Market Research Re Herbs EN

Co-funded by the European Union (ERDF)
and by National Funds of Greece & Italy
Re Herb Recording, documentation and distribution of the aromatic and therapeutic herbs, plants and products ASPECTS OF THE MARKET The market for eco-­‐friendly Bio Aromatic and Medicinal Herbs 1
Table of contents 1. Analysis of the sector ...................................................................................... 5 2. Mapping the external environment ............................................................... 30 2.1 PEST Analysis for the Italian Market ................................................................ 30 2.2 PEST Analysis for the Greek Market ................................................................ 35 3. Mapping the internal environment ............................................................... 55 4. SWOT Analysis For Italian and Greek Markets ............................................. 134 5. USED Analysis ............................................................................................. 150 2
Table of Tables
Table 1. Aromatic and Therapeutic herbs and plants in the Greek Market .............. 8 Table 2. Aromatic and Therapeutic herbs and plants in the Greek Market .............. 8 Table 3. Cultivation areas and production of aromatic and therapeutic herbs and plants in Greece ...................................................................................................... 9 Table 4. Average prices for various aromatic herbs. ................................................ 9 Table 5. Aromatic and therapeutic herbs, plants and products exports 2010-­‐2012.
............................................................................................................................. 12 Table 6. Aromatic and therapeutic herbs, plants and products imports 2010-­‐2012 13 Table 7 -­‐ List of species and cultivated areas in Italy by companies associated with FIPPO (year 2012) ................................................................................................. 15 Table 8 of the main species grown and cultivated in Italy ordered by usage rate (Kg), value (€) and average unit value (kg / €) ....................................................... 16 Table 9-­‐ Areas planted and production in the world (2010) ................................... 17 Table 10-­‐ Ranking of the selected items, based on the area cultivated .................. 19 Table 11-­‐ Dynamics of acreage, production and yield (three-­‐year averages) ......... 19 Table 12.Synoptic view of the evolutionary trajectories of items considered ........ 20 Table 13. Main producer countries of anise, star anise, fennel and coriander (2010)
............................................................................................................................. 21 Table 14. Main producer countries of locust (2010) .............................................. 22 Table 15. Main producer countries of chili pepper and dry (2010) ......................... 22 Table 16.Main producer countries of cinnamon (2010) ........................................ 23 Table 17. Main producer countries of other citrus fruits (2010) ............................ 23 Table 18. Main producer countries of cloves (2010) .............................................. 24 Table 19. Aromatic plants, medicinal and seasoning ............................................. 25 Table 20. companies engaged in retail trade ........................................................ 30 Table 21.PEST analysis main factors for the Greek Market .................................... 39 Table 22-­‐ Imports of medicinal plants and their derivatives by region ................... 46 Table 23-­‐ Exports of medicinal plants and their derivatives by region ................... 46 Table 24-­‐ Evolution of the companies of the surfaces ........................................... 71 Table 25-­‐ Evolution of the companies and the surface area used for classes ......... 72 Table 26-­‐ Evolution of farms and areas by Region ................................................. 74 Table 27-­‐ Percentage of individual regions of the national total ............................ 76 Table 28-­‐ Location Quotients ................................................................................ 77 Table 29-­‐ Value of production and costs specific to certain industrial plants open field (2010) ........................................................................................................... 97 Table 30-­‐ Wholesale trade and commission trade ................................................. 99 Table 31-­‐ companies engaged in retail trade ....................................................... 100 Table 32-­‐ Evolution of farms and areas by Region ............................................... 117 Table 33. organic businesses that operate in the field of aromatic plants, medicinal and seasoning ..................................................................................................... 120 Table 34. Companies producing PAMC by region and level of specialization: contingencies calculated based on the area invested in PAMC ............................ 123 3
Table of Figures Figure 1-­‐ Evolution of the area planted (2000 = 100) ............................................. 21 Figure 2: Factors that affect of aromatic and therapeutic herbs, plants and products production. ........................................................................................................... 39 Figure 3-­‐ Breakdown of imports of medicinal plants and their derivatives (% by value, year 2011) .................................................................................................. 43 Figure 4-­‐ Composition of exports of medicinal plants and their derivatives (% by value, year 2011) .................................................................................................. 44 Figure 5-­‐ Evolution of foreign trade of the aggregate medicinal plants and their derivatives (in 1000 kg) ......................................................................................... 45 Figure 6-­‐ Evolution of foreign trade of the aggregate medicinal plants and their derivatives (in 1000 Euro) ..................................................................................... 45 Figure 7-­‐DEMAND OF AROMATIC PLANTS (%) ....................................................... 62 Figure 8-­‐Composition of the Market Welfare ........................................................ 63 Figure 9-­‐Composition of the cosmetics market ..................................................... 64 Figure 10-­‐ The consumption of whole foods .......................................................... 65 Figure 11-­‐Consumption of dietary supplements ................................................... 66 Figure 12-­‐Consumption of herbal products .......................................................... 66 Figure 13-­‐ Evolution of the companies of the surfaces .......................................... 71 Figure 14-­‐ Variations of companies and surface area used for classes ................... 72 Figure 15-­‐ Relative Frequency of the combined companies of the surfaces (Lorenz Curve), 2000 and 2010. ......................................................................................... 73 Figure 16-­‐ Variations of companies and surfaces (2010/2000) ............................... 75 Figure 17-­‐ Dynamics of surface organic herbs, medicinal and seasoning in comparison to the total organic area .................................................................... 92 Figure 18-­‐How old is the company? .................................................................... 104 Figure 19-­‐ the legal form of the outlets ............................................................... 112 Figure 20-­‐the size of the outlets in Italy .............................................................. 112 Figure 21-­‐the size of the outlets in Puglia ............................................................ 113 Figure 22-­‐Customers want the branded product? .............................................. 114 Figure 23-­‐ Variations of companies and surfaces (2010/2000) ............................. 118 Figure 24-­‐ Relationship between variation and change in the surface of the companies .......................................................................................................... 119 Figure 25-­‐Indicator of regional specialization ...................................................... 122 Figure 26-­‐ Companies PAMC: education of the conductor ................................... 124 Figure 27-­‐The size of the points of sale in Puglia ................................................. 125 4
1.
Analysis of the sector Introduction Definition of " plants" and their importance to agriculture, nutrition, economics, health The term "medicinal herbs " comes from a cultural and historical tradition of our country, as enshrined in legislation dating back to 1931 -­‐ still in force -­‐ which refers to "workshop or opificina ", meaning " pharmaceutical laboratory " where the plants were subjected the various processes (drying, crushing, maceration, distillation, extraction, etc.), so as to make them usable for different purposes. Therefore hence the pairing "medicinal herbs» to refer to those plants that can be processed in a laboratory (Treccani -­‐ Vocabulary of the Italian Language). For customary and for greater simplicity, it was decided to maintain the use of this term, with which from an agronomic point of view is identified a number of plant species very heterogeneous, which in turn includes, on the basis of the main destinations of use, medicinal plants, aromatic and perfume (essence), the latter is the definition that is encountered in official statistics and terminology in use in other countries. Moreover as required by the Law 99/31 governing the sector, the medicinal plants are able to provide "drugs" that can in turn be used for direct consumption or for further processing for the extraction of active ingredients, however, with biological activity. That is, for example, sage, rosemary, digitalis, curare and chamomile are herbs. What is going to search within a medicinal plant are the different classes of active ingredients, i.e. biologically active substances that belong to different chemical classes : alkaloids, glycosides, gums, mucilage, bitter principles, tannins, organic acids, enzymes, vitamins, resins, balsams, gum-­‐resins and essential oils . The primary function of the active ingredients within the economy of the plant has not yet been fully elucidated, but they are mostly secondary metabolites, apparently not essential to the very survival of the plant, but often useful for pollination or protection from harmful insects. Additional definitions: the " medicinal plant " is part of the larger category of plants " herbs " and, as defined by the WHO, is a plant organism that contains, in one of its organs, substances that can be used in therapy, or which are precursors of hemi-­‐synthesis of pharmaceutical species 2 . [WHO (1977). (Resolution -­‐Promotion and Development of Training and Research in Traditional Medicine. WHO document No: 30-­‐49]. In a more specific sense, according to the Italian Official Pharmacopoeia and European Pharmacopoeia, this expression generally refers to whole plants, fragmented or cut, plant parts, algae, fungi, lichen in an unprocessed state, usually in dried form, but sometimes fresh . The main products include: plants (dried in coarse fragments, e.g. crushed. Herbal tea or second cut filter, powder), juice, gum, resin, extracts (liquid, soft, dry), lyophilized, infusions, decoctions, macerated, glycerin macerated, tinctures, essential oils. These products are the result of a series of steps and processes. Regarding the primary phases occurs in particular: growing and harvesting, washing, and drying (natural and "artificial" ). The other processes considered are: distillation, cutting and selection of dried herbs (also called drugs), the adjustment of essential oils, extraction (trade and industry), and maceration, concentration, drying the 5
extract/lyophilization, analysis and evaluation of the extracts obtained content of active ingredients. As regards the primary phases, the technologies are typically the result of adaptations of techniques present in other compartments (e.g. vegetables, food industries base), while as regards the subsequent stages technologies are typically quite advanced, and arise from specific investments of the companies involved often in collaboration with specialist suppliers. The interplay between primary phases (and related intermediate products), the phases «agribusiness» and phases pertaining to other industries involved (food, pharmaceutical, cosmetic, textile, leather, e.t.c.) οutlines a system of interactions between agricultural productions and uses its derivatives very complex in which medicinal plants play a very important role. From an agricultural point of view the medicinal plants are a broad category of botanical species, it is not possible to include in the classical agronomic categories (grasses, legumes, trees, wood, vegetable, e.t.c.). With respect to employment, there is a multiplicity of destinations; medicinal plants can be used in or as foods and beverages, dietary supplements, cosmetics, pharmaceuticals, feed and veterinary products, products for tanning and dyeing industry, agricultural products and house. The transformation of medicinal plants has its roots in the Italian cultural tradition, though for centuries the supply has been dominated by wild harvest, while the agricultural cultivation is a relatively recent and still, from an economic standpoint, this is a sector niche in agriculture. However, today you can see a greater focus on these agricultural products, both by enterprises and public decision-­‐makers, especially at the local level. In recent years, the scenario of agriculture has greatly changed as a result of changes in the Common Agricultural Policy and, in particular, the decoupling of payments directly, which opened space for the cultivation of agricultural products minors, but in some cases very profitable and market opportunities more dynamic. In addition, the elimination of safety nets and public intervention support prices has increased the need for companies to diversify production to reduce the risk of income, and this process is also supported by the Rural Development Policy of the European Union. Finally, the field of medicinal plants has received a major boost in the past decade of development, as a result of increased demand for products related to the sphere of health and well-­‐being of consumers. This trend of consumption is now a confirmed trend and not a fad. In the food sector, are considered with increasing interest in products that promise specific features, and preventive curative4. More generally, consumer interest for all those products that fall within the scope of the "global welfare" has grown in recent years, giving impetus to the market of supplements, foods containing added, cosmetics, herbals, e.t.c., a interest which, according to the market analysis, persists despite the continuing economic crisis that began in 2009. Below and in the following paragraphs present the key definitions, terms and expressions commonly used and cited in the study: MEDICINAL PLANT ( DRUGS ) : According to the World Health Organization, the expression medicinal plants includes any plant that contains, in an organ, or multiple 6
organs, substances that can be used for therapeutic purposes or which are precursors of hemi chemo -­‐pharmaceutical compounds. In a more specific sense, and according to the Italian Official Pharmacopoeia and European Pharmacopoeia, this expression generally refers to whole plants, fragmented or cut, plant parts, algae, fungi, lichen in an unprocessed state, usually in dried form, but sometimes fresh. They are also considered plant drugs some exudates that have not been subjected to a specific treatment. Drugs are precisely defined by the botanical scientific name according to the binomial system (genus, species, variety and author). AROMATIC PLANT AND BOUQUET: with these terms you identify the plants rich in essential oils, aromatic substances containing pleasing to the taste, or other substances or odoriferous molecules with sensory activity, which can be used in the preparation of flavorings and fragrances. The list of medicinal species The list of medicinal plants grown in Italy was carried out with the collaboration of the Italian Federation of Manufacturers Medicinal Plants (FIPPO) of Assoerbe (Italian association representing the growers, pickers, Transformers, Importers, Exporters, Wholesalers and Representatives of Foreign Case Medicinal Plants, Aromatic, Spice, Vegetable Extracts, Essential Oils and their derivatives) and SISTE (Italian Society of applied Sciences with medicinal herbs and health products). With the same association, has been made to the census of medicinal plants of main interest for the domestic market, even foreign origin, distinct habitat-­‐based, production area, the main uses and parts of the plant used. The database was created from the list of substances and herbal preparations allowed in dietary supplements, according to the DM July 9, 2012 (OJ 21-­‐7-­‐2012). The list was then updated by adding the plants also intended for other uses. Subsequently, the list was compiled based on data collected within the associations and privileged sources that operate in the sector. The data production and prices have been estimated based on actual sales and exchanges between the two sides of the chain. The complete list contains information on 296 species from different countries of the world that are used as medicinal plants in Italy. For each species the following information: botanical name, common name (in Italian), habitat, production area, indicate whether the species is cultivated or if it is collected in kind (spontaneous), the main applications and parts of the plant used. Regarding discrimination between those cultivated and spontaneous ones, a total of 296 species surveyed, 160 species are cultivated (54%), 73 species are spontaneous (25%) and the remaining 63 species are both cultivated and harvested in nature. With reference to Italy, among the 296 species surveyed a total of 142, corresponding to 48% of the total, are grown or cultivated in our country. 7
Aromatic and Therapeutic herbs and plants in the Greek Market Table 1. Aromatic and Therapeutic herbs and plants in the Greek Market 2000 2010* 2011* Percentage Change Value of production (current 12,041 14,508 ΜΔ +20,5% prices, million €) Value of Import (million €) 9,0(ε) Value of exports (million €) 5,0(ε) Production (tn) 1.512 2.045 4.716 +214,4% Imports (tn) 5.000(ε) Exports (tn) 2.500(ε) Consumption (tn) 4.545 Autarky % +45 Trade balance (million. €) -­‐4,0(ε) *We include saffron and mastic products. Source: Ministry of Rural Development and Food Papastylianou (2013), *(Temporal data) Table 2. Aromatic and Therapeutic herbs and plants in the Greek Market 2007 2008 2009 2010* 2011* 2012 Number of leasing** 1.750 1.330 Total area (acres) 29.175 36.182 27.109 40.519 51.232 ΜΔ Total Production (tn) 1.060 1.103 1.100 2.045 4.716 ΜΔ *Temporal data, non-­‐available. Source: Ministry of Rural Development and Food-­‐EUROSTAT ** We don’t include saffron production (almost. 1.000) and mastic (almost. 3.000). Major products of aromatic and medicinal plants in Greece In Greece the major aromatic and medicinal plants (cultivated or indigenous) are: Coriander, Saffron, Cumin, Capers, Fennel, Hops, Laurel, Lavender, Chamomile, Melissa, Peppermint, Spearmint, Basil, Dittany, Rosemary, Oregano, Anise, Mastic, Sage, Mountain Tea, Wild Thyme. They are cultivated and/or are collected to have them in a fresh or a dry form for the production of essential oils and dry drug. Their uses range from direct use as beverages and as condiments or seasonings to the food industry. Their connection with the local and national distillery for the production of the famous ouzo and rake with anise is very important. Having data for 2011 from the total cultivation of the aromatic and therapeutic herbs and plants, we can quote that the significant species concerns: mastic (25.130 acres), oregano (14.248 acres), anise (3.092 acres), saffron (2.000 acres), peppermint (1.127 acres), fennel (1.001 acres), mountain tea (951 acres), sage (717 acres), Hippophaes (622 acres), rosemary (540 acres), chamomile (399 acres), lavender (325 acres), melissa (274 acres), diktamos (211 acres), coriander (210 acres), and finally aloe (152 acres). Other species also cultivated are the marjoram (31 acres), basil (35 acres), spearmint (26 acres), thyme (7 acres), aronia (4 acres) and labdanum. From the abovementioned areas only the 11% were irrigated 8
(5.017 acres). Comparing with 2010 almost all the cultivations related to aromatic and therapeutic herbs and plants appear to have a significant increase. More specifically we observe that, anise increased by 86%, oregano by 39%, fennel by 16.583%, lavender by1.060%, basilica by 1.650%, peppermint by 37.466%, marjoram by 520%, sage by 71.600%, diktamos by 252%, Melissa by 17%, and spearmint by 20%. On the other hand, a reduction for saffron by a 10% appears regarding our data. Moreover, in 2011 new crops were introduced, such as 622 acres Hippophae, 130 acres coriander, 210 acres rose, 540 acres rosemary, 400 acres chamomile and 4 acres aronia. In 2011 21,400 acres of organic cultivation for aromatic and therapeutic herbs and plants (full and transitional phase) had joined the measure of organic cultivation of the national and/or regional rural development programs (RDPs) which run for seven years in contrast to 18.039 acres in 2010 and 20.932 acres in 2009. Figure 1. Cultivation areas and production of aromatic and therapeutic herbs and plants in Greece Source: Polysiou Μ. (2013), using data from Ministry of Rural Development and Food Comparing with 2002 (ΑΝΚΟ, 2002), the price of the producers, the level of the production and the gross revenue appears to be significantly increased in different categories of aromatic and medicinal plants. Concerning oregano, an increase in the average performance by 120% was observed, the average producer performance increased by 147% and the average gross revenue growth increased tremendously by 443%. With respect to Melissa, an analogous picture was recorded where the average performance increased by 50%, the average price of the specific product raised by 290% and the gross revenue by 456% (again a very large growth). Finally, for mountain tea the corresponding percentages were 49%, 131% and 244%. In the following table we present the average weighted producer price for the 2007-­‐
2010 periods. Table 3. Average prices for various aromatic herbs. 2007 2008 2009 2010 Saffron 933,00 1.071,30 1.200,00 1.100,00 Chios mastic gum 74,00 73,14 69,64 71,51 Oregano 1,39 1,59 1,73 1,30 Mountain tea 7,01 7,00 6,58 8,00 9
Source: Ministry of Rural Development and Food From 2008 to the list of the vegetables regime of Pillar I, saffron and aromatic plants intended for culinary use as thyme, basil, Melissa, sage and oregano have been included. For the above-­‐mentioned products we can identify possible recognized Producer Organizations (POs) in order to be benefited from Operational Programmes. At the level of production organization, there are the following dynamic producer organizations: the Cooperative of Saffron Producers in Kozani, the Chios Mastic Growers Association, the Agricultural Cooperative VRYNAINA of the Municipality Soyrpis N. Magnesia, the Cooperative of Garlic Producers at Vissa in the Prefecture of Evros, the Agricultural Cooperative of Medicinal & Aromatic Plants in West Macedonia, the Agricultural Cooperative of Growers of Aromatic, Medicinal & Energy Plants Aitoloakarnanias (A.S.K.A.F.E.F.A.), the Agricultural Cooperative Aromatic Plants in Agrinio. On the other hand, a significant number of individual producers exist. The individual producers cooperate under contract with enterprises in the sector and / or operating independently and often with long experience in the field of crop plants, such as in Komotini (VIOEREL), in Samos. Owned farmland herbs are maintained by a large sector business (APIVITA Farm) for organic production in Arcadia, Olympus and Domokos. Finally, there are a significant number of collectors of native plants throughout the country, either licensed by the local authorities (e.g. collection sage in Thesprotia, collecting various plants in Pelion) or acting as free riders. However, the last two years a significant increase of non-­‐experienced free riders collectors has been observed resulting in the destruction of native populations of aromatic and therapeutic herbs and plants and the ban of collection (e.g. in Creta). Contractual Agriculture is practiced among individual producers, producer organizations, cooperatives, sector business by keeping log of production procedures and practices and certification. There exists, in a small scale, full or partly vertical organization and/or participation in vartically organised sector businesses by the Cooperatives (e.g. the Cooperative of Saffron Producers in Kozani, the Chios Mastic Growers Association, A.S.K.A.F.E.F.A.) The Geography of aromatic and therapeutic herbs and plants cultivation in Greece With regards to cultivated species, aromatic and therapeutic herbs and plants cultivation has been located in Macedonia and Thrace, Thessaly, Chios (mastic) in Aitoloakarnania, Boeotia, Euboea, Lesbos and Crete. According to 2010 data the distribution of aromatic and therapeutic plants and herbs in various regions is presented below: • North Aegean: 62% of land area due Chios mastic and smaller areas aromatic Samos and Lesvos (main anise). • Central Macedonia: 25%, mainly oregano and anise. • West. Macedonia: 5.5%, mainly due to saffron and small areas with oregano. • Thessaly: 5%, with oregano, anise, mountain tea and melissa. • East Macedonia and Thrace: 1%, oregano and anise. • Central Greece: 0.2%, with mountain tea, lavender, oregano, fennel, marjoram, mint, sage. • Crete: 0.9%, with oregano. 10
• West. Greece: 0.04%, with oregano. • Attica: 0.05%, with mint. • Peloponnese: 0.04% with oregano The indigenous plants, which are collected in different areas, are not included. Manufacturing sector Uses (essential oils and dry drugs) in perfumery, aromatherapy, soap, cosmetics, personal care, pharmaceutical, dental, food and beverage, confectionary, bakery, feed, insect repellents, antibiotics (microorganisms), apiculture (bee plants), dyeing, floriculture, ornamentals. In total we have 25 units of drying, packing and primary proseccing. More specifically in Athens 4, in Argolida 3, in Heraklion 5, 2 in Kilkis, in Kozani 2 and finally in Chios 1. The recent years there is an increased interest associated with changing lifestyles and eating habits, concern for the environment, preserving food (antioxidant and antimicrobial properties), perfume use, alternative medicinal uses (e.g. herbs, aromatherapy). Imports rise to 5.000 tones with a total value of almost 9 million € while exports reach almost 2.500 tones with a value of 5 million €. There is scope for increasing exports and reducing imports by increasing production of aromatic plants. The significant units of primary processing in Greece are presented below: • The Chios Mastic Growers Association specialized to the production of dry mastic gum, mastic oil, gum powder and chewing gums (PDO) with strong export activity (either independently or through MEDITERRA AE in which it participates). • The Cooperative of Kozani Saffron Growers in packaging and processing of Kozani saffron (PDO) with strong export activity. • Korres Natural Products and APIVITA processed on an industrial scale the raw material and produce essential oils and consumer products, with mainly export activity in over 15 countries and development of affiliate networks and direct partnerships with international firms. • ANTHIR AVEE (ΑΝΘΗΡ ΑΒΕΕ) in drying and processing (with the participation of A.S.K.A.F.E.F.A. • Finally, the production unit of ice tea beverage (with main ingredient the mountain tea Sideritis sp.) from Macedonia -­‐ Thrace Brewery. Main plants of commercial interest for the specific industry are considered: Garlic, Ladania, thyme, saffron, fennel, licorice, hops, St. John's wort, hyssop, Laurel, Lavender, Chamomile, Melissa, Peppermint (chemo type linalool), Pennyroyal, Spearmint, Basil, Salepi, Dittany, Marjoram, Oregano (Greek oregano), anise, Mastic, Rosemary, Sage, Savory, Malotira, mountain tea, tisane. The main export destinations for the Greek aromatic and therapeutic herbs, plants and products considered are: Cyprus (anise, fennel, coriander), Albania (coriander, thyme), Bulgaria (cumin), Spain, Italy (saffron), the Philippines (laurel), the USA (oregano) and Germany (oregano, sage). Correspondingly, the main countries of origin of Greek imports are Turkey (anise, fennel, thyme, bay leaves, and oregano), Bulgaria (coriander, oregano), Syria, India (cumin), Albania (oregano, thyme), the Austria and Spain (saffron). 11
Taking into account, in our analysis, the value of total exports we can quote that saffron appears to have the most significant impact in the total exports with a percent of more than 50%. In addition oregano, anise, bay leaves and sage appears to have an impact to the total percentage of exports while balm and rosemary have a dynamic route. The External Environment for Greece Greece’s imports and exports a significant percentage, with respect to its size, of aromatic and medicinal plants. However, according to the official statistics of international trade and its categorizations with respect to SITC (Standard International Trade Classification), aromatic and medicinal plants can be recorded in the category of Food and live animals (Standard International Trade Classification. Revision 3 1986) but also in the category 2, more specifically in 292.4 line, under the title of «Plants and parts of plants (including seeds and fruits) of a kind used primarily in perfumery, in pharmacy, or for insecticidal, fungicidal or similar purposes, fresh or dried, whether or not cut, crushed or powdered». At this point, we have to quote that in this category Greece carries out all its trade with respect to trade aromatic and therapeutic herbs, plants and products. In the following table (Table 1) we present the total exports of aromatic and therapeutic herbs, plants and products. Table 4. Aromatic and medicinal plants exports 2010-­‐2012. Exports to EU 2010 2011 2012 Value (in euro) 712.829 561.488 544.279 Quantity (in tones) 149,7 122,6 129,3 Unit Price 4,8 4,6 4,2 Exports to other countries 2010 2011 2012 Value (in euro) 824.369 801.250 1.122.186 Quantity (in tones) 198,4 177,9 338,9 Unit Price 4,2 4,5 3,3 Total Exports 2010 2011 2012 Value (in euro) 1.537.198 1.362.738 1.666.465 Quantity (in tones) 348,1 300,5 468,2 Unit Price 4,4 4,5 3,6 Source: Eurostat, EU27 Trade since 1988 by SITC (Variable: DS-­‐018995) The significant export destination for Greece has been shared between countries of European Union and other countries. Outside of EU and Europe in general, the significant export destination remains USA and Canada followed by Russia. On the other hand, exports to EU mainly concerns Germany and Switzerland with Nordic countries to follow. However, the significant improvement in exports has been realized in 2012 with non-­‐EU markets. If we divide the value of exports to the recorded quantity, we construct a unit price measure that reflects the quality 12
composition of exports. In other words, if the unit price decreases means that an average amount of exports consist of goods of less value and vice versa. The reduction of unit price mirrors the contribution of several aromatic and therapeutic herbs kinds with lower value. In table 2 we present the imports of Aromatic and therapeutic herbs, plants and products according to SITC 292.4 (we exclude ginseng και liquorice). Table 5. Aromatic and medicinal plants imports 2010-­‐2012 Imports from EU 2010 2011 2012 Value (in euro) 1.648.368,0 958.625,0 1.075.065,0 Quantity (in tones) 251,7 336,8 211,2 Unit Price 6,5 2,8 5,1 Imports from other countries 2010 2011 2012 Value (in euro) 758.443,0 1.226.914,0 1.023.782,0 Quantity (in tones) 473,3 718,3 469,2 Unit Price 1,6 1,7 2,2 Total imports 2010 2011 2012 Value (in euro) 2.406.811,0 2.185.539,0 2.098.847,0 Quantity (in tones) 725,0 1.055,1 680,4 Unit Price 3,3 2,1 3,1 Source: Eurostat, EU27 Trade Since 1988 by SITC (Variable: DS-­‐018995) As can been seen from Table 2 imports from EU-­‐27 and non-­‐EU have approximately the same value, but imports from the EU have less than half the volume of imports from outside the EU. Thus, the unit price imports from the EU formed over 5 euros per kilo reflecting high quality while imports from outside the EU have a unit price of around € 2 per kilogram reflecting much lower quality. Trade Procedures for Aromatic and Medicinal Plants The only difference between the trade of aromatic and medicinal plants and other plant species are different phyto-­‐sanitary codes that each formulator / exporter of dry material should follow and the certification of culture. For the phyto-­‐
sanitary codes, accepted codes have been proposed from Food and Agriculture Organization (FAO) of UN with the collaboration of the World Health Organization. More specifically, those codes have been recorded in CODEX Alimentarius – International Food Standards database, which is acceptable from the World Trade Organization – WTO1. 1 A thorough and analytical presentation could be found in the appendix of this chapter. Moreover, two additional codes for good agricultural and collector’s practices has been also listed.
