Despite the downturn in consumer spending, Italian families continue to drive sales of frozen foods. Although Italy has the Eurozone’s third largest economy, the country’s economic situation remains precarious. Latest estimates suggests that the Italian economy contracted by 1.8% during the course of 2013, with the country having suffered a double-dip recession in the period since 2008.
Despite predictions of economic growth returning during 2014, one of the more worrying signs is the fact that unemployment is now in excess of 12%. This is expected to adversely affect Italian consumer spending, as a result of which growth in demand for food is likely to remain very patchy. Italy has one of Western Europe’s smaller markets for frozen foods. Per capita consumption is currently worth almost 12 kg, which equates to a market volume of around 735,000 tonnes. Per capita consumption of frozen foods in Italy remains well below other Western European countries such as the UK (32 kg) and Germany (41 kg), mainly because consumers have traditionally preferred to prepare and eat fresh foods.
However, sales of frozen foods in Italy have experienced reasonably steady growth within the last decade or so. Much of this has been driven by the fact that younger consumers are much less inclined to spend the time and effort cooking meals from scratch than their older counterparts, and are turning towards frozen foods as a result. Purchasing is also heavily skewed towards younger families, for whom frozen foods offer both convenience and affordability. Although retail channels such as supermarkets and hypermarkets continue to account for the bulk of frozen food sales in Italy, the last couple of years have seen discount chains gaining share, largely on account of consumers seeking out cheaper groceries.
Ice Cream
Per capita consumption of ice cream at the retail level in Italy amounted to just over 6 liters in 2013, equivalent to a market volume of 375 million liters. Although per capita consumption of ice cream in Italy appears to be on the low side, compared with more northerly European countries, such as Ireland (9.5 liters) and Belgium (9 liters), total ice cream consumption in the country is thought to be much higher. This is chiefly due to the existence of a large artisanal ice cream sector, with Italy home to over 30,000 specialist ice cream parlors. Together, take-home tubs and multipacks account for more than 70% of the Italian industrial ice cream market in volume terms. Multipacks have gained a growing share of the market of late, mainly as a result of greater consumer appreciation of the value for money they offer. The sectors have also benefited from new product activity from the likes of Unilever and Nestlé, which continue to develop new flavors and varieties to attract consumers. Impulse products account for an additional 24% of total market volume, although sales of dessert-style ice creams for home consumption have declined of late. Sales within the impulse channel have held up fairly well in Italy, compared with other parts of Europe, mainly owing to the fact that the country’s summer weather has been its usual warm self. Other notable sectors of the market include children’s products and healthy ice cream.
Frozen Vegetables
With sales worth an estimated EUR830m, the frozen vegetables sector represents one of the largest within the Italian frozen foods market in value terms. Market value increased by 3.8% during the course of 2013, while the sector is worth approximately 255,000 tonnes in volume terms. Almost 70% of Italian consumers are thought to buy into the frozen vegetables category on a regular basis, with varieties such as peas and spinach believed to account for the majority of sales.
Frozen Fish/Seafood
Fish and seafood remains an integral part of the Italian diet, as is the case in other Mediterranean countries such as France and Spain. Per capita consumption is currently worth 24 kg, equivalent to a market volume worth almost 1.49 million tonnes. Although the fish and seafood sector is one of the largest within the Italian frozen foods market, most consumers prefer to eat fish fresh, rather than frozen. In 2013, the frozen sector was worth an estimated EUR625m, up by more than 4% from the previous year. One of the strongest features of the frozen sector are coated fish and seafood products. Manufacturers such as Iglo and Pescanova have helped to drive this category forward in recent years, while the convenience of such products is believed to have given the category added appeal to parents. As is the case elsewhere in Western Europe, the healthy nature of coated fish is increasingly being promoted by manufacturers – for example, a health claim of “rich in omega-3s” frequently appears on packs of fish fingers. In 2013, the Italian market for frozen fish fingers, for example, was worth an estimated EUR120m in 2012, up by 9% from the previous year. At EUR95m, sales of frozen coated fillets and portions are slightly lower, with other popular options including fish nuggets and croquettes, both of which appeal to children. Natural fish portions account for a relatively modest share of the frozen fish and seafood sector in Italy, since most consumers prefer to buy these fresh.
Frozen Ready Meals
Despite a continued growth in the number of single-person households in Italy (now 30% of all households), growth in demand for ready meals has fallen during 2013. At present, market value is worth an estimated EUR335m, down by 4.3% compared with the previous year. Volume sales, meanwhile, were worth 65,000 tonnes, equivalent to 1.1 kg per capita. Much of this fall in demand can be attributed to the economic situation, as well as consumers trading down to cheaper groceries. The frozen sector has also been adversely affected by the growing popularity of fresh and/or chilled ready meals amongst Italian consumers. These are increasingly perceived as being of a higher quality than frozen dishes. Innovation levels within the frozen category also remain on the low side, due to the general consumer preference for traditional favourites such as risotto and pasta-based meals, as well as the comparative lack of presence of ethnic-inspired dishes.
