gis products, governance and price dynamics: some evidence from italy
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GIs products, governance and price dynamics: Some evidence from Italy. Filippo Arfini Department of Economics, University of Parma, Italy [email protected]. FAO, Rome, May 24 2010. Dop, Igp e Stg un lungo dibattito legislativo. - PowerPoint PPT PresentationTRANSCRIPT
GIs products, governance and price dynamics: Some evidence from Italy.
FAO, Rome, May 24 2010
Filippo Arfini Department of Economics, University of Parma, Italy
Dop, Igp e Stg un lungo dibattito legislativo
- Wile “typical products” are the results of the interactions between people and their territory DO, GI and PDO / PGI are the results of legislative actions;
- Their function is to protect producers and consumers but also to promote rural development;
- The low systems that protect and make visible GI products to consumers can be considered a successful tool also for producers?
PDO / PGI products: a very hot debate …
- GI are the result of collective actions;
- GI reputation is related to quality, but … quality is the result of collective, corporate choice and coordination;
- Quality, commercial strategy and governance are key factor for reach efficiency on the market...
- Which typology of GI exist?
- Which Marketing problems arise?
- Which actor should take decisions?
Contents
- The PDO/PGI link with the territory of origin;
- The role of protection associations;
- The economic aspects and marketing strategies;
- A tentative of classification of Italian GI;
- Conclusion.
The PDO/PGI link with the territory of origin
PDO per province PGI per province
The PDO/PGI link with the territory of origin
Olive Oil Horticulture and cereal
Cheese
The PDO/PGI link with the territory of origin
The majority of Designations (89 PDO and 51 PGI) are based within a single Region.
There are also cases where the typical area cover more regions for …historical, economic and … political reasons.
The PDO/PGI link with the territory of origin
PDO Products Category Numbers of regions
Regions involved
Asiago
Cheese
2 Prov. aut. di Trento, Veneto
Gorgonzola 2 Piemonte, Lombardia
Montasio 2 Veneto, Friuli Venezia Giulia
Parmigiano Reggiano 2 Emilia Romagna, Lombardia
Pecorino Romano 3 Toscana, Lazio, Sardegna
Pecorino Toscano 3 Toscana, Umbria, Lazio
Taleggio 3 Lombardia, Veneto, Piemonte
Mozzarella di Bufala Campana
4 Campania, Lazio, Molise e Puglia
Provolone Valpadana 4 Prov. aut. di Trento, Lombardia, Veneto, Emilia Romagna
Caciocavallo Silano 5 Calabria, Campania, Molise, Puglia, Basilicata
Grana Padano 5 Emilia Romagna, Lombardia, Piemonte, Prov. aut. di Trento, Veneto
Salamini italiani alla cacciatora
Based product meat
11 Abruzzo, Emilia Romagna, Friuli-Venezia Giulia, Lazio, Lombardia, Marche, Piemonte, Toscana, Umbria, Molise, Veneto
The PDO/PGI link with the territory of origin
Which are the implications for:-Link whit the territory;-Link whit the agricultural phase; -Link whit the local production system;-Perceived quality and market destination;-Governance and marketing;
PGI Products Category Numbers of regions
Regions involved
Cotechino Modena
Based product meat
3 Emilia Romagna, Lombardia, Veneto,
Zampone Modena
3 Emilia Romagna, Lombardia, Veneto,
Salame Cremona
4 Lombardia, Emilia Romagna, Piemonte e Veneto
Mortadella Bologna
8Emilia Romagna, Piemonte, Lombardia, Veneto, Marche, Lazio, Prov. Aut. Trento, Toscana
Vitellone bianco dell’Appennino Centrale
Fresh meat 8Emilia Romagna, Toscana, Marche, Abruzzo, Molise, Campania, Lazio, Umbria
The role of protection associations
76%
14%
3%6%
1% 1%
Product category
Farms
Industries (dairies, factories,
etc...)