13
In Greece, high quality standards concerning good agricultural practice and cultivation have been also implemented. More specifically, the implementation of two different systems has been recorded. The first is the integrated crop management system which it is in accordance with the national standard AGRO 2.1 & 2.2 of ERGO-­‐DIMITRA and concerns the certification of production system of agricultural products. The second one, is related with the product production according the European protocol EUREPGAP of Foodplus ... Market aspects in Italy In addition, Assoerbe proceeded to estimate the consumption (use) by firms operating in Italy, expressed in kg / year, as well as the wholesale value at 2012 prices. It is estimated that the use of herbs to amount about 25 thousand tonnes per year, valued at the wholesale stage of approximately 115 million euros.The volume of potential use for an Italian production would amount to nearly 18 thousand tonnes, or 73% of the total in terms of value, we estimate a value of the wholesale market of 74 million euros, with an incidence of less than volumes 64%. Among the products that have the greatest economic significance include: the blueberry (fruit) with loans estimated at 15 million Euros, the stigmas of saffron (9.8 million euro), the ginseng root (9.4 million EUR), pepper (piper nigrum, EUR 8.1 million). Among the top twenty most economically important species only ginseng, black pepper, nutmeg, china, lime and horse chestnut are not grown in Italy. The table 1.2 shows the forty most important species among those grown or cultivated in Italy, ordered respectively to volumes used in Italy (in kilograms), for estimated wholesale market value (in euro) and average unit value ( in euro / kg ). Each species is associated with an indication of the commercial side to which the estimate relates to the use and economic value. The main species for the market value of the arable (and to a small extent already grown) in Italy, are bilberry and saffron, red vine, ginkgo balboa, milk thistle, passion flower. Of these only the passion flower is grown on surfaces and quantities consistent with the national demand. The higher volumes of use (first twenty species) are: blueberry, red grape, ginkgo, milk thistle, fennel, Pass flora incarnate, chamomile, onion, oregano, rosemary, licorice, wormwood, garlic, coriander, lettuce, anise, sweet clover, artichoke, rhubarb, aloe .With regard to the habitat of 296 species surveyed, less than 32 species corresponding to 11 % of the total are cosmopolitan. The species that have habitat in Europe are the majority, 89 species, representing 30 % of the total, to which must be added the 56 Eurasian species, 33 species of Mediterranean and alpine species 6 (yarrow nutmeg, alpine lady's mantle, moonwort male, moonwort and female masterwork ) . In Asia, 18 species are habitat specific, accounting for 6 % of the total, including chieretta green Himalayas ( Andrographis paniculata ) and the Philippine elemi ( Canarium luzonicum ), but to these we must add the 56 Eurasian species, 9 species and 4 species Indian Chinese ( ginkgo, polygala, rhubarb and Sichuan pepper ) . The species that have habitat in Africa are 18, accounting for 6 % of the total, while those who are 14 habitats in North America, with an additional 5 with habitats in Central America and 5 with habitats in South America and 1 habitat Pan-­‐American 14
( corn). Finally, nine species have habitat for tropical countries in general, while Australia is characterized by a single species -­‐ eucalyptus -­‐ with specific habitat. As regards the cultivation, it is often realized also in different geographic areas habitat. The most obvious cases are those species that have a growing cosmopolitan while having a specific habitat such as is found for the corn that is grown all over the world, despite having a South American habitat, eucalyptus (Habitat Australia ), the chervil, tarragon, chicory, Hypercom, rose hips, hay Greek and basil ( the Eurasian habitat ), milk thistle ( habitat Europe), flax, sage, clary sage, red vine, the fennel ( Mediterranean habitat ). It 's important to emphasize that at the time an amount comprised between 75% and 90% of medicinal plants marketed in the world resulting from spontaneous collection and that the cultivation, even in the constant increase is still a reality marginal. Certainly in Europe, the species of greatest use, you are developing a system of agriculture and agro-­‐ industry, based on the cultivation, but in different parts of the world, especially Africa and Asia, the cultivation is still far from developing. It’s clear that the cultivation of medicinal plants become strategic in the coming years compared to sales of natural stocks. Two conditions contribute to orient the phenomenon in that direction. On one hand, the expected increase in loans of plants of the world population: 2.5 billion of individuals, including India and China, depend on traditional medicine for primary health care. On the other hand, the unstoppable phenomenon of migration to urban areas of the rural population, which causes the decline of the crafts that are high in manual labor and time, as the spontaneous gathering of plants. Table 6 -­‐ List of species and cultivated areas in Italy by companies associated with FIPPO (year 2012) Species Area (hectares) 15
Source: FIPPO Table 7 of the main species grown and cultivated in Italy ordered by usage rate (Kg), value (€) and average unit value (kg / €) 16
The international scenario The current situation and the dynamics globally through the FAO data For the purposes of reconstruction of the characteristics and evolution of the international scenario an important source consists of databases on the FAO website (especially the database Faostat), enabling it to gather data on a wide range of agricultural products worldwide. It 'obvious that the capacity of this source to provide precise information about the medicinal plants is largely a function of the classification adopted by the database in question. Therefore, we analyzed in detail the items considered in Faostat and were compared with those defined from the list of species described in Chapter 1. On the basis of this comparison were identified a number of items "relevant " among which was made a first selection, excluding at the outset some items for which the intended use of the food -­‐ as a prevalence of nutritional characters specifically -­‐ was too prevalent to take them into account for the purposes of this work. In this way, have been selected a number of basic items for which they have been considered the area invested and production in tons worldwide. As can be seen it is 43 entries of which are found "even» some productions that play an important role as real food, but they have always played or have recently taken an important role as raw materials in the food or as additives within the food industry as flavorings or with other functions. Table 8-­‐ Areas planted and production in the world (2010) Description cultivated area production (ha) tons 17
Source: Faostat Overall, the productions selected represent a little less than 77 million hectares and invested 330 million tons. Within this first set of entries were subsequently selected -­‐ always on the basis of a policy designed to give preference to products that may perform other functions in use, even in the food, than to be true food -­‐ sixteen entries (shown in gray) whose content is detailed below in Table 2.2 18
In terms of tonnage, the most important item is made from other citrus fruits (rest than bitter orange, bergamot, e.t.c.), Followed by tea and chili in terms of quantity produced in the first eight entries are also found spices, anise, safflower, mate and pepper. Table 9 Ranking of the selected items, based on the area cultivated cultivated share Description area (ha) (%) Source: Based on data Faostat Table 3-­‐ Dynamics of acreage, production and yield (three-­‐year averages) Source: Based on data Faostat There is another group of items whose production base is instead "stagnant" or slightly recessive, which, however, show a slight increase production, so as to leave to assume an improvement in efficiency, it is mint, chili, and, to an extent less, hops, and safflower, items for which we can assume restructuring processes, which could 19
add the entry of cloves which reported a reduction of the surface associated with a substantial stagnation of production. To the funds mentioned herein may be offset by the remaining items that show a decrease (or a substantial stability) of the invested associated with a worsening of the dynamics of production. In the first place the carob tree, and secondly, maté and pyrethrum, which are the only two entries that record, from period to period, a decrease of yield per hectare, leaving us assume the presence of processes of "extensification". The different trajectories are summarized in Table 2.5 for the sake of convenience. Table 4.Synoptic view of the evolutionary trajectories of items considered cinnamon, other citrus Expansion fruits, poppy seeds, spices, tea, anise, pepper and chili Mint, hops, dried chili, Renovation safflower seeds, cloves locust beans, mate, Contraction pyrethrum Productions examine a prominent role is played by India, particularly in the areas: anise, other spices, chilies, safflower seeds. Even China is a major player especially in the tea and "other citrus fruits» (next to Nigeria). Some products show a high degree of geographical specialization such as cinnamon (Indonesia), cloves (Indonesia and Madagascar), maté (Argentina), mint (China, USA, India and Morocco),pyrethrum (Kenya and Tanzania). In the case of hops, the production is located in Europe (Germany), but also in Africa (Ethiopia), as in the case of the Carob (Spain, Italy and Morocco). Finally poppy seeds are mainly produced in Turkey and in the Czech Republic. The international scene is therefore very complex, with different countries taking dominant positions in the various sectors, both in terms of specific productive vocations, and / or traditions that characterize them -­‐ the land of gastronomy, medical practices and / or health benefits, e.t.c. -­‐ Both of specific foreign investments made independently by private companies or solicited by the development programs of international agencies. In Europe, begins at over 36. 000 companies interested in the cultivation of "medicinal herbs and seasoning", with an area of almost 234 000 hectares, most of which are located in Bulgaria (almost 73 thousand hectares), France (39 thousand hectares), Romania (21 500) and Finland (21000). Between 2007 and 2010, the data show an increase in both the number of companies (+23%), and the areas under these crops, increased by more than 50%, compared to a sharp decline in abundance of farms Total (-­‐13%) and a substantial invariance of the total utilized agricultural area (-­‐1%). 20
Figure 2-­‐ Evolution of the area planted (2000 = 100) Source: Based on data Faostat The localization of production and the concentration of supply Of all the sixteen items analyzed were subsequently treated area planted and production for different countries, so as to delineate the importance of the latter for each type of product. More specifically, for each item was made to order according to the producer countries area planted and productions, recitals, in order to provide a simple measure of the concentration of production, the percentage of the top eight countries and the sum of that of the total for the two variables considered. Tables 12-­‐14 report the ranking described for the first four items analyzed: anise, carob, cinnamon and red pepper. As can be seen, with regard to the productions included in item 711 (anise, star anise, e.t.c) the primacy of productive indisputably belongs to India, where it is located 62% of the area planted, more than 569 000 hectares, with a production more than 419 thousand tons, accounting for just under 56 % of the total world. A significant role in the production of these raw materials is also carried out by Syria, China, Iran and Bulgaria. Overall, the top 8 countries account for almost 89 % in terms of area and over 86% in terms of production. Table 5. Main producer countries of anise, star anise, fennel and coriander (2010) 21
Source: Based on data Faostat Table 13. Main producer countries of locust (2010) Source: Based on data Faostat Table 6. Main producer countries of chili pepper and dry pepper(2010) Source: Based on data Faostat 22
Table 7. Main producer countries of cinnamon (2010) Source: Based on data Faostat Regarding the carob tree, most of the area (over 50 %) is located in Spain where they are invested just under 47 thousand hectares, is significant, however, the area of Italy, Portugal and Morocco, which together with Spain accounting for more than '83 % of the area in question. In terms of production the difference between Spain and Italy looks much more subdued and most average productivity that characterizes Italy with regard to the production in question. Even in the case of chilli detects an undisputed supremacy in India, where it is located almost 39 % of the area, the country, with over 1 million and 223 thousand tons, generates almost 40 % of world production. Significant portions are observed, in terms of production, in the case of China, Pakistan and Thailand. In terms of area a significant role is assumed by Ethiopia (with 431 000 hectares) and Burma. In the case of cinnamon, the country’s preeminent Indonesia with an acreage of more than 100 thousand hectares, equivalent to 50 % of the world, and a production that reaches nearly 53 % of the latter. Followed by China, 19 % of the area and 31 % of production, Vietnam and Sri Lanka. The tables 16, 17 report the ranking described for other citrus fruits and cloves. As can be seen with regard to other citrus citrus heading the largest acreage -­‐ more than 741 000 hectares, accounting for nearly 59% of the total -­‐ is located in Nigeria, followed by China with more than 186 thousand hectares. In terms of production, however, it holds the record, with nearly 4.9 million tonnes, up 41.5%. Considering the clove notes the strong concentration of land under which it is localized to over 88% in Indonesia, which is obviously the largest producer in the world with over 110 thousand tons. Of some importance are the surface and the production of Madagascar, in both cases representing 6% of the total. Table 8. Main producer countries of other citrus fruits (2010) 23
Source: Based on data Faostat Table 9. Main producer countries of cloves (2010) Source: Based on data Faostat European situation The reconstruction of the production with specific reference to the situation in Europe was affected by a number of difficulties associated with the classifications adopted and the availability of official data at that level. It should be recalled that the Eurostat questioned the land use database Farm, which contains data from the last Census of Agriculture created in 2010 by all EU countries, compared with the data of Sample Survey on Agricultural Production and Facilities 2007, but it allows you to capture information on number of companies and invested the area of industrial crops, to the entry Aromatic, medicinal and culinary plants, considering that a very large aggregate. Although these data have some shortcomings, they allow you to highlight the structure and size of the sector at European level. These data refer only to the cultivation of the plants considered in this group, which represents a subset of the industrial plants, which belong to the broader category of arable land. They are therefore excluded crops classified by Eurostat as part of the woody crops (citrus, grapes, berries, e.t.c.) and vegetable (onion, garlic, fennel, parsley, e.t.c). As you can see, in the countries considered by Eurostat (those belonging to the EU plus Norway, Switzerland and Croatia) in 2010, there were over 36 000 companies invested a total of hectares that bordered the 234 000 hectares. As can be seen, most of the companies in which these crops are found almost eight thousand, is located in France, followed by Poland (6400) and Bulgaria (4600). This 24
country is one in which is found the largest area planted, almost 73 thousand hectares, which more than double the figure for 2007 ( +122.6 %). In fact, the surface invested is highly concentrated in a very limited number of countries, as it is possible to detect in Figure 2.4, in which it is observed that, besides the already mentioned Bulgaria, thicker surface, just below the 40 thousand hectares, is located in France. Followed by Romania and Finland, with an area about 20 thousand hectares followed by Poland which, however, shows a dynamic recessive -­‐ Lithuania and Spain, areas planted with over 10 thousand hectares. Table 18. Aromatic plants, medicinal and seasoning 25
Source: Based on data Faostat Imports of EU-­‐27 countries In this section we have considered the import of the 27 EU countries for products of the following customs codes of the International Classification Harmonized System (SH2). It is a sub-­‐set of the broader aggregate products that will be discussed later with regard to the foreign trade of Italy. 26
For each of these codes were extracted and analyzed the data with the highest level of detail available, arriving at appropriate codes to 6 or 8 digits. For each heading were considered the total volumes imported by the 27 EU countries in 2011 and the details relating to the imports from non-­‐EU countries. Analysis of the data shows that most imported products in 2011 belong to the Customs Code 3302 " Mixtures of odoriferous substances used by the industry", 18 of which were imported over 500 thousand tons with an outlay of around 5.963 billion euro. The imports of these products from countries non-­‐EU concern only 17% of total volumes imported from the EU -­‐27. Following are located imports of: • products related to code 1302 " Vegetable saps and extracts, pectin, agar, e.t.c. " With about 280 thousand tons and a cost of about 1.404 billion euro. 45% of these imports come from non-­‐EU countries, mainly from the U.S., India, China, Switzerland and the Philippines. The aggregate 1302 are particularly significant imports of «vegetable saps and extracts, except those of liquorice, hops, vanilla oleoresin and opium» (code 1302 1980) whose imports amounted to 36 thousand tons at a cost of 416 million euro, imported mainly from China, USA, Switzerland, India and Brazil. There are, in addition, imports of mucilages and thickeners, derived from vegetable products (code 1302 39), imports of dried and pectic substances of PECTINATES PECTATES and dried (code 1302 20 10) and those of mucilages and thickeners, guar gum (code 1302 32 90) • Tea (code 0902), whose imports in 2011 amounted to about 365 thousand tons at a cost of approximately € 1,107 million. 75% of EU-­‐27 imports of tea come from non-­‐EU countries, in particular from Kenya, India, Sri Lanka, China and Indonesia; • essential oils (code 3301), which in 2011 amounted to 82 thousand tons at a cost of 1,105 million euro. However, 56% of the imports of essential oils coming 27
from non-­‐EU countries. Within this category, we distinguish imports of essential oils not deterpened, excluding those of citrus, mint, clove, niaouli and ylang -­‐ylang (code 3301 29 41 ) whose imports in 2011 amounted to 12,115 tons with an outlay of around € 385 million. 71% of the imports of these products came from non-­‐EU countries, especially from China, Indonesia, the U.S., India and Egypt; • pepper and chilli (code 0904 ) with over 209 thousand tons at a cost of 906 million euro. According tou oru data, 65% of these imports come from countries outside the EU. Within this aggregate outstanding imports of pepper (code 0904 11) whose imports amounted to about 72 thousand tons mainly from Vietnam, Brazil, India, Indonesia and China, and imports of chilli whose imports amounted to 113 thousand tons at a cost of over 268milioni euro, mainly from China, Peru, India, Mexico and Serbia; • Herbs and other herbs including ginseng roots, plants for perfumery, medicine, oregano, sage, e.t.c (code 1211), whose imports amounted to about 169 mila tons at a cost of more than € 565 million. 57% of the imports of products of this Customs Code come from non-­‐EU countries. Almost all imports attributable to the Customs Code 3302 18 at even products that do not belong to medicinal plants and their derivatives, such as flavorings produced by chemical synthesis (nature-­‐identical flavors and artificial flavors). However, even at the highest level of detail of the classification of the trade, it is not possible to distinguish the natural product from another. •code 1211 relating to plants and plant parts, including seeds and fruits, used primarily in perfumery, pharmacy or for the production of pesticides (insecticides and fungicides) with the exception of ginseng roots, coca leaf, poppy capsules and tonka beans (code 1211 90 85) whose imports in 2011 amounted to more than 161 thousand tons at a cost of 531 million euro. 58% of the volume imported from the EU in 2011 came from non-­‐EU countries and in particular from the U.S., Israel, China, India and Egypt; • Ginger, saffron, turmeric, curry, bay leaf, thyme and other spices (code 0910) of which the imports in 2011 amounted to about 182 thousand tons at a cost of 535 million euro. In 2011, 52% of EU imports came from 27 non-­‐EU countries, in particular China, India, Iran, Turkey and Thailand. Performance of the sector at the national level (ITALY) In Italy, in 2010, companies with an area under "aromatic plants, medicinal and seasoning» (henceforth PAMC for short) are 2.938 and the overall hectare area of 7,191 hectares. Our country thus covers about 3% of the total area of the European countries analyzed previously. The results in question are the result of an evolution of the industry, between 2000 and 2010, characterized by a reduction in the number of companies involved (-­‐29 % compared to the 2000 Census ) and a simultaneous increase in the number of hectares invested, which in 2000 stood at just under 2,300 hectares. As a result, overall there has been an increase in the average size of the business areas planted with herbs, less than a hectare in 2000 ( average 0.55 ha per farm ) to 2.45 hectares in 2010. The evolution is called the expression of a significant expansion of production that has been characterized by the sharp decline in the number of micro involved and for the simultaneous increase in the area of medium to large companies. In 28
addition to increased size of the cultivation process, census data suggest that the activities in question are part of a different part of the company's product mix depending on the size. Along with a greater, but limited presence of crops examined as part of the regulations of larger companies, are delineated phenomena of specialization involving small and medium-­‐sized companies. The contraction of the small businesses does not have any case substantially modified, in relation to the aforementioned expansion, the degree of concentration of production in the sector. The cultivation of medicinal plants is widespread in all Italian regions and almost everywhere surfaces for both global and medium-­‐sized business are increased compared to the beginning of the decade, and in 2010 the regions that are most specialized in PAMC are Piedmont, Emilia Romagna, Tuscany, Marche, Basilicata, but major production areas are also present in Puglia, Abruzzo and Sicily. Some of these extensions are also medium-­‐sized farm crops above the national average: Piedmont, Emilia Romagna, Marche, Molise, Puglia. Again with reference to the PAMC, compared to the beginning of the last decade most of the regions showed a growth of companies and the joint surfaces (Piemonte, Valle d' Aosta, Trentino Alto Adige, Friuli, Emilia Romagna, Marche, Puglia and Calabria), while another large group of regions (Veneto, Lazio, Abruzzo, Campania, Basilicata, Sicily and Sardinia) seems to be experiencing restructuring phenomena that are characterized by a decrease of the companies and to the simultaneous growth of the surfaces. Among the first of the most dynamic appear Emilia Romagna, Marche and Friuli (although in the latter case the surface growth of PAMC must be connected to the presence of species that find place that is not considered within the supply chain). The dynamics mentioned have in some measure redesigned, both in terms of companies that surfaces, the weight of the different regions at the national level. Besides the regions "suited» in relation to the cultural traditions and production (primarily the Piedmont, but also the Trentino Alto Adige) other regions have gained importance at the national level such as, for example, Emilia Romagna and Tuscany, in particularly in terms of specialization . The different regional dynamics are somehow the result of the interaction of the field with the different forms of intervention at regional, starting with the regulation of the collection of wild species, but also, in some cases, the legislation on the cultivation, processing and sale. Other policies that have varying degrees affected the fund's performance at the local level are those of research and testing and interventions developed in the framework of EU programs, especially in the framework of the Rural Development Programs. With regard to organic farming in 2011 was declared an area in aromatic plants, medicinal and seasoning amounts to 2,916 hectares, of which 452 hectares under conversion. Consequently, it appears that 41% of the area planted with these plants is organic, a very significant percentage of the average of agriculture in completed 10. Over the past eleven years the biological surfaces in medicinal plants have shown a positive underlying momentum, with growth of organic hectares to an average annual rate of 5.4%, compared with a substantial stability of the total national organic farming. In order to deepen the knowledge on organic production sector, have been developed ad hoc detail data of the archives of the Control Bodies, acquired from FederBio. In 2011, 745 companies are involved in the field of medicinal plants, bio, of which 70 are registered as preparatory and / or exclusive importers. 29
In addition, of the remaining 674 companies, 524 are exclusive agricultural producers, while producers and 151 are also preparatory. The increased presence of operators in the sector is, for the organic sector, in Piedmont, Marche, Tuscany and Emilia Romagna. As for the number of firms involved, were compared various statistical sources, that are broadly in line but do not always coincide. In Table 6.7 summarizes the data from ISTAT Asia 2010, which show more than 16,500 pharmacies, 1,100 specialized stores in medicinal SOP (not a prescription), and about 4,500 health food stores. Regarding pharmacies, at the Ministry of Health has established the register of pharmacies, which records and assigns a unique code to each pharmacy, branch office, and clinic or dispensary season. The list currently contains over 18 000 identification codes. According to Anifa Report, National Association of the Pharmaceutical of self that is part of Federchimica, we report the following data of the universes of reference in December 2011 (used by IMS Health to market estimates): -­‐ 17,927 pharmacies (including 400 dispensaries); -­‐ 2,398 drugstores; -­‐ 292 corner of the GDO. Table 19. companies engaged in retail trade 2.
