Italy might not be top of the list when it comes to sourcing in the UK, but this is one heavyweight producer that should not be ignored.
Emilia Romagna, Piedmont, Apulia and Trentino Alto Adige make up just some of the leading production areas that are dotted around Italy, where growers and suppliers produce a basket of fruit and vegetables for the home market and beyond. The distinctively shaped country is home to well-established produce players, many of which have produced and traded fruit for generations, making the most of the mild climate and fertile soils.
But there are a number of challenges facing Italian growers and exporters, not least those brought on by the economic downturn, which has hit trade.
Italian links with the UK are not what they used to be and insiders blame price pressure and high standards for them seeking to trade elsewhere.
Centro Servizi Ortofrutticoli (CSO) data shows that the UK receives just five to six per cent of exports from Italy and while volumes have remained steady in recent years, the value has been squeezed by 15 per cent from 2008 to 2009.
Figures for the first quarter of 2010 show that total fresh produce exports are in line with last year, with value up five per cent. Fruit sendings fell by 20 per cent, while vegetable exports got a 36 per cent boost. Citrus levels returned to normal, following a dip in 2009.
But when it comes to prices, the average for the first quarter of 2010 saw a reduction in the price of fruit and citrus, by seven and three per cent respectively, while vegetable prices nudged up by five per cent.
This has not stopped some of the more forward-thinking companies from aiming for the UK, by targeting their offer and looking to grow sendings across the Channel.
Rago Group is a case in point, having doubled exports to the UK over the last five years so that sendings now reach 40 per cent of its baby leaf output. The Battipaglia-based family firm is the largest grower of organic baby leaf in Italy and grows conventional lines, including rocket, cos, battavia and spinach, as well as lamb’s lettuce and mizuna. The 140-hectare site has increased its production by 25 per cent this year, on the back of new tunnels.
Michael Earley, export manager at Rago Group, has worked hard to build up the business in the last five years and he sees a solid future for the relationship between Italy and the UK as the country is a “future food source”.
However, he warns that Italian growers and suppliers will be looking to see that returns from the UK increase. “Prices have fallen greatly,” he says. “We are selling now at the same price that we were selling at two to three years ago because of pressure from the supermarkets. Suppliers are feeling the pressure and it is passed down to us. The exchange rate plays a part, but it’s mostly pressure from the major retailers that is causing the problem.
“However, we will do whatever our customers want,” he insists. “I have just been in the UK for the last couple of days and we try to keep in touch with the changing demands of the market. This year, for example, we are expanding our herb production and our multileaf products because we can see the market is there. We have put in new tunnels to facilitate the production of teen spinach, which is very popular right now.
“We are constantly trialling new products on 5ha that we have earmarked for this. We are always looking to see how these will play out in the UK and we know that because we have 100 per cent of our production under tunnels, we can guarantee programmes. This season has been very good and we are positive.”
In fact, the changing market and production conditions have opened up opportunities for Italian supply in an increasingly competitive scene. The run of wet summers in the UK has helped boost demand for Italian product, given that exporters have been able to fill gaps and build new relationships with the UK in that way.
“We are not short of water, we don’t get the same wind damage that you can in other countries and we don’t get mould or mildew,” says Earley. “At the same time, Italian technology seems to be ahead of the curve on farming equipment and as a company, we are very involved in developing the right machinery and equipment.
“We moved towards the UK market because we believe that they are bigger on quality and technology, which are not always as highly valued by other markets. We are a high-tech company and so we made the decision to go for a big push in the UK.”
Italians predominantly feed their own, but this has not stopped international firms from recognising the value of investing in the country. At the same time, Italian growers and suppliers are eyeing up eastern markets as they look for better returns without the commitment and the high standards asked for from the UK.
“The UK used to be willing to pay more but now we are going back to other markets,” says Earley. “We are looking for people who will pay a fair price for the product.
“It is important for UK buyers to come here to see growers, look around and see the production and what we have in place.”
Michelangelo Rivoira, from Piedmont-based firm Rivoira, admits that sendings from the region to the UK are decreasing and that attention is turning to eastern Europe and the Middle East.
But for now, he says, fingers are crossed for an improvement on last season, for the sake of the Italian sector as a whole. The firm sends peaches, nectarines, apples and kiwifruit to the UK.
“We started our season for peaches and nectarines well, with a good market, but it ended badly so the overall result was not as good as it could have been,” Rivoira explains. “This year we had favourable weather conditions for the production of nectarines, peaches and apples. But for kiwifruit, we are expecting around a 25 per cent drop in volumes mainly due to winter frosts.
“Export volumes from our region to the UK are decreasing year on year. Sendings of apples and kiwifruit in particular have fallen drastically but fortunately, exports to eastern Europe and the Middle East have increased.”
Back in the UK, Italy has a mixed perception as a supplier of top-notch quality produce but as a source that can be difficult to get to grips with.
Patrick Spoors, sales manager at The Greenery on Gateshead wholesale market, maintains that Italy has a “good reputation” on well-established lines, but he claims that “a lot of the time, Italian product comes in underweight”, especially on grapes.
“The main benefit is that Italian product is available when others aren’t,” says Spoors. “But it is not a sample that sells ahead of other samples if there are more than two or three sources available.”
At the same time, the UK retail sector has seen volumes fall in recent years but buyers have not turned their backs on the Italian offer completely.
The Co-operative Food brings in Italian peaches, nectarines, plums, cherries and apricots from June to October, but volumes have fallen dramatically in recent years, with imports of nectarines, for example, slipping from 1.4 million kilos in 2008 to 950,000kg last year and 600,000kg until 18 September this year. Plums have seen an even greater fall, from 280,000kg last year to 8,200kg to 18 September this year, but this drop has been attributed to lower demand for stonefruit in the UK.
Jim Atkinson, produce buyer for fruit at The Co-operative, insists that the Italians are “underrated” in terms of their quality and offer. “They have a volume stigma attached to them - rather than the ‘boutique’ image that France has been able to cultivate,” he explains. “However, I feel that this is not really correct; if you think of their clothes and car industries, there is real attention to detail and they apply the same attention to detail to the fruit export business.
“We have found Italian produce to be very consistent in terms of quality and availability. We haven’t got a direct link with growers and suppliers as we use a UK service provider, but we regularly audit growers and have built up good relationships with Brero, Petteni & Bassi, Catenaro, Cepal and Bragantini.
“The volumes that they produce, their loyalty and professional approach to doing business - the Italians seem to understand the UK supermarket business very well”
There is a clear way forward for the Italian sector, which has its work cut out to improve its reputation and build links with new and existing markets. The UK is still an important market but if returns don’t improve, the number of firms looking to support the UK will inevitably fall as they consider new options.
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