total supply chain
Firms registered
in Association
s
Incidence%
Firms with certified product
Incidence%
(a) (b) ( c ) (d) (d/c) (e) (e/c)PDO 84.259 4.667 88.926 8.310 9,3 8.337 9,4
Balsamic Vinegar
69 382 451 328 72,7 235 52,1
Other meat products
62 15 77 54 70,1 48 62,3
Processed meat
6.621 265 6.886 406 5,9 390 5,7
Cheese 37.111 2.297 39.408 3.045 7,7 1.977 5,0Olive Oils 33.704 1.618 35.322 4.109 11,6 1.086 3,1
Fruit, vegetables and cereals
6.583 76 6.659 246 3,7 4.520 67,9
Bread 3 13 16 20 125,0 13 81,3Spices 106 1 107 102 95,3 68 63,6PGI 28.197 1.912 30.109 24.295 80,7 6.268 20,8
Fresh meat 3.576 679 4.255 2.685 63,1 2.697 63,4Processed
meat38 188 226 128 56,6 127 56,2
Olive Oils 10.251 627 10.878 10.465 96,2 261 2,4
Fruit, veg. and cereals
14.332 418 14.750 11.017 74,7 3.183 21,6
Total 112.456 6.579 119.035 32.605 27,4 14.605 12,3
The role of collective organizations: the representativenes of the supply - chain
The role of Consortia: remarks
Consortia do not necessarily represent all the producers of the
primary sector.
Consortia represent only some part of the supply chain.
Consortia are not producer organisations.
Consortia are not inter-professional organisations.
Consortia cannot plan the production volumes.
Some PDO/PGI products refer to niche markets; some others are
“large-scale” productions.
The role of Consortia depends upon the characteristics of the
PDO/PGI supply chain.
Specific actions of Consortia and marketing problems
Marketing mix
Market
Product
•Quality,•Name and brand, Packaging,•Certification,•Services,
Price
•Discounts•Payment conditions,•Etc.
Distribution
•Retail channel•Retail strategies …
Communication
• Collective promotion• Retail promotion• Direct marketing
In red: responsibility of collective action
collective brands versus firm brands
The role of collective organisations: the marketing strategies
The economic aspects and marketing strategies
Gross Saleable Production at
production level (Euro)
GSP per firm (Euro)
(member of Consortia)
Standard deviation of GSP per firm (Euro)
PDO 4.207.291.547 1.011.323 1.786.041
Balsamic Vinegar 8.500.000 20.793 12.000
Other meat products 850.000 15.741 -
Processed meat 1.233.769.215 1.035.163 2.105.737
Cheese 2.767.630.411 1.529.089 1.623.137
Olive oils 36.468.822 16.692 22.790
Fruit, vegetables and cereals 157.943.100 1.852.137 4.127.318
Bread 1.800.000 90.000 -
Spices 330.000 4.722 2.750
PGI 728.021.623 1.062.003 2.324.591
Fresh meat 33.000.000 14.300 8.864
Processed meat 493.809.380 3.456.065 3.172.669
Olive Oil 37.553.152 3.588 -
Fruit, vegetables and cereals 163.659.091 43.086 100.138
Total 4.935.313.171 1.028.601 1.979.559
The economic aspects and marketing strategies
Designations
ProductVolume of sales
(€)% of Total Cumulative %
PDO Grana Padano (cheese) 950,000,000 19.2 19.2PDO Prosciutto di Parma (ham) 850,000,000 17.2 36.5PDO Parmigiano Reggiano (cheese) 827,300,000 16.8 53.2PDO Mozzarella di Bufala Campana
(cheese)300,000,000 6.1 59.3
PDO Prosciutto di S. Daniele (ham) 300,000,000 6.1 65.4PDO Gorgonzola (cheese) 200,000,000 4.1 69.4PGI Mortadella Bologna (processed meat) 200,000,000 4.1 73.5PGI Bresaola della Valtellina (processed
meat)165,000,000 3.3 76.8
PDO Mela Val di Non (apples) 157,000,000 3.2 80.0PGI Mela Alto Adige o Sudtiroler Apfel
(apples)120,000,000 2.4 82.5
PDO Pecorino Romano (cheese) 105,175,936 2.1 84.6PDO Asiago (cheese) 95,000,000 1.9 86.5PDO Fontina (cheese) 93,370,725 1.9 88.4PGI Speck dell’ Alto Adige (processed
meat)91,000,000 1.8 90.2
PDO Provolone Valpadana (cheese) 41,697,000 0.8 91.1Other Pdo products
287,747,886 5.8 6.7
Other Pgi products152,021,623 3.1 3.1
Total 4,935,313,171 100.0
The power on the role of collective brand
The economic aspects and marketing strategies
collective brands versus firm brands
The economic aspects and marketing strategies
The economic aspects and marketing strategies
Factors that contribute to influencing the adoption of a collective trademark policy “against” a company brand policy . The size of the companies compared to the competitors of the reference market and the presence of leader companies in the market segment. The level of homogeneity of the companies making up the Consortium. The added value of the product and the sector of the supply chain involved. Precise strategic choices and/or marketing policies.