Mapping the external environment 2.1 PEST Analysis for the Italian Market External factors are factors that change over time and exhibit opportunities and / or threats to the market. They are the systems and structures surrounding businesses. For greater convenience, the mapping of the external environment will be based analysis PEST (EL), which will analyze factors: •
Political and legal environment (political stability, law, taxation) •
Economic environment (economic development and growth, inflation, disposable income) 30
•
Socio – cultural environment (demographic characteristics, education, consumption patterns) •
Technological environment (technical infrastructure, new products-­‐
inventions in agricultural and industrial sectors) and •
The environment factor (laws for the protection of environment, energy consumption e.t.c) In this section, we first present the data of our investigation we will try to highlight some guidelines within which you develop the green economy. We plan to green economy 'productive activities eco-­‐friendly, environmentally responsible, and that its laws. There are two main areas that we considered as in line with the objectives of the Project RE HERB • Bio Area • Herbs and Herbal medicine products made with organic ingredients. Social Aspects • Desire to natural, healthy foods genuineness, as they used to be, are the keywords that you most frequently listen to and see about food in all the campaigns of recent years, positive lifestyles -­‐ so even food -­‐ that change, there is a natural desire of large companies and the Italian food you are thrown -­‐ Mulino Bianco, Plasmon, to name the most famous. A new return to eat 'healthy', but never identify exactly what is meant. • Episodes of 'Mad Cow' first, and feed dioxin recently and last but not least the controversy about genetically modified foods -­‐ such as the recently leaked to the general public -­‐ are other issues that have recently shook the European Union institutions -­‐ generating among the population an atmosphere of uncertainty and concern. • The Italian National Institute of Health reassures stating that the amount of pesticide residues ingested with the diet by an Italian weighing 60 pounds was low and corresponds to less than 2% of the average daily dose acceptable set by the World Health. • But a survey conducted by the Environmental League doth nothing reassuring data for about half of the samples analyzed by the USL presented hazardous pesticide residues, many of which are considered to suspected carcinogens. • When two schools of thought have conflicting positions, it will be better to hire the more valid as a precaution? Ιn this climate of submerged concern for the environment and for your own health should be analyzed so that the organic food sector as one of the herbs and derivatives, because everyone, albeit with different prerogatives responds to the needs of naturalness, cleanliness, no chemistry, and safety. However, this does not amount to a return to the past but to attempt to combine naturalness with the requirements of modern lifestyles, tight deadlines, working women, products that are easy to use and quick to prepare. The Phenomenon of the New Age with all its load of Alternative Medicines real or alleged, the rejection of synthetic medicine, allopathic medicine, which treats the symptoms not the causes of evil, the refusal of the industrialist, albeit with peaks excessively ideological, is none other than the expression of these new needs of 'naturalness' and safety, a return to nature, but in a modern way. On the other hand 31
it must be remembered that the front of the Medical Officer, World Scientific opening to what is called natural medicine there was -­‐ but rightly explained that as a naturopath-­‐medicine is a privilege, and its use is much of modern research techniques as using ancient medical traditions thousands of years old and only those -­‐ from either side -­‐ wants a split in the opposition presents'. And recognition methods such as acupuncture, homeopathy, phytotherapy, begins to be envisaged, although have not yet been included in the category of care and thus also of the 'drugs' of which the citizen can use without incurring further costs. After the controversy, a few years ago that he wanted to put out a little from pharmacies and consider ' 'outlawed ' homeopathic preparations -­‐ tensions are a bit ' loose and there's even a project of our Ministry of Health to enter natural cures among those available for free from the citizen. Meaningful experiences, albeit isolated, there are already in Italy, not least that of the ASL Empoli (FI), made possible by the regional health Tuscan contemplated that this hypothesis. In addition, to an outpatient Doctors Natural and herbal Section phytotherapists has set up a laboratory for research and study of herbal preparations to assess effectiveness and percentage of active ingredients to ensure ' the scientific and impartiality of a public service (Dr. Fiorenzuoli Resp Service ) . People near to natural cures for two main reasons: • As an alternative to health officials, already tested and deemed ineffective • For fear of side effects caused by the use of synthetic drugs. Legislative and Economic Variables In the face of these social issues are legislative measures. • On the one hand, at European level, the CAP, which promotes organic farming that promotes the conversion to organic farming with financial support, hence an explosion of land converted to organic farming in the European countries (including Italy) where he was applied. • Secondly, as regards the sector herbs and derivatives, a law about herboristic sector would put part of the output herbal medicine for therapeutic purposes to the control of the Ministry of Health -­‐ thus acknowledging dignity therapeutic, but also introducing a number of aspects which in fact would sweep from the market all the handicrafts and parartigianali that have made the history of herbal Italian • Still the recognition of the Diploma of Herbalist and the constraint for the new herbalists to get training qualified. In the face of these issues, you really have to take into account trends affecting the economy in general, possible further sacrifices tax for companies with the advent of the single currency and the strengthening of European Policy within individual states, exogenous variables difficult to control. But still a great deal of attention from the European Union to environmental issues and eco-­‐friendly activities.This socio-­‐ economic scenario where you place our research, and then later on, the unborn business activities. In particular, as already shown, it is strongly felt the need for a framework law, especially in the agricultural sector, to reestablish order and modernize the regulation of the sector in Italy taking into account the plurality of aspects that characterize the use of medicinal plants, and covering more specific sectors of 32
herbal, pharmacy, food and phytocosmetics, looking at an increasingly globalized market. Considering that the national legislation of the sector does not have specific rules they need to be filled some gaps in several areas of the sector among which are the priorities related to: -­‐ effective application of the law of orientation and modernization of the agricultural sector to enable the entrepreneur officinal sector to best use the potential and the multi-­‐functionality of a modern company and to realize additional income ; -­‐ adoption of regional standards aiming at the establishment of specific procedures that might facilitate the recognition of producers' organizations, also in accordance with article 6 of Legislative Decree no. N.99/04 as well as to the regulation of specific problems that exist at the local purpose of the protection and promotion of the sector. Technical and agronomic issues Then there are certain aspects related to the cultivation or in short supply for most of the species, agronomic and technical knowledge of all phases of the process of cultivation of medicinal and in particular the quality varietal propagation material, nutrition, defense, collection and post-­‐harvest . Against this, however, for a limited range of species, including Mentha piperita, passionflower, wormwood, dandelion, echinacea, lemon balm, oregano, sage and chamomile, there is a well-­‐established agronomic practices, which allows the production of a advanced and competitive context . It 'clear, therefore, that it is necessary to proceed with the organization / planning processes of local training for farmers (and all stakeholders ) through specific synergies between the competent institutions in the territory involving experts from research institutes in this programming considered the great specificity and diversity of topics . In summary it is necessary to "system" but also achieve a restructuring (or structuring ) of the chain up to other European countries with the purchase " facilitated " the technical means for processing ( drying, distillation, e.t.c) And equipment mechanized harvesting . Market aspect To complete the economic and institutional framework one should also take into account others who play an important role in the supply chain and the institutions that have a active role in the industry. With regard to such subject’s representative of the business world, emphasis should be placed on the role of associations. Given the specificities of the sector, companies often are placed in one or more associations for the purpose of representing the interests of all involved, especially for companies in the supply chain integrated. Some associations are well organized and crisp, not only on the side of political representation, but by providing content associated with specific technical, regulatory and market developments. Obviously this type of association has a structure quite complex, thanks to the significant financial resources and dues in kind, which are able to mobilize, and are characterized by the presence of personnel functions. Other associations are configured just like the network, within which the contribution to the life of the association is mainly based on volunteer work. There 33
are associations substantially composed from primary producers, such as FIPPO that operates nationally, but there are other realities formed on a local basis. There is a fabric association that characterizes the wholesale trade and the processing, marketing and retail outlets. The institutions involved in the management, control, supervision of the supply chain are manifold. These include the Ministry of Health is the public body that plays a key role both in terms of information flows, and on that of the systematic comparison with the supply chain, especially with its final segments (Industry and trade). Other central government authorities are the Ministry of Agriculture, Food and Forestry and the Inland Revenue. At the local level companies interact with various local entities, municipalities, local health authorities and the customs offices, e.t.c. On the institutional side is obviously recalled the role of the regions that is expressed in the first place, as regards the regulation of the collection of wild species, including of course there are important medicinal species. It is a theme that characterizes the regional legislative activity since its inception and has found place mainly within the framework of legislation on environmental and forestry issues, legislation which, in several cases, has undergone important "made point" in the past two decades (take for example the case of Campania, Sicily, Tuscany, Umbria and Lombardy). In some areas, specifically in the case of Valle d' Aosta and the autonomous provinces of Bolzano and Trento, there is specific legislation that governs, within the territorial jurisdiction, the different stages of the production chain (cultivation, processing, and marketing). In these cases, the legislation provides a series of professional and organizational requirements for the implementation of the various activities and a system of controls. In the case of Trentino legislation indicates, so perhaps too prescriptive, although a number of infusions food achievable by agricultural producers, defining the percentage of ingredients provided for. In other cases there is no specific legislation, but it's basically the rules of guidance and encouragement, as is the case of Piedmont and Liguria (and the "old" law sector of Basilicata). Moreover, the possibility of regulation of the sector at the regional level reflects the inadequacy of the national legislation and the complexity of the legislative process, as shown in the many bills presented in various regional assemblies (Friuli Venezia Giulia, Calabria, Sardinia, Emilia Romagna, e.t.c.) -­‐ About the sub herbal and harvesting, production, processing of medicinal herbs -­‐ that have failed to end the path of approval in previous legislatures. A side on which the surgery is widely expressed in the regional sector is certainly one of the programs of research and experimentation above all, whose legal basis is established in several cases by the laws relating to innovation in agriculture. In this context, the activities mentioned were carried out with the collaboration of the Universities and other research institutions, regional agencies for Agricultural Development (Veneto Agriculture, ARSSA e.t.c) and Reclamation. One last note must be reported on the role that medicinal plants have played under Community programs, in particular in the measures of the Rural Development Programs, especially in those regions of central Italy. In several cases in the RDP interventions that take into account herbs have been included in axis 1 (Improving the competitiveness of agriculture and forestry), 34
as part of measures such as the modernization of farms or the accretion the added value of agricultural and forestry products. In some cases, however, some plants that can be counted among the herbs play an important role in the implementation of the provisions of the agro-­‐environmental measures (included in axis n. 2 of PO (Operative programme of each region) ) and measures for encouraging organic farming, animal husbandry also, in this case Whereas some species within the animal nutrition. In this case the increase of the conventional cultivation of these species is most probably an effect of environmental aid that of the pulses triggered by applications connected to the "chains herbs". Also worth mentioning is the existence of a publishing specialized addressed to operators in the sector, which deals with various topics of technical, scientific and regulatory environment. There are at least three monthly magazines specialized in greater spread (Herbalist Tomorrow, Natural 1, The Herbalist) dealing with medicinal herbs in food, supplements and cosmetics, although there are other specialized publications with lower circulation. Must obviously be considered also publications that deal with more general topics -­‐ food, cosmetics, e.t.c . within which issues of herbs are often the subject of study. Of herbs is spoken regularly in magazines more properly scientific discipline with a more markedly (agronomic, chemical, pharmaceutical, e.t.c.). Should be finally recalled the numerous websites dedicated to herbs, on the web, where there is use and effects of the herbs and their cultivation. Higher education is provided at the time in an organic way from the three-­‐year university courses, variously referred to as (health science, Herbal Techniques, Applied Pharmaceutical Sciences ), relating to the Class Computer Science ", which at present are held in eight Italian universities. The architectures of these training courses are generally taking a supply chain approach considering then the body of knowledge involved in the different phases, i.e. including those related to primary production and agronomy. 2.2 PEST Analysis for the Greek Market The needs of both producers and consumers are changing dynamically creating new parameters and data for all the involved units. Thus, one of the overriding priorities for many producers of aromatic plants / trees is to maintain a continuous monitoring system of the entire area covered by the activities of the operating system. In other words, it is necessary to be well and continuously informed with respect to the internal strategic decisions and the external that affects the system. This type of monitoring can be realized using P.E.S.T2[1] based on the following factors. P. Political factors are trying to capture the extent to which the state itself intervenes in the economy shaping economic policies and institutional interventions in the economy. For the production of aromatic and medicinal plants, the most important policy is that of the Common Agricultural Policy (CAP) as formed through direct support and settings of Pillar I and the Politics of Rural Development (Pillar II). Developments in Pillar I the period 2007-­‐2013 indirectly influenced the culture and production of aromatic plants in Greece. The two most important developments in 2[1]
Political, Economic, Social, Technological.
35
Pillar I was the release policy (decoupling) of subsidies from production and their conversion to area subsidies based on historical production model. Thus, especially in Aitoloakarnania full decoupling of subsidies from tobacco smoke production simply meant that a producer could take the historic subsidies to tobacco through the single payment without producing smoke. In this way the agricultural household had an income from grants and all factors of production (land, labor and non-­‐bound specialized uses capital) released for other products. In other cultivations, such as cotton, release was incomplete but partial and based on the cultivation but not necessarily to the production. Farmers, after the adoption of the full release particularly in tobacco, cultivated tobacco for a short time and small quantities satisfying the demand, and after, the majority sought alternative crops. Aromatic and medicinal herbs was one of those especially in Aitoloakarnania. The specific shift of tobacco to alternative crops or activities was also supported by measures of the Rural Development Programme (RDP) of Pillar II, the same period. However, the major problem of tobacco producers was the specialized capital invested in drying ovens (especially for the variety Virginia) that was late. Furthermore, continuous changes in Pillar I brought to farmers great skepticism concerning rural policy and the effectiveness of the proposed measures. For example, in Aitoloakarnania, the traditional cultivation of tobacco concerns Tsebelia variety that is dried in the sun (sun cured variety). The program of restructuring of cultivation and because Tsebelia was a non-­‐desired variety of industry, producers were subsidized to change their cultivation to the desired variety Virginia. However, the variety Virginia is air dried in ovens (flue cured variety) and thus the producers were subsidized for the purchase of ovens. Long before the end of even the repayment period of loans for the purchase of drying ovens, a policy of full release in tobacco (fully decoupled product) was adopted so that the subsidy was paid to producers irrespective of production. Given that trade prices do not cover production costs, most manufacturers have stopped growing and their bound capital (mainly on tobacco drying ovens) was discredited eventually. A critical number of them shift to growing herbs or legumes, non-­‐agricultural activities such as rural tourism, and energy production with photovoltaic. It is easy to understand the reasons why producers have a very small degree of confidence in common agricultural policy. On the other hand, developments in Pillar I continued throughout the 2014-­‐2020 period, with the most important (for Greece) policy of greening. This development is also important for growers of aromatic and therapeutic plants because organic cultivation is automatically exempt from this requirement. At the same time there were developments in rural development (Pillar II) with a clear transfer of funds from Pillar I in order to improve efficiency of Greek agriculture. However, the specific measures have been taken under the current Greek economic crisis so we think that we will have a biased picture concerning its results. We have also to quote that a plethora of measures concerning the agricultural development policies has been indirectly addressed to aromatic and medicinal plant production. More specifically, the measures for the modernization of farms (121), the processing of agricultural products (123), certification and organic farming have been exploited by aromatic and therapeutic herbs and plants farmers. 36
Other more specific measures as those for strengthening farmers in tobacco-­‐growing areas also had an impact on growers of aromatic and medicinal plants. Those developments in Pillars I and II increased the number of producers involved and/or interested in the production (manufacturing and/or standardization) of aromatic and medicinal plants. Unfortunately, the agricultural policy was not prepared to accommodate these farmers since, although they mentioned aromatic and medicinal herbs/plants as one advancing culture, there was no regional promotion plan-­‐proposal nor provision for the control and certification of propagating material and seeds through experimental fields that would give the greatest results to adapt to local climatic and environmental conditions. The development in Pillar I & II of CAP acted as push and pull factors, where Pillar Ι «push» farmers outside of conventional cultivation through the release and Pillar ΙΙ to «pull» them to new activities. Unfortunately, as it turned out, there was no relevant preparation to take advantage of this flow. E. The general economic environment is the most important factor, in our point of view, as it can affect, and in some cases rapidly, the nature and extent of production of aromatic and therapeutic herbs. The global economic crisis, started at 2008, affects the cultivation in different ways. The aim of the present analysis isn’t to make a complete record and demonstration of the impact of the economic crisis in Greek agriculture. Therefore, it will be limited to three important parameters. First, from the one hand the crisis led to a significant reduction in domestic consumption while on the other hand increased exports leading the current Greek agriculture to extrovert and be oriented in markets with high-­‐income. The fact that the agricultural production has little dependence on the internal market reveals the low impact of the crisis (i.e. vegetables and fruits exports). Aromatic and therapeutic herbs, plants and products, during the global crisis, appear to have a remarkable behavior since the field managed to keep their prices constant offering fair value incomes for the producers. Thus, the current economic crisis has no significant impact to the aromatic and therapeutic herbs, plants and products producers but rather catalyzed the attraction of new growers. The second impact of the economic crisis was the very sharp decline in funding both due to high interest rates and also of lack of faith. Many investments for aromatic and therapeutic herbs were canceled; others never managed to ensure the private funding from banking loans while other investment projects remained not applicable. This effect, of the current Greek economic crisis, influence in a significant way the capacity of many units of processing-­‐standardization of aromatic and medicinal plants offering a disanalogous improvement between cultivation and plants capacity. The third effect of the economic crisis is the dramatically increase of unemployment rate especially for the young people (15-­‐25 years old) to the rate of almost 65% and the consequent shift of many young people to the agricultural sector but in non-­‐conventional crops. Unfortunately, due to data availability we can estimate this effect that it can positively affect the cultivation. S.The socio-­‐cultural environment in which the producers of aromatic and medicinal herbs operate constantly changes and these changes affect consumer habits having an indirect impact in agricultural production and demand for particular products. In Europe, in general, and in Greece, in particular, a shift in consumer 37
products that are healthier, local production identifiable, certified and traceable has been observed. This shift has been also recorded by many Eurobarometer surveys. Indeed, Greek consumers are recorded, along with the Germans, as consumers that are extremely concerned about the quality and safety of food that they consumed. This consumer shift can be reflected from the increase of the demand for products of Protected Designation of Origin and Protected Geographical Indications. In this framework a significant increase has occurred for pharmaceuticals or cosmetics based on herbal active substances that are now considered as important inputs in their respective industries. T. Finally, the technologies used by the system and/or from competitive systems, now and in the future, will determine to a large extent the level of production for aromatic and therapeutic herbs. These factors include different technological aspects as the implementation of R&D programs, the adoption of innovative technologies in the production and the automation of the production process reflecting the rate of technological change. The specific technological improvements could influence the production costs, the product quality and lead to innovation while on the other hand they can identify issues related to barriers to entry and the minimum cost of effective production. A remarkable example is the innovation adaptation of drying tobacco oven to drying aromatic herbs oven that reduces significant production costs and allows for a further product processing. Extending PEST analysis we could add to our analysis factors associated with the prevailing legislation and the environment (climatic change, area microclima, organic use) using PESTLE ή PESTEL. The greatest influence of the institutional environment is derived from the regulations of organic agriculture and production certification by certification bodies, concerning the internal market, and from the Sanitary and Phytosanitary Standards – SPS with respect to the exports. The Food and Agriculture Organization (FAO) and the World Health Organization (WHO) are two organizations responsible for providing Sanitary and Phytosanitary Standards for the trade of aromatic and therapeutic herbs to CODEX ALIMENTARIUS. Since the standards for aromatic and therapeutic herbs have been established in 1995, a revision has been decided by the common committee of FAO/WHO in July of 2013 including herbs and spices. However, many global supply chains require additional phyto-­‐sanitary standards, imposed by the same industry, pushing farmers to follow. For example, GLOBALG.A.P sets its own standards and certifications (using ACERT EUROPEAN ORGANIZATION FOR CERTIFICATION S.A as a certification centre). The standards for the plants collected from the wild are different, like those of FairWild Standard, which contain an integrated system of certification for the sustainable management and collection. There should be emphasized that, many times, the standards of international supply chains go well beyond the simple plant-­‐health situation of market and product conditions mentioned in sustainable farming, the environmental impacts of farming even in conditions of work and remuneration workers. Concerning the climate change, the aromatic and medicinal plants, appears to be with of low demand concerning their irrigation and organic cultivation. In the new programming framework which provided important actions for resilience and adaptation in climate change, aromatic and medicinal herbs, plants and trees cultivation should face significant opportunities to grow and spread. At this point, we 38
should also notice the opportunity for organic cultivation of aromatic and therapeutic plants in rural areas adjacent to habitat areas (Natura 2000) because of the protection they offer to soil and water resources and the fully manual weeding. A diagrammatic representation of the PEST-­‐PESTEL-­‐PESTLE analysis follows below: Figure 1: Factors that affect of aromatic and therapeutic herbs, plants and products production. POLITICAL
ECONOMIC
FACTORS
FACTORS
LEGAL
FACTORS
FARMER-INDUSTRY
ENVIRONMENT
FACTORS
TECHNOLOGICAL
SOCIO-CULTURAL
FACTORS
FACTORS
The use of PEST analysis as a wider tool comparing with SWOT analysis recorded not an exhaustive list of factors, but a list of specific factors associated with the cultivation of aromatic plants and trees from broader political, economic, social and technological changes. PEST analysis is also demonstrates the main trends in the sector field of aromatic and therapeutic herbs, plants and products and focused on projected future impacts. Summarizing the corresponding table identifies the main trends mentioned above. Table 10.PEST analysis main factors for the Greek Market POLITICAL FACTORS ECONOMIC FACTORS CAP new development and especially: •
To Pillar I – decoupling aid from production •
To Pillar II – diversification and new crops, modernization of farms, support manufacturing SOCIO-­‐CULTURAL FACTORS Consumers turn to products: •
healthy, •
organic, •
local and recognizable and Effects of recession in: •
Agricultural production due to reduced demand •
Funding due to high interest rates and lack of trust •
Return of young people in agriculture TECHNOLOGICAL FACTORS Possibility of innovative activities in cultivation, collection, drying and processing. 39
•
traceable Analysis of competition The farms and national players in the industry: the picture of the opportunities and problems in Italy A more detailed analysis of data from the 2010 Census has made it possible to identify, among the companies involved in the cultivation of herbs, the coexistence of different production models. Among the 13 companies in 2011 were imported 939 tonnes of nutmeg and I have been re-­‐exported 612 highly specialized in PAMC are both small companies both large and medium-­‐sized enterprises (between 10 and 50 hectares of UAA and over ) compared to the landscape national Agricultural . In some cases, the farm is the primary basis of fully integrated production activity, which leads to the realization of finished products distributed directly to pharmacies or health food stores. On the other hand, there is a wide range of diversified companies where the cultivation of herbs is a source of supplementary income, sometimes also associated with an asset of farm or processing of farm products. The data show that companies with PAMC are on average larger than the national average in the agricultural sector, as the utilized agricultural area of these companies is on average 18 hectares, while the average UAA per farm census of the universe does not arrive in 8 hectares. On average, the share of land under PAMC than the SAU is 13%. Considering both the legal form of the run, the farms with PAMC appear to be more complex and articulated than the national average. The analysis of the links between the productive specialization of these companies and their size confirms that the presence of PAMC fits into a plurality of organizational models from the small company highly specialized, the average company where these crops play a role in characterizing the large diversified company where they represent an important supplementary activity. From the point of view of the specific production systems, the presence of PAMC in several cases is connected to a strong imprint sorts mixed cereal and livestock, in other cases appears associated with the presence of horticultural and industrial. The role of complementary or supplementary to the PAMC can play in management decisions means that, in many situations, the inclusion or otherwise of certain aromatic plants (medicinal and seasoning) in the legal business is consistently influenced by the expected profitability of alternative crops (including but not limited to, food) and that, therefore, the markets for production, you can generate economic imbalances, which in turn is an element of uncertainty for everyone involved. Moreover, the presence of PAMC is significantly linked to several related activities such as the farm, the first transformation, social and educational activities, and services of the green, all activities characterizing a business model evolved and “multifunctional” (broadly defined). At the base of this model there is a level of education of the conductors above the national average and not necessarily specialized in agriculture. In other words, the cultivation of PAMC seems that is characterized by a level of education and skills more articulate, not strictly sectoral, 40
