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Citrus Report Italian Citrus: Perspectives on the season 2021/2022

Contents 1

pag. 3

4 pag. 11

The Report Method and aims

Sustainability and research What the operators say

2 pag. 4

5 pag. 19

The citrus season Account and prospects

Agrumaria Reggina’s role in the next citrus season

3 pag. 8

6 pag. 20

The phytosanitary conditions of citrus fruits

About Agrumaria Reggina

”

As I consider these challenges, I grow increasingly convinced of the role Agrumaria Reggina should play, as a reliable partner guaranteeing excellent and effective service, for both products and solutions. Our goal is to be the bridge between citrus groves and consumers around the world.

General Manager

THE REPORT

The Report Method and aims Citrus fruits continue to play a fundamental role in the nutrition and consumption of families all over the world; they are loved as fresh fruits, give refreshment as drinks, and inebriate when used as a basis for perfumes.

In this context, the role of the citrus fruit processing industry is to guarantee the most authentic experience possible, while maintaining the quality of the fruit. For these reasons, we have decided to publish the second edition of the report “Italian Citrus: Perspectives on the season 2021/2022”. This document includes numbers, forecasts and analyses, but is also includes people and their stories, thanks to interviews with the main actors of citrus groves. With this report, we would like to share the main data of the new citrus season in Italy and tell you about the virtuous experiences of those who dedicate their effort, intelligence and passion to bringing the fruits of our land into the homes of many families around the world every day. One year after the publication of our first report on the Italian citrus industry, we will take a quick look back at the past months, which were marked by natural and social events that have put a strain on the economic system. As described by the figures on the following pages, the Italian citrus sector recorded a particularly generous season in terms of production volumes. The processing industry – in which Agrumaria Reggina has a leading role – has benefited from this abundance and provided a high volume of ingredients to all the markets where citrus derivatives are applied: food, beverages, fragrances, flavours and a lot more. Let’s turn now to the new year. The new season is expected to be more limited in terms of production volumes; the summer drought in Calabria and Sicily affected fruit development. Global crises, at all levels of supply chains, will

also negatively affect the citrus industry. You will find detailed analyses of all these phenomena in the sections below. As I consider these challenges, I grow increasingly convinced of the role Agrumaria Reggina should play, as a reliable partner guaranteeing excellent and effective service, for both products and solutions. Our goal is to be the bridge between citrus groves and consumers around the world. Let me conclude this introduction by sharing our new corporate mission, which was rewritten as part of the upcoming five-year plan; it is a summary of my mandate to the women and men of Agrumaria Reggina, so that they have a compass to work with for a better future, more and more decisively each day:

To develop and manufacture tailor-made fruit-based solutions to meet the needs of our customers and give their consumers nutrition, happiness and unique experiences.

Mission Statement Agrumaria Reggina

Enjoy the reading, General Manager

The citrus season Account and prospects This initial section describes the figures, competitiveness and prospects of the Italian citrus supply chain for this season. The main data for this report are collected from the ISTAT (Italian National Institute of Statistics) and ISMEA (Italian Service Institute for the Agricultural and Food Market) databases. The citrus season 2020-2021 was particularly generous. Considering the main citrus fruits cultivated – oranges, clementines, lemons, mandarins and bergamots – the production amounted to 3,320,627 tonnes, that is, 38% more than in the 2019-2020 season. The main increase was recorded in the oranges department (+57% of volume produced) followed by clementines (+34%). Table 1 below summarises the main data. A difficult year is expected in Italy for the new citrus fruit harvest season of 2021-2022. Reduced volumes are expected due to various phenomena that occurred in 2021: - Reduced rainfall recorded in the April-August period; - Reduced irrigation of agricultural land; - More droughts on land, especially for associations that do not have automatic irrigation systems. Oranges will be the most affected among citrus species, for which a decrease of about 40% is expected in the volumes produced. As for mandarins and lemons, 25% and 30% decreases are expected. Bergamots, after an extraordinary campaign in the 2020-2021 period, will return to the levels of 2019 (30,300 tonnes).

On the industry front, the reduction in harvested volumes will translate into a 32% reduction in the volume of citrus fruits destined for the processing industry. Where, in the 2020-2021 season, the volume of processed fruit amounted to 1,165,699 tonnes (Table 2), a decrease of 368,486 tonnes is expected for the new citrus season. In terms of citrus area in production (hectares), the situation is at the same levels as the previous year, for a total of 226,002 hectares in production (Table 3). Oranges are the main cultivation, with a total of about 82 thousand hectares (of which 53 thousand dedicated to blond oranges and about 28 thousand to blood oranges) which correspond to 57% of the national surface area.

