The poultry market - Italy

1.2 The global market

As said earlier, chicken is one of the most popular foods in the world. The United States is the country with the highest consumption. However, chicken meat consumption has increased in almost all nations and regions, with consumers attracted by the low prices, the product's consistency and versatility, and the higher protein-to-fat ratio. As a result, global chicken meat consumption is expected to increase, reflecting its important role in the national diets of many populous emerging countries, including China, Indonesia, India, Malaysia, Pakistan, Peru, the Philippines, and Vietnam.

As said earlier, the global chicken market is expected to reach a value of $***.** billion by ****, with a compound annual growth rate (***) of *.** percent.

Global poultry market World, ****-****, US$ billion BusinessWire

In ****, the United States was the largest producer with **,*** thousand metric tons, followed by Brazil with **,*** thousand, and China with **,*** thousand. The European Union, Russia, Mexico, Thailand, Turkey, Argentina, Colombia, Peru, and other nations contribute smaller but significant amounts to global poultry production. In ****, poultry production is expected to continue to grow in almost all nations and regions. The United States is expected to produce **,*** thousand metric tons, Brazil **,*** thousand, and China would remain stable at **,*** thousand. The European Union, Russia, ...

1.3 The Italian market

Italy is among the leading poultry producers in Europe, with * percent of the total in ****. Only Poland, Spain, Germany, and France produce more.

Main chicken producers in Europe EU, ****, % European Commission

In ****, Italian poultry meat production decreased slightly to *,***,*** tons (***). Chicken meat production remained almost stable, while turkey meat production decreased by *.**%. Chicken and turkey account for **.*% of national poultry production.[***]

The poultry meat market is worth €*.** billion in the country, accounts for *.*% of total agricultural turnover in ****.

Breakdown of agricultural turnover Italy, ****, % ismeamercati Data show the differences between intensive and extensive/alternative farming in Italy in terms of location, farm techniques, breed, feed, economic productivity, and profitability [***]:

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1.4 Export-Import

Data on Italian meat trade between **** and **** show an increasing trend for both imports and exports. In ****, meat imports amounted to $***.* million, while exports were $***.* million. In ****, imports increased to $***.* million, while exports grew significantly to $***.* million. The coverage ratio, which indicates the ratio of exports to imports, was constantly greater than * during the years taken into consideration.

Exports - imports of poultry (***) Italy, ****, millions of $ Uncomtrade

Germany is the leading importer with $*** million, followed by France (***).

Poultry exports to major countries Italy, ****, millions of $ Uncomtrade In terms of imports, the most important country is still Germany, followed by the Netherlands, Poland, Hungary, and France. Poultry imports from the most important countries Italy, ****, millions of $ Uncomtrade

1.5 The effect of covid

The poultry sector has been affected by the COVID-** pandemic, but the effects vary greatly from one area to another. Each country differs in the progression of the disease. In a study conducted in England and Spain, producers indicated a recent increase in demand for products, with **.* percent mentioning that the increase had been marked. However, this was not universal as **% said that demand had decreased, with **% indicating that demand shrunk considerably. In addition, there was a greater acceptance of working on the Internet in favor of live production; **% of respondents said that farms employed fewer workers. Over **% of respondents revealed that the pandemic had renewed the transition to fully automated slaughter plants. According to *% of respondents, the problems caused by the pandemic COVID-** encouraged them to accelerate their automation plans. [***]

In Italy, domestic poultry meat consumption has increased significantly. There was a ** percent increase during March over the monthly average of the last five years, even though the Horeca channel (***) was blocked due to the virus. The poultry supply chain was able to respond well to consumer demand. In delicatessens, mainly light chicken was in demand, while domestic purchases were geared more toward heavy chicken. [***]

A more recent problem, however, ...

2.1 The question

The ISMEA (***) report indicates that there is a stable demand in Italy for chicken, which is the most widely consumed white meat in the country. In addition, demand for chicken products - such as minced meat and precooked products - is also growing steadily.

In ****, more than ** percent of the Italian population consumed white meat at least once a week. This figure has remained fairly constant over the past * years.

White meat consumption at least a few times a week Italy, ****-****, % Istat

Average per capita consumption has also remained fairly stable over the last * years for which data are available, rising from ** kg in **** to **.* kg in ****, an increase of *%.

