F&B Sector
Presentation by Andrea Goldstein
Managing Director | Nomisma

Foreign Direct Investment Department
Italian Trade Agency – RomeDubai, November 9th 2016

SECTOR OVERVIEWThe extended Italian agrifood supply chain
AGRICOLTURE

WHOLESALE

MACHINERY*

F&B INDUSTRYRETAIL

FOOD SERVICE
About 2 million
companies

FINAL CONSUMERS

More than 3 million
employees

In 2015 the extended agrifood industry generated a value added of about € 130 billion,
equivalent to 9.1% of GDP
Source: Nomisma-Crif Agrifood Monitor elaborations and estimates based onIstat, Eurostat, UCIMA, Federunacoma and CRIF-Cribis D&B data

*Machinery for agriculture e F&B industries, packaging machinerywww.agrifoodmonitor.it

Italian F&B industry: figures and performance
Italian F&B industry figures (2015)

TurnoverValue added€ 132 billion€ 25 billion

EmploymentCompanies

385,000 people

58,000850,000 (agriculture included)

12% have more than 9 employees

Consumption*

Agrifood export€ 230 billion€ 37 billion

Value added trend (index numbers; 2005=100)

F&B represents the second-largest manufacturing sector in Italy in 2015, after mechanics:
12% of employment, 11% of value added and 8% of export*Total F&B consumption in Italy (at home + away from home)

Source: Nomisma-Crif Agrifood Monitor on Federalimentare and Istat data

www.agrifoodmonitor.it

Italian F&B industry: product differentiation and geography
Distribution of the Italian F&B industry turnover
per product (2014)

Distribution of the Italian F&B industry turnover
per macro-region (2014)

77%
12%

11%

Source: Nomisma-Crif Agrifood Monitor on Federalimentare and CRIF-Cribis D&B data

www.agrifoodmonitor.itMade in Italy: the role of quality certification schemes• ITALY HAS THE HIGHEST NUMBER OF PRODUCTS WITH QUALITY CERTIFICATION SCHEMES (I.E. GEOGRAPHICALINDICATIONS, SUCH AS PDO/PGI AND TRADITIONAL SPECIALTIES)• TOTAL PDO/PGI VALUE OF PRODUCTION ≈ € 13 BILLION

FOOD - VALUE OFPDO/PGI PRODUCTION€ 6.4 billion
WINE - VALUE OFPDO/PGI PRODUCTION:€ 7.0 billion
ORGANIC FOOD
PRODUCTS:€ 2.7 billion

Almost 300 products, Italy #1 EU member in terms of number ofregistered products (e.g. Grana Padano, Parmigiano Reggiano, Prosciuttodi Parma, Prosciutto San Daniele)More than 80,000 companies



Cheeses and cured meat = around 85% of total DOP/IGP production value

PDO/PGI wines represent about 2/3 of the total Italian production valueMore than 500 wines with a registered quality certification schemeLeading PDO wines: Prosecco, Montepulciano d’Abruzzo, Chianti, Asti

1,5 million ha (+7.5% compared to 2014; 12% of the total Italianagricultural surface)60,000 companies (+8.2% compared to 2014)

69% of Italian people bought organic food products at least once in 2015(+2.5 million of family buyers compared to 2014)

Source: Nomisma-Crif Agrifood Monitor on Istat, Qualivita and Ismea data

www.agrifoodmonitor.it

MARKET TRENDS

Exporting is increasingly important for Italian F&B companies
Trend of Italian F&B domestic consumption and export

Export intensity in F&B industry(index numbers, 2011=100; current values)(export as % of revenue)

Export value:€ 29 bn in 2015

F&B export+52%

Domestic
consumption+5%

Stagnation in the domestic market but exports keep growing

Source: Nomisma-Crif Agrifood Monitor on Federalimentare and Istat data

www.agrifoodmonitor.it

The Italian F&B industry in the global market: WHERE?
Distribution of the Italian F&B export
per main destination (% share in total value, 2015)

Italian export growth per market(% change 2015/2005, € values)

UAE
+506%
UAE
1%

Italian F&B export per capita (€ per person)
BRICS
0,3 €
Source: Nomisma-Crif Agrifood Monitor on Istat and IMF data

UAE
21 €
www.agrifoodmonitor.it

The Italian F&B industry in the global market: WHAT?
Distribution of the Italian F&B export
per main product (% share in total value, 2015)

Source: Nomisma-Crif Agrifood Monitor on Istat data

Best-performing products in foreign markets(% change 2015/2005, € value)

www.agrifoodmonitor.it

The Italian F&B industry in the global market: COMPETITIVE SET/1
Italy versus top EU competitors in some foreign markets (F&B export, € million - 2015)

EXPORT/DOMESTICPRODUCTION

USA+CANADA

BRICS

Source: Nomisma-Crif Agrifood Monitor on UN Comtrade data

NEXT ELEVEN

JAPANUAE

www.agrifoodmonitor.it

The Italian F&B industry in the global market: COMPETITIVE SET/2
Role of Italy in the international tradefor specific product categories (2013-15 average)

Price positioning in the global market:
Italy versus top EU competitors

Italy share in total world F&B export

Average export price, € per kilo (2015)

ITALY GERMANY FRANCE
Cheese

6,3

2,9

4,4

Coffee6,83,8n.a.

