Large-scale distribution and e-commerce represent retail models that are emerging in all developed markets and now offer new export opportunities for Italian entrepreneurs
This was discussed in Rome at the XIV annual Leonardo Committee Forum, which since 1993 has been committed to the promotion of Italian quality abroad. In particular, the event presented a study carried out in collaboration with KPMG Advisory and ICE Agency, which examined the four main European destination for Italian export: France, Germany, Great Britain and Spain.
“In all these countries – said Luisa Todini, president of the Leonardo Committee – large-scale distribution and e-commerce play a major role. For example, in Britain and France the big supermarket chains absorb as much as 80% of food sales. It is therefore a channel that allows Italian manufacturers not only to enter markets that are often very competitive, but also to have qualified communication support, which can accelerate the processes of internationalization. The online sales channel is an interesting opportunity because it allows manufacturers to have direct contact with the consumer and avoid some expensive steps of the value chain, although it still has many limitations for highly perishable products, such as cheese, fruit, meat and vegetables.”
The presence in of global players in foreign large-scale distribution, which has highly concentrated and vertically integrated decision-making structures, enables Italian producers to count on a capillary and international distribution chain, whilst requiring them to accept purchasing and price policies. It is therefore essential that the decision to enter large-scale distribution abroad is taken with an adequate degree of product maturity and sufficient production capacity.
For the online sales channel, however, an advanced digital communication plan must have been developed alongside a solid logistical organization and an efficient customer service abroad.
“Although each market has its own peculiarities – emphasizes Todini – our survey revealed interesting purchasing trends of Italian products that are common to most large European markets. For example, Germany is the second largest market for the purchase of wine, olive oil, pasta and Italian cheeses. Moreover, consumers seem to pay more and more attention to the quality and origin of products, which surely rewards our local PDO and PGI and organic products, especially in France and Germany, where demand far exceeds supply. The quality and the wide variety of products, together with the typical Italian products, are undoubtedly rewarding factors abroad, which are able to balance the price effect with our competitors.”
Table
Large-scale distribution and e-commerce: the opportunities in four European countries
Germany • The main way for foreign companies to enter the market is in association with a local trading partner.
• The market is willing to absorb new gastronomic specialties with innovative ingredients and presentation, with a good value for money.
• German consumers pay attention to organic and health products and the organic industry is constantly developing.
UK • The outlook in the food industry remains positive for Italian exporters, thanks to the favourable pound/euro exchange rate.
• The Italian branded food sector maintains strong appeal.
• Small and medium-sized Italian companies can find market outlets, also through high level specialty stores. The British supermarket chains, in fact, generate over 50% of turnover from private label products.
France • The typical Italian products have a strong attraction for the consumer and typically allow more remunerative and quality positioning for the product, both in specialized distribution and in large-scale distribution.
• The food products, which are typical of the Mediterranean diet and healthy/organic register constant consumption growth.
• It is essential to focus on marketing and promotion which tries to convey the image and tradition of typical Italian cuisine, with particular reference to the specialty products, when launching a product in the market.
Spain • Distribution is characterized by continual mergers and acquisitions, with an imbalance of forces in favour of the retail giants, outweighing producers.
• Business opportunities for Italian producers can be found by looking for niche sectors and predicting future trends.
• It is essential to have a strong brand and business organization in order to introduce products that can anticipate latent needs or make consumers curious about new ideas, their practicality and convenience.
Source: Food data from Leonardo Committee research, in collaboration with KPMG Advisory and ICE