The characteristics of reference market, supply chain and the capacity of the companies are influencing the Consortium strategies.
The economic aspects and marketing strategies
Direct selling
Traditional
Mod. dristribu
tion
Ho.Re.Ca
Domestic
MarketExport EU
Non EU.
PDO 26 25 39 10 86 15 52 48 Balsamic Vinegar 25 59 11 5 45 55 51 50 Other meat products 5 5 90 0 100 0 0 100 Processed meat 8 30 53 9 94 6 62 38 Cheese 24 29 39 8 87 13 52 48 Olive Oil 45 14 24 17 80 20 55 45 Fruit, vegetables and cereals 32 18 48 3 81 19 29 72 Bakery products 11 11 74 5 95 5 100 0 Spices 13 59 10 18 93 8 40 60
PGI 16 18 56 10 89 11 32 68 Fresh meat 0 24 71 6 100 0 0 0 Other meat products 20 19 47 14 89 12 68 33 Olive Oil 20 5 70 5 40 60 28 72 Fruit, vegetables and cereals 17 18 55 10 91 9 30 70
Total 23 23 44 10 87 13 45 55
Retail channel and product category. (Source: our elaboration of Qualivita data
2008)
The economic aspects and marketing strategies
Product Volume commercialized at Gdo (First 15 products per turnover)
Average Price of Production (€/kg-
l)
Average Price of Sale on the
prevailing channel(€/kg-l)
Increase (€)
Increase (%)
20-40% 0,85 1,33 0,5 55,9
Mela Alto Adige o Sudtiroler Apfel (apples) 0,60 0,90 0,3 50,0
Mela Val di Non (apples) 1,10 1,75 0,7 59,1
40-60 % 6,10 11,47 5,4 88,0
Asiago (cheese) 4,27 9,36 5,1 119,2
Bresaola della Valtellina (processed meat) 15,00 27,50 12,5 83,3
Gorgonzola (cheese) 4,05 9,37 5,3 131,4
Mozzarella di Bufala Campana (cheese) 7,50 13,00 5,5 73,3
Parmigiano Reggiano (cheese) 8,44 12,46 4,0 47,6
Pecorino Romano (cheese) 4,30 8,25 4,0 91,9
Provolone Valpadana (cheese) 4,60 9,95 5,4 116,3
60-80 % 9,96 23,46 13,5 135,6
Prosciutto di Parma (ham) 7,42 26,64 19,2 259,0
Prosciutto di San Daniele (ham) 12,50 25,75 13,3 106,0
Speck dell’Alto Adige (processed meat) n.a. 18,00 - -
80-100 % 5,52 10,19 4,7 84,6
Grana Padano (cheese) 5,52 10,19 4,7 84,6
Total 5,89 11,80 5,9 100,3
The economic aspects and marketing strategies
Product category (Niche productions)
Average Price of Production
(€/kg-l)
Average Price of Sale on the
prevailing channel (€/kg-l)
Increase (€)
Increase (%)
PDO 10,5 18,6 8,0 76,3
Balsamic Vinegar (bott. 100 ml) 45,0 87,5 42,5 94,4
Other meat products (kg) 8,3 11,0 2,7 33,2
Processed meat (kg) 12,5 24,3 11,8 93,9
Cheese (kg) 7,0 11,9 4,9 70,9
Olive Oil (l.) 11,4 15,8 4,4 39,0
Fruit, vegetables and cereals (kg) 4,3 7,1 2,8 66,0
