Lower Volumes, Higher Values

Lower volumes and higher values mark the current Italian market for panettone, the leavened cake associated with festive seasons.
Last Christmas volume sales were down by some five percent from 104,500 tonnes to 98,800 tonnes according to AIDI, the Italian confectionery association.

Their value however was 3.7 per cent higher from €559.9million to €580.5m.
Faced with rising costs of raw materials, energy and fuel, most of the major players such as Bauli, Motta, Balocco and Bistefani have cut their TV and media advertising spend and reduced their promotional activities.
Total spending by the industry on publicity has slumped by 30% from €45.3m to €31m according to estimates by marketing managers of the companies involved. Tight budgets have favoured the less costly below-the-line activities involving non-media communication such as direct mail, point-of-sale presentations and vouchers offering customers discounts on their next purchase. There remain a few who still use advertising.
These include Melegatti which has annual sales of €60m; it has raised its advertising spend from €2.6m to €3m and Maina with the same annual sales and which has kept its budget at €7.5m.
The problem facing the industry is to settle on a price that will not be too high for consumers but which can give the multiples, who sell around 80% of total output, and the producers a reasonable profit margin and this has resulted in a 13% increase per kilogram.
The coming Yuletide will see a variety of new versions of this traditional cake. Balocco is aiming at the kids’ market with wrappings featuring Disney’s Dreamworks characters and miniature versions with Tigger and Winnie the Pooh. Granmilano, producer of the up-market Tre Marie (Three Marys), is offering a sky-blue, hand-wrapped package topped with a bow (also hand-tied) illustrated with Christmas icons and a small greetings card attached. Nestlé, which dominates the market with annual sales of €1.5billion, has produced a model of the famous Roman arena of Verona with a milk-chocolate covering scattered with white-chocolate drops and two horizontal layers inside: one of cream and the other of cherries.