Average per capita consumption of poultry meat Italy, ****-****, Kg Ismeamercati Regarding the most consumed white meat categories, chickens are clearly in the first position. Poultry meat supply Italy, ****, % Ismeamercati

2.2 Demand drivers

The main drivers of demand for chicken are:

Healthier image compared to other meats, ease of preparation, and absence of religious constraints related to consumption. [***] Age of consumers: Chicken meat consumption decreases with advancing age. Consumption at least a few times a week is highest for children aged **-** and lowest for adults aged **-**.

Consumption of white meat at least a few times a day depending on the age range Italy, ****, % Istat

Household type: Singles and young people were the groups with the largest increases in poultry meat consumption compared to the pre-pandemic period.

Poultry meat consumption dynamics by household compared to pre-pandemic Italy, ****/****, % Ismeamercati

Profession: profession also influences consumption. More than ** percent of students consume white meat at least a few times a week, while the figure drops to ** percent for self-employed workers.

Consumption of white meat at least a few times a week by occupation Italy, ****, % Istat

2.3 Geographical distribution of demand

Data on the regional consumption of white meat suggest a fairly homogeneous popularity of this type of meat throughout the country, except for Trentino Alto Adige, which shows a significantly lower consumption than other regions. The highest figure is for Tuscany.

These data show the percentage of people who consume white meat (***).

Consumption of white meat at least a few times a week by the population center Italy, ****, % Istat

2.4 The organic chicken

Free-range organic chicken is a form of chicken meat production that follows strict standards for animal health and welfare, as well as for the quality of meat produced. In this type of farming, chickens are free to move around and behave naturally, such as scratching the ground and laying eggs. They are also fed organic food that is free of antibiotics and hormones, which makes the meat healthier and more nutritious. Free-range farming is considered more sustainable than other production methods because the animals have more space to move around and live more naturally, thus reducing stress and the need for health treatments. In addition, using more sustainable and responsible farming practices helps to preserve the environment and promote the health of the people who consume the meat produced. [***]

Recently, organic chicken production has come under attack from investigative journalism. In particular, Rai produced a report showcasing the conditions of production at the plants of Fileni, which is one of the most important poultry producers in Italy. The report showcases sanitary and hygienic conditions deemed not in compliance with current standards and animals were allegedly mistreated. The report, which aired in January ****, went viral and was picked up by various news ...

3.1 The market structure

Poultry farms are concentrated in the North, where about ** percent of the ** million broilers surveyed are raised. In the top three regions alone, nearly two-thirds of the national stock is raised.

Breakdown of head and broiler farms Italy, ****, % ismeamercati

Istat does not provide up-to-date data on market structure; however, Ismea data indicate the presence of more than **** farms, hiring about **,*** people. These data signal a rather concentrated sector, with a small number of companies and a high average size.

These considerations mainly concern northern Italy, where intensive production is concentrated. In the south, farms are smaller in size, concentrate on raising slow-growing native species and target their product at niche markets.

The top companies by turnover are indeed all based in the north. The most important is the Veronesi Group (***), which includes the Aia, Negroni, and Veronesi brands. It has a turnover of more than €* billion, which puts it in a position of clear market dominance.

Company Turnover La pellegrina Agricultural Company €*.** bn Mangimificio Romagnolo €*** M O.R.A. €** M Fileni agricultural company €** M Ripro-Coop €** M Prealpina Agricultural Society €** M Sorriso Agricultural Society €** M Il Sole agricultural society €** M Agricultural Society Alimentare €** M Agricultural Society Interzoo €** M

3.2 The value chain

3.3 Distribution

Distribution of chicken meat is mainly through three channels.

Retail: Modern Distribution: refers to the more modern and structured sales channels, such as supermarkets, hypermarkets, and discount stores. Traditional Distribution: refers to the more traditional sales channels, such as independent grocery stores, butchers, and local markets. Calane Ho.Re.Ca.: covers the distribution and sale of chicken products to hospitality facilities and services.

Retail: The businesses it includes are: hypermarkets, supermarkets, discount grocery stores and minimarkets, and other miscellaneous non-specialized establishments, which generally consist of small non-specialized grocery stores. Italy has a large number of these enterprises, particularly in the latter category.

Number of enterprises in the sector: Retail trade in non-specialized establishments (***) Italy, ****, in numbers. Istat

Ho.Re.Ca. channel: This sector experienced a phase of deep crisis during the pandemic. The sector, however deeply impacted, has recovered vigorously. In **** the Italian restaurant industry grew by **.* percent compared to ****. Moreover, the comparison that gives greater certainty is the growth from ****: +*.* percent. It points out a growth that has recovered from the contraction due to the pandemic. Despite the future clearly looking bright, some critical points should be brought up. The main one is rising inflation, which is leading to price ...