THE CITRUS SEASON

CITRUS FRUIT

SEASON 2018/2019

SEASON 2019/2020

SEASON 2020/2021

SEASON 2021/2022

VARIATION OF SEASON 21/22 VS 20/21

Table 1 Citrus fruit harvest production (tonnes)

Source

ISTAT Date

Forecast

Orange

1,592,402

1,273,922

1,592,402

1,173,472

-40%

Clementine

453,735

485,496

509,771

696,921

-3%

Lemon

424,663

440,376

572,488

377,735

-25%

Mandarin

124,579

121,465

133,611

104,945

-30%

Bergamot

30,000

30,300

31,815

30,300

-13%

Total

2,625,379

2,403,070

3,320,627

2,383,373

-28%

VARIATION OF FRUITS PROCESSED IN 21/22 VS 20/21

INCIDENCE ON THE TOTAL OF PROCESSED CITRUS FRUITS 2021/22

QUANTITY OF CITRUS FRUITS PROCESSED DURING SEASON 2021/22

INCIDENCE ON THE TOTAL OF PROCESSED CITRUS FRUITS 2020/21

QUANTITY OF CITRUS FRUITS PROCESSED DURING SEASON 2020/21

CITRUS FRUIT

PERCENTAGE OF CITRUS FRUITS DESTINED FOR PROCESSING

Table 2 Citrus fruits destined for processing by species (tonnes)

Source

Statistical analyses Statistical analyses Statistical analyses Statistical analyses Statistical analyses

Forecast

Orange

40%

782,315

67%

469,389

59%

-40%

Clementine

20%

135,324

12%

139,384

17%

-3%

Lemon

35%

176,276

15%

132,207

17%

-25%

Mandarin

25%

37,480

26,236

-30%

Bergamot

99%

34,304

29,997

-13%

1,165,699

100%

797,214

100%

-32%

Total

In terms of citrus area in production (hectares), the situation is at the same levels as the previous year, for a total of 226,002 hectares in production (Table 3). Oranges are the main cultivation, with a total of about 82 thousand hectares (of which 53 thousand dedicated to blond oranges and about 28 thousand to blood oranges) which correspond to 57% of the national surface area. At almost equivalent levels, clementines and lemons are the second and third most cultivated species in Italy. Clementines have 26 thousand hectares in production, which correspond to 18% of the national surface area. Compared to the previous year, we can see a slight growth rate in the cultivation of clementines. Lemons come in third again, with almost 25 thousand hectares, correspon-

ding to 17% of the national surface area. The production area of mandarins settles at 8,513 hectares, representing 6% of the national area in production. Bergamots (1,650 ha) continue to grow thanks to the ongoing investments of local citrus farms and are now just over 1% of the cultivated area. Grapefruits (299 ha), citrons/ cedars (70 ha) and chinotto (6 ha) make up less than 0.27% of the national production area. The last analysis concerns the growth of organically farmed citrus areas. According to SINAB1, “we are the world’s largest producers of organic citrus fruits (27% of Italy’s entire citrus area is organic)2”. Organic farming is on the rise due to several reasons, including the following: - Concentration of citrus fruits in the regions of Southern Italy, which have a low incidence of

CITRUS FRUIT

2019

2020

2021

PERCENTAGE BY CITRUS FRUIT

Table 3 Production area (hectares)

Orange

81,849

84,162

82,302

57.27%

and other blond oranges

54,839

55,883

53,947

37.54%

Blood oranges

27,010

28,279

28,355

19.73%

Clementine

25,597

25,550

26,033

18.12%

Lemon Mandarin

23,131 8,323

24,785 8,530

24,727 8,613

17.21% 5.99%

Bergamot

1,500

1,650

1.15%

Grapefruit

280

297

299

0.21%

Citron

0.05%

Chinotto

0.00%

140,741

144,895

143,700

157%

Navel

1 2

National Information System on Organic Agriculture Source: SINAB, Global organic production: https://bit.ly/2Y6EH7S

THE CITRUS SEASON

phytosanitary problems thanks to a stable climate. - Family management of many areas, by individuals for whom investing in phytosanitary products to increase the yield is often seen as not very convenient. Therefore, Italy leads the way in the development of organically grown products, which can be a global trend. As in 2020, Sicily holds the record with 61% of the cultivated area, while Calabria follows with 30.3% (Graph 1).

