Sweets, pasta and coffee to lead food industry growth in 2024

The Italian food industry continues to enjoy good health both in terms of turnover and in terms of margins and positive returns on investment. In spite of the fact that the consumption crisis caused by inflation has hit again in 2023 (-1.8% household spending in real terms according to ISTAT), the main indicators of the sector surveyed by the Food industry monitor of the University of Gastronomic Sciences in Pollenzo and Ceresio Investors remain largely in the positive zone and exceed the estimates made last year by the same observatory, with exports and out-of-home consumption offsetting the drop in purchases in supermarkets, which nevertheless held up better than expected.

According to the tenth edition of the Food industry monitor, in fact, the turnover of the companies surveyed - 840, active in 15 sectors for an aggregate turnover of around 90 billion - grew by almost 10% in 2023 and even if 70% was 'eaten up' by inflation, "commercial profitability (ROS, Return on Sales) reaches 5.1%, a figure in line with that recorded in 2022", write the researchers; and above all it is higher than the forecasts of the same study last year, which had estimated ROS at 4%.
In addition, "return on capital employed is close to 8% and is slightly higher than in 2022, thanks to the ability to optimise inventories" (the forecast was 6.5%).

"The sector continues to grow due to both the good resilience of domestic consumption," comments Carmine Garzia, scientific head of the Observatory and lecturer in Management at Pollenzo, "and the strong dynamism on the international market: quality exports are a driving force. A 5.9 per cent Ros is forecast for 2024 and particularly positive values of this indicator are to be reported for sweets (7.1 per cent), pasta (6.3 per cent), coffee (6.2 per cent) and wine (6.1 per cent)".
The outlook predicts that growth will continue in the next two years at rates above GDP; +4.8 per cent is expected in 2024 and +5.2 per cent in 2025. Exports will also continue to rise: +8.1% this year and +7.3% next year.

The companies in the sample surveyed have made 72 acquisitions since 2009, 26 of which towards international targets, for a total value of 5.4 billion. These, according to the report, "three years after the conclusion of the deal have recorded an increase in turnover of just under 90% and an improvement in Ebit margin of 6%". "The time has come to consolidate the excellent results of the post-Covid period. Dimensional growth," emphasises Alessandro Santini, head of Corporate & Investment Banking for Ceresio Investors, "is a priority that must also be pursued through acquisitions and mergers that would not only benefit the individual company, but also the production chains.

The Food Industry Monitor, now in its tenth edition, also drew a balance sheet of the excellent last decade of agribusiness: rising from a value of 53 billion in 2012 to around 90 billion in 2023. Exports have seen continuous growth, rising from EUR 23 billion to EUR 44 billion over the same period. Employment in the food processing industry alone increased from 449,000 to 488,000, a record growth of about 39,000, in a period that was not particularly good for the Italian economy, turnover grew by an average of 4.4% per year.