THE FOOD DISCOUNT SEGMENT

costs, should trigger a truce and then a gradual deceleration of food prices. Therefore, these phenomena should come together with a stop in the demand erosion and its stabilisation. However, it should be noted that food prices will be held hostage to the low levels of raw material stocks that affect many sectors, so they will still be exposed to volatility.

Food consumption trends

In this scenario, food consumption at home in 2022 is expected to have reached 180 billion, largely due to the price boost. The “eating out” share (as a conservative estimate) of around 80 billion should be added to this, between the quantity recovery, as a postpandemic rebound, and once again the price impact, although this was slightly less impactful than food consumption at home. The result is a conservative estimate of overall food consumption of around 260 billion, which is above (at last) the 250 billion figure calculated by Istat for pre-pandemic 2019 food consumption. However, in this period, savings were the top selection criteria in the consumer purchasing behaviour. Not surprisingly, the food discount segment grew at double-digit rates, while white labels marked a further acceleration. This has resulted in a further polarisation of consumption and stagnation in the market area of highend and high-added value products, the flagship of the national “food and beverage” sector.

Food exports

Exports strengthened their role in supporting the economic situation of this sector. As a result, the year ended with exports reaching EUR 49.2 billion in the food industry and EUR 59.1 billion in the agri-food industry, with growth rates of +19.0% and

+16.0% respectively. The biggest boost for the food industry (thanks to the combination of absolute export share and growth rate) came from the US market. After all, this is the market with the greatest potential. Its trend was around +19% at the end of the year. It must also be said that the US market is now on its way to catching up with Germany, taking its historical role as the leading outlet for Italian food exports within a few years. In a nutshell, in 2022 the US market was more strategic than ever in compensating for the quality and quantity shortcomings of domestic demand.

Conclusions

It must be said that, in this rather fluid and complex scenario, some basic pitfalls still remain for the export sector. They come mainly from two sides. The first is represented by the labelling rules that are issued more and more frequently, often aiming at instrumentally curbing our products’ competition, basically undermining their image and appeal. The traffic light labels linked to Nutriscore and the recent Irish initiatives on wine labelling are emblematic. In the long run, they could turn out to be more dangerous than the duty policies themselves, which are, at least, more transparent. The second pitfall is related to the reopening of an old issue, which creates vulnerability in our productive structure, i.e. the agrifood balance deficit. In fact, the latest

Also Labelling Rules Among The Pitfalls For The Export Sector

data show that the final agri-food balance 2022 closed with a deficit of 2.2 billion, which clearly reverses the surplus of 3.1 billion recorded in 2021. In particular, the primary segment balance just “exploded” during that period along with the prices of some commodities, reaching a 19 billion deficit, up sharply from 13.3 billion reached in 2021. The deficit of the agri-food balance reappeared after three years in which the balance had finally turned into positive. This is rather disappointing. In fact, this shows that the previous turnaround had been volatile and that supply chain weaknesses are still latent, with the risks associated with strong foreign exposure on the supply side. Therefore, as this is the case for energy, bilateral agreements with individual countries and areas can help stabilise sources and protect the long-term competitiveness of this sector.

In conclusion, at the beginning of 2023 the trend related to the national “climate of confidence” index seemed revealing of the current interim phase. The consumer confidence index fell from

102.5 to 100.9, while the composite business confidence index rose from 107.9 to 109.1. The consumer’s psychological drive is therefore still inertial and negative, while the premonitory urge of businesses has already turned positive. And - without a doubt - this is an encouraging factor.

Luigi Pelliccia

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The General Assembly of European Flour Millers, which took place in Venice (Italy) on 26-28 May 2022, unanimously elected its new president, Francesco Vacondio, chief executive officer of Molini Industriali (Modena, Italy), for a two-year term (2022-2024). Gary Sharkey (UK) of Hovis, who has ended his term as President, and Jan Cordesmeyer (Germany) of Hemelter Mühle, have been elected Vice Presidents, while Bernard Valluis (France) was chosen Honorary President.

With some 47 million tonnes of soft wheat, rye and oats processed each year to produce some 35 million tonnes of flour, the European flour milling industry is the largest single food user of EU domestic wheat, rye and oats.Today, its European Association is composed of 28 national associations, representing some 3,800 companies which produce 600 different types of flour to meet increasingly specific consumer demands. We met Francesco Vacondio to ask him some questions.

Mr. President, can you remind us what are the mission and the objectives of the European Flour Millers?

«The European Flour Millers is the organization representing the interests of the European milling industry. Its mission is to promote the benefits of grain-based foods and to support the development of the milling industry in Europe. The objectives of the European Flour Millers are as follows: contribute to improving the competitiveness of the sector; promoting food safety, food security and sustainability throughout the flour supply chain, whilst avoiding an excessive regulatory burden; securing competitive access to agricultural raw materials in the quality and quantity required, including the management of extreme price volatility; contribute to maintaining a sufficient export activity and level of protection against flour imports; defending and promoting the wholesome and healthy image of bread and the vital role of the flour miller in the local supply chain to feed and nourish the European consumers. Overall, the European Flour Millers is dedicated to promoting the interests of the milling industry in Europe, and ensuring that consumers have access to high-quality, safe, and nutritious grainbased products».

Which are currently the major vulnerabilities affecting the EU milling industry and, on the contrary, what are its strengths?

«As with any industry, the EU milling industry has both vulnerabilities and strengths. Here is an overview of some of the major vulnerabilities and