Italian dairy production is largely in the hands of small, family-owned companies with few animals and limited production capacity. Although this can limit growth, given the lack of critical mass, the increasing importance of large cooperatives acts as a guarantee of quality and offers direct access to raw materials.
Parmigiano Reggiano and Grana Padano remain at the top of consumer preferences as holiday gifts, with product ageing determining the price and importance of the gift. Despite this success, however, hard cheese showed declines in both current value and volume terms in 2017.
Like all other types of cheese, unpackaged hard cheese continued to decline in 2018; nonetheless, there were some differences amongst product types. Whilst provola, Scamorza, Emmenthal/Maasdam, Asiago, Montasio, fontina and other types of cheeses declined, pecorino saw growth in both current value and volume terms.
BiG from Groupe Lactalis operates in cheese with several products and brands, both in packaged and unpackaged cheese, as well as hard and soft cheese. In recent years, the company was able to maintain its leading position; achieved largely with strong promotional activity and large investment in new product developments.
The performance of Mondelez Italia Services was badly affected in recent years by the strong promotional activity implemented by all large grocery retailers. Consequently, whilst some brands, such as Philadelphia, increased their sales in volume terms, value growth remained negative.
The Italian cheese industry has always been strongly bound to traditional products, given its long heritage and the presence of small companies. To boost its growth, Parmareggio was the first to increase the competition by launching new snack references, aimed at expanding cheese consumption outside of proper meals.
Italian adults have always been critical of the lack of digestibility of dairy milk, thus often limiting consumption to macchiato and cappuccino in the foodservice channel. The recent growth of non-dairy products led to a further decline in dairy milk consumption, especially in the case of shelf stable milk.
Fresh milk continued to decline both in current value and volume terms in 2018. Together with traditional fresh milk, in recent years some new references of ESL (Extended Shelf Life) milk were added by many brands and retailers.
Almond milk is not a new product in Italy, as it has always been manufactured in the southern part of the country, given the large production of almonds in the area. A fresh drink in the summertime, its distribution has always remained time-limited, but also regional, given that its presence is less prominent in the north.
In 2017 and 2018, Parmalat faced a decline in its profitability, mainly due to declining sales of value-added products that have higher margins. In spite of its declining share, the company still maintained its leading position.
Within Granarolo’s sales, the share of milk is 35%; however, this share is expected to decline in the coming years, considering the increasing importance of other products, both dairy and non-dairy. According to the company’s strategy, exports will soon account for 40%, and the recent acquisition of Midland in the UK has made this target more feasible.
In 2017, Newlat changed its name to Newlat Food, stressing the increased company focus on becoming a key player in the food industry in Italy. The company’s new strategic plan entails the relaunch of brands such as Giglio, Polenghi and Matese.
In recent years, Italian consumers embraced health and wellness products such as organic or lactose-free products, considering them the cure for all ills. In yoghurt, traditional products suffered from the growth of novelty items, and brands had to implement strong promotional activity to drive sales.
Greek yoghurt was the latest innovation within yoghurt and sour milk products. Plain and flavoured, Italians appreciate the fact that it is tasty, and creamier than regular yoghurt.
In Italy, a large number of drinking yoghurt brands target people who want to maintain healthy gut flora, and consume such products daily. Targeting these “heavy users”, some brands have been implementing strong promotional activity, ranging from price discounts to offering free bottles in regular multipacks.
For the first time in 15 years, Danone decided to extend the portfolio for its drinking yoghurt, with the launch in early 2017 of drinking Activia reference Activia Da Bere, a 195g bottle at EUR1.25.
Granarolo’s sales of traditional yoghurt continue to suffer, given that consumers increasingly appreciate health and wellness products. Sales of Greek yoghurt, by contrast, were instrumental in maintaining its sales in recent years, together with specific activities such as the co-marketing between Yomo and Melinda apples.
In December 2017, Mila launched Mila Skyr, a new product made according to a special yoghurt recipe from Iceland. The company has always invested in new product developments; however, innovation in the past was limited to the introduction of new and unexpected flavours, more recently combinations of exotic fruits.
Chilled dairy desserts do not fall within the health and wellness trend, which was strong amongst Italian consumers in recent years. Combined with the recession and lower disposable incomes, sales of such desserts suffered, with growth strongly affected by promotional activity.
German discounters continue to grow their presence in terms of outlets and sales in Italy, and besides Lidl and Penny Market, which have a long and established presence, at the beginning of 2018 Aldi opened its first store in the country. Whilst coffee whiteners are not part of Italian food tradition, German discounters prominently display them on shelves, thus driving up product visibility and sales.
Thanks to the ongoing new product development from all the major players in cream, this category was able to recover in 2018, at least in current value terms. In fact, thanks to the launch of new health and wellness products, such as lactose-free or organic references, cream was less exposed to strong promotional activity, at least for less traditional products.
In April 2018, at the beginning of the spring/summer season, Ferrero introduced an addition to its Kinder Fetta chilled snacks, namely Kinder Fetta allo Yoghurt. The product is made with yoghurt instead of milk, thus having a higher content of live active culture.
Ciobar is one of Cameo’s best-selling products – it is well-known amongst Italian consumers for its powder drinking chocolate. Towards the end of 2017, Cameo launched an extension of this product line, which included three chilled desserts under the brand, more specifically three spoonable creams: Classic and Crema Variegata (with whipped cream) in 2x100g containers, as well as Ciobar Choco Shot, which comes in a 4x50g multipack.
Like all other manufacturers in the dairy industry, Trevalli Cooperlat had to face the increasing cost of milk. Nonetheless, its sales of cream were positive, and in 2017 the company launched new free-from references, to complement the rest of its free-from line.
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This industry report originates from Passport, our Packaged Food market research database.