***).

Source: ****

4.2 Second most consumed category of nuts

From an elaboration of Coldiretti on Ismea data it emerges that, during the last ** years, purchases of dried fruit have doubled, together with the average quantity per person consumed every year, today estimated at about * kg. The growth in consumption has also influenced the production sector, leading to an increase in the amount of land dedicated to these crops, despite the constant and high flow of imports of this category of goods. The most consumed dried fruit is nuts, followed in second place by peanuts. Italy ranks **th in the world for nut producing countries: it produced **,*** tons in ****, a figure which remained substantially unchanged in ****; on the other hand, from **** to ****, production has progressively decreased, reaching **,*** tons last year (***). There are various reasons behind the decline in yield, such as low plant productivity, substandard variety yields, and outdated cultivation methods. However, the walnut market in our country is still fertile, because walnuts are a fruit, an essential ingredient in many traditional recipes of Italian cuisine, and because walnuts are a deep-rooted tree in many Italian agricultural regions[***].

In ****, peanut sales were the second largest in terms of volume among all categories with a **% share, just behind walnuts. Dry fruit sales ...

4.3 Increase in prices of dried fruit

The index price of a certain commodity in a certain year is given by the ratio of the price of the commodity at the end of the year to its price at the beginning of the year.

Nuts, particularly almonds, walnuts, or pecans, are extremely expensive. The following two graphs show the index price of nuts (***). In contrast, in ****, the price index peaked at ***.*, which translates into a **.*% increase in **** nut prices compared to ****.

Price index of nuts and cost of production Italy, ****-****, ****=*** Source: ****

The cost of production index represented is given by adding a number of variables: Wages Fertilizers Phytosanitary Energy products High prices can be partly justified by high production costs. In the three years under review, there is a slightly upward trend, particularly due to increases in energy products and wages.

4.4 Peanuts: the cheap nuts

The market price of peanuts is considerably lower than the average price of nuts or dried fruit. In fact - according to the table - the average price per kilogram of peanuts is *.** euros. Almonds, for example, have an average price per kilo of ** euros - for a range from ** to ** euros per kilo - or, similarly, walnuts have an average price per kilo of **.* euros.

Source: ****

5.1 Regulatory framework

Legal requirements for peanut imports into Europe and Italy include a number of relevant controls.

Food safety

In ****, a new EU regulation for the treatment of particular categories of imported goods was introduced in the specific framework:

Peanuts from Brazil Capsicum annuum and nutmeg from India Nutmeg from Indonesia

These goods are subject to preventive controls, due to a possible increase in aflatoxin - which is a toxic substance produced by fungi. As of **** in Europe, the import of other categories of edible nuts is also subject to stricter controls:

Peanut butter from Bolivia, Gambia, Madagascar, Sudan and Senegal Peanuts from Bolivia, Gambia, Madagascar, Sudan and Senegal

Packaging requirements: peanut packaging must be able to preserve flavor, taste and appearance, and must protect against contamination. Labeling requirements: the allergen must be prominently displayed.

5.2 World Customs Nomenclature and Harmonized System

The Harmonized System is an international nomenclature for the classification of goods. It allows participating countries to classify traded goods on a common basis for customs purposes. At the international level, the Harmonized System (***) for the classification of goods is a six-digit code system[***].

The HS consists of approximately *,*** item/product descriptions in the form of titles and subtitles, organized into ** chapters, grouped into ** sections. The six figures can be divided into three parts. The first two digits (***).

The Harmonized System was introduced in **** and has been adopted by most countries in the world. It has undergone several changes in product classification. These changes are called revisions and came into effect in ****, ****, ****, ****, and ****. Detailed changes to each HS nomenclature are available on the links in the attachment below.

The following areas were selected to compile foreign trade statistics and market calculations for this study:

For domestic production[***] code ********: Peanut preparations and preserves (***).

For foreign trade[***] Code ****: Peanuts, not roasted or otherwise cooked, whether or not shelled or crushed.

For estimating the size of the Italian market[***]. Export and import values were given in USD, so the exchange rate as of **/** for the three years considered - ****,****,**** - was taken into account ...

6.1 Segmentation

• Gruppo Besana
• Noberasco
• Madi Ventura
• Euro Company
• Foodspring
• Ki Group S.r.l