To conclude, the Italian citrus sector recorded an excellent growth rate in the 2020-2021 season. Natural events such as the drought in the summer period did not allow a generous development of crops. However, the data are expected to be in line with the previous years and, therefore, no particular crises are foreseen for the processing industry.

Graph 1 Area under organic cultivation (hectares) 61%

30.30%

2.70%

0.40%

CAMPANIA

OTHERS

5.20%

SICILY

CALABRIA

APULIA

BASILICATA

The phytosanitary conditions of citrus fruits3 This report relating to the citrus supply chain provides a forecast framework for the 2021/2022 citrus season, including the production and phytosanitary condition of citrus fruits. As is well known, the citrus production chain is strongly concentrated in the southern regions of our country (Italy), mainly Sicily and Calabria, which make up more than 80% of the national area invested in citrus fruits. All the indicators point to a drastic reduction in citrus production for the 2021/2022 season. The etiological analysis shows that the above is partly attributable to evident physiopathies (adversities not of an infectious parasitic nature) due to unfavourable climate conditions. Such abiotic stresses concerned the following: - Productivity; - Growth reduction; - Fruiting as well as resistance to parasitic diseases. In addition, scorching temperatures that lasted for several weeks resulted in significant fruit drop. Up to the present (first week of September), some citrus farms have been surveyed in Reggio Calabria province, as for bergamot (“fantastico” and “femminello” cultivars), orange, clementine and citron, which are in the phenological phase of fruit enlargement and have reached between 30 to 60% of the final size.

The phytopathological analysis, which was aided by phytosanitary bulletins, shows that attacks by the following occurred: - Medfly (Ceratitis capitata);

- Red spider mites (Tetranychus urticae and Panonychus citri);

- Whiteflies; - Citrus leafminer (Phyllocnistis citrella);

- Cottony cushion scale (Icerya purchasi);

- Red scale (Aonidiella aurantii).

Despite these minor threats, the available fruits will enjoy excellent health and record excellent processing yields both as far as juices and essential oils.

3 This section is developed by Agronomist Dr Salvatore Lauria, owner of the technical office by the same name and a consulting and planning expert in the agricultural and agro-industrial sector. Listed in the Reggio Calabria Court register of technical consultants, Dr Lauria is a tenured professor at the “Leonardo da Vinci” Science Gymnasium of Reggio Calabria.

THE PHYTOSANITARY CONDITIONS OF CITRUS FRUITS

Medfly (Ceratitis capitata)

Red spider mites (Tetranychus urticae e Panonychus citri)

The phytopathological analysis, which was aided by phytosanitary bulletins, shows that attacks by the following occurred:

Whiteflies

Citrus leafminer (Phyllocnistis citrella)

Cottony cushion scale (Icerya purchasi)

Red scale (Aonidiella aurantii)

SUSTAINABILITY AND RESEARCH

Sustainability and research What the operators say Several actors play a fundamental role in the citrus supply chain. Their presence guarantees sustainability and work continuity for many farms, which, “in addition to providing food and fibres, shape the landscape and produce environmental benefits such as soil conservation, biodiversity protection and sustainable management of renewable natural resources, while contributing to the socio-economic vitality of

many rural areas” (European Commission, 1998). By aggregating individual productions, Cooperatives and Producers become a reference point for the processing industry, simplifying and guaranteeing the flow of the supply chain. Moreover, they invest time to design new paths for sustainability, with the purpose of providing healthier and more ethical products, which is better for everyone.

To talk about this specific experience, we interviewed the “Arcoria Giosuè” farm in Catania province (Sicily) and the O.P. PIANAGRI SOC. COOP. in Reggio Calabria province (Calabria).

Azienda Agricola ARCORIA GIOSUÈ

“

Farm that for several generations has been producing conventional and organic citrus fruits to deliver the highest quality fruit to Italian families and the processing industry.

Via Etna, 91 – 95038, S.M. Di Licodia (CT)

Citrus Fruits produced

Arcoria Giosuè Farm mainly produces Sicilian Oranges, for a total of 7,800,000 Kg, Sicilian Lemons for a total of 1,500,000, Mandarins of Sicily for 750,000 Kg.

