Italy Food and Drink Report Q4 2008

The rising price of Italian staple foods, including pasta and bread, continues to be a source of concern for many consumers. On September 18 consumer groups urged shoppers to boycott bread for 24 hours in protest at the price increases; official figures indicate that the price of bread rose by 12.2% in the year to August, while the price of pasta increased by 25.6% over the same period. These price rises are not only damaging consumer confidence but also mean that financially stretched consumers are looking to save money buy purchasing fewer luxury goods and trading down to private label and massmarket products where possible.

The bread boycott follows a similar campaign targeted at pasta in September last year. The pasta boycott was held partly responsible for a reduction in pasta sales over the year and convinced more consumers to pay greater attention to the price they pay for pasta products. A similar campaign targeted at bread could have a similar effect, and sales could therefore take a knock over the coming months With the price rises largely attributable to the global increase in the price of commodities, there is little that producers are likely to be able to do in response to the ongoing consumer campaign. Although consumer groups accuse producers of profiteering, the profits being reported by bread and pasta producers suggest this is far from the case. For example, one of Italys major food firms, Barilla, which supplies around 40% of the Italian pasta market, reported that its earnings before interest, tax, depreciation and amortisation fell by 7% in 2007, coming in at EUR448mn compared with 480mn the year before. This fall in profits came despite a 3.4% increase in revenues, suggesting that the firm is having its margins eroded by the current spike in commodity prices.

Meanwhile, the switch to private label products has been noted by several manufacturers, including dairy giant Parmalat. In March, Parmalat revealed that its fresh milk products have struggled to compete against retailers cheaper, private label brands, which have been marketed aggressively at a time when consumers are feeling the pinch of rising food prices. Private label producers in other sectors, including bread and pasta, are also likely to benefit as consumers becoming increasingly price conscious.

Falling consumer confidence is also having an effect on retail sales. In August 2008, Italys national statistic office, ISTAT, reported that retail sales in June 2008 fell by their fastest rate for more than three years. Yearonyear sales came in 3.3% lower, with food sales dropping by 2.3% and nonfood sales dropping by 4.1%.

• Executive Summary
• Business Environment
• Italy Food & Drink Business Environment Rating
• Global Food & Drink Business Environment Ratings
• SWOT Analysis
• Food And Drink
• Italy Food And Drink Industry SWOT
• Mass Grocery Retail
• Italy Mass Grocery Retail Industry SWOT
• Macroeconomic Outlook
• Food
• Industry Forecast Scenario
• Total Food Consumption
• Canned Food
• Confectionery
• Industry Developments
• Market Overview
• Overview Of Food Sector
• Prepared Food
• Confectionery
• Organic
• Meat, Fish And Dairy
• Private Label
• Drink
• Industry Forecast Scenario
• Soft Drinks
• Alcoholic Drinks
• Industry Developments
• Market Overview
• Hot Drinks
• Soft Drinks
• Alcoholic Drinks
• Agriculture At A Glance
• Agricultural Commodity Price
• Mass Grocery Retail
• Industry Forecast Scenario
• Industry Developments
• Market Overview
• Annual Average Sales Per Outlet By Format 2007 (US$mn)
• Competitive Landscape
• Key Players
• Food And Drink
• Mass Grocery Retail
• Company Analysis
• Food
• Gruppo Galbani SpA
• Perfetti van Melle SpA
• Gruppo Barilla
• Carapelli Firenze SE SpA
• Drink
• Davide CampariMilano SpA
• Mass Grocery Retail
• Conad
• Deep US Recession Scenario
• Global Scenario
• Western Europe Food & Drink Scenario
• US Deep Recession Scenario's Implications For Western Europe
• Recession Scenarios (EURbn)
• Core And Recession Scenarios (%)
  • Food & Drink Business Environment Ratings
• Ratings Methodology
• Ratings Overview
• Ratings System
• Indicators
• Limits Of Potential Returns
• Risks To Realisation Of Potential Returns
• Weighting
• Weighting
• BMI Food & Drink Industry Glossary
• Food & Drink
• Mass Grocery Retail
• BMI Food & Drink Forecasting & Sourcing
• How We Generate Our Industry Forecasts
• Sourcing
• List of Tables
  • Table: Western Europe Food & Drink Business Environment Ratings Q4 2008
  • Table: Italy Macroeconomic Forecasts
  • Table: Italy Food Consumption Indicators Historical Data & Forecasts
  • Table: Food & Drink Trade Balance Historical Data & Forecasts
  • Table: Canned Food Value/Volume Sales Historical Data & Forecasts
  • Table: Confectionery Value/Volume Sales Historical Data & Forecasts
  • Table: Drinks Indicators
  • Table: Italy Organic Agricultural Data
  • Table: Italy Agricultural SubSector Production
  • Table: Italy Dairy Industry Data
  • Table: Sales Value By Format In Italy's Mass Grocery Retail Market (US$mn)
  • Table: Sales Breakdown By Retail Format Type
  • Table: Structure Of Italy's Mass Grocery Retail Market By Estimated Number Of Outlets
  • Table: Sales Value By Format In Italy's Mass Grocery Retail Market (US$mn)
  • Table: Key Players In Italy's Food & Drink Sector 2007
  • Table: Key Players In Italy's Mass Grocery Retail Sector 2007
  • Table: Key Players In Italy's Mass Grocery Retail Sector 2007 (continued)
  • Table: World GDP Growth
  • Table: US GDP Growth, Investment Growth, and Private Consumption Growth
  • Table: Eurozone GDP Growth
  • Table: Asia, Excluding Japan, GDP Growth
  • Table: China GDP Growth
  • Table: Mexico GDP Growth
  • Table: Africa GDP Growth
  • Table: Impact Of Deep US Recession On Total Food Consumption In Selected Eurozone Markets Cumulative Difference Between Core And
  • Table: Impact Of Deep US Recession On Total Food Consumption In Selected Western European Markets Cumulative Difference Between