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Italy: The fresh-cut sector is recovering

The trend changed in the first two months of 2014 - the food sector recovered lost volumes, especially for what concerns pre-packed food, fresh produce and drinks. Italian consumers are even more rational, as quality remains important, but they still look at prices first.

Confidence trend in Italy. Source: Nielsen Consumer Confidence IV trimester.

This is some of the data discussed on May 6th 2014 at CIBUS during the "Salto di qualità per la Quarta Gamma italiana: l'evoluzione dei rapporti fra produzione e distribuzione, nuove opportunità per lo sviluppo del settore" (Quality leap for Italy's fresh-cut range) round table.

The downward trend stopped
Simone Nucci talked about the opportunities and problems in the short-medium term. The downward trend has stopped and companies invested a lot on prices, as they have become the most important factor of choice for purchases. 

Below charts in Italian

The fresh-cut market (Iper + Super + LS + Discount) - Click here to enlarge.

The downward trend in value of the fresh-cut market continues, even though consumers are looking to save time and reduce waste (just think that fresh soups increased from +7.5 to +9% in terms of volume).

Click here to enlarge.

In addition, the average assortment is widening and supermarket chains continue to grant more space on shelves to fresh-cut produce. The number of families purchasing these kind of products is also increasing.

Click here to enlarge.

Despite this though, the market is still concentrated, as 20% of purchasing families generate 63% of volumes. This in turns means there is scope to increase the average shopping of medium and light users. 

Retail channels
Discount stores and Hypermarkets keep on growing, even though slower than they used to. Small stores are penalised by small assortments and higher prices, and discount stores are paying more attention to their fresh produce section.

The fresh-cut range is where Private Labels have the strongest influence (+47 points with respect to the general grocery average) but small producers with good prices have indeed affected them. Smaller formats also play a bigger role thanks to the fact that they are more practical.

Lower value for all sectors, only the "classic" ones are holding up in terms of volume. Click here to enlarge.

Innovation is proving essential for this market as, for example, fresh-cut refrigerated vegetables represent 8% of the value on the market. New and brand-new products represent 13% of the turnover. 

What is really unique, is that this year new launches have lower prices than last year.

"The market is showing encouraging signs in terms of volumes, although turnovers are not holding up. The introduction of new products continue to be a key variable. 65% of the turnover generated by new products comes from brands, so there is still scope for improvement," concluded Nucci.

Guaranteed minimum shelf-life
The processing industry, represented by Aiipa, came up with a "recipe" that can work for the whole chain. In particular, fresh-cut produce manager Domenico Stirparo talked about the connection between the regulation concerning the cold chain and labelling and the guaranteed minimum shelf-life proposal made by Aiipa.

The new regulations in accordance with law 77/2011 will in fact establish the hygiene-health parameters to be respected during the productive and distribution cycles and the information that must be included in labels (best before date, use, storage and consumption).

Aiipa's proposal has more or less the same objective, i.e. a part of the produce shall be destined for storage in fridges (shorter shelf-life), whereas the bigger part (longer shelf-life) shall be destined for orders. This in turn will lead to a more efficient chain.

Publication date: 5/8/2014


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