Italian agrifood exports are healthy: here's why

A recent report by FEDERALIMENTARE highlighted that the export of the Italian food industry recorded a +9.3% growth in the first seven months of the year, potentially reaching around €57 billion by the end of 2024. This figure aligns with recent years, which have seen increasingly significant growth rates.

What drives this +9.3% export growth?
Dr. Massimo Iannetta, head of ENEA's Division for Sustainable Agri-Food Systems and Vice President of the Scientific Technical Committee of the National AgriFood Technology Cluster (C.L.AN.), helps analyze some of the factors influencing this trend.

Supply Chains

“It’s essential to start with an analysis of global value chains and the degree of supply for various national sectors. This has brought very positive and somewhat unexpected news. Greater international openness has facilitated foreign trade relationships, coupled with a stronger production and logistics infrastructure, which has effectively increased the autonomy of food supply in relation to demand. The Italian agri-food sector has shown progress on both foreign and domestic fronts.”

One key indicator is the general supply rate of the Italian agri-food sector, defined as the ratio between the value of domestic production and consumption. This rate reached nearly 100% (99.2%) in 2023.

There are differences across individual production sectors, especially where a deficit in agricultural products combines with an export-oriented food industry. This leads to significant dependence on foreign sources for raw materials to transform into hallmark Italian products. This trend has intensified in recent years alongside the increased ability of the food industry to penetrate foreign markets and the reduced availability of domestic raw materials due to climate change impacts.

This deficit makes some supply chains more vulnerable to geopolitical (e.g., the Russia-Ukraine conflict), climatic, and health factors, especially where supply rates are low, and imports originate primarily from distant or high-risk countries.

Key Imported Products

The top ten products imported by Italy are: coffee, extra virgin olive oil, corn, live cattle, hams and pork shoulders, soft and durum wheat, soybeans, palm oil, and soybean meal. Italy’s self-sufficiency in these products ranges from 0% (coffee and palm oil) to over 60% (hams). However, corn and soybeans, essential for animal feed, show the most critical supply issues, with availability rates significantly declining over the past two decades (46% for corn and 32% for soybeans in 2023). Soybean imports are highly concentrated, with 50% sourced from Brazil, while corn imports, though less concentrated, predominantly come from Ukraine, a high-risk country.

The supply rate for wheat is also low, with the pasta industry relying 44% on imports from Canada, Russia, Greece, and Turkey. The baked goods sector meets 64% of its wheat needs with imports from Hungary, France, Austria, Ukraine, and Romania.

Italy is a net importer of pork and has seen its beef supply rate drop to very low levels in 2023 (40%), with France accounting for 85% of imported cattle. While France's reliability is reassuring geopolitically, the sector remains vulnerable to other factors, as shown by recent challenges due to health restrictions related to epizootics in French farms and the recent Blue tongue outbreak.

For extra virgin olive oil, of which Italy is the world's second-largest exporter and top consumer, nearly 50% of supplies come from other Mediterranean countries, primarily Spain. This links the domestic product's fortunes closely to foreign markets, especially regarding price variability.

ISMEA Report Insights

The ISMEA report highlights the resilience and strength of the Italian agri-food sector amid numerous macroeconomic, geopolitical, and climatic challenges. Representing over 15% of national GDP in its broadest sense ("from farm to table"), the sector plays a key role in Europe and globally. Italy contributes nearly 17% of European agricultural added value and 12% of its food industry value, placing it among the EU leaders. Italian exports, which have grown by about 90% over the past decade, show higher dynamism than European, global, and major competitor averages.

Despite these achievements, the structural reliance on foreign sources for key "Made in Italy" supply chains in a volatile global context remains a concern. Moreover, the Italian agri-food value chain stands out not only for the excellence of its food products and protected designations (DOC, IGP, DOCG) but also for its manufacturing technology, leadership in processing and packaging equipment, logistics capabilities, and patents and innovations exported worldwide.

G7 and Agri-Food Sustainability

At the recent “G7 – Agriculture and Fisheries”, the focus was on responsibly investing in sustainable agriculture and food systems to provide safe, quality food while reducing waste from production to consumption. The global food chain, which generates about 32% of total greenhouse gases (FAO 2024), cannot be excluded from efforts to combat global warming. The G7's final document reaffirms the role of science and innovation in addressing climate change and meeting the global demand for safe food. Advancing the agri-food transition with technological innovation is an undeniable priority to maintain the global leadership of Italian food systems.

Italy’s Agrifoodtech Ecosystem

Despite immense opportunities, Italy’s Agrifoodtech innovation ecosystem remains in its infancy. Investments in 2023 amounted to around €250 million (AGfunder), significantly lower than other leading European countries or Silicon Valley. While Italy ranks fourth in Europe for the number of Agrifoodtech startups, it falls to tenth for capital raised.

The partnership between Federalimentare, the Linfa fund managed by Riello Investimenti Sgr, and the Luiss X.ITE Research Center aims to create a virtuous link between businesses and the startup innovation ecosystem to stimulate innovation and scale. This initiative supports the adoption of new technologies and the development of an ecosystem to sustain the innovation efforts of Italian businesses. As part of this, Federalimentare, along with the National AgriFood Technology Cluster (C.L.AN.), promotes an "Observatory on the Technological Transition of Made in Italy Agri-Food" to strengthen and enhance the innovation ecosystem towards transforming Italy's agri-food systems.