Organic Food Sales on the Rise in Italy

Organic food remains dynamic in Italy. Retail value sales are continue to boom as more Italian consumers are willing to pay extra for better quality food. Accordingly, organic packaged food in Italy is blossoming, recording double-digit growth in value. Over 2010-2015, organic food saw value sales rise at a CAGR of 12.3%, the second highest growth rate in Western Europe after Turkey. But why have Italians started showing such an appetite for organic products?

Growing product range, vegetarianism and premiumisation

The main driving factors behind this growth have been product expansion and increasing demand for premium, high-priced products, as well as changing consumer habits towards food. Consumers in Italy have started focusing more on healthy food, prioritising quality over quantity, and preferring to buy less but more premium and natural food. In addition, Italians consider organic products to be sustainable and environmentally friendly. According to Anabio, the association that represents farmers of organic products in Italy, consumers are willing to pay 15% more for an organic product than for its standard counterpart.

Additionally, more people in Italy are switching to vegetarianism or, at least, reducing their meat consumption. According to the European Vegetarian Union, Italy has over six million vegetarians and the highest rate of vegetarianism in the EU, at 10% of the population. Thus, this type of consumer is prepared to spend more money on organic fruit and vegetables. This trend is less visible in packaged food, but is growing quickly from a low base.

The highest growth in organic packaged food over 2010-2015 was noticed in organic pasta, a category that has a special position in Italian cuisine. Sales of regular pasta suffered over 2010-2015, with value sales falling at a CAGR of 1%, while organic pasta saw value sales rise at a CAGR of 27% over the same period. Other categories that experienced strong growth were organic rice, organic honey and organic cheese.

Growth in Value Sales of Organic Product Categories vs. their Packaged Food Counterparts: 2010-2015


Source: Euromonitor International

Getting closer to the source

Another reason behind the growing demand for organic products is that consumers want to get closer to producers, and since it is believed that organic products are more natural, sales have increased accordingly, especially for food that is produced in the country and labelled ‘Made in Italy’. In fact, two out of three Italians (68%) stated that they would consume organic food if it was labelled “Made in Italy” according to Coldiretti, the national association for Italian farmers, setting the criteria of the product origin high when buying biological products. During the financial crisis, consumers started supporting domestic companies, especially small manufacturers and independent retailers, feeling that they were supporting the local economy in this way. As a result, farmers’ markets became very popular; in 2015, Italian consumers started to increasingly visit street stalls in order to buy fresh products, such as vegetables, fruit, meat and fish. Many cities in Italy now organise ‘mercato del contadino’ (markets where fresh food is sold directly by the producer to the consumer). On the website, consumers can look for the location of such markets and they can also filter for organic markets only.

Outlook for the organic food market is positive in Italy

The forecast for the organic food market in Italy seems very optimistic. As open food markets are becoming more popular, the packaged food industry is expected to respond quickly with more packaged organic food becoming available in modern grocery retailers. However, as packaged organic food becomes more established, slower growth is expected in the future. According to Euromonitor International, organic packaged food value sales will rise at a CAGR of 6.3% at constant 2015 prices to 2020 compared to 12.3% CAGR over 2010-2015.

Organic milk and organic dried baby food are anticipated to be new protagonists, while organic honey will continue to register double-digit growth. With regards to milk, 2015 saw an end to the milk quota, a measure used by the EU to bring rising milk production under control. Thus, this has opened the door to milk originating from other countries under less stringent production restrictions, and consumers are more likely to choose organic milk as it is considered a safer option, especially in Italy where organic milk production capacity is high. As far as dried baby food is concerned, parents seem to have started trusting organic products for their offspring more, with the perception that they are healthier.

Furthermore, when it comes to distribution, organic food chains like NaturaSi and CuoreBio, which both belong to Ecor NaturaSi SpA, are winning ground, and by the end of 2015, both are expected to have developed an extensive network, with 458 stores between them present across the country. Consumers find it convenient to visit these stores as it is easier to identify organic products than in supermarkets and hypermarkets. Ecor NaturaSi has seen a 67% increase in revenue since it started operating in 2009 and it plans to expand further, although competition from big supermarkets is likely to be tough.

Forecast growth: Organic packaged food Vs Packaged Food in Italy


Source: Euromonitor International