Italian Organic Foods Are Winners Abroad
When it come to organic food, Italy ranks 6th in the world, and 4th in terms of market growth. Such performance deserves an explanation in a country where the economy has been shrinking and domestic demand stagnating. When you look at the numbers of the organic food industry, it's hard not to be astonished, especially considering the fact that organic food has been traditionally regarded as a niche market. While food spending has been decreasing by 1% each year and domestic demand of premium products is plagued by excessive fluctuations, the organic market has been growing steadily for a decade (+220% in ten years). It grows even faster than wine, Italy's badge of pride in exports. In fact wine has been adversely affected by the crisis, while food carrying the "bio" label has kept growing, even faster than products carrying the DOP (protected designation of origin) and IGP (protected geographical indication) labels. Italy produces €3 billion worth of organic food each year, and a third is sold abroad, particularly to Germany and Northern Europe.
What do organic products have that other goods don't have? And why are Italian organic foods so well liked abroad?
It's hard to disentangle the weight of each factor and direction of causation, but consumers have been the driving force in the process. Safety first has been paramount in the minds of consumers and a main driver of the market. In spite of the fact the food has never been safer and healthier, consumers seem to think otherwise and are increasingly uncertain about the quality and safety of the food they purchase. This is because of various health scares that have raged over the news, the scandal of horse meat being the latest in the a long series of negative media reports on the security of major branded foods. Such scandals have undermined consumers' trust in big brands and have pushed them to cut the middleman to go nearer to the source of food production, searching for a direct relations with agricultural producers. Hence there has been a multiplication of farmers' markets, buyers' collectives (what in Italy are known as GAS, Gruppi di acquisto solidale, groups of solidarity-oriented buying) and direct sales to consumers by agricultural firms.
The consumer has evolved: he/she is now more informed and takes in part in the production process, by changing the existing concept of food quality. For six decades, quality had been determined by rational economic choices, while today is more a function of rootedness, i.e. of how much a given food is perceived as being part of a unique cultural and social terroir. This phenomenon is common to all Western countries, where overabundance in the supply of commodified foods is less and less appreciated by increasing numbers of consumers.
The changes in consumer behavior certainly explain why demand for organic food is growing, but not why Italy is Europe's leading exporter and one of the world's largest markets. The secret of the success of Italian organic foods across the world lies in the supply side. Even if the industrialization of agriculture which started in the 1950s contributed to Italy's modernization, large-scale agriculture is ill suited to the country's characteristics. In countries where history, culture and the environment had left a lighter baggage, mechanized, fertilizer-intensive, large-scale farming has prospered unencumbered. Conversely, in Italy the low average size of agricultural firms has affected the subsequent development of the sector, exposing small producers to the vagaries of commodity prices in world markets. With the advent of organic foods, many firms started to differentiate production by introducing high-value added crops and abandoning intensive wheat and corn farming. Organic agriculture has enabled the valorization of microclimates and products once excluded from mass production. Thus varieties of fruits and animal species deemed not apt for industrial production have been recuperated to the delight of consumers, as the diffusion of the Slow Food philosophy well exemplifies. Italy is not a country for commodities and organic food is the specialty product par excellence.
Since organic foods are considered specialty goods all over Europe, it's not hard to understand how Italy has quickly become the leading exporter. No other country in the Continent enjoys the same combination of climate and cultural diversity, and can match the same range of supply in organic foods. Also, the higher ability and care required by organic agriculture, which is done without the help and standardization afforded by phytochemicals and fertilizers, favor Italian small producers and their rich tradition of food culture.
It may be hard to envisage organic farming becoming the dominant agribusiness model, but if it so happened, Italy could well turn into the reservoir of European food specialties, thereby sidestepping the commodity trap, which has forced Italy's agricultural sector into a cutthroat competition on price that it can't win.