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CBI MARKET SURVEY: THE CUT FLOWERS AND FOLIAGE MARKET IN ITALY CBI MARKET SURVEY THE CUT FLOWERS AND FOLIAGE MARKET IN ITALY Publication date: November 2007 Report summary This CBI market survey discusses, amongst others, the following highlights for the market for cut flowers and foliage in Italy: • Italy is the fourth largest market for cut flowers in the EU. Since 2002, consumption of cut flowers in Italy decreased significantly, amounting to € 1.7 million in 2006. As from 2006, however, the economy recovered and the outlook for the period 2006-2011 is slightly positive. Italy is the largest EU producer of flowers after The Netherlands, with production amounting to approximately € 850 million. Current developments are characterized by scale increases. • Italy is the fifth largest EU importer of cut flowers and foliage, accounting for 5% of total EU imports. Italian imports remained stable between 2002 and 2006, amounting to € 170 million / 23 thousand tonnes in 2006. The largest product groups are Rosa and Orchids. Italy has a traditional distribution system dominated by florists. • Developing countries account for a share of 15%, although imports from developing countries decreased by 4% annually between 2002 and 2006. The most important developing country suppliers are Thailand and Ecuador, with market shares of 7% and 3% respectively. Developing countries have a large share in imports of Orchids, prepared cut flowers, and foliage. Emerging developing countries are Ethiopia (imports increased by 149% annually between 2002 and 2006), and Turkey with an annual increase in Italian imports of 50%. This survey provides exporters of cut flowers and foliage with sector-specific market information related to gaining access to Italy. By focusing on a specific country, this survey provides additional information, complementary to the more general information and data provided in the CBI market survey ‘The market for cut flowers and foliage in the EU’, which covers the EU in general. That survey also contains an overview and explanation of the selected products dealt with, some general remarks on the statistics used as well as information on other available documents for this sector. It can be downloaded from http://www.cbi.eu/marketinfo. 1 Market description: consumption and production Consumption Total market size The total Italian expenditure on flowers amounted to € 1,619 million in 2006. This makes Italy the fourth largest consumption market within the EU. A comparable consumption market is France, where the expenditure amounted to € 1.9 million in 2006. Since 2002, consumption in Italy has decreased by an average of 5% per year. Life has become more expensive since the introduction of the euro. Purchasing power has significantly decreased. In 2002, consumer purchasing power was 8% higher than the average in the EU25. In 2006, however, it was equal to the average. As a result, per capita consumption of flowers decreased from € 35 in 2002 to € 28 in 2006. Since 2006, however, the economy has been recovering and the outlook for the period 2006- 2011 is slightly positive. The Flower Council of Holland predicts that total consumption will slowly pick up again and reach an estimated € 1,660 million in 2011. Purchasing power is also increasing slightly according to the National Institute for Statistics (ISTAT). Note that Eurostat, Source: CBI Market Information Database • URL: www.cbi.eu • Contact: [email protected] • www.cbi.eu/disclaimer Page 1 of 14 CBI MARKET SURVEY: THE CUT FLOWERS AND FOLIAGE MARKET IN ITALY in contrast, estimates a further decrease in relative consumer purchasing power. According to the EU statistical institute, consumer purchasing power in Italy will not follow the general increase in the EU economy as closely as that of other EU countries. Italian women associate flowers with beauty, happiness, scent, sunshine, light, freshness, nature and simplicity. Next to that, they offer company, decoration, give a certain elegance to the house and mark the end of the winter. Moreover, they demonstrate love and they are an expression of someone’s identity and creativity. Negative associations are mortality and dependence. In general, giving flowers is seen as a polite gesture and represents good manners. In 2005, the share of people purchasing flowers was 57%, according to the Flower Council of Holland. According to the Istituto di Servizi per il Mercato Agricolo Alimentare (ISMEA), the share of people purchasing flowers in 2006 was 39.4%. The average purchasing frequency was approximately 11.7 in 2005. Since 2000, market penetration has decreased by 13%. It appears that fewer people bought flowers after the introduction of the euro, which made flowers more expensive. Product groups In 2005, mono-bunches accounted for 36% of the number of flower sales. Mixed-bouquets accounted for 30%, compositions for 25% and single flowers for 9%. In 2001, the mixed- bouquets formed the largest