The mood of Italians and their food consumption are analyzed, as usual, by theCoop Report 2023 - Consumption and lifestyles of today's and tomorrow's Italians'. (1) The research highlights the impact of the permacrisis on the population, threatened from many sides. And robbed of purchasing power by inflation and speculation.
Victims of permacrisis
War and geopolitical changes, climate change and migrations. And again, artificial intelligence and the labor market, of course inflation and the possible economic crisis. These are the ingredients of the restlessness of the Italians, still stunned by the pandemic and already oppressed by fears for the present and the near future.
The mood is sad and resigned. A feeling of anger does not emerge among the interviewees, at least not yet. But the very concrete effects can be seen on the hardships that many are experiencing. Even those who work struggle to cope with ordinary expenses: 35% of low-income people declare themselves unable to face an unexpected expense of 12 euros in the next 18-800 months.
The impact on food consumption
The renunciation forces you to first cut the most substantial or luxury expenses. The replacement of cars, houses and household appliances is postponed. It focuses on travel and culture, shows and concerts (in primis)on shoes and clothes. But the expenditure for food consumption is also reduced.
The most worrying aspect is the impact of saving on the quality of the diet. Consumption of fruit and vegetables, basic foods of the Italian food tradition, has decreased by -15,2% in the last two years and for 16% of Italians it will decrease further.
The price of inflation
Now 1 out of 5 Italians, mostly baby boomers and belonging to lower class, claims to have lost all references to identity, abandoning the dictates of traditional culture, typical features and the territory.
With an inflation which has increased the cost of food by over 21% and which does not promise to stop before the next two years (72% of sector managers believe that food inflation will not return below 2% before 2025), the Italians buy less food: -3% the change in sales at constant prices in the first 7 months of the year and in the forecast for 2024 out of 2023, 60% of the managers interviewed expect a result in a further albeit modest decline (-0,5%) .
New trends at the table
In parallel, in minority segments of the population, 'innovative' or at least less basic consumption styles are advancing, as already highlighted by the Imagine report: (2)
- The plant based food, whose sales recorded a +9% year on year,
- products sugar free (which beats all free from). Looking ahead, 15% of those interviewed will use products without or with little sugar in the next 12/18 months.
– proteins andhealthy food (sports nutrition, dried fruit, health drinks),
– foods defined as 'sustainable'. Already today, 5,1 million Italians declare that they eat zero waste, 2,8 define themselves as reducetarians and 1,4 are the so-called climatarians (i.e. those who use products with low C02 impact).
To pay the price it is above all meat, according to the sample interviewed:
– 39% say they are willing to reduce their consumption (among these, 'right-wing' consumers rarely appear, as we have seen), (3)
– in the next 10 years, the top 5 new foods include plant-based products with a meat flavor (31%) and synthetic meat produced in a laboratory (28%).
Discount e private labels as a lifeline
Italians – although attracted by innovative foods – they are willing to give up products that are not strictly necessary and also those with a greater service content. Committed to reducing waste and seeking more affordable prices.
Shopping becomes more frequent and moves to the channel and the most convenient purchasing choices. THE discount and the products a private-label they are chosen by 8 out of 10 Italians as a hedge against inflation, which is felt above all in the brand industrial.
Supply chain imbalance
The exceptional growth in prices of the last two years has also profoundly changed the structure of the food chain.
In 2022 the increase in the prices of raw materials and the soaring energy costs have caused producer prices to explode, while the difficulties of the final demand have forced the retailer to contain the final impact on consumer prices. With heavy repercussions on the budgets of both operators in the supply chain.
The annual analysis of Mediobanca highlights how in 2022, for both players in the supply chain, there was a significant decrease in added value and, as a consequence, in operating margins.
A negative impact which, however, does not change the positive difference in performance in favor of industrial operators. Basically, companies in the food industry - and especially the larger ones - show a profitability that is structurally higher than that of large-scale food distribution. And even in the difficult situation of 2022, the profitability of industry's own resources shows a less pronounced decrease than that of distribution.
