Download - Food Industry Monitor

Prof. Carmine Garzia

June 26, 2020

Food Industry Monitor

Food is Health. Competitive scenarios in the food industry

Performance analysis and forecasting

Content analysis. Evolution of consumer behavior

Business model analysis. Health innovation and performance

Agenda

© 2020 Carmine Garzia - Food Industry Monitor - All Rights Reserved

© 2019 Carmine Garzia - Food Industry Monitor - All rights reserved

Flours Oil

Transformation

Preserves

Salumi Frozen food Milk

Brand intensivePasta

Coffee

Sweets

Beverage & Luxury

Beer Water

Wine

Distillates

Packaging Food Equipment

834 63companies billions of revenues

3

Performance Analysis - The Sample

4

Country GDP growth 2020

Italy -9.5%

France -8.2%

United Kingdom -8.3%

Germany -6.5%

Euro Area -7.7%

USA -6.5%

China 1.0%

Sources: EU Commission (May 6)

The evolution of the food sector is closely linked to the evolution of GDP (IC= 0.8-0.9)

Performance analysis - Food growth vs. GDP

2,4%

3,9%

2,7%3,5%

3,0% 3,1%

-5,0%

7,7%

0,0%0,8%

1,3%1,7%

0,8%0,3%

-9,5%

6,5%

2014 2015 2016 2017 2018 2019 2020 2021

5

Performance analysis - Food growth vs. GDP

Source: our elaborations and EU Commission.

*2019, 2020, 2021: forecast

Food Revenues Italian Companies

GDPItaly


Scenario assumptions: return to pre-COVID consumption levels starting July 2020, no second waves, no financial shocks

6

Performance Analysis - Profitability

*2019, 2020, 2021: forecast


6,1%6,4%

6,6%6,3%

6,0%6,2%

5,9%6,0%

2014 2015 2016 2017 2018 2019 2020 2021

Trade margin - ROS

7

Performance Analysis - Profitability


9,6%9,9%

10,2%9,7%

9,2%9,6%

9,0%9,4%

2014 2015 2016 2017 2018 2019 2020 2021

Return on Investment - ROIC

*2019, 2020, 2021: forecast

8

Performance Analysis - Financial Structure


2,582,48

2,39 2,35 2,332,21

2,70

2,40

2014 2015 2016 2017 2018 2019 2020 2021

Initial rate of indebtedness

*2019, 2020, 2021: forecast

1

3

4

5

6

6

7

13

15

21

24

27

SAUCE

CONSERVATIONS

ICE CREAM

MILK

DISTILLATES

PACKAGING

PASTA

WINE

FARINE

WATER AND SOFT DRINKS

FOOD EQUIPMENT

COFFEE

9

Performance Analysis - Financial Sustainability Growth

(CAGR revenues*100)*(average ROS*100)

Average Indebtedness Rate

Sustainable Growth Index (2014 - 2018)

*sweets, oil and beer ICS not calculated


Sector average: 11

-3,6%

-3,0%

0,7%

1,6%

2,2%

2,2%

2,5%

2,8%

2,9%

3,2%

3,3%

6,8%

14,1%

BEER


CONSERVATIVES

OIL

COFFEE

SWEETS

PASTA

MILK

DISTILLATES

WINE

FARINE

Cumulative Revenue Growth (2020 - 2021)

SALUMI

SURGELATI

10

Performance Analysis - Revenue Growth


*2020, 2021: forecast

Industry average: 2.9%.

*Packaging, Beer and Food Equipment not calculated

*Independent variable: Real GDP

11

Performance analysis - Export growth


3,0%

5,2%

5,9%

7,4%

8,3%

8,6%

10,9%

11,0%

12,0%

13,1%

15,1%

26,6%

OIL

PASTA

PRESERVES

SAUCE

PACKAGING

WINE

MILK

COFFEE


SWEETS

FARINE

DISTILLATES

Growth of cumulativesportazioni per compartment cumulative (2020 - 2021)

Industry average: 10.6%.