able to articulate a vision that interacts with the "modern" communication technology. Main difficulties These features can also put in relation with the specific skills and knowledge required for the realization of products and marketing. The chain of medicinal plants is very complex and difficult to be outlined. The main difficulty in defining a model that summarizes and expresses in a complete structure of the supply chain and the relationships between the different actors that compose it can be traced to the following points: 1. large number of cultivated species, semi-­‐finished and finished products that are generated in this sector; 2. abundance of the types of actors who take part in the supply chain (collectors, producers, processors, end users, e.t.c). 3. different degree of vertical integration between actors from different stages of the supply chain. In a simplified representation, we can distinguish three main stages: agricultural production and primary processing, which includes a series of activities generally related to agriculture ( sorting, washing, drying up the distillation ), and accordingly the products of the primary phase are herbal plants aromatic fresh or dried plants and essential oils; intermediate processing, in which through processes of cutting and selection and extraction are obtained and assorted chopped herbs, herbal teas, herbs, liquid extracts, dyes, processing finals where the final products are obtained: beverages (wines, spirits, food supplements, herbal teas, spices, pastries, yogurt, e.t.c)., pharmaceuticals, pesticides, cosmetics, detergents, animal feed, textile. Upstream, there are the suppliers of raw materials for agriculture (seeds, fertilizers, pesticides, e.t.c.). While downstream rank distribution (GDO, health food stores, pharmacies, generic and specialized retail, catering, e.t.c .) And finally, the consumer .The reality is, however, far more complex. Primary production can take place on farms, more or less specialized, dedicated to the cultivation of medicinal plants, or it may result from an activity of collecting wild species. Subsequently, the product can be placed on the market in various modes. Some farms will simply produce and sell fresh produce (fresh system), others carry potted plants, others still maintain the reproduction of seed. Several farms carry within them some of the early stages of the supply chain of products (chain processed), and finally, in some cases, agricultural activities are carried out within companies or groups who achieved the entire production process products (fully integrated supply chain). With regard to the relationships that exist between the various figures that are part of the supply chain, the series is very wide. There are some major companies that integrate the entire supply chain, coming directly to the consumer / end user, performing all phases of agricultural production, importation, processing industrial for sale, both wholesale and retail. In other cases, farmers realize the first processing of the finished product and sell wholesale. An example are those companies that grow herbs and realize even the drying or distillation of essential 41
oils, thus reaching the wholesale market with a product manufactured or semi-­‐
finished products. In other cases, there is an integration of a contractual nature between the industry and the agricultural phase, through production contracts. In the industrial area are companies that manufacture and bring into derivatives trading of agricultural commodities, as both industrial and semi-­‐ finished products, ready to be placed on the consumer markets. In the industrial sector there are specialization -­‐oriented food products, products for health and well-­‐being, and so on, but you should keep in mind that there are several intersections between the different uses or better between the various subsystems of the chain. Prominent figures are also the wholesalers, who are involved in several stages in the supply chain. Finally, at the stage of retail marketing, once focused mainly on herbalists and traditional food retail, is now involved in a wide range of outlets, with an increase in the role of pharmacies and supermarket chains, and are developing new commercial channels, such as hairdressers, beauty salons, SPA and wellness centers, e.t.c. between the areas’s newest, but with increasing potential limited, even direct sales and farmers market. It 's obvious that, especially in reference to what has been called " the transformed system," it is in front of a chain that if the primary stage is fairly well characterized ( especially if you take into account the cultivation of PAMC and bergamot, leaving raw materials, also of extensive use in the supply chain, from cultivation of citrus fruits or vegetables ), downstream " branches " in very different customer industries, both from the point of view of technical and technological production processes, both point of view of the degree of competition and concentration of businesses, both from the point of view of the dynamics of the final market consumption. Still appear different then the system of fresh (fresh herbs) and the sector of potted plants. For the reconstruction of the competitive context of the production and processing and for an assessment of the opportunities and threats in the industry as a whole and of the strengths and weakness it was considered appropriate to conduct a direct survey, interviewing operators and representatives of the privileged sector, trying to cover the different specializations and the different stages of the supply chain. The results of the survey made it possible to describe a second approach to the Porter for each "system" and phase, the strategic groups of companies, the competitive forces (competitors, suppliers, customers, barriers to entry) and the framework of threats, opportunities, strengths and weaknesses. In 2011, Italian imports of all items inclusive of medicinal plants and their derivatives amounted to about 161 thousand tons at a cost of 999 million euros. Compared to the total imports of agricultural products and foodstuffs, the sector accounts for about 2.5%. ISMEA -­‐ Economic Observatory of the field of medicinal plants -­‐ June 2013. Among the groups most imported products, the main items in terms of value are: -­‐ Odoriferous substances for food, which concerns the preparation of flavoring agents and mixtures of odoriferous substances used as raw materials in the food and beverage) 42
-­‐ Odoriferous substances for non-­‐food use (mixtures of odoriferous substances used by other industries). These two groups include mix of flavoring preparations and odoriferous substances, the nature of which should be thorough, since the heading contains both products of natural origin is produced by chemical synthesis. Excluding these, the most important aggregate imports are: -­‐ Vegetable saps and extracts, locust bean and guar gum (11.7%) -­‐ Spices, aromatic and medicinal plants used primarily in perfumery, medicine or for insecticides and pesticides, which taken together amounted to 10.2%. Figure 4-­‐ Breakdown of imports of medicinal plants and their derivatives (% by value, year 2011) In 2011, total Italian exports of medicinal plants and their derivatives amounted to approximately 82 thousand tons with revenues for 413 milions of euro. Compared to total exports of agricultural products and foodstuffs, the sector accounts for about 1 to 4%. Among the most exported products, the main items are: -­‐ Vegetable saps and extracts, which includes substantially saps and extracts unspecified saps and extracts of liquorice except those containing more than 10% sucrose, locust bean and guar gum ; -­‐ Odoriferous substances for food use, (where again It should be stressed that the products in this entry is not clearly attributable to certain medicinal plants and their derivatives, or natural origin or chemical); -­‐ Essential oils, essential oils do not deterpened mainly of lemon and bergamot, but also to orange -­‐ Spices, aromatic and medicinal plants used primarily in perfumery, medicine or for insecticides and pesticides, taken together account for about 10%. 43
Figure 5-­‐ Composition of exports of medicinal plants and their derivatives (% by value, year 2011) Trend of trade between 2000 and 2011 Between 2000 and 2011, total imports of medicinal plants and their derivatives have increased from 120 thousand tonnes in 2000 to 160 thousand tons in 2011. The trend in the volume of imports is increasing even if the positive trend was interrupted by setbacks recorded in 2004 and the 2008-­‐2009 periods. During the same period, exports in terms of volume have had contrasting trends. In fact, between 2000 and 2004, exports have remained steady around 40 thousand tons, then between 2005 and 2007 there has been a surge in shipments. In 2008 remained stationary on levels the previous year (about 100 thousand tons). The year 2009 marked a major setback, linked to the international economic crisis, with the collapse of shipments to 60 thousand tons, which was followed by a recovery in 2010-­‐2011. At the same time, the trend of the revenue generated from exports shows less variability with respect to fluctuations in the volume of shipments. This is because the change in average prices for exports has determined the compensation of positive and negative fluctuations in export volumes. 44
Figure 6-­‐ Evolution of foreign trade of the aggregate medicinal plants and their derivatives (in 1000 kg) Figure 7-­‐ Evolution of foreign trade of the aggregate medicinal plants and their derivatives (in 1000 Euro) With regard to the areas where some of the exchanges of Italy, from the analysis of ISTAT figures show that imports from non-­‐EU countries play a leading role. In fact, in 2011, more than 50% of the quantities of medicinal plants came from non-­‐EU countries. In terms of overall value, however, 80% of the imports of Italy covers countries dell'UE33. 45
Table 11-­‐ Imports of medicinal plants and their derivatives by region With regard to exports, two-­‐thirds of products shipped from Italy as a destination country of the EU. In terms of value, however, the share covered by Italy's exports to the EU countries drops to 55%. Table 12-­‐ Exports of medicinal plants and their derivatives by region Main products imported Mixtures of odoriferous substances, non-­‐alcoholic beverages, not including those used by the food industry are the group most products imported from Italy. In 2011, there were imported over 16 thousand tons at a cost of approximately € 221 million, corresponding to 22% of total disbursement of Italy. The main market for the supply of these products is France, with about 50% of the supplies in value, followed by Germany (21%), the Netherlands (16%), United Kingdom (5%) and Spain (4%). The average value of the import of these products amounts to about 13 euro / kg. In second place among the products most imported from Italy, are mixtures of odoriferous substances, alcoholic and non-­‐alcoholic beverages used by the industry. In 2011, there were imported about 3,700 tons at a cost of approximately € 200 million, corresponding to 20% of total disbursement of Italy. The main market for the supply of these products in 2011 Ireland, with approximately 90% of deliveries in value, followed by Switzerland (5%) and Germany (3%). The average 46
value of the import of these products is very high and amounts to about 53 euro / kg. In third place among the most imported products from Italy are mixtures of odoriferous substances, alcoholic and non -­‐alcoholic beverages, used by the food industry (code 3302 10 90). In 2011, 8,600 tons were imported at a cost of approximately € 76 million, representing 8% of total disbursement of Italy. The main market for the supply of these products is Germany, with more than 50% of deliveries in value, followed by the Netherlands (14 %), France (12%) and the UK (8%). The average value of the import of these products amounts to about 9 € / kg. In fourth place among the most imported products from Italy are vegetable saps and extracts, except that of liquorice, hops, vanilla oleoresin and opium (code 1302 19 80). In 2011, there are about 5 thousand tons were imported at a cost of € 47 million, corresponding to approximately 5% of the total outlay of Italy. The main market for the supply of these products is France, with 36% of deliveries in value, followed by China (15%) and Germany (8%). The average value of the import of these products amounts to about 9 € / kg With regard to the juice and extracts of liquorice, in 2011 they were imported about 463 tons, of which 222 tons by Germany, Iran 153 tons and 39 tons from the Netherlands. In 2011, they were imported into Italy 2,160 tons of hop extracts (code 1302 13), of which 1,400 tons by Germany. Imports of vanilla oleoresin, in 2011, amounted to about 6 tons at a cost of approximately Euro 390 million. In fifth place among the most imported products from Italy are plants or parts of plants, seeds and fruits, used primarily in perfumery, in pharmacy or for insecticidal, fungicidal or similar purposes, fresh or dried, whether or not cut, crushed or powdered excluding the roots of ginseng, coca leaves, poppy straw and tonka beans (code 1211 90 85). In 2011, there were imported over 11 thousand tons at a cost of approximately € 46 million, corresponding to approximately 5% of the total expenditure of Italy. The main market for the supply of these products is the United States, with approximately 19% of supplies in value, followed by Germany (13%), India (9%) and France (9%). The average value of the import of these products amounts to about 4 € / kg. Imports of ginseng roots in 2011 amounted to about 400 tons of product, coming almost exclusively from China. Residual quantities are imported from France, the United Kingdom and Germany. In 2011, spending on imports of Italian ginseng amounted to about 9 million. In sixth place among the most imported products from Italy are vegetable dyes. In 2011, there were imported about 6000 tonnes at a cost of just under EUR 40 million, corresponding to approximately 4% of total disbursement of Italy. The main market for the supply of these products is Spain, with approximately 27% of deliveries in value, followed by France (13%), Germany (8%) and Peru (8%). The average value of the import of these products amounts to about 6 euro / kg. In seventh place among the most imported products from Italy are preparations containing all flavoring agents characterizing a beverage, with actual alcoholic strength of> 0,5% volume, of a kind used in the drink industries. In 2011, there were imported about 480 tons at a cost of € 31 million, corresponding to about 3% of total disbursement of Italy. The main market for the supply of these products 47
is Spain, with about 90% of deliveries in value, followed by France and Germany (3%). The average value of the import of these products amounts to about 9 € / kg. Eighth place among the most imported products from Italy are black tea "brewed" and partly fermented tea, whether or not flavored, in immediate packings of a content not exceeding 3 kg. In 2011, there were imported about 2,700 tons at a cost of € 30 million, corresponding to about 3% of total disbursement of Italy. The main market for the supply of these products is Poland, which re-­‐exports products from China, with approximately 33% of deliveries in value, followed by the UK (22%), Belgium (20%), and Germany (8%). The average value of the import of these products amounts to about 11 euro/kg. In ninth place among the most imported products from Italy are mucilage and thickeners of guar seeds. In 2011, there are approximately 18 thousand tons were imported at a cost of € 26 million, corresponding to about 3% of total disbursement of Italy. The main market for the supply of these products is India, with about 80% of deliveries in value, followed by Switzerland (5%) and the UK (4%). The average value of the import of these products is low and amounts to approximately 1.40 € / kg. In tenth place among the most imported products from Italy are mucilage and thickeners plants, not including carob, guar gum and agar. In 2011, there were imported about 3,700 tons at a cost of almost € 21 million, corresponding to about 2% of total disbursement of Italy. The main market for the supply of these products is France, with about 27% of deliveries in value, followed by Germany (13%), Belgium (12%), China (11%) and Denmark (11%). The average value of the import of these products amounts to about 5.50 €/kg. The main products exported from Italy The vegetable saps and extracts, except that of liquorice, hops, vanilla oleoresin and opium are the group most exported products from Italy. In 2011, they have been exported to more than 18 thousand tons with revenues of approximately EUR 68 million, corresponding to 16% of total revenues in Italy. The main market for these products is France, with about 29% of deliveries in value, followed by Japan (16%), the USA (10%), South Korea (7%) and Spain (6%). The average value of exports of these products amounts to about 4 € / kg. Exports of saps and extracts of liquorice involve small quantities of product. In 2011, 80 tons were exported, with revenue to EUR 430 thousand. The main market is the Netherlands. In second place among the most exported products from Italy are mixtures of odoriferous substances, alcoholic and non-­‐alcoholic beverages, used by the food industry (code 3302 10 90). In 2011, there were exported about 7 thousand tons with business for approximately € 47 million, corresponding to 11% of the total revenue of Italy. Shipments are very fragmented. The main market is France, with about 12% of deliveries in value, followed by Spain (11%), Ireland (9%), Germany and Turkey (8%). The average value of exports of these products amounts to about 7 €/kg. In third place among the most exported products from Italy are vegetable dyes. In 2011, there were exported over 4 thousand tons with revenues of 36 million Euros, corresponding to about 9% of the total collections of Italy. The main market for these products is Spain, with approximately 20% of deliveries in value, followed 48
by the U.S. (12%) and Brazil (10%). The average value of exports of these products amounts to about 8 €/kg. In fourth place among the most exported products from Italy are mixtures of odoriferous substances of a kind used in non-­‐alcoholic non-­‐food industries. In 2011, there were exported 4,400 tons with revenues of 32 million Euros, corresponding to about 8% of the total collections of Italy. The main market for these products is Poland, with about 13% of deliveries in value, followed by Switzerland (11%), Germany (11%) and the U.S. (7%). The average value of exports of these products amounts to about 7 €/kg. In fifth place among the most exported products from Italy are the essential oils of lemon. In 2011, there were exported about 1,700 tons with revenues of 29 million Euros, equivalent to 7% of the total collections of Italy. The main market for these products is the United States, with approximately 18% of deliveries in value, followed by Germany (13%), France (10%) and Japan (10%). The average value of exports of these products amounts to about 17 euro/kg. In sixth place among the most exported products from Italy are the essential oils of other citrus fruits, which are represented mostly by the essential oils of bergamot and to a lesser extent those of mandarin and clementine. In 2011, there were exported around 600 tons with revenues of 36 million Euros, corresponding to about 7% of the total collections of Italy. The main market for these products is France, with about 32% of deliveries in value, followed by the U.S. (14%), Germany (13%) and the UK (10%). The average value of exports of these products is very high and amounts to approximately 47 €/kg. In seventh place among the most exported products from Italy are mucilage and thickeners of locust beans or locust bean seeds. In 2011, there were exported 2,700 tons with revenues of 17 million Euros, equivalent to more than 4% of total collections in Italy. The main market for these products is Germany, with around 22% of deliveries in value, followed by the U.S. (17%), Japan (12%) and France (9%). The average value of exports of these products amounts to about 6 €/kg. Eighth among the most exported products from Italy are the medicinal plants used primarily in perfumery, medicine or for insecticides and pesticides. In 2011, there were exported 2,700 tons with revenues of approximately EUR 16 million, corresponding to approximately 4% of the total collections of Italy. The main market for these products is France, with about 45% supplies in value, followed by Germany (17%), United Kingdom (7%) and Argentina (5%). The average value of exports of these products amounts to about 6 € / kg. In ninth place among the most exported products from Italy are mucilage and thickeners of guar seeds. In 2011, there were exported 6,500 tons with revenues of 15 million Euros, equivalent to slightly less than 4% of the total collections of Italy. The main market for these products is the Netherlands, with approximately 23 % of deliveries in value, followed by China (7%),U.S (7%) and Poland (7%). The average value of exports of these products amounts to about 2.3 € / kg. In tenth place among the most exported products from Italy are the extracts of sumac, vallonia, oak or chestnut. In 2011, there were exported 5,500 tons with revenues of approximately EUR 14 million, corresponding to 3% of the total collections of Italy. The main market outlet for these products is France, with about 49
21% of deliveries in value, followed by Mexico (15%), Spain (10%) and Brazil (10%). The average value of exports of these products amounts to about 2.5 euro / kg. The Italian trade balance The foreign trade of medicinal plants in Italy and products (finished or unfinished) derived from these result in a deficit in the trade balance in 2011 amounted to approximately € 600 million. During the period examined, from 2000 to 2011, there has been an evolution first increasing the budget deficit until 2005, followed by a slightly descending phase that seems to have run out in 2010. This trend is mainly due to expenditure on imports, while the income from exports have had an upward trend rather than continuous. In the field -­‐ features more than 3,000 hectares cultivated ¬ in Italy, with a production value is over upper ¬ 9 million euro -­‐ there are about 500 employees and more than 2,000 are trademarks that use herbs in their products. Βecause of the small stock of domestic production are the goods from abroad to fuel much of the demand of the Italian market. As with many agricultural production is the production of herbs is characterized by a fragmentation of supply and demand was concentrated in a very limited number of operators. The application is supported for the most part (85%) by processing industries (pharmaceutical, food, liquor and beverages, cosmetics, of phytopreparations) and to a lesser share of the herbalists (15% of raw materials go into this channel, fresh or dried). Numbers of market • 3,300 hectares ; • 3,600 tons of product; • EUR 9 million of the value of production; • 500/1000 operators in the sector (processing, manufacturing, and wholesale) • Over 2,000 trademarks that use medicinal plants in their products. Estimates indicate that the degree of self-­‐sufficiency reaches only 25% of total needs in a wellness market in Italy estimated at 1 trillion 600 billion euro (Sole data 24 hours) are spent on imported raw materials. Among the top twenty most economically important species, 4 occupy the largest share of the market: • Vaccinium mirtyllus (fruits) 15 million euro; • Crocus sativus (stigma) of EUR 9.8 million; • Panax ginseng (root) of EUR 9.4 million; • Piper nigrum (fruit) 8.1 million euro Among the top twenty most economically important species: • A. They are not grown in Italy: Panax ginseng the AC Meyer, Piper nigrum L., Myristica fragrans Houtt. Cinchona succirubra pav. ex Klotzsch, Tilia spp, and Aesculus hippocastanum L. • B. They are grown or could be: in addition to Vaccinium L. mirtyllus and Crocus sativus L., Also Vitis vinifera L., Ginkgo biloba L., Silybum marianum (L.) Gaertn., 50
Passiflora incarnata L., Matricaria chamomilla L., Gentiana lutea L. and Valeriana officinalis L. • Only Passion flower is grown on surfaces and quantities are compatible with national needs The higher loan volumes for the species cultivated in our country are: • mirtyllus Vaccinium L., Vitis vinifera L., Ginkgo biloba L., Myristica fragrans Houtt., Foeniculum vulgare Mill, Passiflora incarnata L., Matricaria chamomile L., Allium cepa L., Origanum vulgare, Rosmarinus officinalis, L., Glycyrrhiza glabra L., Artemisia absinthium, Allium sativum L. Coriandrum sativum L., Valeriana officinalis, Illicium verum, Melilotus officinalis, Cynara scolymus L., Rheum palmatum var. tanguticum maxim ex Regel, Aloe spp. Potentiality • There are spaces to increase the production of medicinal plants in Italy and overcome, at least for the crop species, the existing requirements, reducing the relative share of the imported product • To make the product more palatable than the national most important: ! in terms of quality ! with regard to price Quality • Quality is the most effective tool to promote and competitive raw materials and finished products • The quality of raw materials, especially of plant origin, is a sine qua non for ensuring the safety of products for the health and well-­‐being Growth Strategies • Promote and encourage the cultivation of medicinal plants (PO) cultivated in Italy, more economic value •Support the business of primary production, and distributors in the implementation of quality systems and quality assurance (creation of consortia in outsourcing) • Certify the "Italian Herbs" and to promote the distribution vs. foreign markets as typical products of the tradition and the "Made in Italy" • Encourage research to find the PO sustainable alternatives to petroleum Future opportunities Nowadays, the demand for products of natural origin is growing. In particular their growth is observed in aromatic medicinal plants, as well as secondary products such as essential oils and extracts. In collaboration with technological progress which facilitates the production and the distribution of the products, the future opportunities for development are significant. The aim is to analyze: ! Current and future technological support ! The strengths and weaknesses of the sector and companies operating in this ! Opportunities and risks that can arise in this environment 51
Exemplified product advantages or unique locally available resources (as a power), ways of improving production or distribution, in order to eliminate the weaknesses, differences in trends and lifestyle areas, technological change, competitors and barriers (as opportunities and threats). To extract some conclusions we can use the SWOT matrix as a tool. Nowadays, the demand for products of natural origin is growing. In particular their growth is observed in aromatic medicinal plants, as well as secondary products such as essential oils and extracts. In collaboration with technological progress, which facilitates the production and the distribution of the products, the future opportunities for development are significant. The main objective to achieve is to increase the competitiveness of the sector as a whole, with effective and appropriate national policies, laws, economic and trade that will have to be pursued through the necessary synergistic actions with other public institutions at central, regional and local levels. In this regard, there are many problems that slow down the growth of the industry and they are detailed in this chapter some of the most important, which are shown as vital objectives to be achieved. Moreover, the implementation of some priority objectives would address the other side in order to overcome the "contradiction" of European country (Italy) with the highest number of health food stores, more than 4,000, but with the least agricultural land planted with herbs which, however, in 2012 is only about 3,000 hectares for the organic sector (Source SINAB). Unfortunately the result of this paradox is that the domestic production sector meets only 30% of the requirement while the remaining 70% of the herbs consumed in Italy comes from abroad, from countries where labor is cheap and they can guarantee a low price, but quality is not always satisfactory. As mentioned above the national production of medicinal plants can be competitive only for the quality, as is now happening in many other areas, not only related. The accompaniment of this process first requires the overcoming of issues related to national legislation of the agricultural sector which requires modernization, but also a greater knowledge, overcoming the deficiencies in the available data with specific investigations and efforts to improve the classification statistics that are not relevant to the cognitive needs. By focusing primarily on the agricultural sector and the domestic production of raw materials, including the critical issues is highlighted: -­‐ Small size and lack of continuity of the production (including in relation to the competition of land with other crops in function of the price) that cause little market power; -­‐ Offer to be developed for some species and to produce certified organic -­‐ Costs of production; -­‐ Lack of generational change on farms that also limits the push for innovation in production techniques; -­‐ Barriers to entry in the industry, which include: high know -­‐how required, complex regulations, difficulties in entering the market -­‐ Lack of quality standards which link the prices, and in general, a need for information on prices and market trend; 52
-­‐ Low level of organizational structure of the sector (cooperatives, associations, etc.). -­‐ Difficulties in integrating the production and downstream (organizational complexity, high investment) -­‐ The need for upgrading of contractual relations with buyers in order to stabilize the supply and allow adequate remuneration of farming. In summary, the following table attempts to summarize the framework of the general problems of the entire supply chain and to focus on the strengths and weaknesses especially in reference to the Italian agricultural production, in order to identify the objectives and possible actions to be take to the strengthening and development of the primary sector and the enhancement of national production. As for the threats to the industry as a whole, the main issues raised by the operators of all phases and segments are: threats Opportunities -­‐ Competitive pressure of foreign -­‐ Positive underlying trend in demand, countries with a competition based on given the growing consumer interest in price; highlighted by respondents from the natural product (quoted for all all segments of the fresh system ( segments, including herbs, pot plants, aromatic ) of the transformed system, processed foods, and also by wholesale) especially at the primary and to certified products and organic, for intermediate processing ; potted plants ; brands recognized (specifically with regard to the business integrated supply -­‐ Regulations imposed at EU level limiting chain); the development of industry and innovation (e.g., the legislation called the -­‐ Increase of sales channels, and claims) ; expansion of foreign sales (quoted from wholesalers); -­‐ Regulatory shortcomings and inadequacies in the systems of -­‐ Dissemination of knowledge and classification (e.g. Customs codes ) culture of medicinal plants. which include confusion and market presence of substitute products often chemically reconstructed ; -­‐ Saturation of the market for certain products (especially for fresh aromatic, but also for traditional products such as chamomile ) and reduction in consumption away from home for the economic crisis ( fresh aromatic used by restaurants) It 'should be introduced following the strengths and weaknesses of the sector as a whole: Strengths Weaknesses 1) positive underlying trend in demand, 1 ) competitive pressure of foreign given the growing consumer interest in countries with a competition based on 53
natural product (quoted for all segments, including aromatic plants vessel, processed products, and also from wholesalers) for the products and certified organic for brands recognized (specifically with regard to the business integrated supply chain); 2) increase of sales channels and opportunities for expansion sales abroad (quoted from wholesalers); 3) dissemination of knowledge and culture of plants herbs; 4) Question on the rise, especially for the quality product; 5) They are adapted to marginal lands, require no care agronomic challenging; 6) Decrease of CAP subsidies for traditional crops; 7) satisfactory financial results, the possibility of direct selling price; highlighted by respondents of all segments of the fresh system ( aromatic ) ; transformation system, especially at the primary stage and intermediate processing ; potted plants ; 2 ) regulations imposed at a European level by limiting the sector development and innovation ( for example, the SO-­‐
CALLED legislation the claims) ; 3) regulatory shortcomings and inadequacies in the systems of classification (e.g. Customs codes ) that involve confusion and market presence of substitute products often chemically reconstructed ; 4) saturation of the market for certain products (especially for the fresh aromatic, but also for traditional products such as chamomile ) and reduction in consumption away from home economic crisis ( fresh aromatic used by restaurants) ; 5 ) Lack of supply chain and primary processing centers ; 6 ) Difficulty of the market ( demand / supply, market not transparent) ; 7 ) Lack of a specific mechanization ; 8) Competition from countries with low labor costs. The strengths and weaknesses about the national production: Strengths Weaknesses The quality and care of the Italian product (indicated by and for all -­‐ High production costs, especially labor segments); requirements; -­‐ Know-­‐how of Italian companies -­‐ The need for high investments for specialized in the field; processing intermediate and final, which -­‐ Natural vocation of the Italian territory; would allow to increase margins; issue is -­‐ Great appeal of the "Made in Italy" for complicated by the difficulty of access to the greater safety of the product as credit; perceived by customers, which translates -­‐ The absence of qualitative scales, need into positive trend in exports; to brand policies; -­‐ Presence of industrial districts (liquor, -­‐ Poor organization of the sector; essential oils). -­‐ Any administrative, bureaucratic difficulties of interpretation; 54
-­‐ Poor connection between enterprises and scientific research; -­‐ Some of the difficulties of supply on the domestic market, including biological product (as declared by the wholesalers); -­‐ Logistical shortfalls (for the field of potted plants). CHALLENGES • encourage forms of associations and cooperative between the manufacturers, in order to reach critical masses higher; • networking of expertise and exchange of information among professionals in the field; • aim to produce high quality standard (local brands, organic certification); • for processed products (herbal teas, extracts of various kinds, etc.), It would be interesting to a certification stating that the percentage of raw materials of domestic origin in the finished product; • at the level of research, study to obtain cultivars adapted to specific pedo-­‐climatic environments; • Study for the improvement of cultivation techniques and processing 3.
