The Odorizzi family has been growing fruit for the processing industry since 1952. Together with its trusted suppliers, the company cultivates apples, peaches and pears following organic, baby food and traditional techniques.
FreshPlaza (FR): Are the problems generated by poorly regulated imports?
Leonardo Odorizzi (LO): We have to deal with fierce foreign competition, which is based on price rather than on value. In the last few years, global exports have been characterised by an exceptional growth caused by multiple factors. Just think about the removal of trade barriers, drop in transport costs, improvement of logistics and distribution. Then you must add shorter transport times and improved storage techniques.
Leonardo Odorizzi surrounded by "his" bureaucracy.
FP: Who are the new competitors on an international level?
LO: China registered exceptional performances and doubled its bearing on global fresh fruit exports in just a few years. Mexico and the US also increased their market share, while top European exporters such as Spain, Italy, Belgium and France have seen their influence drop.
FreshPlaza (FR): Are the problems generated by poorly regulated imports?
Leonardo Odorizzi (LO): We have to deal with fierce foreign competition, which is based on price rather than on value. In the last few years, global exports have been characterised by an exceptional growth caused by multiple factors. Just think about the removal of trade barriers, drop in transport costs, improvement of logistics and distribution. Then you must add shorter transport times and improved storage techniques.
Leonardo Odorizzi surrounded by "his" bureaucracy.
FP: Who are the new competitors on an international level?
LO: China registered exceptional performances and doubled its bearing on global fresh fruit exports in just a few years. Mexico and the US also increased their market share, while top European exporters such as Spain, Italy, Belgium and France have seen their influence drop.
FP: But Italy is always occupying a leading position.
LO: Our country is competing with Spain for the European leadership. We are excellent producers, although fragmentation weakens the competitiveness of businesses. In 2015, the value of Spanish produce was only slightly higher than that of the Italian produce and both countries retain double the market share of other countries like Germany, Poland and France.
Archive photo of a supermarket
FP: Is the current market situation considered negative because of the continuously low prices of the produce?
LO: Yes. While production and trading costs are much higher than in competing countries, sales prices remain low because of the slow consumption, low foreign demand and abundant supply. These elements all contribute to making this sector not very profitable. We need lower costs to be competitive, anti-deflation policies are needed to push consumption and taxes must be reduced. In addition, the current European economic policy must be changed, at it is slowing down world recovery.
FP: But the potential is huge…
LO: It's true. If we compare our sector with the wine sector, we can see differences are significant. Produce exports are worth €8 billion compared to the 5.4 of the wine sector. One million hectares are dedicated to growing produce while 650,000 are dedicated to wine grapes. In our country, one farmer our of three grows fresh produce. Ours is one of the few sectors whose trade balance is active, thanks to exports, and is therefore a strategic sector for our economy. This means governments should pay more attention to us, while they have been inefficient since the 1970s. What we have achieved so far has been only thanks to the entrepreneurial capabilities of various subjects in the chain.
FP: But the potential is huge…
LO: It's true. If we compare our sector with the wine sector, we can see differences are significant. Produce exports are worth €8 billion compared to the 5.4 of the wine sector. One million hectares are dedicated to growing produce while 650,000 are dedicated to wine grapes. In our country, one farmer our of three grows fresh produce. Ours is one of the few sectors whose trade balance is active, thanks to exports, and is therefore a strategic sector for our economy. This means governments should pay more attention to us, while they have been inefficient since the 1970s. What we have achieved so far has been only thanks to the entrepreneurial capabilities of various subjects in the chain.
FP: What should we expect from 2017?
LO: Considering the political situation in Italy, I don't think things will improve. I do hope there will be an improvement on the international level, though, thanks to new dialogue among US, EU and Russia. It is vital to maintain the cooperation for both Europe and Italy. The commercial war generated by the sanctions led to a drop in Italian exports, with a total loss estimated at over €10 billion. Russian countermeasures to European sanctions rudely interrupted an incredible growth of exports, which had more than doubled in value (+112%) in the five years before the ban.
FP: How do you think retail will evolve?
LO: If we analyse the latest balance sheets of the main distributor chains, the number of stores is striking, 5,000 only in the Discount segment. Another leading German chain is interested in the Italian market and it seems like it could reach 6,000 stores. But while turnover is increasing on the one hand, on the other hand margins are dropping by 17%. Investments are also increasing, though.
Archive photo of a supermarket
FP: Are you worried by this trend?
LO: I believe we can all agree that suppliers are paying the price of continuous special offers and promotions. More than one chain actually had to lay people off. We work 9 out of 12 months to meet the demands of retailers. Quality is taken for granted and is almost never taken into consideration when making prices.