Italy's agrifood powerhouse shifting market dynamics and retail competition
January 20, 2025
5 MIN READ
This article is featured in the Magazine “Private Label and National Brands: Decoding Food Retail”, created in collaboration with Global Retail Brands. You can find more insights about the Magazine and additional articles here.
Industrial tomatoes represent one of the most significant sectors in the Italian and European agri-food industry, both in terms of production volume and economic impact.
The Global Market at a Glance
In an increasingly competitive retail market, tomato-based products (such as purées, concentrates, sauces, and ready-to-use tomato preparations) are at the heart of a fierce battle between branded goods and private labels, with major implications for growers, processors, and distributors.
Global industrial tomato production is highly concentrated. In 2024, around 40 million tons were produced, with the top three producers being China, U.S., and Italy. The top ten producing countries accounted for 80% of global output, while the top 50 processing companies were responsible for two-thirds of the total.
Italy maintained its position as the world’s third-largest producer of industrial tomatoes, with 5.3 million tons harvested in 2024, a slight decrease of 2.5% compared to 2023. The harvest season was impacted by adverse weather conditions: droughts in the South and excessive rainfall in the North led to frequent disruptions in processing plants and extended the season into November.
Despite an 11% increase in cultivated areas nationwide, production fell short of initial estimates, especially in Northern Italy. Nonetheless, the industrial tomato supply chain posted a record trade surplus for Italy. According to ANICAV, in 2023 Italian exports of tomato-based products rose sharply by 16% compared to the previous year, reaching a total value of approximately €3 billion. In 2024, this trend continued, growing by 4.2% and reaching €3.39 billion. Tomato derivatives remain among the top-performing fruit and vegetable products, both in export markets and domestic sales.
The competition between brands and private labels in the tomato-based product segment reflects the challenges and opportunities of a constantly evolving supply chain, where quality, sustainability, and innovation will be key to future success. Historically, the battle between brands and private labels has played out on many levels beyond simple price comparisons.
It’s a contest that involves perceived value, brand identity, sustainability, traceability, and increasingly, organic production.
Different Paths to Value
Branded products have traditionally built their value on:
• Consistent and recognizable quality, with strict standards and careful raw material selection.
• A regional storytelling approach, such as highlighting origin (“100% Italian tomatoes,” “grown in Emilia-Romagna,” etc.).
• Product innovation, such as new formats (tubes, resealable cartons), premium options (e.g. “rustic purée”), or environmentally friendly packaging.
• Strong investment in marketing and brand equity, allowing for higher average price positioning.
The added value offered by brands is not just perceived, it’s measurable. It typically results in higher margins for producers and processors, greater product diversification, and easier access to international markets thanks to brand recognition.
Brands are also often the first to experiment with trends such as organic tomatoes, certified environmental impact, well-known tomato varieties, or yellow tomato derivatives.
On the other hand, private labels, now more sophisticated and often managed with brand-like strategies, have reshaped their image from “second choice” to “smart choice.” Large retail groups have heavily invested in:
• Eye-catching packaging, often resembling that of leading brands.
• Supply chain certifications and 100% Italian production.
• Organic products under their own brand, which are growing strongly in the retail segment.
These are all offered at highly competitive prices, although such downward price pressure often affects the margins of primary producers and processors.A particularly notable trend is the rise of organic private label products, which consumers often perceive as both “ethical” and “affordable.”
This shift has led many “conscious premium” shoppers to opt for supermarket offerings, eating into the market share of long-established brands.
Adding Value Through Ethics and Transparency
In recent years, there has been a significant change in the behavior of European organic consumers. More are shopping in conventional supermarkets, often discounters, abandoning specialty stores.
In this context, those looking to escape the price war must add value to their offerings by focusing on sustainability. As a result, initiatives that certify the ethical nature of supply chains – ensuring transparency, social responsibility, fair working conditions, sustainable farming practices, and fair compensation for farmers – are gaining increasing importance.
Fair remuneration is essential for maintaining a high-quality and sustainable supply chain, a farmers must receive compensation that reflects the real costs and effort involved. These factors are becoming essential prerequisites for access to demanding European markets like Germany and the Nordic countries, where both consumers and regulations require high standards of sustainability and social responsibility.
In conclusion, while the industrial tomato supply chain remains a cornerstone of Italy’s “traditional” economy, it is rapidly evolving to meet new market demands: not only through industrial and technological investments but also, and above all, through investments in sustainability, innovation, and transparency to secure its future within the European agri-food landscape.
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