Frozen Pizza
Although the Italian frozen pizza sector has performed reasonably well during the last few years, sales experienced a small decline in 2013, largely as a result of the downturn in consumer spending. Market value was worth an estimated EUR335m, down by 1.5% compared with the previous year. During the same period, volume sales were worth an estimated 46,000 tonnes, equivalent to 0.7 g per capita. Sales of frozen pizza in Italy have traditionally lagged behind other European countries such as the UK and Germany, owing to the general preference for unpackaged, freshly-made alternatives sold through many of the country’s grocery stores, as well as products from pizzerias. The frozen sector is thought to account for between 85% and 90% of the retail pizza market in Italy. Growth in market value has also been held back by intense price competition, as a result of which cheaper own-label products have gained at the expense of their branded counterparts. The Italian preference for traditional recipes such as Margherita means that scope for innovation as far as pizza toppings is concerned remains on the limited side.
Major Suppliers
One of the largest suppliers to the Italian frozen foods market is the Iglo Group, which is present in most parts of Europe. The company has owned the Findus Italy since 2010, and now competes in sectors of the frozen foods market such as fish and seafood, meat products, pizza, ready meals, frozen soups and frozen vegetables. The company leads the Italian market for frozen coated fish and seafood products, many of which are popular with children and teenagers. Its Capitan Findus range in this sector includes fish fingers, fish burgers and coated fish portions. The company’s fish fingers are now marketed as being a good source of omega-3 fatty acids. The Findus brand also encompasses the ‘Findus 4 Salti in Padella’ range of stir-fry meals and the ‘Sofficini’ brand of crunchy frozen pancakes aimed at children. Unilever leads the retail ice cream market in Italy, with a share estimated to be worth over 40%. Most of the company’s ice cream products are marketed under the Algida umbrella brand, and the range includes international favorites such as Cornetto, Magnum, Carte d’Or, Ben & Jerry’s, Solero and Viennetta, as well as local brands (e.g. Café Zero, Cucciolone, Cremino and Croccante).
As is the case elsewhere, a recent innovation from Unilever was the launch of Magnum in take-home tubs, with flavors such as Vanilla & Chocolate, Chocolate & Raspberry and Hazelnut & Chocolate now available. Unilever’s main rival in the Italian ice cream market is Nestlè, which accounts for between 15% and 20% of sales in the industrial sector. The company’s Italian-based ice cream business includes brands such as Motta, La Cremeria, Perugina, Maxibon and Coppa del Nonno. Nestlè is also particularly strong within the Italian market for children’s ice cream, where its offerings include Pirulo ice lollies and products featuring Spongebob Squarepants. In addition, the company also supplies ice cream products based on its popular confectionery brands, examples of which include Smarties and KitKat. Nestlè is also a major supplier of frozen pizza in Italy, largely on account of its Buitoni brand, and accounts for an estimated 17% of sales. The Buitoni range of frozen foods also includes chicken nuggets and coated chicken portions, as well as frozen vegetables – examples of the latter include peas and spinach. Frozen coated fish and seafood products are supplied under the company’s Mare Fresco brand. Another of Italy’s leading suppliers of ice cream is PAI Partners, which entered the market in 2013 via the acquisition of R & R Ice Cream.
The latter had acquired Eskigel (Italy’s leading supplier of own-label ice cream) the previous year, in a deal valued at EUR77m. Since taking control of R&R, PAI Partners has further strengthened its position in European ice cream markets such as Italy and Germany by acquiring the Yoomoo brand of frozen yoghurt. The company is now thought to be planning further acquisitions in the Middle East and North America. A number of pan-European seafood companies compete in the Italian market. One notable example is Pescanova Group of Spain, which supplies customers in both the retail and foodservice industries and is particularly strong within the Italian frozen coated fish and seafood sector, where its range includes fish fingers, breaded fish portions, fish nuggets and calamari rings. It also supplies coated fish products which are marketed on a gluten-free platform.
One of Italy’s leading meat suppliers is the Veronesi Group. According to the company, it produces 300,000 tonnes of fresh, frozen and processed poultry meat, as well as 200,000 tonnes of turkey meat (a sector it has pioneered in Italy since the early 1970s), plus pork and rabbit meat. The company’s AIA business accounts for 40% of the Italian poultry meat market, and owns 15 production facilities. Besides its domestic market, AIA exports poultry meat to other Western European countries such as Germany, Austria, Belgium and Spain. Elsewhere, the Ristorante brand from Dr Oetker has become one of the largest within the Italian retail pizza market, where it accounts for around a quarter of the thin and crispy frozen pizza sector.