Sustainability

What certifications have you obtained, why are you focusing on sustainability, what are the most important choices you have made, why you are Global Gap and what it entails? Certifications obtained: • Bioagricert organic certification • International Bio Suisse certification • GLOBALG.A.P • IGP

Next season

How do you see the next citrus season? What threats and what opportunities? We expect a drastic reduction of production due to the impending drought and other climate related factors. From the organoleptic point of view of citrus fruits, we will have excellent quality.

Future projects

What are the company’s future projects?

We have recently completed an important investment that reduced crop water consumption by 30%. This fundamental project ensures increasingly sustainable cultivations. For our next project, we will graft less traditional citrus fruits that are increasingly attracting consumer attention, such as yuzu, pomelo, and tacle mandarins. 12

Azienda Agricola O.P. PIANAGRI SOC. COOP.

“

Since its inception, the O.P. Pianagri organization has always directed, planned and improved the fruit and vegetable production of its members. Pianagri serves the fruit and vegetable markets with productions of Oranges, Bergamots, Lemons, Clementines, Mandarins, Kiwis, and much more fruits.

C.da Vatoni snc – 89029, Taurianova (RC)

Citrus Fruits produced

The O.P. Pianagri Farm mainly produces Calabrian Oranges for 14.500.000 Kg, Calabrian Lemons for 165.000 Kg and Mandarins of Calabria for 4.295.000 Kg.

Sustainability

Next season

We are GLOBALG.A.P. because we strongly believe in environmental sustainability and firmly believe in the quality of our product. Our customers can choose from a wide range of fresh fruit depending on the period, both conventional and organic.

How do you see the next citrus season? What threats and what opportunities? The 2021/22 citrus campaign will have excellent yields in terms of quality, but scarce in terms of quantity, which raises a bit of concern among thea member companies.

Future projects

What are the company’s future projects?

Our perspective is to keep on improving food quality and safety for our consumers. To do this, we are constantly investing in more efficient irrigation systems and artificial intelligence programs that allow precise control over all the trees in our citrus groves.

”

In this way, we will continue to bear witness to the beauty and extraordinariness of the fruits of our land, the citrus fruit, which have continued to surprise us for centuries.

Sales & Marketing Director

AGRUMARIA REGGINA’S ROLE IN THE NEXT CITRUS SEASON

Agrumaria Reggina’s role in the next citrus season Agrumaria Reggina is looking at its 37th citrus processing season. We have been in the business of producing citrus fruit derivatives for 37 years.

As always, we will be a point of reference for the Italian and international citrus industry. In the next season of 2021-2022, we will once again be one of the main providers of processed Sicilian and Calabrian citrus fruits, covering the entire range. Here is what is new for the coming year: - We will increase the quantity of citrus fruits from organic farming, due to growing market demand. - We will get more from processing waste products thanks to new production techniques that will make our production system more and more a virtuous example of circular economy, where nothing is wasted, and everything becomes a resource. In addition, in late 2021 we will open the Taste Innovation Centre in Milan, which is our second Food & Beverage research and development centre. There, our R&D team will work on innovations for the beverage industry, where citrus fruits undisputedly play a major role.

In 2022, we will continue making investments allowing us to increase our production capacity for Flavour & Fragrance ingredients, namely, essential oils. We continue to invest in this department to provide increasingly unique ingredients for the creation of special flavours and fragrances. We know that, to tell the great story of our land, we need to create close relationships with our customers. Citing our Mission Statement, our ingredients need to deliver nutrition, happiness and unique experiences to consumers. This is how we will continue to show the beauty and extraordinary nature of the native fruits of our land, citrus fruits, which have been surprising us for centuries.

Sales & Marketing Director

ABOUT AGRUMARIA REGGINA

About Agrumaria Reggina Agrumaria Reggina is the Italian company specialiez in customised fruit-based solutions for consumer products. All our projects start with the processing of the best citrus fruits; we run an advanced supply chain that allows us to exploit the best juices and other natural ingredients. Thanks to our Food & Beverage and Flavour & Fragrance R&D Teams, we create unique and effective ideas and solutions, and guarantee the highest quality of all the ingredients throughout the production process. For further questions, write to citrus@agrumariareggina.it or visit agrumariareggina.it Agrumaria Reggina Srl Reggio Calabria, Italia

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This Report has been printed using recycled paper

Citrus Report | Italian Citrus: Perspectives on the season 2021/2022