Mapping the internal environment 3.1 Market Analysis for Greece For the mapping of the internal environment in relation to production, pricing, marketing and distribution of aromatic and therapeutic herbs, plants and trees we used a detailed questionnaire distributed to producers with whom the interviewer proceeded with an extensive discussion-­‐interview. This analysis used data from the regions of Ilias, Achaias and Aitoloakarnanias and analyzed in depth both investments aromatic / medicinal plants and shrubs. Mapping the internal environment for aromatic and therapeutic plants and herbs. Producers of ASKAFEFA and other cooperating producers cultivate Rosemary, Melissa, Thyme and Oregano in an area of about 200 hectares, not including experimental plantations of other aromatic and medicinal plants and energy ones. In the following analysis, we tried to understand and record the important facts and production costs so as to draw a realistic picture of the cultivation without apologies and/or excesses. Then follows a detailed presentation of two major produces, namely Melissa and Rosemary, and information about the oregano and savory. In the second part we have a detailed presentation for the aromatic and therapeutic trees cultivated in the study area. Melissa organic production costs Production and Performance In our study area we have recorded an average performance that varies from 300-­‐
350 kg for net dry drug per year (assuming that we have two seedings) with an average performance of 270 Kg for dry drug. Data for Mellisa agriculture in Greeece refer to dry drug performance of 500 Kg, which does not reflect the reality. At this 55
point, we have to quote that the cultivation performance for melisa can been influenced by the quality of the primary propagating material and the suitability of the field with main reference to physical soil properties (irrigation), the position and intensity of farming care and the cultivation intensity. Another factor that significantly influence the seed of Melisa cultivation is the time of the crop collection. Price and Gross Value of Production The price of dry bulk per kg depends on two main characteristic: first the quality and second the produced quantity. A typical production seems to appear with an average price of 6-­‐7 euro per kg (with a high percentage in essential oils of 0.13% and more) while the lowest and the highest values reach the 8 and 6 euros per kg accordingly. The average gross values of production is 1,750 euro per hectare, a value resulting from the average price of dry bulk of 270 Kg per hectare with an average value to 6.5 euro per kg with the assumption of quantity more than one tonne. Thus, the upper gross values should reach to 1,900 euros (400 Kg/hectare multiplied by 5.5 euros/kg) while the lowest gross value is 1,600 euros. Intermediate inputs and labor costs The lifetime of the specific cultivation is 4 years while the plant lifetime is estimated to 5-­‐7 years. The cultivation of melissa is productive is productive after the second year. The average total installation costs are 800 euro per hectare and include cost of seedlings in seedbed, labor costs (200 ευρώ), machinery and materials. The major cost in organic cultivation of melissa is weed removal which is engineered between the rows with small manual digging and intermediate to the rows and between the plants. An appropriate and correct weed removal for the specific cultivation is estimated to 500 euros per hectare (actually labor costs) for the first year, while in the second and the following years reduces to 200 euros due to the increase of the density with the closing cover of the crown of the natural plant and reduction of weeds.we have to quote that proper weed is of significant importance for the cultivation affecting significantly the performance. Other costs refer to fertilization (almost 70 euro per hectare), irrigation (almost 30 euro per hectare), and in some cases organic pest and other intervetions with a total cost of 15 euros per hectare. Total costs per hectare Year Intermediate Inputs Labor cost ο
1 – Installation 500 300 2ο – Non-­‐productive 115 500 ο ο
3 -­‐6 Productive 115 200 Total 1075 1600 Present Value (interest rate 936 1331 10%) Gross Value Added and net profit Using 10% as a discounted factor, the intermediate inputs can be estimated at 936 euros while the gross production value for a period of 6 with four productive years, years is 5043 euros. The gross value added is estimated at 4,107 euros while the gross profit calculated by the gross production value minus the labor cost and depreciations reaches the amount of 2,776 euros. Subtracting interest and rent costs 56
the net profit is estimated at almost 2,500 per hectare for 11 year and thus we can have an annual net profit of about 417 euro per hectare. Taking into account the previous estimations with an average cultivation population of 50 hectares for each farmer the net profit for each farmer for an annual work unit (AWU) can be formed at 20,850 euros. Oregano production costs The difference between organic oregano and mellisa concerns the following: •
Lifetime of cultivation of seven years •
Planting with 4500 seedlings per hectare •
A performace of 160 kg per hectare of dry drug The cost structure is identical to that as described above for melissa. Rosemary production costs Production and Performance In our study area we have recorded an average performance that varies from 380-­‐
410 kg for net dry drug per year (assuming that we have two seedings). Rosemary agriculture is different from classical cultivations as oregano e.t.c because of large lifetime of the cultivation that reaches the 12 years. At this point, we have to quote that the cultivation performance for rosemary can been influenced by the quality of the primary propagating material, which in this case is graft with time production of nine months. Price and Gross Value of Production The price of dry bulk per kg depends on two main characteristic: first the quality and second the produced quantity. A typical production seems to appear with an average priceof 4.5-­‐5 euro per kg while the lowest and the highest values reach the 6.5 and 4 euros per kg accordingly. The average gross values of production is 2000 euro per hectare, a value resulting from the average price of dry bulk of 400 Kg per hectare with an average value to 5 euro per kg with the assumption of quanittie more than one tonne. Thus, the upper gross values should reach to 2200 euros (400 Kg/hectare multiplied by 5.5 euros/kg) while the lowest gross value is 1750 euros. Intermediate inputs and labor costs The lifetime of the specific cultivation is 8-­‐10 while the plant lifetime is estimated to 11 years. The cultivation of rosemay is productive is productive after the second year. Very important for the potential and existing producers of rosemary can be considered the initial installation costs for a given cultivation per hectare estimated in an average value of 800 euro (for about 150 trees Aronis) and includes the purchase cost of the trees and includes transplant and labor costs (200 euros) and machinery and materials. The major cost in organic cultivation of rosemary is the weed that is engineered between the rows of small cultivators and manual intermediates in rows and between plants. Proper weed requires labor costs as in balm 500 per acre in the first year, while the second and subsequent years the cost reduced to 200 euros due to the increased density of coverage by closing the crown of plants and the natural reduction of weed. Other costs includes lubrication (almost 70 euro per hectare), irrigation (almost 30 euro per hectare), and in some cases η organic pest and other interventions with a cost of 15 euros per hectare. Total costs per hectare 57
Year Intermediate Inputs Labor cost ο
1 – Installation 500 300 ο
2 – Non-­‐Productive 115 500 ο
ο
3 -­‐11 Productive 115 200 Total 1650 2600 Present Value (interest rate 1207 1802 10%) Gross Value Added and net profit Using 10% as a discounted factor the intermediate inputs can be estimated at 1207 euros while the gross production value for a period of 6-­‐9 years is 10471 euros. The gross value added is estimated at 9,264 euros while the gross profit calculated by the gross production value minus the labor cost and depreciations reaches the amount of 7,462 euros. Subtracting interest and rent costs the net profit is estimated at almost 7,000 per hectare for 11 year and thus we can have an annual net profit of about 636 euro per hectare. Taking into account the previous estimations with an average cultivation population of 50 hectares for each farmer the net profit for each farmer for a annual work unit (AWU) can be formed at 31,800 euros. Mapping the internal environment for aromatic and therapeutic trees. The coperating producers/farmers of aromatic and therapeutic trees cultivate 75 hectares of Aronia, Hippophae L, Goji-­‐Berry and Cratageus in three perfectures of western greece (Achaia, Ilia and Aitoloakarnania). Ath this stage we didn’t include other areas from potential producers which they are in discussions with these growers for their participation in the wider consortium. The same assumption as before holds for this case also. Aronia production costs Production and Performance In our study area we have recorded an average performance per tree for Aronia ranging from 8-­‐10 Kg per year. Having in our mind that having a correct placement of aronia trees per hectare obtaining an optimal performance, the maximum use can be considered in the number of 150 trees, and thus the total per hectare performance ranges from 1200 -­‐ 1500 Kg per year. At this point, we have to quote that the cultivation performance for aronia trees can directly been influenced by the quality of the primary propagating material and the suitability of the field with main reference to physical soil properties (irrigation), the position and intensity of farming care and the weather conditions (special reference to high temperatures). Price and Gross Value of Production The price of Aronia per kg depends on two main characteristic: first the quality and second the produced quantity. In addition, in fresh for, its price varies in retail from 20-­‐25 euros per kg. Moreover, aronia’s price appears to have significant fluctuations depending of its final form (dried or powdered in various products, liquid or frozen. According our market research aronia price should exceed ever more that 50 euros per kg noting its dependence from the disposed form. In contrast, in the case of industries producers faces significant lower prices, about 1-­‐3 euros per kg, but increased quantities. Finally, in the case or retail producers face potential prices in 58
the same level with higher variances. On this basis, the average gross production value in the case that all the production be placed in the industry is estimated about 2,700 euros per hectare and by each year. However if the production has been allocated to retail the producers achieved significant economies of scale while weak differentiation exists when placing the limit on wholesale market.On the other hand, the producer can achieve a different mixed pattern gross profits allocating their products in different market with different percentages and prices . Intermediate inputs and labor costs The lifetime of the specific cultivation is big enough and is calculated for many decades giving a comparative advantage to the producers. However it should be noted that for the first 5-­‐6 years there is virtually production as well as for the sixth year the producers may have sample production. The full exploitation of this seedling takes place from the seventh year onwards where it becomes operational for long enough and depending on the maintenance of the cultivator. Very important for the potential and existing producers of aronia trees can be considered the initial installation costs for a given cultivation per hectare estimated in an average value of 1550 euro (for about 150 trees Aronia) and includes the purchase cost of the trees (450-­‐750 euros depending on the nurcery garden), the enclosure of the crop area (cost about 600-­‐700), planting costs and irrigation and further installation costs about 250-­‐350 per hectare. However, the annual cost of production for Aronia per hectare and by each year is estimated at around 200 euros. The most considerable proportion that reaches a percent of more than 50 of the total annual cost considers the harvest of the fruitw to be undertaken. It should be mentioned that other costs such as electricity and fuel, or packaging materials and other costs are not a significant percentage of the annual costs of production. Finally the weed which is mechanically between the rows of small cultivators and manual intermediates in rows and between plants is not a significant cost factor and limited to the first years of cultivation where the plants are low height and acts as lubrication for subsequent periods. Total costs per hectare Year Intermediate Inputs Labor cost 1ο – installation 1550 30 ο
ο
2 –6 Non productive 100 100 ο
ο
7 – 16 Productive 50 100 Total 2150 1530 Present Value (interest rate 5%) 1320 940 Gross Value Added and net profit Adopting a scenario of the first ten years of actual production for Aronia trees and using 5% as discounted factor, the intermediate inputs is 1320 euros and the gross value of production is 27,000 euros for the period of sixteen years with ten productive years. Using the previous assumptions a gross value added is estimated at 25,680 euros while the gross profit calculated by the gross production value minus the labor cost and depreciations reaches the amount of 24,740 euros. Subtracting interest and rent costs the net profit is estimated at almost 24,000 per hectare for 10 year and thus we can have an annual net profit of about 2,400 euro per hectare. Taking into account the previous estimations with an average cultivation population 59
of 10 hectares for each farmer the net profit for each farmer for a annual work unit (AWU) can be formed at 24,000 euros. Hippophae L production costs The second aromatic tree recorded at the interviews with the producers was the Hippophae L. It should be noted that actually Hippophae L production costs have no significant differences in the production, sale price and therefore the cost structure is the same as that described above for Aronia. Production costs of Organic Goji-­‐Berry Production and Performace In our study area (in Ilia’s prefecture) we have recorded an average performance per tree for Aronia ranging from 8-­‐10 Kg per year 9with lowest vale of 4 kg). However we have to note that Goji-­‐Berry’s cultivation performance can directly been influenced by the quality of the primary propagating material and the suitability of the field with main reference to physical soil properties ( irrigation), the position and intensity of farming care and the weather conditions (special reference to high temperatures). Price and Gross Value of Production The price of Goji-­‐Berry per kg depends on two main characteristic: first the quality and second the produced quantity. It seems that this cultivation follows the case of the other two aromatic trees in terms of price and appears great variation for the price depending on the field disposal.In addition, in fresh form, its price varies in retail from 20-­‐25 euros per kg. In the case that the potential buyer is the industry the price varies between 1-­‐3 euros per kg while in the retail case producers face potential prices in the same level as before but with higher variances. On this basis, the average gross production value in the case that all the production be placed in the industry is estimated about 2,700 euros per hectare and by each year. However if the production has been allocated to retail the producers achieved significant economies of scale while weak differentiation exists when placing the limit on wholesale market.On the other hand, the producer can achieve a lowest value of 1,200 euro and a highest of 3,000 euros per hectare. Intermediate inputs and labor costs The lifetime of the specific cultivation is big enough and is calculated for many decades giving a comparative advantage to the producers. However it should be noted that from the first year the producers have a small sample of production while a full exploitation of this seedling takes place from the fifth year onwards where it becomes operational for long enough and depending on the maintenance of the cultivator. Minor importance for potential and existing producers of Goji-­‐Berry can be considered the initial installation costs for a given cultivation per hectare whicih is being estimated in an average value of 1550 euro (for about 150 trees) and includes the purchase cost of the trees (450-­‐750 euros depending on the nurcery garden), the enclosure of the crop area (cost about 600-­‐700), planting costs and irrigation and further installation costs about 250-­‐350 per hectare following the same picure as for Aronia and Hippophae L. Total costs per hectare 60
Year Intermediate Inputs Labor cost ο
1 – Installation 1550 30 ο
ο
2 –4 Non-­‐productive 100 100 ο
ο
5 -­‐14 Productive 50 100 Total 2350 830 Present Value (interest rate 1444 510 5%) Gross Value Added and net profit Adopting a scenario of the first ten years of actual production for Aronia trees and using 5% as discounted factor, the intermediate inputs is 1444 euros and the gross value of production is 27,000 euros for the period of sixteen years with ten productive years. Using the previous assumptions a gross value added is estimated at 24,046 euros while the gross profit calculated by the gross production value minus the labor cost and depreciations reaches the amount of 23,000 euros. Subtracting interest and rent costs the net profit is estimated at almost 23,000 per hectare for 10 year and thus we can have an annual net profit of about 2,300 euro per hectare. Taking into account the previous estimations with an average cultivation population of 10 hectares for each farmer the net profit for each farmer for an annual work unit (AWU) can be formed at 24,000 euros. Production costs of Organic Crataegus Production and Performace The great difference between crataegus and the previous trees refers to the quantity produced. The performance per each tree it is estimated to 50-­‐70 Kg. Consequently, the per hectare performance, having almost 30-­‐40 trees, varies between 1,500-­‐ 2,800 Kg per year. Price and Gross Value of Production The price of Cratagus follows the previous one tree. However the significant different per hectare performance differentiates the average gross output. Focusing in our case study we can estimate a price of 4200 per hectare for one year if the whole production placed in the industry sector. Accordingly we have a lowest and a highest value of 3,000 and 5,600 euros correnspondingly. Intermediate inputs and labor costs The production costs for the specific tree follow Aronia’s standard. Total costs per hectare Year Intermediate Inputs Labor cost 1ο – Installation 1550 30 2ο –6ο Non 100 100 ο
ο
7 – 16 Παραγωγικά 50 100 Total 2150 1530 Present Value (interest rate 1320 940 5%) 61
Gross Value Added and net profit Using the same assumptions as before and adopting a scenario of the first ten years of actual production for Aronia trees and using 5% as discounted factor, the intermediate inputs is 1320 euros and the gross value of production is 44,000 euros for the period of sixteen years with ten productive years. This is giving a gross value added estimated at 40,680 euros while the gross profit calculated by the gross production value minus the labor cost and depreciations reaches the amount of 39,740 euros. Subtracting interest and rent costs the net profit is estimated at almost 23,000 per hectare for 10 year and thus we can have an annual net profit of about 3,800 euro per hectare. Taking into account the previous estimations with an average cultivation population of 10 hectares for each farmer the net profit for each farmer for an annual work unit (AWU) can be formed at 38,000 euros. 3.2 Market Analysis for Italy Numbers in the market of medicinal herbs in Italy 3,300 hectares; 3,600 tons of product; EUR 9 million of the value of production; 500/1000 operators in the sector (processing, manufacturing, and wholesale) over 2,000 trademarks that use medicinal plants in their products. As part of the user industries that liquor (30%) and pharmaceuticals would absorb the bulk (24%), but substantial quantities would also be used by the cosmetics industry food (16%) and the herbalist (14%) and food (12 %) Figure 8-­‐DEMAND OF AROMATIC PLANTS (%) 62
The remaining portion would be eventually used by the homeopathic industry and dyes. The most interesting segments are then the pharmaceutical, cosmetics and liquor industry. The references to herbal products-­‐fitoprerparati -­‐ herbal teas -­‐ supplements-­‐cosmetics-­‐present on the Italian market are around 13,000. What is the situation between the different sectors and segments of the market in terms of overall turnover. Figure 9-­‐Composition of the Market Welfare Composizione del Mercato del Benessere
Altro
8%
Cosmesi
18%
Integratori
Alimentari:
14%
Rimedi Fitoterapici:
38%
Erbe
22%
The cosmetic industry increases its market share, and this is also confirmed by the views of the companies that you identify as the second largest sector in order of impact on sales. In particular, it appears that herbs and phyto constitute 60% of the total market and 45% of the turnover of the health food stores, but also to expert opinion the cosmetics industry is one that keeps track of the most interesting growth trend for the future. Comparing these data with data on retail cosmetics should be noted that the turnover of the cosmetic industry is so divided Body Care 34.1% Face Care 20.3% Perfumes 21.5% Solar 4% Make Up 15.7% Manicure and Pedicure 4.4% 63
Figure 10-­‐Composition of the cosmetics market La Composizione del Mercato della Cosmesi
Manicure e
pedicure 4,40%
Trucco 15,70%
Cura del Corpo
34,10%
Solari 4%
Profumi 21,50%
Cura del Viso
20,30%
The Demand In 1960 spending on food consumption accounted for around 60% of total household expenditure Italian, in the early '80s it had fallen to 30% and today is going to drop below 20 percent. This phenomenon is typical of advanced economies is the result of several factors: • the increase in income in real terms • the limited growth of food prices compared to those of non-­‐food • increasing the supply of food, favored by technological progress, often greater than the demand. In addition to these economic factors, other socio-­‐demographic change have contributed to the eating patterns of the industrialized countries: the exodus from the countryside, the increase of working women, the change in the composition of families, the internationalization of food patterns, the new technologies of storage and cooking of food, the less time spent on food preparation. Also in terms of distribution, there has been a strong and constantly changing, is still ongoing. In Italy, the number of traditional retailers has decreased considerably over the last two decades, while at the same time has increased its presence on the territory of organized chains and consumer cooperatives both Italian and foreign. In this scenario, the spread of mass consumption and the distribution system and a market characterized by an excess of supply over demand, echoed attempts to diversify from manufacturers. This will also give answers to different needs of consumers: higher product quality, safety in production methods more environmentally friendly, and concern for future generations. In recent times there is so a growth of interest in healthier eating from the point of view of hygiene and nutrition program, especially on the part of consumers belonging to the middle and upper social classes, and to a greater demand for quality food, even if at higher prices . In this context and in this segment of the market that are space and are directed organic products. 64
On another front the other hand increased the consumption of products for the hygiene and care of the person, within which are located some of the products from herbal medicine -­‐ natural cosmetics. The increasing care of the person and in any case the demand for safety and hypoallergenic qualities has increased the interest in this kind of products by consumers. On another front, again, we find then the consumption of phyto-­‐ therapeutic, nutritional supplements and various infusions that have seen a boom in consumption in recent years. The Ecological Consumption But consumption and consumer attitudes -­‐ in Italian -­‐ are really changing in the direction of eco-­‐friendly consumption -­‐ you want to be eating or not eating? According survey of CENSIS the majority of Italians said they had changed their consumption behavior in relation with the increase in environmental problems. However, on the basis of that investigation we can make segmentation and identify different groups: • 36% is the indifferent -­‐ age high -­‐ low education completely unwilling to see the environmental issues and to take charge in some way. • 16% are involved -­‐ in those who already consume green products to the point of spending 30-­‐40 % more. • In the middle are concerned (16 %) and sensitive (32%) groups willing to change their future buying behavior. We compare these data with other green consumption and see what answer Italians on certain types of ecological consumption: Figure 2-­‐ The consumption of whole foods I consumi di cibi integrali
Sempre
6,40%
Spesso
19,60%
Mai 32,40%
A volte
43,60%
Our data processing CENSIS Key: often always never sometimes 65
Figure 3-­‐Consumption of dietary supplements I consumi di Integratori alimentari
Mai 2,70%
A volte
10,70%
Sempre
46,20%
Spesso
40,40%
Our data processing CENSIS Key: often always never sometimes Figure 4-­‐Consumption of herbal products I consumi di prodotti di erboristeria
Mai 2,70%
A volte
10,70%
Sempre
46,20%
Spesso
40,40%
Our data processing CENSIS Key: often always never sometimes 66
If we look at the food industry, we see that only 0.3% of the expenditure of the Italian food is intended for the purchase of organic food. Organizations of producers and raw material prices Returning to the field of medicinal plants in general also has specific features related to the geographical location Wherefore deserves careful thought, in fact, the spread of medicinal plants is slowed by obstacles to economic, regulatory, and sometimes related, as noted earlier, technical knowledge and culture . But the most problematic at the organizational level is the lack of aggregation of the supply chain, which in reality does not exist from its own systems from the classical aggregation operators in the agricultural sector (e.g., Professional Organizations, Cooperatives and Consortia) and the low degree of innovation compared, especially, to mechanical harvesting. In fact, the key figures in the agricultural sector remain the operator that provides the right product, herbs, another important figure or the wholesaler and / or brokers specialized (which are few compared to Germany for example ), or even directly to industry and enterprises for transformation. In recent years the relationship between the manufacturer and the operators is changed or at least you're trying to change it because the grower of medicinal plants is more visible and present and its importance, professionalism and productive specificity are recognized within the industry. Buyers are starting to be more attentive to the national product and for the most simple and safe management of supplies and purchases compared to imports from EU countries and third parties is for a generally higher level of quality of the herbs. This is because, as mentioned, the professionalism of the operators but also to the climatic characteristics of the area that is available to remunerate more for the product in exchange for receiving a higher quality standard. In fact Italy for its disposal in the Mediterranean basin allows the cultivation of many medicinal species (150 species cultivated and other potentially cultivable as is apparent from technical ) of the distribution depending on the agro-­‐ biological being able to draw on a biodiversity of vegetation that must be more protected as a common good and as an economic resource . However, the critical issue remains the price of the raw material that forms on the market with respect to production costs incurred by the Italian farmer, however, that should be more than competitive with the product purchased abroad (Asia, Africa or South America) which reflects operating costs such as freight import, customs clearance, controls. From here it follows the inadequate production of the domestic sector as to the difficulty of offering large batches that meet the real demand consequence of small / medium size that do not have behind them an organization of producers gathered, as already mentioned, which would allow a completely different bargaining power, allowing you to give and offer the product in the quantities required by the market. So it is essential to the creation of a consortium or cooperative medicinal plants that can be grown alongside other traditional crops. 67
The operators of the wholesale The wholesale stage is characterized by a limited number of companies that have significant market power in this market as "natural" buyers of products of the largest farms, with whom relationships are close and continuous, in order to secure supply flows stable. The wholesaler usually buys the product in uniform lots and consistent and then provides for apportioning the quantity, and classify them (analytically and with controls on contaminants of various kinds). To this must be added that, for some years, some foreign wholesalers (especially German or French) operating in Italy directly or through subsidiaries Italian. The wholesaler generally has a large storage capacity of the product and work on stocks according to a logic including financial. Obviously, large storage capacity and involve large areas covered with plants capable of ensuring the maintenance of the storage parameters optimal. Some of these companies also have some processing machines, such as sieving and cutting, so as to transform the product as in commercial cuts. In most cases, however, this kind of companies simply repackages, after checking and qualification, the product in containers of a smaller size appropriate to the orders of the downstream firms. The wholesalers of essential oils are very few. On this segment in our country operate mainly agents of operators located in France and Germany, which are the most important markets, because in this case the storage capacity of a constraint is much less important because the substances are concentrated and easy to handle and transport. Ultimately, companies in this segment of the industry can be traced to the following main types: -­‐ Companies specialized in the trade of primary product dried, or plants for the production chain derivatives (extracts) and refined ingredients used in turn to be used in the finished product manufacturing; -­‐ Companies that specialize in trading of essential oils, less in Italy, who have a particular expertise for this type of raw materials. -­‐-­‐ other companies in addition to dried plants, they also extracts, essential oils, along with other natural ingredients (such as minerals, animals), offering a very wide range of raw materials and semi-­‐finished products. The sales unit range from 0.5-­‐1 kg for higher-­‐value products (essential oils, spices and fine herbs) up to the hills from 100 to 1,000 kg. The product has fresh wholesale buyers, but they are usually the same people who operate on the fruit markets. There are companies that have a very wide and deep with hundreds of references to the cuts for infusion, and the same with regard to products and ingredients for food supplements and sachets for infusion. The target market for this type of companies consists basically from B2B or from other companies in the supply chain. The supply of the product is mainly on the international market, according to the different geographical areas of productive specializations abroad and in part, as evidenced by the Italian producers. The customers of wholesale enterprises is very varied, it is subject that transform raw materials and semi-­‐finished products, other products, which can be formulated and finished products or ingredients to resell to other subjects: in the final manufacturing enterprises foods, supplements, cosmetics, medicines and so on. A limited proportion of the products sold by wholesalers are made up of loose sold in retail grocery stores and health food stores. The volume sold by wholesale 68
companies (referred to dry weight) ranges from tens to thousands of tons. The sales range from less than one million to ten million Euros. Analysis of the production The chain of medicinal plants is very complex and difficult to be outlined. The main difficulty in defining a model that summarizes and expresses in a complete structure of the supply chain and the relationships between the different actors that compose it can be traced to the following points: -­‐ Large number of cultivated species, semi-­‐finished and finished products that are generated in this sector; -­‐ Numerosity of the types of actors who take part in the supply chain (collectors, producers, processors, end users, e.t.c). -­‐ Different degree of vertical integration between actors from different stages of the supply chain. As shown previously, medicinal plants have multiple uses and also the processing and/or processing which they are subjected are very numerous. Many end up among the shelves of herbal products in the form of dried product (e.g. Chamomile flowers), essential oil, extracted with alcohol, glycerine macerate and the like. Another use is that of fresh or dried herbs used in the kitchen at home or in restaurants or within the food industry as ingredients in ready meals (think of the frozen ready meals) or in sauces, gravies and dressings. Essential oils and natural flavors are widely used by the food industry, from the drinks, both alcoholic and non-­‐alcoholic industry, the pharmaceutical and cosmetics industry. A segment in recent years is growing rapidly is derived from the use of medicinal plants and as food supplements. Among the industrial uses other than those related to the preparation of detergents, dyes, feed and processing leather industry. With regard to the high number of figures which take active part in the chain of medicinal plants, what is to be put in relation to the high number of species and raw materials entering in the chain and the wide variety of processes, technological and transformation which these plants are subjected. Many species are grown in Italy and then led to the development of a genuine agricultural activity, with close ties to the nursery activity. In other cases, it is spontaneous species of which the collection is performed in nature. In other cases, again, it is cultivated species and/or collected in nature in other countries, Consider, for example, the typical species of tropical or sub-­‐tropical countries. In the latter case it is essential to figure importer. With regard to the relationships that exist between the various figures that are part of the supply chain, the series is very wide. There are some major companies that integrate the entire supply chain, coming directly to the consumer / end user, performing all phases of agricultural production, importation, processing industrial for sale, both wholesale and retail. In other cases, farmers realize the first processing of the finished product and sell wholesale. An example to those companies that grow herbs and realize that even the drying or distillation of essential oils, thus reaching the wholesale market with a product manufactured or semi-­‐finished products. In other cases, there is an 69