*2020, 2021: forecast

*Packaging, Beer and Food Equipment not available

Content analysis gives insight into consumer behavior

42 web titles analyzed, 60% international

Period of observation: 2015-2019

Identification of recurring topics and perceptual cluster analysis

Content analysis - Objectives and structure


2,99%

7,28%

7,46%

9,33%

9,51%

13,99%

14,74%

16,98%

17,72%

Made in Italy

Market Potential

Advice on new foods and ingredients

Health foods

New product development

New process technologies

Global food trends

Traditionality

Food Safety

Topics predominant in the media international

13

Content analysis - Predominant topics


14

Content analysis - Predominant topics


1,53%

1,53%

1,92%

2,30%

8,43%

10,73%

15,33%

18,01%

40,23%

Innovation

Global food trends

New Product Development

Food Safety

Traditionality

Health foods

Advice on new foods and ingredients

Market potential

Made in Italy

Topics predominant in the media national

Content analysis - Topic trends


15

14,7%

19,3%

16,8%

13,6%

24,3%

0,0%1,6%

7,1%

0,0%

2,2%

2015 2016 2017 2018 2019

Food Safety

International Media Italian Average



16

10,8% 10,5%

8,4%7,3%

9,7%

2,0%

9,7%

12,5%

14,9%15,6%

2015 2016 2017 2018 2019

Health foods

International Media Italian Media



17

14,7%15,8%

20,6%

18,2%

15,5%

3,9%

9,7%

12,5%

4,3%

11,1%

2015 2016 2017 2018 2019

Traditionality

International Media Italian Average

New Product Development

Trends of market

Safety foodProperties nutrients and

benefits of foods

History of cuisine

Numbers of market

New technologies of process

Tradition Italian tradition

Debate on food e ingredients

Topic sulla Tradizione

Topic sull’Innovazione

TopicTecnico-economici

Topic Narrativi

1

2

18

Content analysis - Perceptual positioning of topics and strategic clusters


Health products may have one or more of the following characteristics:

contain raw materials of organic origin

raw materials are subjected to clean transformation processes

do not contain artificial additives and preservatives

may have functional health benefits

Business models - Healthy offer


18,3%

21,3%

28,4%

29,4%

41,0%

45,0%

52,8%

57,2%

57,8%

Coffee

Sweets

Water

Pasta

Meat products

Preserves

Milk and dairy products

Oil

Flours

Presence of products on total range of products offered by Italian companies

Business models - Healthy offer

Average: 39.3%.


20

78,8%

74,4%

60,8%

47,2%

46,8%

19,3%

18,4%

23,1%

35,8%

44,6%

45,9%

73,4%

2,8%

2,5%

3,5%

8,2%

7,3%

7,3%

Organic

Traditionality

Health and wellness

Craftsmanship(handmade)

Healthy Lifestyle

Sustainability

Communication contents of Italian companies

Low Average High

Business models - Communication content


21

Only 20% of companies do communication on the functional benefits of health products

22

Business Models - Impact on Profitability


7,4%

4,6%

Companies with process innovations Other companies in the sample

Innovation and sales profitability (ROS 2018)

*Calculations performed with unstandardized beta of the scalar variable health communication transformed into a dummy variable

23

Business Models - Impact on Profitability


10,4%

8,3%

Companies with health products Other companies in the sample

Health product offerings and return on investment(ROIC 2018)


24

Business Models --Impact on Productivity


*Productivity: Revenues / tangible fixed assets

7,2

6,5

Companies with healthy products Other companies in the sample

Healthy product offerings and productivity of tangible investments (2018-2009)


25

Business Models - Impact of Healthy Offerings


Healthy products

offer

Growth

revenues

Profitability Productivity

Targeted communication

on health aspectsNon-standardized beta

0,02

0.66 (ROS)

1.03 (ROIC)

9,10

9,68

This research report is based on public data and data collected from restricted access databases, which were processed by a team of

researchers at the University of Gastronomic Sciences in Pollenzo, Bra.

Representative samples of the various sectors of the food industry were constructed by extracting companies with ATECO codes, and all the

companies identified in this way were checked to verify the congruity of the activity carried out with the sector to which they belonged.

The financial statements of the companies were acquired from the AIDA and CERVED databases in optical format and were reclassified

according to the financial statement formats currently in use in the context of economic-business analysis.

The report was written by Prof. Carmine Garzia in collaboration with Dr. Francesco Maria Gentile who coordinated the research team for the

collection of questionnaires, the construction of databases and statistical processing. The research team, composed of: Margherita Testa, Sofia

Eleonora D'angelo and Pier Lorenzo Rolando, carried out the collection of empirical data on business models and strategic choices of

companies.

The research project was carried out with the support of Ceresio Investors.

The computations were based on public budget data available as of 5/25/2020. The report was closed as of 06/20/2020.

http://www.foodindustrymonitor.com

26

METHODOLOGY

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