category. The share of compositions increased by 5% since 2001. Traditionally, the assortment of cut flowers consumed in Italy was relatively limited. In the past, domestic production focused on only a relatively small assortment of products. As a result, consumers have become used to this limited assortment. Nowadays, Italian consumers more and more develop a taste for different varieties. The most frequently sold flowers are presented in Table 1.1. Particularly young women often prefer to buy less traditional and simpler flowers, which are considered to express spontaneity. Traditional flowers are often associated with formal gifts and have lost some of their emotional value. Table 1.1 Top 10 flowers sold in Italy, 2006, in % of flower purchasing consumers 2006 1. Rosa 41.8 2. Dendranthema 26.6 3. Mixed bouquet 24.0 4. Dianthus 16.2 5. Gerbera 15.2 6. Orchids 14.9 7. Lilium 14.1 8. Tulipa 11.8 9. Gladiolus 10.8 10. Mimosa 9.5 Source: ISMEA (2007) Dendranthema are mainly bought to put on graves on all Souls Day. Gladiolus is also often bought for graves. The most popular flower for wedding bouquets is Rosa, which is part of about 94% of the bouquets. Orchids are included in 25% of the bouquets, Freesia in 20%, Lilium in 11% and Zantedeschia (Calla) also in 11%. Dianthus has significantly decreased in popularity in the last 3 decades. Many consumers regard Dianthus as an old-fashioned flower. Market segmentation The choice of flowers is strongly dependent on the occasion for which flowers are bought. Different occasions require different flowers. In Italy, 47% of the flowers purchased is bought Source: CBI Market Information Database • URL: www.cbi.eu • Contact: [email protected] • www.cbi.eu/disclaimer Page 2 of 14 CBI MARKET SURVEY: THE CUT FLOWERS AND FOLIAGE MARKET IN ITALY as a gift within the family, 36% as a gift outside the family, and 20% for own use. Figure 1.1 presents the occasions for which Italian consumers purchase flowers to give them away. Figure 1.1 Occasions for purchasing flowers as gifts, 2005, share in % Wedding Thank you 3% 3% Funeral 3% Name day 5% No reason 8% Birthday 37% Visit 8% Jubilee 9% Cemetary 24% Source: Product Board for Horticulture (2007) Italians predominantly purchase flowers for birthdays (37%) and for visits to cemeteries (24%). Other categories are considerably smaller. It is also possible to categorize the occasions by special day. Valentine’s day, Women’s day, Mother’s day and religious (holi)days generate especially high flower sales in Italy. In the second half of the year, All Saint’s Day and Christmas are major reasons to purchase flowers. Also refer to Appendix E of the EU survey of cut flowers and foliage for a list of the public holidays. As an exporter of flowers, it is also important to know the composition of the population buying flowers. For example, on average, Italian men spend considerably more on flowers (€ 14.38) than women (€ 9.76). Flower purchases by men consist for a larger part of gifts than flower purchases by women. This results in a relatively high average expenditure, as they often buy more expensive flowers as gifts. Younger people also spend relatively more on flowers than older people. Younger people between 15 and 25 years old spend € 5.72 on average, while people of 65 and older spend € 4.28 on average. The explanation for this remarkable fact is that younger people more often purchase flowers as gifts, which are usually more expensive. The institutional market for flowers is considerable in Italy, although the share of companies (with more than 10 employees) buying flowers decreased from 75% in 1996 to 68% in 2003. Companies have also become more price-sensitive. However, the absolute number of purchasing companies increased, due to an increase in the total number of companies in Italy. Moreover, the average expenditure on flowers per company increased. 64% of Italian women purchase flowers and 58% of men. The Italian flower market can also be segmented into four different geographical regions, which are Northwest, Northeast, Central and South. The North western part increasingly spends more on flowers and was the region with the highest expenditure in 2005. The other regions are approximately the same. Source: CBI Market Information Database • URL: www.cbi.eu • Contact: [email protected] • www.cbi.eu/disclaimer Page 3 of 14 CBI MARKET SURVEY: THE CUT FLOWERS AND FOLIAGE MARKET IN ITALY Trends in consumption • Although consumption of flowers decreased drastically in recent years, Italians are now also expected to profit from the general upturn in the EU economy. • Particularly consumers in the Northern part of Italy are currently diversifying their demand to include less traditional flowers. Production Total production Unfortunately, no up-to-date statistics on the production value are available for Italy. However, production of cut flowers in Italy can be estimated to be between € 800 and € 900 million.

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