integration of a contractual nature between the industry and the agricultural phase, through production contracts. The figure below is not meant to describe exhaustively the chain, but to give a clear picture, even if simplified. In it three distinct main stages are presented: agricultural production and primary processing, intermediate processing and final processing. Upstream, there are the suppliers of raw materials for agriculture ( seeds, fertilizers, pesticides, e.t.c.), While downstream lie the distribution and consumption .The analysis of the supply chain has resulted in two steps: first, a survey was done (type of desk) in which, through official data and various sources of data or information through privileged witnesses made by the experts of the table of the supply chain, have been identified the main actors (companies and actors) and their roles and has tried to quantify the structural dimension in the first instance and economic. On the other hand, on the basis of this first survey, was carried out a qualitative survey and its methodology and the results of which are discussed later in this chapter. Key: green primary production (agriculture and wild harvesting stage), in blue phases of industrial transformation in the phase of commercial brokerage orange, blue retail and heavenly final consumption. Source: ISMEA. The work presented in this chapter aims to trace through the official sources, a comprehensive picture as possible of the structural characteristics and local companies engaged in the production of crops under consideration and to highlight some activities where it is possible, main economic results. On the first aspect has been taken into consideration the number of farms and areas, distributed by classes of Utilized Agricultural Area (UAA), relating to " Aromatic plants, medicinal, spice and condiment " detected -­‐ for the years 2002, 2005 and 2007 -­‐ the survey on the structure and production of agricultural holdings (SPA) ISTAT, for the same aggregate, they are also considered in detail the information the Census of Agriculture 2000 and 2010, always considering the number of companies and surfaces class of cultivated area . As for the economic results were examined available data on the site of the Farm Accountancy Data Network (FADN ), which, in the section RICA AREA, for crops or their aggregates, allows you to make, if the conditions relating to joint the publishable data, queries that allow you to obtain a series of corporate economic performance indicators ( gross, specific costs, gross margins, e.t.c.). The following will therefore be taken into account first the structural characteristics and spatial aggregate considered and then examine, for some productions, performance data. The macro trends Figure 14. has proposed an overall comparison between the two sources cited above (SPA and Censuses). It is a comparison that must be made with extreme caution since the two sources very different from a methodological point in the first place, because the Census is carried out on the entire universe of farms, while the 70
APS is a sample survey, also if designed in such a way that, as a whole, its results may be representative of the universe census. However, as noted, were taken over by the Census in 2000 over 4100 companies in the areas under cultivation of "aromatic and medicinal plants, spices and seasoning" Table 13-­‐ Evolution of the companies of the surfaces Source: Based on ISTAT data The number of companies interested in these crops estimated by the SPA in subsequent years (2002, 2005 and 2007) appears to be much lower, and remained around two thousand units. Also the last census survey detects a number of companies involved much lower than in 2000, slightly below that of 3000 units. The measured surface to 2000 amounted to less than 2 thousand and three hundred hectares. The estimated area in subsequent years through the APS appears much larger, surpassing the first 3000 hectares to reach 4400 in 2007. The value found in the census in 2010 finally beat the 7000 and 200 hectares. For explanatory purposes, the "time series" examined are shown in Figure 3.1. Figure 5-­‐ Evolution of the companies of the surfaces Source: Based on ISTAT data Ultimately, while presenting the two types of information significant differences, the evolutionary framework of the same appears to be consistent, in the sense that both detect a significant expansion of the surfaces in front of a stagnation of the number 71
of companies involved (it should be considered in this sense that part of the decrease detected by the Census of 2010 could also be attributed to the different definition universe adopted). The overall dynamics suggest therefore start within the sector, expansion processes characterized by growth in size and specialization of production, processes that seem somehow confirmed by the increase in the average size invested in these crops, which a little more than half hectare in 2000 to nearly 2.5 hectares per farm in question in 2010. Moreover, considering the census findings, the overall change of the surface (see Table 3.1.) Is over 200%, in other words interdental decade in the area would grow at an average annual rate of over 12%, which appears surely significant? The number of companies indicated a reduction of almost 29%, to an average annual rate of 3.4%. The evolution of the size and concentration The interpretative hypotheses described above were subjected to a careful analysis considering dynamic Census data by size classes of the utilized agricultural area (UAA) Total corporate and the percentage of the latter, as shown in Table 3.2. Examining the raw can see that the overall decrease in the number of companies is actually the result of a very substantial reduction affecting the micro (less than 1 hectare of UAA ) and partly those between 1 and 2 hectares of UAA, while all other classes see grow their numerosity. Companies with less than 1 hectare, in fact, spend more than 2 thousand to "only" 452 (-­‐77.9 %), and the 1 to 2 from 700 to 465. The number of interested companies to crops under consideration, of a size between 50 and 100 hectares of UAA grows, however, from 48 to 131, that is, by nearly 173%. Considering the dynamic character in relation to the size available, the area planted, it is noted that, as a result of the decline in the number shown above, only the "micro businesses " (those below one hectare ) see reducing the total invested in the crop area in examination . All other classes showed an increase of the surface that increases with the size. In particular, the class of between 50 and 100 hectares of UAA sees increase the area under 291 to over one thousand and three hundred hectares, i.e. more than 372 %, and that above the 100 hectares even from less than 283 to 1460 ( +416.4 % ). Table 14-­‐ Evolution of the companies and the surface area used for classes Source: Based on ISTAT data Figure 6-­‐ Variations of companies and surface area used for classes 72
Source: Based on ISTAT data As seen in classes over the 10 hectares of UAA growth surface is more than twice that of the companies. In the specific case of between 2 and 5 hectares growth of numerosity is quite modest (+6.9%), while the surface is invested in the crop concerned is more than 16 times higher than that of said numerosity (+144 %). In other words, alongside a greater presence of the crops under consideration as part of the regulations of companies of greater size, seem to emerge even greater specialization phenomena involving small and medium-­‐sized companies. The dynamics shown, of course, do change significantly in 2010 compared to 2000, the percentage of each class to the total. Suffice it to observe this effect (always compare tab. 3.2) that in 2000 about 50 % of the companies was composed of micro per hectare below, the surface of which was invested 6.5% of the total. In 2010, these companies accounted for 15 % of the total with just over 1% of the surface. Similarly, in 2000, companies with medicinal plants, larger than 50 hectares of UAA were just 2% of the total, and committed just over 25 % of the total area planted. In 2010, the companies in question represent 7.7% of the complex with an area of almost 40%. Ultimately, the percentage of character «surface «attributed to larger companies have increased over the decade. However this does not imply, also in consideration of the large increase of the surface itself, that overall the distribution of the latter character between the different classes has considerably moved away from the initial situation. In other words, it is said that in 2010 it varied considerably in statistical terms what is defined as a concentration technique. The analysis of the latter is given in Figure 3.3 using the known Lorenz curve, i.e. the relationship between the cumulative frequencies of the high number of classes and that of the surfaces. Figure 7-­‐ Relative Frequency of the combined companies of the surfaces (Lorenz Curve), 2000 and 2010. 73
Source: Based on ISTAT data In graphical terms the concentration level can be perceived as the distance of the broken deriving from this relation with respect to the line of distribution, which refers to the hypothetical situation in which the character of the surface is distributed uniformly between the classes. As seen in the figure the broken line that describes the relationship at issue in the case of the 2010 Census appears even "closer" to the line of equal distribution than it is that of the 2000 Census. In other words, the decrease of the micro and the simultaneous growth of the intermediate classes would lead in 2010 to a level of concentration is not particularly different (even a bit 'lower) than that recorded in the previous census. The territorial dynamics and specialization The overall performance recorded at the national level is obviously the result, as is often the case in the Italian case, the dynamics are very different recorded at the local level. A first illustration of these dynamics is proposed in Table 3.3, in which, for each region, shows the number of companies recognized at the two censuses, its surfaces and the related percentage changes. As can be seen, there are regions in which we are witnessing a growth of both companies of the surfaces (Piemonte, Valle d' Aosta, Trentino Alto Adige, Friuli, Emilia Romagna, Marche, Puglia and Calabria), and others in which both decrease (Liguria and Molise). Another large group of regions (Veneto, Lazio, Abruzzo, Campania, Basilicata, Sicily and Sardinia) is characterized by a decrease of the companies and to the simultaneous growth of the surfaces. Finally, there is Lombardy, which is the only case in which a growing number of companies interested in the crops under consideration correspond to a decrease in the area planted. In Liguria, the area reduction in medicinal plants can be traced back to the strong crisis in the greenhouses that has affected the region since 2006, dragging down these crops. Table 15-­‐ Evolution of farms and areas by Region 74
Source: Based on ISTAT data For the sake of convenience in Figure 16 shows the relative changes of companies and surfaces. As can be seen the highest growth in the number of companies registered in the Friuli region, while the largest increase of the surface in the case of the Marches. In the case of Lazio, Abruzzo, Campania and Sardinia decrease in the number of firms is accompanied by increase in the area that appears to be fairly consistent in Friuli, Emilia Romagna, Tuscany, Umbria, Marche, Puglia and Calabria surface increases much more than the number of companies. Figure 8-­‐ Variations of companies and surfaces (2010/2000) Source: Based on ISTAT data Depending on their position relative to the point that represents Italy (ITA) regions can be divided into four types: -­‐ Those with increases in the number of companies and the surface higher than the national average -­‐ Those that have a higher than average growth of companies, but a smaller increase in the surface 75
-­‐ Those with variations in both variables and those with lower average variation of smaller companies and changes in the surface more The figure allows highlighting that, among the regions in the first quadrant; Emilia Romagna, Friuli and brands have played a role in the evolution expansive national, while Abruzzo, Basilicata, Sicily, Liguria and Molise have contributed recessive sense. There have been a number of regions where the trend appears to be characterized in towards greater fragmentation of production. The dynamics described above have greatly altered the incidence of the different regions within the national framework, as it is possible to detect in table 27. Table 16-­‐ Percentage of individual regions of the national total 2000 Census 2010 Census Companies companies surfaces surfaces 76
Source: Based on ISTAT data At the beginning of the last decade almost 32% of the hectare age was located in Piedmont, where he was present slightly more than 5 % of companies, followed by 10%, from Sicily. At the end of the decade, despite a modest increase in absolute terms (see tab. 3.3), the incidence of the developed area of the first region represented «only " 12% of the national total (and that of the second just over 4 %). In 2010, the regions that «weight " more in relative terms on the surface are national brands (30%) and Emilia Romagna ( 24%). Obviously, considering the absolute size of the different regions, in order to assume some form of territorial specialization in activities considered necessary to compare the incidence of regional surface in such activities with the weight of each region on the national agricultural area used, as is proposed in table 17 which shows the so-­‐called location quotients (QL ) . Table 17-­‐ Location Quotients Regions QL ≥ 1 Region QL <1 77
Source: Based on ISTAT data As can be seen in the table, according to this indicator regions can be divided into two groups: Those with a higher QL (or equal) of the unit and those with a less than QL 122. Those with a substantial degree of specialization are therefore Marche and Emilia-­‐Romagna. Some degree of specialization also connotes the cases of Piedmont and Tuscany. Aside from Umbria, which takes a similar profile to the national, all other regions have a lower QL unit that leaves no conjecture, at least for all the crops harvested under the heading considered, no particular specialization. Products and Processes In this section we describe the chain of production steps and their products, the stage of cultivation to the finished products. They retrace the definitions given in the previous section by expanding the technological aspect and especially the agro-­‐
industrial or industrial context. It is also focused on the essential aspects of technology and the exciting prospects for the development and search. The cultivation of medicinal plants is a fairly recent and in the expansion phase. Surely the production of plants in field derivatives, dating back no more than a century ago. The release for cultivation has intensified after the war, thanks to the interest of nations historically related to medicine from plants, such as Hungary, Germany, the former GDR and the former Yugoslavia. Recently is experiencing a booming thanks to some important changes in the market. The cultivation of medicinal plants does not lend itself to a description of agronomic unique, with the criteria of classical economics (herbaceous open field, wood, fruit, e.t.c.). However, it has many similarities with the cultivation of vegetables in the open field, so a fairly intensive culture system, which provides plant, crop care and frequently one or more collected during the development cycle of the crop during the growing season. More rarely, the cultivation of medicinal plants is similar to the crop cycle typical of cereal or grass, where sowing and harvest practices are the only highlights. Finally, there are woody species, shrubs, trees or other perennials that are grown in non-­‐ intensive and which are difficult to fit into the traditional systematic agronomic (eg. Ginkgo, hawthorn, rosemary, gentian, e.t.c.) . Scarce, for most species, the agronomic and technical knowledge at all stages of the cultivation process and in particular the quality varietal propagation material, nutrition, protection, harvesting and post-­‐harvest. For a limited range of species, including peppermint, passionflower, wormwood, dandelion, echinacea, lemon 78
balm, oregano, sage and chamomile, there is a well-­‐established agronomic practices, which enables the production in an advanced and competitive. By some technical cultivation of medicinal plants is treated as a "hybrid" between the crop Ortiva full field, the intensity of cultivation, and the screw, for the need of a technology of post-­‐harvest indispensable, both for the stabilization of the primary product, both for the subsequent enhancement in the market. Manufactured by collecting "field" The plants are harvested in the green field in bloom, or the maturation of the parties, and in any case, except for some rare cases, it is the product that contains varying percentages of water and vegetation for which there is not storable and transportable, if not on short range . The collection can be done by hand or machine, depending on the type of crop and the characteristics of the company. Once collected, the material as it has a short life, from a few hours to a maximum of half a day, and requires immediate treatment or stabilization. The collection is made with lawn mowers, mower harvester, reaper binders and the like. The machine is more efficient and suitable, especially for extensions at least greater than 5 hectares, is the gatherer for spinach. More rarely, machines have been developed ad hoc, such as chamomile machine (there is a prototype Italian and the rest are of foreign manufacture ) or lavender ( made in France or Bulgaria ) . The roots are harvested with machines derived from the cultivation of beets or potatoes. Primary processes attached to the cultivation Processes are necessary to ensure that the product "in the field" is tradable in the respective channels of the supply chain. The primary processes of transformation are the indispensable basis for the marketing of the product. These processes are specific to the type of business and production process, ie each company choose definitively the orientation of the production base (dried / essential oils / cool ) and specializations rarely meet in the same company if you do not like impromptu conditions in the face of market demands. Washing The washing of herbs, or parts of them, it is not a standard practice of processing. They are washed in fact only those herbs that are grown for fresh consumption ( herbs such as basil, parsley, e.t.c . ) . They also washed the roots or the like, which, because of the contact with the ground, are dirty at the time of collection . In the latter case, the type of soil influences the practice, and in fact some roots grown in sandy soil can be worked in later stages with a mechanical cleaning without the use of water . The washing plant for drying is usually not carried out. It is generally not recommended because even the water made, and which remains in the material, the end must be removed by the drying process, making it much more costly and expensive. Furthermore, washing, which has effects Toilet related if done with water only, makes the material extremely more susceptible to fermentation processes . The material to be distilled has no reason to be washed. Sometimes it is also washed green material left to soak directly into alcohol, based on alleged purpose hygiene. In fact, the alcoholic maceration is sanitizing of itself and any dust and earth recede adequately filtering the crude extract. Washing is done with rotary washing baskets 79
(which sometimes also act as centrifuges) or washing machines for fruit and vegetables with appropriate modifications. In fact, it would be necessary to develop ad hoc technologies. Drying The drying is a process of stabilization achieved by removal of the water plant tissue and inactivation of enzyme systems. The drying process does not modify substantially the chemical composition of the plant, except for certain substances are extremely volatile, that can go lost. The dried product is stable for a water content of less than 12.50%, but depending on the plant and the characteristics may be slightly higher moisture retention ( up to 15% ) or lower (below 10% ) . The moisture retention affects the durability of the raw material, but also on its manipulability and dustiness. The drying is made in a natural or artificial. Natural drying is done in air, partially in the sun, or more often in the shade to prevent the loss of the color of plants. Natural drying is the world's most popular method of drying the plants in hot dry climates, environments, as well as in Mediterranean contexts. In industrial systems or in climates continental and humid this process is always carried out in a dryer. The natural drying process is made so precarious, on racks, in barns, under carports temporary and inside greenhouses or other structures set up ad hoc. It is generally not a suitable method for large quantities of production, but a great solution for small productions often at the family level. It is a system with low environmental impact and low cost. On the other hand, is highly dependent on weather conditions and gives no guarantee of success. Finally and practicable, where the harvest season is climatically dry periods. The artificial drying is a more efficient method, which is necessary to cope with industrial production. Allows to dry in a short time (48-­‐60 hours) a large amount of material, however, always using low temperatures, below 50 ° C. It ' a very expensive system from the point of view of energy, and also economically, affects up to 50 % of the cost of production of the dry plant. The principle is to dry the waste water with a forced flow of dry air passed through the biomass stretched out over large areas, on one or more levels. The easiest way is drying free-­‐flowing, where dried air, through heat or a dehumidification system, is blown through the green biomass until drying of the same. The air containing the moisture removed from the biomass is then vented to atmosphere without any control of the process. On modern systems and efficient air dried instead is recycled to saturation and therefore dried again or expelled, depending on whether you are in a closed or semi-­‐
closed cycle. Necessary to develop intelligent systems for precise control of the process, but also for the promotion of co-­‐generation through the use of biomass or waste heat from other processes. Distillation or extraction steam current The distillation, better described as extraction in a current of steam, is a process of extraction of volatile aromatic substances from plants by use of steam. The steam, produced according to different principles and technologies, it is forced to pass 80
through the green mass, or more rarely dry, within an alembic. The steam passes through the material breaking tissues and dragging the top (or bottom) in the form of azeotropic steam (water + essential oil), odorous substances . The vapor is then condensed in a condenser and the liquid mixture of distilled water and essential oil is sedimented in a jar sedimentation (Florentine vase), where the oil separates and floats flotation (sometimes sinking) and extracted with a separator. Distillation is a very old method, which has undergone relatively few changes over time. Even today in France and Piedmont is distilled with stills similar to those of the beginning of the last century. The system is formed from a heat source where it generates steam, an alembic of typical shape, a condenser, a Florentine vase. The heat source is a separate furnace or next alembic, and depending on the systems, the steam is generated in part ( a vapor stream ) or inside the alembic ( hydrodistillation ) . The fresh or dried plant is packaged in the still, slightly above the water. Boiling or immersed in the same, according to the methods, or simply crossed by a flow of steam injected in the still from the bottom. The different systems are used for different types of plants and/or matrices. The most popular is a "current of steam". The steam usually does not reach high pressures in the still correct and there are systems to reduce the pressure and the kinetic energy of the steam itself, so as to make the process less impact on the material. The steam output from the still is then condensed at temperatures varying from seventy to 30 ° C (according to the type of oils ) and channeled into a container where sedimentation takes place faster of the two phases essential oil / distilled water. The essential oil, generally less dense than water, it floats and is collected by a system of communicating vessels in touch ( Florentine vase ). Here is then separated and, in fact, collected the essential oil, distilled water, while the excess is evacuated continuously. This can be collected and used. Although distillation is a process with high energy consumption and therefore also in this case it would be appropriate to develop technical solutions, including through co-­‐generation, to improve yields . Primary products attached to the cultivation Products derived from cultivation that have undergone a simple conditioning or minimal processing, so that they are marketable, are similar to agricultural products attached to the crop. In the absence of this phase, carried out in close proximity to the cultivation and function close to it, the product would not be also storable and therefore marketable in the ordinary system of trade in agricultural products. In the case of distillation, it is an activity traditionally carried out in close connection with the collection and therefore the essential oil, although the processed product from a plant matrix, is considered a primary product. Fresh Herbs Fresh herbs are collected with the purpose of marketing the vegetable market . They are simply unsorted and sold loose or in boxes, or are washed, selected and arranged in clusters, formed for fourth range for consumption shortly. The plants in this category are herbs Classic cuisine, such as sage, thyme, rosemary, e.t.c . Dried herbs or "drugs" 81
The product drying is a dry plant (called drugs) consists of all the parts gathered, stems, leaves, flowers, private water only . The drug is storable for a variable time depending on the type of plant, which ranges from about a year or so (flowers, starchy roots ) up to some years ( aromatic plants and resinous). In this phase, the plant is a primary product susceptible to multiple uses provided subjecting to successive stages of processing, such as cutting, cleaning, selection (see below ) because in this format is difficult to use and also difficult to commercialization . The reduction in weight of the fresh material depends on many factors, both of which species of cultivation conditions. Typical dehydration detected on large volumes are as follows. Essential oils / resins / rubbers The product of distillation is the essential oil. Products are extracted in a similar manner also resins, although for these products during the extraction phase is increasingly using means other than steam. The essential oil is a natural ingredient complex consisting of many substances, mainly hydrocarbons, such as phenols, terpenes, aldehydes, ketones, alcohols, esters, e.t.c Some are characteristic of plant/species and common to many other species. The relative composition of various substances creates the characteristic aroma of the single species. Essential oils are highly concentrated natural substances and therefore can be irritating or toxic at high exposures and should be handled with caution. The essential natural oil has a multitude of uses: from the field of food flavorings to drugs, veterinary medicinal products to cosmetics up to uses in industrial and household products (paints) . Secondary processes Are processes that can occur in later stages of the first and are performed either within the same company, cultivators, in order to enhance the primary product, both at industrial companies belonging the supply chain. The purpose of the secondary processes is also to derive different products with specific uses along the supply chain. Cut and dried selection of drugs Such a process is placed in an intermediate size between the primary process (drying), which gives rise to a primary product ( dried drug ), and the transformation process itself. In this type of activity, in fact, the dry plant is cut or manipulated through machines and installations, to deprive it of harmful or unnecessary parts, without altering significantly the properties and characteristics . The dedicated facilities shall crush the drug to make it easy packing and storage. Or cut the drug and sequentially undergo selection systems to " shape " ( sieves or sifters) and Specific gravity ( separators airflow) classifying foreign objects such as stones, hair, glass, dust and other impurities, and deriving a material similar to that of departure, but "clean". The technology is not standardized and is sometimes adapted from other sectors, such as machining and grinding of cereals, or the processing of spices. Dedicated machines have been developed in a very small scale and deserve a development to improve the quality, the yield in the processed product and the hygiene of the dried herbs worked. 82
Correction of essential oils The "adjustment" is a transaction physico-­‐mechanical sideline where the essential oil is subjected to a "redistillation", a split and a stream of hot steam to remove or extract the most valuable fractions. The technology is similar to that of the distillation and rectification of the chemical substance. Extraction The extraction in general is the separation by means of solvents of the active matrix of the plant from ligno-­‐cellulosic fraction, which is considered not useful. The homemade herbal tea or infusion, it is a simple and familiar process of extraction in hot water, and the tea is an aqueous extract to about 2%. The aim is to make the plant assumable in different forms by the use of the material as it is. The solvents used are of many types, low by simple water to organic solvents of industrial use. The extraction has many variations, some other innovative traditional (see strippers ultrasound), but it is certainly a very old technique. The solvents most commonly used are water, ethyl alcohol, vegetable oil, glycerin, glycol and mixtures of said solvents. The drug-­‐solvent ratio is typically 1:7 or 1:10, sometimes more, depending on the type of extraction and plant used. Maceration The maceration, extraction or static, is an operation of simple infusion of the drug (dried plant) or also of the fresh plant in a solvent for a number of days, typically 3 weeks. The solvent must ensure not only the extraction of the matrix but also its stability, therefore using solvents, or mixtures thereof, with sufficient power denaturant (eg ethyl alcohol plus water) in order to make the infused not fermentable. It is a traditional system for the infusion of herbs and mixtures intended for the production of liquor. Intensive extraction "craft" A form of intensive extraction, or with output extracted in real time, is the one carried out on a small scale with the use of intensive extractors. Such facilities may also be referred to as "trickling flow forced" in the sense that there is not only the force of gravity to act in the infusion process. In fact, these extractors intensive, the solvent is forced through the dry drug, or is it stirred in the presence of the drug, in order to speed up the extraction process. The process happeneth usually within a few hours or days, in a discontinuous manner (charge-­‐discharge-­‐extraction), and allows producing in short, a large amount of extract. The technology has developed in recent year’s different types and principles of intensive small-­‐scale mining, which also allows you to craft businesses to adopt such systems and provide in a simple way in this transformation. Industrial extraction The mining industry concerns a large installed capacity, as a rule always kind of "intensive" and often of a "continuous". The technology has evolved sufficiently, though not particularly standardized, being incorporated in plants usually designed and developed by the same manufacturers. In usually next to intensive lines, there 83
are also systems of discontinuous or small extractors to preserve the flexibility of the production. Concentration The concentration of the extract is done by removing the excess solvent through the evaporation heat, at ambient pressure or under vacuum. The solvent can be recovered for further use with or without regeneration. The plant is always a purpose-­‐built, and derived from the food industry. The product is usually concentrated up to a limit that depends on the type of solvent and matrix evaporated, below which the product deteriorates. The concentrated extract is stable for a short period and can be used as such or intended to be dried. Drying of the extract / lyophilization The extract is sometimes led to dry after being concentrated. The final drying of the extract is a process that leads to the obtaining of an ingredient very refined and for the formulation of the finished products. The drying of the extract can be hot in closets dryers, spray drying using or by freeze drying under vacuum. Apart from the technology first, quite simple in appearance and readily available, the other two are industrial activity and very little spread in this sector. Most widespread is spray drying, compared to lyophilization. In this process the extract, with varying degrees of concentration, is brought to dry, with or without addition of inert substrate, or thickener, such as maltodextrin, cellulose, stearate, powdered plant. The process involves atomization of the liquid preparation, in a current of hot air (90-­‐150 ° C ) that instantaneously evaporates the solvent and precipitate the extract in the form of micronized powder . The lyophilization instead is a process well known in the food industry, in which the fluid material is deposited in thin layers in a vacuum cell and with temperatures of -­‐ 40 ° -­‐ 50 ° C. Once the frozen product, a vacuum is applied to the liquid sublimates, leaving a dry extremely hydrophilic. The latter must be usually milled and granulated in order to be subsequently manipulated. Secondary products Drugs and herbs selected These products are the same as dried plants, private mechanically unnecessary parts, free of substances, inert fibers, and foreign bodies, dust and dirt. Are cut, cleaned, calibrated or graded according to sizes suitable for various uses. Refer to Annex glossary for definitions of herbal tea cut, cut filter and other cuts for applications in the food, pharmaceutical or similar. The filter cuts are typically used in the production of filter bags for infusions and herbal teas. Cut and dried preparations obtained from the crude drug (dried whole plant) are used both as an ingredient in prepared foods, either as finished products in bags, bottles, dispensers, to the ultimate consumer for seasoning foods. These are also the leaves whole, dusted the ground coarse, coarse powders of single herbs or mixed with others and with spices. Extracts fluids ( fluids ) The liquid extract is stable (for the presence of ethyl alcohol, eg . ) Or must be stabilized with treatments (e.g. Pasteurization ) and / or addition of preservatives of 84
various kinds. Alternatively, the extract liquid is started at later stages of processing to remove excess water and to prevent the phenomena of fermentation . The liquid extract is a product that lends itself to many uses directly thereafter. These are the preparation of beverages and foods, the manufacture of cosmetics and drugs, usually in liquid form. Necessary to assess whether extracts intended for the production of food to be stored with food preservatives. The tinctures are a particular type of extracts, manufactured using a methodology prescribed by Pharmacotéchnie Francaise. The filtered liquid extracts can be packaged as such, and to the ultimate consumer in the form of dietary supplements or medications ( tinctures, drops, e.t.c.) . The liquid extracts may also be concentrated and dried to obtain other derivatives. Extracts semi / soft The concentration of the liquid extract, by removal of the solvent, the extract port in a denser form viscose and in which the suspended solid is from 20 up to 40% (30-­‐40 degrees Brix). In this form, characteristic for certain matrices, the product can be used as an ingredient in the manufacture of the finished product, or it can pass to the next stage of drying. Extracts dried / lyophilized These are materials in powder or granules, or solid or crystals, resulting in the total evaporation of the liquid extracts or soft. Typically are made from the extract as such and additives, to improve the smoothness and palatability,with the other ingredients of various types, such as maltodextrins or magnesium stearate. Are used in the manufacture of foods, dietary supplements, drinks and drugs, preferably in solid forms of employment such as candy, capsules, capsules, tablets and tablets, as well as use in cosmetic liquids. Formulation and mixing The final stage of the substances as described above is the formulation. The formulation is the combination of the plants, of derivatives and / or mixtures there, between them and with other ingredients, foods, other active ingredients or excipients to give rise to the shape of the final salable product. This becomes the final form to the consumer and is packaged in units for use or sale. In it, the plant will be a more or less important part of the total mass of the product. What is certain is that the medicinal plant is a distinctive and characteristic of a finished product, and even more sensations, the benefits, the smells, the flavors of herbs are an important element in the promotion of many products,food and non food . Primary production can take place on farms, more or less specialized, dedicated to the cultivation of medicinal plants, or it may result from an activity of collecting wild species . Subsequently, the product can be placed on the market in various modes . Some farms will simply produce and sell fresh produce ( fresh system ), others carry potted plants, others still maintain the reproduction of seed . Several farms carry within them some early stages of the supply chain of products ( chain processed), and finally, in some cases, agricultural activities are carried out within companies or groups who achieved the whole process of production of downstream products ( fully integrated supply chain ) . 85