Bread (kg) 1,8 2,3 0,5 27,8
Spices (gr.) 7,5 9,0 1,5 20,3
PGI 4,6 8,5 3,9 83,9
Fresh meat (kg) 6,1 14,0 7,9 129,6
Processed meat (kg) 12,5 23,0 10,5 84,0
Olive Oil (l.) 10,4 12,0 1,6 15,4
Fruit, vegetables and cereals (kg) 3,6 7,4 3,8 105,8
Total 8,7 15,9 7,2 83,4
The economic aspects and marketing strategies
Product category / Volume of products trade by big retailers
(in %)
Average Price of Production (€/kg-
l)
Average Price of Sale on the
prevailing channel (€/kg-l)
Increase (€)Increase
(%)
Dop 11,0 18,2 7,2 65,4 Processed meat 13,8 23,4 9,7 70,3 0-20 20,7 29,5 8,8 42,5 40-60 13,3 24,3 11,0 82,5 60-80 8,8 18,2 9,4 107,1 80-100 12,0 20,9 8,9 74,5 Cheese 8,2 12,8 4,6 56,2 0-20 8,5 12,1 3,6 42,3 20-40 8,3 10,1 1,9 22,4 40-60 8,4 13,9 5,5 64,9 60-80 6,3 12,9 6,6 103,4 80-100 6,9 9,2 2,3 33,6 Olive oil 10,1 14,6 4,5 44,6 0-20 10,7 14,8 4,1 37,8 20-40 9,8 14,8 5,0 50,7 40-60 9,4 14,7 5,2 55,3 60-80 12,0 15,9 3,9 32,4 80-100 7,2 8,0 0,8 11,4 Horticulture 3,7 6,0 2,3 62,2 0-20 5,5 6,5 1,0 18,2 40-60 4,2 9,5 5,3 126,2 80-100 1,4 2,0 0,6 42,9
The economic aspects and marketing strategies
Product category / Volume of products trade by big retailers (in %)
Production price
(€/kg - l)
Retail price (€/kg-l)
Margin (in euro )
Margin( in % )
PGI 5,1 9,3 4,2 81,8
Processed meat 10,3 21,5 11,2 109,3
0-20 18,0 50,0 32,0 177,8
60-80 11,0 21,0 10,0 90,9
Olive oil 10,0 12,0 2,0 20,0
80-100 10,0 12,0 2,0 20,0
Horticulture 4,3 7,7 3,5 81,1
0-20 7,9 12,8 4,9 62,1
20-40 12,3 18,2 5,8 47,3
40-60 1,7 2,7 1,0 56,1
60-80 2,2 4,3 2,0 91,1
80-100 2,6 5,3 2,7 102,9
Others products: total 9,0 15,2 6,2 68,8
A tentative of classification of Italian GI
By non-hierarchical methodology based on k-means five indices applied to 98 Designations were obtained (R2= 0.75): •Cluster 1) Ratio between the number of companies with certified product and the total companies registered with protection consortia or associations (in %); Coordination;
•Cluster 2) Ratio between the consumer price in the prevalent channel and the production price (in %); Market efficiency
•Cluster 3) Volume of certified product sold by direct sales channel (in %); Market channel;
•Cluster 4) Volume of certified product sold by traditional sales channel (in %); Market channel;
•Cluster 5) Volume of certified product sold by modern distribution sales channel (in %); Market channel.