Speculation of the food industry
In 2023 on the other hand, even in the face of a rapid return on the historical values of the costs of commodities food and an equally well-known reduction in energy costs, there was no significant reduction in the food industry's price lists. On the contrary, there have been further increases in price lists, even higher than those of 2022 and in the same period the further deterioration of household purchasing power has again prevented distribution operators from being able to transfer the entire increase to consumption.
In this way, the comparison between the trend of industrial and consumer prices continues to highlight a negative differential that has no equal in recent decades.
In essence, for distribution, purchase prices remain structurally higher than those charged for sales. In the coming years too, industry and distribution strategies will diverge. THE retailer they will focus on private brands to have control over production chains and sales prices, while large industry at the moment seems more oriented towards defending margins by focusing on product innovation and the defense ofequity of your own brand.
Maura Latini: we protect the purchasing power of families
'The first crackdown on consumption, which had already started before the summer, appears to be worsening further and is having repercussions on sales volumes. Doing the job that is typical of a set of consumer cooperatives, that is protect the purchasing power of households, combining prices and quality of the offer is increasingly difficult, but for us it is the challenge to overcome', says Maura Latini, President of Coop Italia.
The turn on the valorization of MDD, announced two years ago, (4) is bearing good fruit.
'With 74 categories reviewed out of 114 (nearly 70% of the objective given) we can begin to draw the strings and state the first positive data. In fact, this strategy had already started to give good results in 2022 and in this first part of 2023 with an overall increase in the MDD share within Coop, making it become in many cases our category-leading brand product.
The strong increase in the share in value and quantity of the Coop product (in the first 8 months of 2023 30% in value (+5% August 2023 on August 2021) and 34% in volume (+4,0), thus generating the containment of the cost of the shopping cart'.
Lightning rods of the branded industry?
In this context, underlines Maura Latini, 'the negotiating table with the brand industry for the year 2024 has not yet started, of which we have not received any signals at the moment. I take advantage of this opportunity to invite everyone to assume their responsibilities and have a proactive attitude marked by moderation in requests.
The data in the Report confirms this the risks that the branded industry is also running with a constantly negative sign on sales for some time now. As I see it, there is a need for a serious and constructive discussion precisely to provide an answer to a large part of the Italian population in difficulty. I believe it could be a solid common goal to work towards recover sales volumes that customers are currently diverting to discount stores.
Like Coop, in the last 18 months we have withheld an important part of the increase in industrial price lists without passing it on to consumers, but the budgets of our cooperatives now limit the possibility of further commitments if not in the context of an effective collaboration between the parties, which the institutions are also asking for'.
Marco Pedroni, more money is needed in the paycheck
'The picture is really not very optimistic', says Marco Pedroni, President of Ancc-Coop (National Association of Consumer Cooperatives-Coop).
'We ask the government for very concrete actions, not for us but for the Italians: first of all by put more money in workers' pockets through tax wedge cut and with the tax relief on salary increases, then to help the weakest part of the country not only through the social card for the poor but also through support for the introduction of minimum salary.
With an inflation which erodes more than 15% of purchasing power, half of households are in difficulty, domestic demand is destined to fall and savings will not be able to sustain a significant level of consumption for long'.
Footnotes
(1) Coop Report 2023 – Consumption and lifestyles of Italians today and tomorrow https://italiani.coop/rapporto-coop-2023-anteprima-digitale-2/
(2) Marta Strinati. Consumption stressed by high prices. XIII Report I guess. GIFT (Great Italian Food Trade).
(3) Marta Strinati. Vegetable substitutes for meat, references to the environment can hold back sales. British study. GIFT (Great Italian Food Trade).
(4) Marta Strinati. Start the revolution of Coop brand products. GIFT (Great Italian Food Trade).
A professional journalist since January 1995, she has worked for newspapers (Il Messaggero, Paese Sera, La Stampa) and periodicals (NumeroUno, Il Salvagente). She is the author of journalistic studies on food and has published the book "Reading labels to know what we eat".
