A positive 2023, but 2024 and 2025 will be better, for Italian food and wine

A sector that is the protagonist of a march at a rapid speed, despite everything. This is the Italian food sector, which has seen significant growth over the past decade, rising from a value of 53 billion in 2012 to 90 billion in 2023. A “boom” that obviously has not left behind exports, which have seen continuous growth, rising from 23 billion to 44 billion in the same period. Numbers that also embrace the workforce, which is growing, with those employed in the food processing industry alone rising from 449,000 to 488,000, an increase of 39,000, during a period that was not particularly good for the Italian economy. Here, in brief, is the snapshot, taken by Food Industry Monitor No. 10, “Ten Years of Italian Food”, with the Observatory on the Performance and Business Models of Italian Food Companies, produced by the University of Gastronomic Sciences in Pollenzo (founded in 2004 on the initiative of Slow Food) and Ceresio Investors.
Over the past decade, Italian food companies have consistently performed better than medium-sized Italian companies (Mbres Data) not only in terms of profitability (Roi), but also in terms of investment productivity and debt ratio. Companies in the Belpaese, known for their quality leadership position in many market segments, are still relatively small, with an average turnover of about 97 million euros and 178 employees. From 2013 to 2022, average turnover grew by 4.4% per year, Italian food remains characterized by the prevalence of family-controlled SMEs, which, while it has ensured quality offerings by balancing tradition and innovation, is an objective limitation in international comparison. Companies in the Food Industry Monitor sample have made 72 acquisitions since 2009, including as many as 26 to international targets, with a total value of 5.4 billion euros. Acquisitions are an effective tool for profitable growth; in fact, companies that have made acquisitions have reported, three years after the deal was completed, an increase in turnover of just under 90% and an improvement in Ebit margin of 6%.
Turning to the performance in 2023, the past year is considered to be an extremely positive one for the food sector with 10% growth thanks to both the good performance of the domestic market and the excellent performance seen in exports. In 2023, the sector’s exports reached 44 billion euros (+6.3%), an excellent figure although lower than the growth seen in 2022, driven in part by price increases. Profitability data show a largely positive scenario. Commercial profitability (Ros) reaches 5.1%, a figure in line with that recorded in 2022. Return on capital employed is close to 8% and is slightly higher than in 2022, thanks to the ability to optimize inventories. The industry's growth will continue in the two-year period 2024-2025 with rates higher than GDP: in particular, for 2024, a growth of +4.8% is projected, while for 2025 it will be 5.2%. Exports will also continue to increase; the estimate made is that in 2024 foreign sales growth will be 8.1% and in 2025 7.3%. In 2024, typical made-in-Italy sectors such as coffee, oil, distilled spirits and wine will grow at rates above the market average, mainly due to good results on the international market. Other sectors such as pasta, milk and dairy products, and sweets will grow at slightly lower values, which will be affected by the tensions generated by the distribution system and the contraction of consumption in some segments of the Italian market.
“The sector continues to grow due to both the good resilience of domestic consumption and strong dynamism in the international market. Quality exports are a decisive driving force of the Italian food sector”, explained Carmine Garzia, scientific head of the Observatory, professor of Management at the University of Gastronomic Sciences in Pollenzo. For Gabriele Corte, Ceresio Investors managing director, “it is necessary to emphasize the absolute excellence of the sector, which, in 10 years, has been able to overcome several economic crises, a pandemic, geopolitical tensions and deglobalizazzione processes, continuing to grow above the national average, increasing exports and generating continuous interest in merger and acquisition operations”. Alessandro Santini, head of corporate & investment banking for Ceresio Investors pointed out that “the time has come for Italian food companies to consolidate the excellent results of the post-Cvid period. Dimensional growth is a priority that must also be pursued through acquisitions and mergers that would not only benefit the individual company, but also the production chains”.