A tentative of classification of Italian GI
1 High Value Chain
TOTAL CLUSTER 1Processed
meat Cheese
Fruit, vegetables and cereal
PDO PDO PDO PGI 13 3 2 2 6
2 Traditional retail
TOTAL CLUSTER 2Balsamic vinegar
Processed meat
Cheese Olive oilFruit, vegetables
and cerealSpices
PDO PDO PDO PDO PDO PGI PDO
32 2 6 10 5 2 6 1 3 Modern Distribution
TOTAL CLUSTER 3Others meat
products
Fresh meat
Processed meat Cheese Olive oilFruit, vegetables
and cerealBread
PDO PGI PDO PGI PDO PDO PGI PDO PGI PDO41 1 1 4 4 7 7 1 2 13 1
4 Direct sales
TOTAL CLUSTER 4 Cheese Olive oilFruit, vegetables
and cereal PDO PDO PDO PGI
11 2 5 1 3
5 Quality control and traditional retail
TOTAL CLUSTER 5Fruit, vegetables
and cereal
PDO 1 1
A tentative of classification of Italian GI
1 High Value Chain
TOTAL CLUSTER 1Processed
meat Cheese
Fruit, vegetables and cereal
PDO PDO PDO PGI 13 3 2 2 6
2 Traditional retail
TOTAL CLUSTER 2Balsamic vinegar
Processed meat
Cheese Olive oilFruit, vegetables
and cerealSpices
PDO PDO PDO PDO PDO PGI PDO
32 2 6 10 5 2 6 1 3 Modern Distribution
TOTAL CLUSTER 3Others meat
products
Fresh meat
Processed meat Cheese Olive oilFruit, vegetables
and cerealBread
PDO PGI PDO PGI PDO PDO PGI PDO PGI PDO41 1 1 4 4 7 7 1 2 13 1
4 Direct sales
TOTAL CLUSTER 4 Cheese Olive oilFruit, vegetables
and cereal PDO PDO PDO PGI
11 2 5 1 3
5 Quality control and traditional retail
TOTAL CLUSTER 5Fruit, vegetables
and cereal
PDO 1 1
C3 Bresaola della Valtellina (dried beef), Gorgonzola cheese, Grana Padano cheese, La Bella della Daunia (olives), Parmigiano Reggiano cheese, Pecorino Toscano cheese, Pomodoro di Pachino (tomatoes), Prosciutto di S. Daniele (ham), Riso Nano Vialone Veronese (rice), Salamini italiani alla cacciatora (mini salamis), Speck dell' Alto Adige (smoked ham), Uva da tavola di Canicattì (grapes),.
A tentative of classification of Italian GI
1 High Value Chain
TOTAL CLUSTER 1Processed
meat Cheese
Fruit, vegetables and cereal
PDO PDO PDO PGI 13 3 2 2 6
2 Traditional retail
TOTAL CLUSTER 2Balsamic vinegar
Processed meat
Cheese Olive oilFruit, vegetables
and cerealSpices
PDO PDO PDO PDO PDO PGI PDO
32 2 6 10 5 2 6 1 3 Modern Distribution
TOTAL CLUSTER 3Others meat
products
Fresh meat
Processed meat Cheese Olive oilFruit, vegetables
and cerealBread
PDO PGI PDO PGI PDO PDO PGI PDO PGI PDO41 1 1 4 4 7 7 1 2 13 1
4 Direct sales
TOTAL CLUSTER 4 Cheese Olive oilFruit, vegetables
and cereal PDO PDO PDO PGI
11 2 5 1 3
5 Quality control and traditional retail
TOTAL CLUSTER 5Fruit, vegetables
and cereal
PDO 1 1
C2 Aceto Balsamico Tradizionale di Modena (balsamic vinegar), Asiago (cheese), Brisighella (olive oil), Caciocavallo Silano (cheese), Mozzarella di Bufala Campana (cheese),
A tentative of classification of Italian GI
1 High Value Chain
TOTAL CLUSTER 1Processed
meat Cheese
Fruit, vegetables and cereal
PDO PDO PDO PGI 13 3 2 2 6
2 Traditional retail
TOTAL CLUSTER 2Balsamic vinegar
Processed meat
Cheese Olive oilFruit, vegetables
and cerealSpices
PDO PDO PDO PDO PDO PGI PDO
32 2 6 10 5 2 6 1 3 Modern Distribution
TOTAL CLUSTER 3Others meat
products
Fresh meat
Processed meat Cheese Olive oilFruit, vegetables
and cerealBread
PDO PGI PDO PGI PDO PDO PGI PDO PGI PDO41 1 1 4 4 7 7 1 2 13 1
4 Direct sales
TOTAL CLUSTER 4 Cheese Olive oilFruit, vegetables
and cereal PDO PDO PDO PGI
11 2 5 1 3
5 Quality control and traditional retail
TOTAL CLUSTER 5Fruit, vegetables
and cereal
PDO 1 1
C4 Alto Crotonese (olive oil), Canino (olive oil), Carciofo Romanesco del Lazio (artichokes), Collina di Brindisi (olive oil), Fagiolo di Lamon della Vallata Bellunese (beans), Formai de Mut dell' Alta Valle Brembana (cheese), Marrone di San Zeno (marron-chestnuts), Molise (olive oil), Murazzano (cheese), Scalogno di Romagna (shallots).