In the industrial era are companies that manufacture and bring into derivatives trading of agricultural commodities, as both industrial and semi-­‐ finished products, ready to be placed on the consumer markets . In the industrial sector there are, as we have already explained, specializations oriented food, products for health and well-­‐being, and so on, but you should keep in mind that there are several intersections between the different uses or better between the various subsystems of the chain. Prominent figures are also the wholesalers, who are involved in several stages in the supply chain. Finally, at the stage of retail marketing, once focused mainly on herbalists and traditional food retail, is now involved in a wide range of outlets, with an increase in the role of pharmacies and supermarket chains, and are developing new commercial channels. Binders spontaneous Although it is a strongly declining, collecting spontaneous activity, however, is still present in our country . That wallet was a figure very easily identifiable until a few years ago. In general, the spontaneous gathering was the prerogative of rural families, sometimes of entire villages, in areas with strong natural heritage and poor job opportunities, valorized the spontaneous resources, in conjunction with other activities of silvopastoral . This situation is one that is found today in those areas where there is still an important activity of wild harvest (the Balkans, the Baltics, Northern Africa, Middle East) and activity, however, still present in the Western Alps (eg. Gentian, alpine plants), Central Apennines (eg . Juniper, hawthorn), Sardinia (eg. Myrtle, everlasting), Calabria and Sicily (eg . Oregano). It is estimated could be tens those who carry out this work in various parts of Italy, but only very few do so prevalent or professional (source: FIPPO). The relevance of the spontaneous gathering in the European context is recognized, moreover, also by the same rules on organic farming, which equates to cultivation. Typically, the binder has no special facilities or equipment, the maximum is equipped with some means of transport that allows him to reach harvesting areas, usually quite inaccessible . The harvested product is simply lying in the sun, or under simple roofs and screens, relying on conditions Natural good season for stabilization (drying). Often, however, the collector gives directly to a "center" of the collection, such as a farm or a cooperative structure where the material is conditioned, distilled or otherwise prepared to be placed on the market. The wild harvest ranges over a very wide range of products from natural plant communities. It may cover branches, epigean herbs, roots, bulbs tubers, bark, berries. In particular, the spontaneous collection today is limited to niche products whose demand is very limited in terms of quantity, but the prices of which remainghigh, mainly due to the difficult cultivation. Think of ferns, lichens, other pteridophytes ( Lycopodium, Equisetum, e.t.c), Gems, some species of trees, orchids, algae, e.t.c . The target market for these manufacturers is constituted by the client companies that withdraw the product on the basis of annual programs. So the general trend of the commodity market strongly influences the level of activity of the collector, whose strength is given by its extreme flexibility organization, which allows it to 86
adapt to changes in the market. The buyer is typically a wholesaler, often located away from areas of collecting, and on the basis of relations established over time, guarantees a certain purchase of raw material year after year. The volumes and values of this market are unknown, although there are important products -­‐ such as the aforementioned juniper and myrtle, the everlasting, the gentian root, birch, oregano, e.t.c . Coming largely from wild harvest still made in the Apennines, the Alps and the Islands .The wild harvest, however, is in serious decline everywhere in the world because of the changed working conditions of populations, the reduction of natural stocks and the urbanization of the world population. In Italy and in Europe, the wild harvest is decidedly influenced by the cost of labor and transport (in particular, the price of the fuel), which in practice are the main factors that contribute to define the production cost of this type of products Farms As seen previously, the Census of Agriculture 2010 enables quantification in less than three thousand farms in various capacities involved in the cultivation of " Aromatic plants, medicinal and seasoning " for an hectareage of more than seven thousand hectares. Obviously, as amply highlighted earlier, only some of these companies (and related surface) practice this activity in a "professional" in the broadest sense . It can be said that companies that characterize the sector (small and medium to high specialization, highly specialized medium-­‐sized businesses and large diversified companies ) comprise a little more than five hundred companies with an hectareage of just over three thousand five hundred hectares . In fact, according to estimates by FIPPO, the central core of primary producers in our country encompasses three to four subjects (defined as farmers and agricultural entrepreneurs, members of cooperatives and gatherers ) . According to the same source, the area devoted to permanent cultivation (according to the canons proper agronomic ) of herbaceous and woody herbs is strictly defined as between 2000 and 2500 ha, with a production that can be estimated at between 2 000 and 3 thousand tons of product per year. Assessments FIPPO confirm the necessity of distinguishing between the non-­‐
specialist companies -­‐ in which, regardless of the area involved, the presence of the herbs in the legal business is explained by the research activities capable of providing additional income compared to that caused address the prevailing productive -­‐ those specialized derive a predominant part of the business income from the cultivation of the species in question. This type of companies, according to the same source, is characterized by a discrete land size (from 10 to 100 hectares), flat or pianocolle, with a large surface irrigation and with a good overall productivity. This type of company is mainly located in the historic areas of production, such as the Po Valley, between Cuneo and Turin (Moretta, Pancalieri, Savigliano), in some areas of Veneto, Marche (Macerata, Ascoli) and in some areas between Puglia and Basilicata, and Sicily. This type of companies -­‐ basically the heart of the primary sector -­‐ according to FIPPO concerns about a hundred structures ; them in the cultivation of herbs is practiced on surfaces ranging between 5 and 30 hectares, where they are grown from 3 to 10 different species . From a technical point of view this crop is done by tracing models of type "intensive", relying in large measure to the practice irrigation and fertilization, as a 87
whole for the management of the crop s'impiegano large quantities of technical means and practicing different processes mechanical . According to the estimates of FIPPO, in these contexts soil and climate and corporate yields are quite high, in the order of 3-­‐5 tonnes dry weight per hectare or 50-­‐80 kg of essential oil ( always per hectare) and production costs ( in the order of 2-­‐5 € / kg dry weight ) reach their minimum levels . This type of company has also often the equipment for air conditioning or before the processing of the product, usually a dryer or a distiller (often both), which are used for the initial treatment of the green material and its stabilization or processing in storable product. In addition to these facilities, the company also has warehouses for storage, processing machines secondary, such as cutting, peeling, and selection. The product generally is a dried plant, an essential oil or a fresh plant. In the case of dried plants, obviously the product can be formed, depending on the case, from the aerial parts of flowers, leaves, flowers, roots, seeds or whole fruit. The dried plants can be pre-­‐cut or partially processed in the company to facilitate storage or transportation, or according to the specific requirements of the buyer. Otherwise, the production can be made up of essential oils in the natural state, obtained by distillation in a current of steam. In other cases, the production is represented by fresh plants which are instead directed to the chain of cool, to be quickly processed by other parties, both agricultural (Cooperatives, associations), whether industrial, which shall be dried, frozen, remove or stabilize the product to cool before starting further processing or final packaging. According to estimates FIPPO, within the group examined the average company produces 20 to 50 tons of dry product and / or up to 2 tons of essential oil, with a salable production resulting from these activities, which is between 150 000 and 250 thousand euro. Companies fully integrated As part of the supply chain of medicinal herbs a type of business to be considered a party is represented by vertically integrated companies also known in jargon as "closed-­‐loop". It is an organizational model that features both companies is limited in size, and some of the largest companies in the sector. The underlying philosophy is that of realization within the corporate boundaries of the entire production cycle, as well as significant part of the same marketing stage, perhaps through controlled distribution networks, so that the company itself may take the lion's share of the value added generated by these productions. According to the FIPPO, it can be estimated at around hundred the number of firms in whole or in part aimed at the integrated cycle, and among these, as already mentioned, include the most important companies in the industry. The land cultivated by ciascun'azienda, therefore, is very variable in size, from small patches to hundreds of hectares. The product is harvested and processed within the company, in the first semi described several times, then subjected to further processing, even complex, with the addition of ingredients outside the agricultural phase, to the assembly of the finished product. The production facilities include, therefore, in addition to land and buildings, a laboratory, more or less wide, in which the raw materials are processed, mixed, 88
formulated, e.t.c., which can also be very sophisticated with regard to the equipment, and its mass to the point in some cases requires complex authorization procedures. The integrated companies produce a wide range of products derived from medicinal plants, from food to food supplements, cosmetics medical devices, up to the drugs. Herbal substances used in such products -­‐ with the exception of food, such as herbal infusions or decoctions and spices for cooking, which containing the dried and crushed form of the plant -­‐ derived from secondary processes of transformation, even complex, made within the same company, which makes it plausible and compatible use within the specific finished product. The volumes and economic values produced by these companies are highly variable, however, companies are able to generate higher productivity in value per hectare. The entrepreneur and the other company's human resources are clearly focused in the early stages of product creation, as well as those of processing and sales. The agricultural activity, while remaining strategic, performs the dual function of ensuring a basic raw material congruent in terms of quantity and quality with the entire supply chain business, as well as an element of assurance and promotion of the finished product to the consumer final. The operators of the wholesale The wholesale stage is characterized by a limited number of companies that have significant market power in this market as "natural" buyers of products of the largest farms, with whom relationships are close and continuous, in order to secure supply flows stable. The wholesaler usually buys the product in uniform lots and consistent and then provides for apportioning the quantity, and classify them (analytically and with controls on contaminants of various kinds). To this must be added that, for some years, some foreign wholesalers (especially German or French) operating in Italy directly or through subsidiaries Italian. Industrial enterprises These are companies that manufacture and put on the market derived from agricultural raw materials, as both industrial and semi-­‐finished products. As noted above, must be clearly given the differences between the companies engaged in the food and those specializing in products for the health and well-­‐being, even if there are intersections between the different compartments. This group also place companies that produce for third parties. Also in this case it is difficult to draw with precision the official statistics the number of industrial enterprises that transform medicinal plants and their derivatives. A first order of magnitude can be assessed by considering more information archive Asia ISTAT . The table 8.1 shows the number of firms active in 2010 in certain food and drinks that supposedly work or even using medicinal plants. For example, there are 11,010 in the voice of companies producing gin and other spirits of juniper and grappa, while the item 11,040 companies that produce Vermouth. In Table 8.2 also shows the number of firms active in some non-­‐food industries involved in the processing of medicinal plants or potential users of these. In particular, in 2010, 77 companies that produce essential oils. As regards the other industries, shows the 89
total number of firms operating in the manufacturing of soaps, perfumes and cosmetics and medicines. According to estimates FIPPO Assoerbe and in Italy there are over two thousand companies involved in various capacities in the production of semi-­‐finished products from plants and their derivatives and production for own account and for third parties to finished products based on ingredients derived from medicinal plants. These companies operate in food, food supplements, cosmetics, medical devices and pharmaceuticals. For the construction of each type of product are of course provided equipment and specialized machinery investments, which can range from a few tens of thousands of euro (in the case of a small laboratory extraction craft) up to millions of euros. Only with regard to the dietary supplement industry, in Italy there are about 660 factories authorized to manufacture and / or packaging of foodstuffs for particular nutritional uses of dietary supplements and foods with added vitamins and / or minerals. There are also 111 approved establishments for production and packaging of plant-­‐based food supplements only. These lists are firms whose main business of which belong to the sectors of agriculture, food, beverage, pharmaceutical, health food stores, e.t.c. At the Ministry of Health is also established by the National Register of dietary supplements 38. In fact, the marketing of supplements is subject to a notification procedure. It is estimated that the plant-­‐based dietary supplements reported to the Ministry of Health and are marketed in Italy about 20,000, while firms that enter the market plant-­‐based food supplements are estimated at approximately 1,300, many of these companies have commercial nature only and do produce third parties. The plants and their derivatives can be used in all production sectors and be employed with different functions in the most varied types of products. Because of the type of goods / product in which it is to be used, the plant must be treated in order to be suitable for the intended purpose and formulation to which it is intended. The tea plants are cut for the preparation of decoctions and infusions for use in food. The dried and powdered products can be used in the preparation of capsules, capsules, tablets dietary supplements, medical devices and pharmaceuticals. Juices, extracts and macerated can be used in the preparation of foods and dietary supplements. Fluid extracts, oils squeezing, essential oils and aromatic waters are used in foods, dietary supplements and cosmetics. Gums and resins are used as additives and active ingredients in the preparation of foods, food supplements and cosmetics. From medicinal plants are derived additives for food and ingredients for coloring and preservation of cosmetics. The company, therefore, by reason of the product / process or a combination of these, defines and implements a variety of facilities and skills that allow, often, the performance of different stages of the production process, from initial processing of the raw plant up to processing purposes such as tabletting or formulation . In other words it is not possible, as far as plants, refer to standard situations, because the plant is often the result of a process linked to the original specificity and experience, and closely congruent with the type of product process carried out . 90
Some companies have such machines for the grinding of drugs as such, mixing dedusting. Others have facilities for extraction, concentration plants, plant incubation, precipitation and isolation, similar to those used by the drug. Finally, in a few cases, there are companies drying and dehydration of liquid products to the extract dried and concentrated forms. Subsequent steps are the formulation of mixtures of liquids or powders, the tabletting or inclusion in capsules, gel capsules or other forms of creation of measured doses of the substance / preparation or characterizing the active ingredient. In the final stages, we can mention the conditioning processes, ranging from simply filling bottles with liquids, preparation of filter bags (with sophisticated technology), the packaging of blister and carton, until the final stages of secondary packaging, labeling, e.t.c . The medicinal plants and their derivatives are now more than ever used in a great variety of types of products are the real element of innovation for many products. Traditionally used as spices for use in the culinary field and for the preparation of herbal teas and infusions to health-­‐ purposes, medicinal plants are widely used in beverages and alcoholic products, supplements, which are in many cases the basic raw material, in a conspicuous part of cosmetic products to natural value when not organically certified in medical devices such as eye drops and other products intended for mucous membranes and internal oral use (which plants exploit the properties softening, soothing and protective), and in a number of drugs . Among the emerging applications that have experienced strong growth in recent years and are becoming an attractive diversification opportunities for companies operating in the field of medicinal plants, should be mentioned the feed and products for the health of the animal from the barn and pet . A quantification of the economic value of industrial production involved in the supply chain of medicinal herbs is very difficult because, once again, the classifications available statistics make it difficult to circumscribe the activity of processing of medicinal plants in aggregate economic activity wider. The highest level of detail available in the official statistics production is the European classification Prodcom used in Industrial Production Surveys conducted in Italy by ISTAT. Through this survey, it is estimated that in 2010 the value of production sold tea, herbal teas and extracts amounted to almost € 144 million, while the value of the production of processing of spices is around 85 million Euros. In addition, more than € 294 million resulting from the sale of Vermouth and flavored wines. As for other food and beverage industries shown in the table, the data relate to production for which it is estimated the coexistence of firms employing artificial flavors and businesses that use only natural flavors and essences (eg, flavored drinks) . The estimates of the value of production of essential oils, resinoids and solutions of essential oils, amounted in 2010 to about 66 million Euros. A similar value is estimated with regard to tanning extracts of vegetable origin. In other cases (perfumes, toilet waters, mixtures of odoriferous substances), it is the total value of production achieved through the use of derivatives of medicinal plants but also other types of substances. 91
The organic sector In the field of medicinal plants, organic production is of considerable importance. On the basis of administrative data to Mipaaf Bodies of control and processed by SINAB, the area under aromatic plants, medicinal and seasoning in 2011 amounted to 2,916 hectares, of which 452 hectares are under conversion. Compared to the total organic agricultural area, these crops account for about 0.3%. But more interesting is the comparison with the total hectares invested aromatic crops, medicinal and seasoning, resulting from the Census of Agriculture, which suggests that in 2010 41% of the hectareage of these plants is organic, while the total agricultural crops, the incidence of biological surface is only 9%. Over the past eleven years, the organic area of crops under consideration showed a rising trend, net of annual fluctuations characteristics in the face of substantial stability of the total area . During the period in fact there has been a growth in organic hectares of these crops to an average annual rate of 5.4%. Figure 9-­‐ Dynamics of surface organic herbs, medicinal and seasoning in comparison to the total organic area Source: Based on data MiPAAF / SINAB In order to deepen the knowledge on organic production sector, have been developed detailed data archives of the Control Bodies, acquired from Federbio. These figures refer to 745 companies of which 70 are registered as preparatory and / or exclusive importers. In addition, of the remaining 674 companies, 524 are exclusive agricultural producers, while producers and 151 are also preparatory. Organic operators to comply with the European regulations of the biological need to make a "Notification" to the competent authority (State or Ministry). Indeed, data on the number of notifications per year, you can assess what has been the evolution of the officinal industry compared to organic operators in general. For several years, the number of organic operators is stabilizing under 50,000 workers, while green indicates the trend line as organic herbs for operators, albeit with ups and downs years, there is a continuous growth of the notifications. Were also analyzed data from the Annual Production Plan (PAP) that provide information on the farmland and cultivated species for each plot of land that operators biological 92
each year communicate their inspection bodies and certification. These data show the actual productions invested during 2011 . The data provided relate to 614 organic farms for a total of 2227.25 hectares, covering 76.4 % of the then total estimated hectares nationwide source SINAB . The order of the companies according to areas of business confirms the high fragmentation of production. The average size is about 3.6 hectares, as shown in the following table, where we calculated the distribution of farms and areas by class of superficie27, only two companies have more than 90 hectares, concentrating 27% of the total area, the large number of firms increases in the lower size classes . It then states that a significant proportion of the total area (over 27% ) falls within the classes of surface between 1 and 10 hectares. The production then takes place in large extent on surfaces of small and very small. Even the list of species cultivated by these companies is a very interesting question, although a portion of the surface temperature is generically referred to as " medicinal and aromatic variety " (140 hectares). The species with the largest area planted with organic methods in 2011 are lavender, coriander, psyllium and fennel, followed by chamomile, passionflower and oregano. The data on the sweet clover should be interpreted with extreme caution, because -­‐ although there is a tradition passed to this crop in most areas of production -­‐ probably the figure is somewhat oversized compared to that in the opinion of the operators, the demand for market sectors considered in this work, both nationally and internationally. In other words, the sweet clover has been grown widely in the past to extract coumarins, however this function in use is poorly developed today and the plant is grown mainly as an essence to renew, or forage mellifera . Analysis of pricing The Italian trade balance The foreign trade of medicinal plants in Italy and products (finished or unfinished) derived from these result in a deficit in the trade balance in 2011 amounted to approximately € 600 million. During the period examined, from 2000 to 2011, there has been an evolution first increasing the budget deficit until 2005, followed by a slightly descending phase that seems to have run out in 2010. This trend is mainly due to expenditure on imports, while the income from exports have had an upward trend rather than continuous. In the field -­‐ features more than 3,000 hectares cultivated ¬ in Italy, with a production value is over upper ¬ 9 million euro -­‐ there are about 500 employees and more than 2,000 are trademarks that use herbs in their products. Because of the small stock of domestic production is the goods from abroad to fuel much of the demand of the Italian market . As with many agricultural production is the production of herbs is characterized by a fragmentation of supply and demand was concentrated in a very limited number of operators.The application is supported for the most part (85%) by processing industries (pharmaceutical, food, liquor and beverages, cosmetics, of phytopreparations) and to a lesser share of the herbalists ( 15% of raw materials goes into this channe, fresh or dried) . 93
The products from Italy and the prices The vegetable saps and extracts, except that of liquorice, hops, vanilla oleoresin and opium are the group most exported products from Italy. In 2011, they have been exported to more than 18 thousand tons with revenues of approximately EUR 68 million, corresponding to 16% of total revenues in Italy. The main market for these products is France, with about 29% of deliveries in value, followed by Japan (16%), the USA (10%), South Korea (7%) and Spain (6%). The average value of exports of these products amounts to about 4 € / kg.Exports of saps and extracts of liquorice involve small quantities of product. In 2011, 80 tons were exported, with revenue to EUR 430 thousand. The main market is the Netherlands. In second place among the most exported products from Italy are mixtures of odoriferous substances, alcoholic and non-­‐alcoholic beverages, used by the food industry (code 3302 10 90). In 2011, there were exported about 7 thousand tons with business for approximately € 47 million, corresponding to 11% of the total revenue of Italy. Shipments are very fragmented. The main market is France, with about 12% of deliveries in value, followed by Spain (11%), Ireland (9%), Germany and Turkey (8%). The average value of exports of these products amounts to about 7 € / kg. In third place among the most exported products from Italy are vegetable dyes. In 2011, there were exported over 4 thousand tons with revenues of 36 million Euros, corresponding to about 9% of the total collections of Italy. The main market for these products is Spain, with approximately 20% of deliveries in value, followed by the U.S. (12%) and Brazil (10%). The average value of exports of these products amounts to about 8 € / kg. In fourth place among the most exported products from Italy are mixtures of odoriferous substances of a kind used in non-­‐alcoholic non-­‐food industries. In 2011, there were exported 4,400 tons with revenues of 32 million Euros, corresponding to about 8% of the total collections of Italy. The main market for these products is Poland, with about 13% of deliveries in value, followed by Switzerland (11%), Germany (11%) and the U.S. (7%). The average value of exports of these products amounts to about 7 € / kg. In fifth place among the most exported products from Italy are the essential oils of lemon. In 2011, there were exported about 1,700 tons with revenues of 29 million Euros, equivalent to 7% of the total collections of Italy. The main market for these products is the United States, with approximately 18% of deliveries in value, followed by Germany (13%), France (10%) and Japan (10%). The average value of exports of these products amounts to about 17 euro / kg. In sixth place among the most exported products from Italy are the essential oils of other citrus fruits, which are represented mostly by the essential oils of bergamot and to a lesser extent those of mandarin and clementine. In 2011, there were exported around 600 tons with revenues of 36 million Euros, corresponding to about 7% of the total collections of Italy. The main market for these products is France, with about 32% of deliveries in value, followed by the U.S. (14%), Germany (13%) and the UK (10%). The average value of exports of these products is very high and amounts to approximately 47 € / kg. 94
In seventh place among the most exported products from Italy are mucilage and thickeners of locust beans or locust bean seeds. In 2011, there were exported 2,700 tons with revenues of 17 million Euros, equivalent to more than 4% of total collections in Italy. The main market for these products is Germany, with around 22% of deliveries in value, followed by the U.S. (17%), Japan (12%) and France (9%). The average value of exports of these products amounts to about 6 € / kg. Eighth among the most exported products from Italy are the medicinal plants used primarily in perfumery, medicine or for insecticides and pesticides. In 2011, there were exported 2,700 tons with revenues of approximately EUR 16 million, corresponding to approximately 4% of the total collections of Italy. The main market for these products is France, with about 45% supplies in value, followed by Germany (17% ), United Kingdom (7%) and Argentina ( 5%). The average value of exports of these products amounts to about 6 € / kg. In ninth place among the most exported products from Italy are mucilage and thickeners of guar seeds . In 2011, there were exported 6,500 tons with revenues of 15 million Euros, equivalent to slightly less than 4% of the total collections of Italy. The main market for these products are the Netherlands, with approximately 23 % of deliveries in value, followed by China ( 7%), Use ( 7%) and Poland ( 7%). The average value of exports of these products amounts to about 2.3 € / kg. In tenth place among the most exported products from Italy are the extracts of sumac, vallonia, oak or chestnut . In 2011, there were exported 5,500 tons with revenues of approximately EUR 14 million, corresponding to 3% of the total collections of Italy. The main market outlet for these products is France, with about 21% of deliveries in value, followed by Mexico (15% ), Spain ( 10%) and Brazil ( 10%). The average value of exports of these products amounts to about 2.5 euro / kg . The analysis of the costs and profitability of the crops covered and available information RICA survey is a sample survey carried out in the European annual with a common methodology can produce information that can support Community policies. The investigation is aimed at determining the incomes of agricultural holdings and the variables considered for this purpose allow to obtain appropriate indicators for structural and economic. It presents a profile ofstatistical representation that extends, as a whole, the sample results to the universe consists of companies that fall within its field of observation at the regional level (national and obviously). The survey has undergone a significant evolution over the years which has led to acquire detailed information on the manufacturing processes. Among these, both between arable that between woody crops, the methodology includes a whole series of crops that fall in the database of the species herbs (and previously used in the selection of the items to be considered at the international level). However it should be stressed that, in the first place, it is not said that obviously all crops "planned" in the design is actually present in the companies selected to be included in the sample. Secondly, it is said that the number of companies in which it is present a particular crop is sufficient to constitute a group of numbers adequate to allow you to calculate the variables of interest to the average of the group and to disseminate the information thus obtained. 95
In its area RICA website dell'INEA is therefore possible to acquire information on the financial results and costs only with respect to those processes that meet the conditions set out above and in particular that a high number of appropriate cases. It 'obvious that this information is which may constitute a valuable reference, but the extent of which the universe of activities considered to be regarded with extreme caution. A first set of crops for which data are available the above findings, reported Ha, is given in Table 3.6 which is taken into account in the field of industrial plants in the open field.As can be seen, first and foremost, there are signs on the size of the group of companies and the land under it gave rise to the economic performance of the crop. Taking the example of cumin is a culture present in 9 companies for a total of nearly 69 hectares, with an average area per company, i.e. to 7.4 hectares. The Total Gross Production (PLT) per hectare of the crop in question, calculated as the average of the group said, is a pariah to 2,787 Euros, in this case the PLT is identical to gross salable production (PLV) have no such in the case of crop examination, intra-­‐ corporate . The value of production is presumably related to the sale of dried whole seeds . In this production value can be opposed in the first place costs directly attributable to the crop itself -­‐ fertilizers, pesticides, seeds, e.t.c . -­‐ Amounting to 315 Euros, which subtracted from the PLT result in a gross margin of the crop amounted to € 2,472 . Of course, by that margin should be subtracted least labor costs and those of the machines to arrive at what might be considered the operating margin of the business. The value of total production per hectare of lavender is much higher than that of cumin, surpassing the 5000 and 800 Euros . The data are presumably related to the production and sale of essential oil of lavender. In this case the specific costs are significantly higher and exceeding the 770 thousand euro, with a gross margin of just over 4000 € . If this margin subtracts the value of labor costs attributable to the culture medium according to the same source (not shown in table 17) -­‐ almost one thousand and EUR 800 per hectare -­‐ and one of the machines it can be concluded that the operating margin of the asset in question ends to be equal to a little more than two thousand euro per hectare. 96