Processed meat

6,2

3,9

3,8

Chocolate

5,4

4,7

3,9

Bakeries

3,62,42,4Preserved fruit&vegs

0,91,3

1,6Wine (€/liter)

2,72,65,8High average price and lower market penetration in mass market segment
Source: Nomisma-Crif Agrifood Monitor on UN Comtrade data

www.agrifoodmonitor.it

The great value of “Made in Italy” as a brand…

Ranking accrossindustry sectors

Source: FUTUREBRANDS

www.agrifoodmonitor.it

“Made in Italy” F&B in UAE: high reputation and perception
Which products better represent ‘Made inItaly’?

Consumer base of Italian food products in the UAE

91%

Quota of UAE population who
consumed Italian food products
in at least one occasion in 2015

FREQUENT USERS OF MADE IN ITALY(at least once a week)
Multipleanswers

26%

What distinctive feature comes to your mind when
you think about Made in Italy food products?

In your opinion, compared to French products,
the quality of Italian food products is …

First answer
provided

Source: Agrifood Monitor UAE Consumer Survey (Panel size: 870 consumers)www.agrifoodmonitor.it

Halal F&B sector in Italy
More than 300 Italian F&B companies
with halal certification

Main products: meat, dairy, grain
products, processed fruit andvegetables, confectionery

Distribution of companies
with halal certification per size

Distribution of companies
with halal certification per macro-region

55%

20%

25%

Source: Nomisma-Crif Agrifood Monitor on Halal Italy Authority data

www.agrifoodmonitor.itMarket forecast: F&B consumption in the leading foreign markets
Trend of Food&Beverage consumption (US$ billion, constant value)+42%+12%+10%+8%+64%+84%+7%+17%+49%

NEXT-11= Bangladesh, Egypt, Indonesia, Iran, Mexico, Nigeria, Pakistan, the Philippines, Turkey, South Korea and Vietnam
EU-5= Germany, France, UK, Italy and Spain

Source: Nomisma-Crif Agrifood Monitor

www.agrifoodmonitor.it

Investment trends: FDI in the Italian F&B sectorFDI in Italy’s F&B sector

Distribution of FDI in Italy per origin(stock, € billion)(% share in total F&B FDI stock, 2012-14 average)

Share top-5

92%

Foreign Direct Investments? A chance for everyone: Italian and foreign investors
Source: Nomisma-Crif Agrifood Monitor on Bank of Italy data

www.agrifoodmonitor.it

INVESTMENT DRIVERS

Growth: Italian F&B industry and main branches
TURNOVER TRENDVALUE ADDED TREND(index numbers; 2012=100)(index numbers; 2012=100)

Companies with turnover > € 40 million

Companies with turnover > € 40 million

112111

115

115
114

110
110

108
107
106

106
104

109

105

105
102

103

102

100
100

100
98
2012

2013

2014

95
2012

2013

2014

F&B industry

Meat

F&B industry

MeatDairy

WineDairy

Wine

Confectionary

Processed fruit&veg

Confectionary

Processed fruit&veg

Source: Nomisma-Crif Agrifood Monitor on CRIF-Cribis D&B data

www.agrifoodmonitor.it

Profitability: Italian F&B industry and main branches/1
ROE – RETURN ON EQUITY(PROFIT/EQUITY RATIO)
Companies withturnover > € 40 million

ROS – RETURN ON SALES(EBIT/TURNOVER RATIO)
Companies withturnover > € 40 million

Source: Nomisma-Crif Agrifood Monitor on CRIF-Cribis D&B data

www.agrifoodmonitor.it

Financial sustainability: Italian F&B industry and main branches
BANKS DEBT TRENDFINANCIAL COSTS/TURNOVER RATIO(index numbers; 2012=100)

Companies with a turnover > € 40 million

Companies with a turnover > € 40 million
115

1,6%

110
105
100

111

1,5%

107

1,3%

1,3%
1,2%

104
102

1,1%

99

0,9%

1,0%
0,7%

9590
2012

2013

2014

2012

2013

2014

F&B industry

Meat

F&B industry

MeatDairy

WineDairy

Wine

Confectionary

Processed fruit&veg

Confectionary

Processed fruit&vegSource: Nomisma-Crif Agrifood Monitor on CRIF-Cribis D&B data

www.agrifoodmonitor.it

Italian Trade Commission
Trade Promotion Officeof the Italian Embassy
Sheikh Zayed Rd (Exit 32)
Dubai Internet City
Arenco Tower, office 506-508
500088 Dubai, UAE
Tel. +9714.4345280
fdi.dubai@ice.it; dubai@ice.it
www.ice.gov.it
Italian Trade Agency
FDI Department
Via Liszt, 2100144 Roma
fdi@ice.it; realestate@ice.it
www.investinitaly.com
www.investinitalyrealestate.com

Thank you forthe attention