Italy’s small food-makers - Export or die? Is Small Beautiful?

(The Economist, Castel del Piano, 2 January 2015) The smaller, often family-owned manufacturers that are the backbone of the Italian economy have been hit especially hard: between 2008 and the first half of 2014, a fifth of them went bankrupt or into administration, or were voluntarily wound up. One of the main reasons so many have gone to the wall is that they are too focused on the home market. Italian businesses of all sizes are much less likely to have export customers than German or Spanish ones, according to a recent study by SACE, Italy’s official export-credit agency. Italian cuisine is popular all over the world, but Italy’s countless small food producers get only a morsel of this huge global market: exports account for a smaller share of the Italian food industry’s output than in either France or Germany... Businesses are looking abroad for customers, and for saviours. Italy does not have a globalised food retailer on the same scale as other European countries and its domestic market is fragmented: even those chains with national coverage often stock different products in different regions, chosen by different local purchasing managers... Deep discounters like Aldi and Lidl, which offer only a restricted range of products, most of them under their own labels, have been taking market share from conventional grocers which sell a broader range, including many products bearing their manufacturers’ brands... Over four-fifths of Italian food manufacturers are family-run and with annual revenues of less than €10m. With their home market still struggling, a rich foreign backer may be just what they need.