3.4 Slaughtering and processing

Over the past two years, broilers less than * kg have shown monthly fluctuations with an overall trend to remain stable, increasing *.* percent over the period. In contrast, broilers greater than * kg have shown more consistent growth over time, despite some fluctuations, registering an overall increase of **.* percent.

Number of broilers slaughtered Italy, ****-****, thousands of heads Istat

There are only *** companies employed in poultry meat processing, a category that includes slaughterhouses, in Italy. The number has increased in recent years.

Number of enterprises active in the sector: poultry meat processing and preservation (***) Italy, ****-****, in numbers. Istat The total turnover of enterprises has been fluctuating but still signals a very concentrated sector with few very large companies.

Turnover of enterprises active in the sector: processing and preserving poultry meat (***) Italy, ****-****, € billion Istat

4.1 The offer

The term chicken is a generic term to refer to the male and female of the Gallus gallus species raised for food. Chicken according to age and weight can be defined as: pullet, hen, cockerel, free-range rooster, or capon:

chicken: * kg to *.* kg, suitable for all cooking. pullet: from *.* kg to *.* kg. hen: *.* kg to * kg, meat suitable for making broth or being boiled. cockerel: about * months old, lost *** g to *** g, suitable for all cooking. free-range rooster: maximum ** months old, suitable for all cooking. capon: castrated male chicken at the age of **/** days and slaughtered when it reaches * to *.* kg. Can be boiled, roasted, stuffed, typical of the Christmas season.

Every part of the chicken can theoretically be consumed. Below is a useful diagram for recognizing the parts of the chicken:

White meat - such as chicken, turkey, and rabbit - is rich in noble proteins and branched amino acids. Despite the meat's tending white color, *** grams of chicken and turkey contain *.* and *.* g of iron, respectively. Those values are roughly equivalent to beef. Another characteristic of white meat is the low-fat content: only * percent in chicken breast and *.* percent in skinless turkey. The low-fat content, concentrated in the easily ...

4.2 The prices

The previously explained increase in raw material costs, combined with the inflation that is affecting Italy, has led poultry prices to rise in recent years. As of February ****, this value has increased by **.*% compared to ****. The graph shows the monthly trend over the past * years.

Consumer price index trend for poultry Italy, ****-****, base ****=*** Istat

The price surge has mainly occurred since January ****, as can be seen in the graph above.

Below are the average prices for poultry products updated to March ****, differentiated between wholesale and origin prices.

On the other hand, the next table shows some examples of final product prices in supermarkets, so you can see the price trend throughout the poultry supply chain [***].

5.1 The regulation

At the European level, the most important laws for the market are [***]:

eU animal health and food safety regulations. Commission Regulation (***) No. ***/****: stipulates that imported poultry meat bearing certain optional indications must be accompanied by a certificate issued by the competent authority of the country of origin attesting to compliance with EU marketing standards. Regulation (***) No. ****/****, Article ***: establishes a common organization of the markets in agricultural products with Article *** indicating measures related to animal diseases and loss of consumer confidence due to risks to public health, animal health, or plant health. Regulation (***) No. ****/**** as regards marketing standards for poultry meat. The Regulation (***) ****/****: lays down rules on price and production notifications. Directive ****/**/EC: establishes minimum standards for the protection of chickens raised for meat production.

In Italy, production is regulated by LEGISLATIVE DECREE No. *** of September **, ****, implementing Directive ****/**/EC.

6.1 Segmentation

Among active companies in the poultry breeding sector, pure breeders and feed producers have to be distinguished. Among the breeders, the Veronesi group alone makes up more than ** percent of the industry's turnover, whereas the other companies all have a turnover of less than €*** million per year.

Breeders Name Turnover (***) SOCIETA' AGRICOLA LA PELLEGRINA S.P.A. (***) €*.** bn O.R.A. S.r.l. €** M Fileni Agricultural Company S.r.l. €** M Ripro-Coop Agricultural Cooperative Society €** M Sorriso Agricultural Society S.r.l. €** M Agricultural company Il Sole S.r.l. €** M Agricultural company Alimentare S.r.l. €** M Agricultural company Interzoo S.r.l. €** M

• SOCIETA' AGRICOLA LA PELLEGRINA S.P.A. (Gruppo Veronesi)
• O.R.A. Società agricola S.r.l.
• Società agricola Fileni S.r.l.
• Società agricola Prealpina S.r.l.
• Società cooperativa agricola Ripro-Coop (Amadori)