A tentative of classification of Italian GI
1 High Value Chain
TOTAL CLUSTER 1Processed
meat Cheese
Fruit, vegetables and cereal
PDO PDO PDO PGI 13 3 2 2 6
2 Traditional retail
TOTAL CLUSTER 2Balsamic vinegar
Processed meat
Cheese Olive oilFruit, vegetables
and cerealSpices
PDO PDO PDO PDO PDO PGI PDO
32 2 6 10 5 2 6 1 3 Modern Distribution
TOTAL CLUSTER 3Others meat
products
Fresh meat
Processed meat Cheese Olive oilFruit, vegetables
and cerealBread
PDO PGI PDO PGI PDO PDO PGI PDO PGI PDO41 1 1 4 4 7 7 1 2 13 1
4 Direct sales
TOTAL CLUSTER 4 Cheese Olive oilFruit, vegetables
and cereal PDO PDO PDO PGI
11 2 5 1 3
5 Quality control and traditional retail
TOTAL CLUSTER 5Fruit, vegetables
and cereal
PDO 1 1
C1. Fiore Sardo (cheese), Fungo di Borgotaro (mushrooms), Kiwi Latina, Limone Costa d'Amalfi (lemons), Prosciutto di Modena (ham), Prosciutto di Parma (ham), Prosciutto Toscano (ham).
C5 Mela Val di Non
A tentative of classification of Italian GI
1 High Value Chain
TOTAL CLUSTER 1Processed
meat Cheese
Fruit, vegetables and cereal
PDO PDO PDO PGI 13 3 2 2 6
2 Traditional retail
TOTAL CLUSTER 2Balsamic vinegar
Processed meat
Cheese Olive oilFruit, vegetables
and cerealSpices
PDO PDO PDO PDO PDO PGI PDO
32 2 6 10 5 2 6 1 3 Modern Distribution
TOTAL CLUSTER 3Others meat
products
Fresh meat
Processed meat Cheese Olive oilFruit, vegetables
and cerealBread
PDO PGI PDO PGI PDO PDO PGI PDO PGI PDO41 1 1 4 4 7 7 1 2 13 1
4 Direct sales
TOTAL CLUSTER 4 Cheese Olive oilFruit, vegetables
and cereal PDO PDO PDO PGI
11 2 5 1 3
5 Quality control and traditional retail
TOTAL CLUSTER 5Fruit, vegetables
and cereal
PDO 1 1
C3 Bresaola della Valtellina (dried beef), Gorgonzola cheese, Grana Padano cheese, La Bella della Daunia (olives), Parmigiano Reggiano cheese, Pecorino Toscano cheese, Pomodoro di Pachino (tomatoes), Prosciutto di S. Daniele (ham), Riso Nano Vialone Veronese (rice), Salamini italiani alla cacciatora (mini salamis), Speck dell' Alto Adige (smoked ham), Uva da tavola di Canicattì (grapes),.
C2 Aceto Balsamico Tradizionale di Modena (balsamic vinegar), Asiago (cheese), Brisighella (olive oil), Caciocavallo Silano (cheese), Mozzarella di Bufala Campana (cheese),
C1. Fiore Sardo (cheese), Fungo di Borgotaro (mushrooms), Kiwi Latina, Limone Costa d'Amalfi (lemons), Prosciutto di Modena (ham), Prosciutto di Parma (ham), Prosciutto Toscano (ham).
C4 Alto Crotonese (olive oil), Canino (olive oil), Carciofo Romanesco del Lazio (artichokes), Collina di Brindisi (olive oil), Fagiolo di Lamon della Vallata Bellunese (beans), Formai de Mut dell' Alta Valle Brembana (cheese), Marrone di San Zeno (marron-chestnuts), Molise (olive oil), Murazzano (cheese), Scalogno di Romagna (shallots).
C5 Mela Val di Non
Conclusion
• Do exist a rather varied picture of GI products, where designation of origin, as such, provides only partial information to consumers and is certainly not a guarantee of success;
• The distinction between PDO and PGI is not relevant in term of market efficiency, while is important product differentiation;
• PDO / PGI food chains need commercial strategy and coordination;
• Which organization should act in order to improve the market efficiency of GI producers on modern market?