Table 18-­‐ Value of production and costs specific to certain industrial plants open field (2010) DIMENSIONS OF THE PROCESS cumin lavender linen Other oregano Rosemary herbs medicinal herbs Source: Based on Istat data In the case of flax, of which the seeds are sold whole, the PLT per hectare is much lower compared to previous crops, while much larger it appears in the case of oregano (dried leaves) and especially the rosemary (fresh florets) which also shows a fairly consistent gross margin (the same can be said, considering additional information on the cost of labor, for the operating margin). Then there is a residual aggregate consists of a series of "other" medicinal plants not included in the list provided by the methodology that has a GSP amounted to little more than a thousand and EUR 400, but that, in view of its lack of homogeneity can not obviously serve as a reference for the analysis.The maximum production (in value) per hectare were recorded in the case of raspberry, blueberry and currant. In the case of blueberry you touched 28 000 euro per hectare in respect of which it is possible to identify 2000 and € 300 for specific costs with a gross margin of the crop of more than 25 thousand euro. It should be said in this case that labor costs determined by INEA're touching 11 thousand euro per hectare, adding the costs of the machines we can say that the operating margin hovers around seven thousand euro. A similar argument applies to the black currant, where the gross margin of the crop is equally high and where, among other things, labor costs, according to the source INEA, seem less consistent. Considerations about costs and margins The importance of the contribution of the operating margin of the crops under consideration to overall corporate profitability is in significant part a function of the size of the initial gross margin. In this sense, the analysis of the incidence of specific costs and their composition is an important element in the assessment of the 97
introduction of the crops under consideration in the legal and business conditions in the markets of so-­‐called technical means. For the set of crops covered previously shows the percentage of the specific costs of production and the corresponding items that compose them. It goes dall'l'11 % of the PLT, while in the case of lavender they skim 30% of the latter, in view of the high cost of breeding material which accounts for almost 12% of the production value. In the case of the other three items considered these costs are around 20% of the PLT. The items that contribute most to their incidence are represented by fertilizers and pesticides, and in the case of rosemary from "Other specific costs" are not spelled out. Obviously in crops concerned the analysis reflects the problems of the depreciation costs of 'plant, which in arboreal substantially affect the results of the differential same crops, for which the gross margins of the crops to be considered, also in this case, as a reference really coarse. However, even in this case the simple calculations performed for some crops indicate the "critical" represented by the cost of fertilizers and pesticides. Analysis of distribution The distribution channels concerns suitable market places for the products as well as the geographical coverage offered. It is essential to be recorded: •
Existing distribution channels including intermediaries and market places where the products are sold •
The cooperating companies that undertake to supply the final consumer through direct delivery (for example web site selling products of aromatic and medicinal herbs) The operators of the wholesale The wholesale stage is characterized by a limited number of companies that have significant market power in this market as "natural" buyers of products of the largest farms, with whom relationships are close and continuous, in order to secure supply flows stable. The wholesaler usually buys the product in uniform lots and consistent and then provides for apportioning the quantity, and classify them (analytically and with controls on contaminants of various kinds). To this must be added that, for some years, some foreign wholesalers (especially German or French) operating in Italy directly or through subsidiaries Italian. It 'difficult to highlight in the official statistics of the wholesale traders that deal mainly attributable to the medicinal raw materials. Table 6.1 shows the official data on wholesale enterprises from the archives ASIA Istat (2010). The maximum detail available is a five-­‐digit classification dell'Ateco 2007. At this level of detail, the wholesale of medicinal plants is located within a broader voice refers to the trade of industrial crops (oilseeds, tobacco, e.t.c)., Seed and feed the activity in which there are more than 2000 operators, and likewise, as regards the wholesale tea and spices, there are 984 companies in the voice, but you are also the traders of coffee and cocoa. The only item that can be attributed entirely to the area of interest for this study is that of the wholesale of botanical products for pharmaceutical use, where you will find 143 companies, mainly located in the North. 98
Table 19-­‐ Wholesale trade and commission trade Description Italy North Center South Islands Agents involved in the sale of 22.702 11.226 4.660 6.815 pharmaceutical products and cosmetics Wholesale of seeds and food for 2.049 1.130 309 610 livestock (feed), medicinal herbs, oilseeds, potatoes seed, unmanufactured tobacco Wholesale of coffee, tea, cocoa and 984 395 205 384 spices Wholesale of botanical products for use 143 83 27 33 Pharmaceutical Source: Istat, Asia 2010. However, according to FIPPO in Italy the most significant enterprises in wholesale trade are less than a fortnight, the first four of which are estimated to cover at least 80% of the market. The wholesaler generally has a large storage capacity of the product and work on stocks according to a logic including financial. Obviously, large storage capacity implies large areas covered and systems capable of ensuring the maintenance of optimal storage parameters. Some of these companies also have some processing machines, such as sieving and cutting, so as to transform the product as in commercial cuts. In most cases, however, this kind of companies simply repackages, after checking and qualification, the product in containers of a smaller size appropriate to the orders of the downstream firms. The wholesalers of essential oils are very few. On this segment in our country operate mainly agents of operators located in France and Germany, which are the most important markets, because in this case the storage capacity of a constraint is much less important because the substances are concentrated and easy to handle and transport . Ultimately, companies in this segment of the industry can be traced to the following main types: -­‐ Companies specialized in the trade of primary product dried, or plants for the production chain derivatives (extracts) and refined ingredients used in turn to be used in the finished product manufacturing; -­‐ companies specializing in the trade of essential oils, less in Italy, who have a particular expertise for this type of raw materials. -­‐ other companies in addition to dried plants, they also extracts, essential oils, along with other natural ingredients (such as minerals, animals), offering a very wide range of raw materials and semi-­‐finished products. The sales unit range from 0.5-­‐1 kg for higher-­‐value products (essential oils, spices and fine herbs) up to the hills from 100 to 1,000 kg. The product has fresh wholesale buyers, but they are usually the same people who operate on the markets dell'ortofrutta. As mentioned, there are companies that have a very range wide and deep with hundreds of references to the cuts for tea, and the same with regard to products and ingredients for food supplements and sachets for infusion. The target market for this type of companies consists basically from B2B or from other companies in the supply chain. The supply of the product is mainly on the 99
international market, according to the specialized production of different geographical areas amply illustrated. The customers of wholesale enterprises is very varied, it is subject that transform raw materials and semi-­‐finished products, other products, which can be formulated and finished products or ingredients to resell to other subjects: in the final manufacturing enterprises foods, supplements, cosmetics, medicines and so on. A limited proportion of the products sold by wholesalers is made up of loose sold in retail grocery stores and health food stores. The volume sold by wholesale companies (referred to dry weight) ranges from tens to thousands of tons. The sales range from less than one million to ten million Euros. Retail operators The sub-­‐system of retail channels, in recent years has undergone a complex evolution in which in addition to health food stores and grocery stores have established other sales channels, within which the derivatives of medicinal plants have acquired a different degree of recognizability and different consumability. As for the number of firms involved, were compared various statistical sources, which are broadly in line but do not always coincide. The table 19 shows the data for Asia 2010 Istat, which show more than 16,500 pharmacies, 1,100 specialized stores in medicinal SOP (not a prescription), and about 4,500 health food stores. Regarding pharmacies, at the Ministry of Health has established the register of farmacie41, which records and assigns a unique code to each pharmacy, branch, dispensary or dispensary season. The list currently contains over 18 000 identification codes. In dell'Anifa Report, National Association of the Pharmaceutical of self that is part of Federchimica, we report the following data of the universes of reference in December 2011 (used by IMS Health to market estimates): -­‐ 17,927 pharmacies (including 400 dispensaries); -­‐ 2,398 drugstores; -­‐ 292 corner of the GDO. Table 20-­‐ companies engaged in retail trade Description Italy North Center South Islands Pharmacies 16.510 7.372 2.938 6.200 Other retail sale in specialized stores of 1.169 382 211 576 medicinal products not subject to Prescription Retail trade of articles of perfumery, toilet 9.307 3.186 1.905 4.216 and personal hygiene Herbalists 4.465 2.338 967 .160 Source: Istat, Asia 2010. Highlights -­‐ The operators of the wholesale Activities and diversification The wholesaler, as already mentioned, plays an important role in the whole supply chain by acting at all levels: between primary production and processing intermediate between it and the final transformation, and further downstream (for 100
example, by intercepting channels herbal medicine and pharmacy). These operators play a role in fitting the distribution and sales of concentration (involving products of other sectors), warranty, logistics. Most work in both the domestic and on the foreign. As amply demonstrated the presence of these operators is explained by the difficulty for manufacturers to establish direct relations with distant markets or to follow commercial relationships for limited quantities of raw materials, semi-­‐finished or finished products. Next to the classic role of the wholesaler, to cross each commodity sector, in the case of medicinal herbs is not uncommon for the wholesaler to intervene on the product, possibly by partially or fully to copacker and external laboratories to have references to its own brand . SWOT ANALYSIS -­‐ The operators of the wholesale threats Opportunities Weaknesses Strengths Uncertainty and Positive trend in Stiffness of credit supply from regulatory demand abroad shortcomings Confusion New customers regulations, Increasingly strong (fitness) excessive competitive bureaucracy and pressure, price Expansion abroad rigidity in the competition controls High quality products and low quantities of biological Italian production for some species The herbalists in the context of the evolution of the retail The sector of herbalists is in phase change, since the logic of the entire sector of medicinal herbs is transiting from one floor to one more absolutely handicraft industrial The herbalists buy directly from manufacturers or through wholesalers. The problems of lack of product available are not frequent and are limited to a few species and extracted with meeting the requirements set by the Italian legislation. Further difficulties are encountered in the case of supply of certified organic plants. The bargaining power of suppliers is not so much due to the scarcity of some productions (balanced, however, by more frequent cases of excess of others), as a dimensional imbalance and difficulties in integrating upstream encounter a herbalist. Also, and this applies to both the relationship with the wholesaler, with both the transformer, vendors tend to implement strategies based on product differentiation, on the scale of the range, but especially on the service (for example, capillarity, willingness to fragmented deliveries, e.t.c.). Another significant competitive force that governs this area lies in the relationship with the categories of competitors: pharmacies, drugstores, the corner OTC inside of retail in general are characterized by a greater bargaining power with suppliers, from which they derive Consequently, best conditions of supply. 101
The pharmacy and drugstore sectors have a higher firm size and are also more aggressive in winning market share. They are for example implemented policies based on loss leaders. It must also not overlook the growing interest in large-­‐
scale distribution in respect of derivatives of medicinal herbs. From the point of sale, the motor industry and the ability of the seller often depends on the fate of a product. In fact, all products herbal, whether they be food or other, intended for culinary purposes or health effects of various kinds, are bearers of a message that must necessarily be conveyed by the seller. As part of the sales network, then the retailer must have a culture in depth about the property, the benefits and also the possible risks related to medicinal plants and substances contained in them. The strength of the trade is the growing diversification in search of an increasingly wider and more cultured. The culture of herbs is definitely driven by herbalists, pharmacies and expand the customer base and give it a more professional content to the product, especially when it becomes something sophisticated, like food supplements (healthy products) or medical devices. The other categories of detail seen grow your own "portfolio herbs" mainly due to the reverberation of the major outlets. Factors external to the field of health food stores, but they involve him in a relevant way, are related to the legislation, which has areas of poor clarity on both products is on the same figure of the herbalist, who is considered undervalued in terms of professional and scientific . In part, these problems depend on the inadequacy of existing legislation, which, as is well known, goes back many years ago. From the interviews it emerged that the assumptions of the new rules, announced periodically, have not contributed to the creation of an environment capable of fostering confidence in the prospects of the sector. The weakness of the sector is also the huge amount of products and applications that are associated with a regulatory complex and not always sufficiently known, create a veritable jungle of products, in which the consumer is struggling to extricate also for cultural gaps. Competitive forces at a glance (herbalists) o
Competition among herbalists limited by natural barriers related to the location o
Bargaining power of suppliers, difficulties of integrating upstream, service differentiation of suppliers, disequilibrium dimensional o
Factors external to the industry: strong impact of the legislation o
Alternative solutions to more aggressive: pharmacies, drugstores, retail chains 102
SWOT ANALYSIS – Herbalist threats Opportunities Weaknesses Strengths Culture depth of Some difficulties in Differentiation the seller the supply of strategy based on certified organic the product range plants and amplitude of the the supply of services Impact of legislation Lack of clarity on the products and on the same figure herb Aggressive competition from pharmacies, drugstores, retail chains that hold greater bargaining power with suppliers Survey – Conclusions from producers, retailers and operators The analysis was carried out on a sample of 50 companies distributed throughout Italy and have collaborated in the research. The sample is composed as follows: • 21 companies Cultivation -­‐ Transformation -­‐ Marketing • 12 companies of Processing and Marketing • 5 companies of Transformation. • 12 companies in Marketing. These are companies that are active in all or some of the phases of Medicinal Plants and derivatives, indicating that transformation means for transforming laboratories mainly by purchasing raw materials from third parties and for marketing does not mean that the company's products but the situation in which this supports its products the sale of third party products to provide a complete range. STRUCTURE OF BUSINESSES CLOSED CHAIN -­‐ GROWING -­‐ TRANSFORMATION -­‐ MARKETING . This segment includes companies -­‐ as I said -­‐ both companies mainly involved in cultivation, as those who are active in the processing and marketing stages. The weight of the crop in terms of contribution to sales is between 0-­‐30% for the majority of companies surveyed ( 16 of 21 ) for only 5 of these weight percentage is between 30 and 50%, indicating that they are prevailing agricultural vocation . Profitability by Transformation Most have their own gain in the phase transformation -­‐ 9/21 stated that they carried out between 30 and 50% of its turnover in this section and always 9/21 to extract it from marketing activities of products of other companies that complement the its range of products . 103
The main sector in which companies are active is the one that includes herbs, teas phyto-­‐ derivatives, which are present in all companies and some of them in addition to these target areas of production, alongside skincare products . Almost all operations -­‐ harvesting, drying, Flowing, extraction of active ingredients -­‐ are manufactured by companies inside . Tradition and Passion the secrets of success All have a certain tradition and have existed for several years -­‐ from 3 to 20 years -­‐ in particular: Figure 10-­‐How old is the company? 0-3 years
2%
3-5 years
28%
5-10 years
28%
10-20 years
28%
More than
20 years
14%
It must also be considered that the founders of all businesses (21) when they started they had already experienced in the industry and know the properties of herbs, this signal that the skills can not be improvised, but are acquired through experience . All of the companies surveyed have strong motivations to the base, in fact, the founding partners -­‐ as -­‐ seen, the characters are always ' in the field ' before you start the business entity itself, or were lovers, enthusiasts and discerning consumers, therefore always reasons for enthusiasm and passion to the basis of a successful business activities Problems Despite this, however, in the first 3 years of business has faced a number of problems with different difficulties. The area in which the companies have had more problems is that commercial distribution, here the companies claim to have had difficulty high followed by the problems of financial and technical agronomy. Average level of concern for most companies is the financial area, followed by the agricultural engineer . Less difficult are the problems of personal and organizational that most companies attest to a low level. Commercial and Financial Aspects 2 nodes that companies have to face the full circuit for the first three years of operation. In fact, if we look at the composition of the business costs we see that the Structural costs (buildings, land ) are around 10-­‐20 % of total costs, while the costs of processing (machinery and equipment varies) Commercial and rising to 20-­‐30 % of the costs Total business in confirmation of the previously analyzed on the level of initial difficulties, which then clearly reflect the cost structure and so we see that the commercial aspect is the one that affects most cost followed by the processing costs which are those for which required initial investment in equipment and know-­‐how. Equity and soft loans are the main funds 104
will finance the companies to complete the circuit followed in order by bank loans and other private parties . The Role of Research and Communication What weight do the research, 43% of the sample claimed to invest in research in small part, 28% moderate, and the remaining 14% in a conspicuous and absolutely not. Investment in research and innovation in companies integrated circuit absolutely not 14% in small part 43% in a conspicuous 14% Mildly 29% But going to quantify, we see that 85% of companies stated that year to invest in research, 84% of those not invest more than 10% of its costs and the remaining 16% between 10 and 20% of the total costs business. This highlights one of the problematic aspects of the research -­‐ fundamental in these areas -­‐ ends up totally weigh on companies, which are thus at a disadvantage compared to other European countries where a portion of these costs are incurred at the institutional level, within organic research projects in these areas. 71% of companies said they support communication costs: fact sheets, brochures and advertising. However, the impact on costs is 60% of the companies no more than 10% of the total costs only a few (20%) have more, but they are a minority. Average turnovers ranging from € 50 000 to over 20 million in revenue for leading companies, however it is not possible to provide a complete data for the scarcity of data provided by the companies. For companies with low average revenue 50000000-­‐200000000 there is a trend of sustained growth with revenues of over 5 years have climbed from $ 50 to 500 million. Clearly these growing trend of large companies do not record them Aboca size as that in the period under review stood at revenues exceeding 20 billion, maintaining its position in the market. Side by side activity: 42% of the sample has no activities side by side, another 42% is farm, the remaining 16% provides educational visits, but these activities have always been the objective of strengthening the company's image or to spread the culture of the herbs and natural products in general. And never make a decisive contribution to the business income. The employment of staff is marginal and the contribution to the total turnover stood at very low levels -­‐ between 0 and 5%. As well as the people involved never exceed the number of 5 and never full time. The collaborations and employment opportunities The majority of companies -­‐ 71% -­‐ live out its production activities in isolation, prove the lack of a spirit of collaboration and corporation or partnership, 71% of companies do not have forms of cooperation with other companies in the industry. The companies in this segment have an average of 26 units of permanent employees, 105
with seasonal peaks of about 30-­‐40 in the companies in which the phase cultivation plays an important role. The mid-­‐sized businesses 100-­‐500 million turnover stood at an average of about 10 occupied units. In companies in which the role of the transformation is more important in number of employees is lowered. All you are assisted by external experts mainly herbalists and chemists have considerable importance but also the figures and business professionalism. The average size is about 80 hectares, but there is a big disparity between companies that exceed 500 hectares (with leadership positions) and small-­‐scale producers with surfaces contained within the 10 hectares. Almost all of the surface properties (76.5%), compared with 23.5% in use (rental or other form of tenure) . More than 1,000 tons of raw materials processed yearly average, but even here it goes great inequality between 4000 q.li 20-­‐30 q.li of small and medium-­‐sized Cultivation techniques As regards the methods of cultivation 18/21 companies -­‐ 85% -­‐ use organic farming methods in the main street or products, using seedlings and bulbs, seeds and fertilizers (manure) and for the defense of beneficial insects. However, none of the companies has added to the main productions production of technical means, preferring to rely on specialized firms in the industry and sourcing mainly from trusted stores and wholesalers a few kilometers away (50 miles). High prices and difficulty of finding -­‐ and distributional aspects of retail outlets in the sale of qualified technical means -­‐ some of the issues reported against buying these irreplaceable media for the cultivation and processing. But despite this, the cost of these products for 71% of companies does not affect more than 5% of total business costs. The collection of productions is manual, 85% of cases, indicating that the level of mechanization is still low and that however you want to protect -­‐ probably -­‐ some aspects of quality that are sometimes less with mechanical harvesting, especially when want to pick up some parts of the plant -­‐ buds, flowers or fruits or leaves new -­‐ hardly the machine can then select . If necessary, 57% of companies use irrigation methods, and uses it regularly for 28% of our companies, the remaining 15% do not use them. The weeds are eliminated primarily by manual intervention, mulching, and mechanical intervention and sometimes even with the flame weeding. The perishable nature of raw materials affects not more than 10% on the final value of herbs. Transformation -­‐ technical and economic aspects Companies to produce chain closed while both semi-­‐ finished products sometimes carry only drying and grinding. But the materials are processed for 85% of its production and the remaining 15 % purchased from third parties. The majority of purchases are made in their own region and in any case in Italy. The main aids in the transformation are water alcohol and vegetable oils, sometimes beeswax, which however do not create particular problems for users. Processing costs for the companies to complete the circuit affect 20-­‐30 % of total costs. The main types of packaging are bottles, glass containers, followed later by the envelopes and bags vacuum affecting 20-­‐30 % of total costs. In this calculation is included not only the cost of the material (glass), but also the label understood as plant chart, printing, packaging costs .According to these companies are the phyto-­‐ therapeutic use, 106
followed by drinks and teas the two areas of greatest development for the future. And among the Mediterranean crops thyme is considered the one with the most market, followed by rosemary, almond, strawberry . Sale Agents and direct sales network marketing channels being used . Quality, Price and quality / price ratio in order of importance are the variables that determine the purchase of products from other companies . For most companies the markets for their productions are Northern and Central Italy, with rates of incidence between 10 and 50% of its turnover. South Islands, markets still occupy a space in the marginal customers of companies to complete the circuit. The number of customers ranging from a minimum of 50 (28 % of companies ) to a maximum that exceeds 200 units (28%) . The figure of mono or multi-­‐mandate is the type of contact used by most commercial companies -­‐ it uses 42% of the companies -­‐ followed soon after by the wholesaler and the direct sale of products in the company, customers and visitors an opportunity to ' touch hand with ' the realities of production and processing. They are then in a few companies to provide massively forms of support to the trade, which however does not go beyond discounts at certain times of the year, while 42 % of respondents say they do not make any form of incentive. With regard to the services to the customer commitment is even smaller, only 4 carry out refresher courses and informative . BUSINESS SEGMENT OF PROCESSING AND MARKETING The companies considered in this section are those which carry out the stages of processing and marketing, without producing the raw materials themselves, most of them derives income from the sale ( between 30 and 50 % of income ), followed by the transformation that contributes sometimes ( 33% of companies ) to the income percentages between 70 and 100% . Phyto-­‐ therapeutic uses, and herbal teas, drinks and liqueurs and Natural cosmetics are the main products of this segment of companies with a percentage of percentage of sales variables. 1st place with an incidence of 70-­‐100 % are fitoderivati , herbal teas, followed by drinks and spirits (40-­‐50 %) and then again in order natural cosmetics (20-­‐30 % of total sales ) . The areas of privileged destination of farm products are herbal medicine and herbal cosmetics and perfumery. The choice of destinations is often linked to certain knowledge on the part of the company and only sometimes to specific business and market reasons . All companies produce both semi-­‐ finished products. The tradition of the company is situated in a period ranging from 5 to 20 years, in fact the higher frequencies we find for classes 5-­‐10 years (3 companies) 10-­‐20 years ( 6 companies ) and except for 3 that there are as manufacturing activities for more than 20 years. The main problems that companies in this segment have faced in the first three years are divided as follows: •
Main problems with a high level of difficulty are those of a commercial •
Middle level of difficulty for the 50 % of companies as regards both commercial and financial problems. 107
Soon, however, accidents and solved problems related to the organization of personnel and technical agronomic companies at levels low and medium. So financial and commercial aspects of distribution : 2 problems to solve in the first three years, even for companies in this segment. The sources of funding in 50% of cases are flanked by the equity financing, bank and or private. However, what is clear is that these companies are a little ' made by you and only a few cases have benefited from subsidized loans . The Role of Research and Communication All companies make investments in research and innovation, 25% in small part, and the remaining 75% moderately, then going to quantify, we see that only 3 spend between 10 and 20% of its turnover in research, which is important with regard to new uses. However, in this segment of the costs of research and attention are greater than the segment to complete the circuit .We see the attitude towards communication activities, 75 % of companies declare to make investments in this sector, especially traditional advertising in newspapers and magazines and fact sheets on the products. However, the investment does not go beyond 10% of total business costs in 60% of cases.No company in this segment adjacent to the main activity, nor have partnerships or collaborations with other companies.The average number of people working permanently is 11 units . Passion and professionalism All they began already had experience in the field, in the sense that they knew the properties of herbs, and then only in a few cases they support by expert herbalists external. The passion and self-­‐interest aspects of propulsion that have then also determined the choice of certain placements within the market. Transformation technical and economic aspects All companies are active primarily in the production of finished products and semi-­‐
finished products in the second place .95% of the raw material is purchased and supply markets are both regions of Italy and some European countries, but also South America and Asian countries. 435 q.li the average annual quantity processed by this segment of companies. Water, alcohol, oils and glycerine major adjuvants used in the transformation, found with little difficulty . In this type of companies processing costs also come to affect around 30% of total business costs.Bottles and Glass Bottles major types of packaging that, together with graphics, labels and so on. make up between 5 and 10% of total business costs. In the opinion of this segment of the business would be more profitable products cosmetics and dietary supplements. Tablets and plant extracts products of our companies that contribute most to turnover. The areas of further development are identified in the phyto-­‐ therapeutic use on a par with skincare products . Then come the eco-­‐friendly products for the home and the seeds and the technical means necessary for production and processing. Thyme and fennel crops with a future market, followed by rosemary and other minor ( olive, almond, sage, helichrysum, fig ) . The wholesalers are the sales channel by these companies later tied agents and direct sales networks . Also developed the work to third parties and selling the company. About the work to third parties, although we have no data to estimate the phenomenon as a whole, it is very popular not only among the small and medium-­‐
108
sized (some work for third parties), but also in large organizations leaders. With this form of processing is obviate some problems : -­‐ Will reduce business costs -­‐ image -­‐ own brand -­‐ its channels -­‐ It reduces the necessary know-­‐how compared to finished products -­‐ Are reduced in part the problems of conservation and maintenance of the active ingredients of the raw materials . -­‐ Can resolve and dampen some organizational problems related to the early years of business activity Sales Since these are companies that buy and sell products from other providers, we asked them what criteria prevailing at the time of purchase 100% answered us value for money, followed by continuity of supply and therefore price and quality alone. The main suppliers are as in other regions of Italy and in countries of South America and Asia . The customers are mainly located in the North and contribute to revenues to the extent of 50-­‐70 %, the South and the Islands account for 30-­‐50 % of the turnover and Abroad for 10-­‐30 % . 75 % of companies have more than 200 customers while the remaining 25 % are around 200 . To trade these companies provide bonuses the objectives were achieved (50%), marginal rewards quantity meetings, but the remaining 505 does not provide any support. All make use of courier services for logistics. Few provide services to customers in limited promotional and informational services (50%), the remaining 50 % do not make any. But would be willing to do in-­‐depth courses and believe that the future of the industry is related to legislative issues. About the knowledge of the consumer market believe that quality is the most important element in the purchase process and then followed by information on the price as scale of importance. In this segment should be merged some companies 5 to be exact realize that only the business of processing, and which differ from the previous segment because only commercialize its products without purchase by third parties. Active in the fields fitoderivati , herbal teas and natural cosmetics, herbal remedies mostly allocate the products to cosmetics . The cost structure varies in the extent to which prevail processing costs between 30 and 40% of total business costs. Private financing and equity sources of financing the initial few companies who do research and the percentages of reduced cost 0-­‐10 % of total costs. All, however, are investments that do not exceed 10% of the costs and expenses are mainly in advertising and product cards -­‐ promotional material.No sideline or partnerships.Medium-­‐sized companies are suppliers of raw materials -­‐ totally bought -­‐ mainly in Italy and in Europe. Main products, skincare products and dietary supplements and extracts, which indicated the cosmetics of the most profitable (cost / higher value added). For the rest are comparable to those of Processing Trading. SEGMENT BUSINESS MARKETING -­‐ WHOLESALERS All wholesalers derive their income solely from marketing activities.Herbal teas and phyto is the area from which the wholesalers derive additional income ( over 60 % of 109
total sales ), then follow the natural cosmetics that contributes to turnover to the extent of 40-­‐50% . Areas of increased profitability : 1 . Herbal teas, fitoderivati 2 . natural cosmetics And in 100% of cases, the products sold are intended to herbal remedies and herbal medicine, followed then by what cosmetics for reasons mainly of the market and not of personal interest as we have seen in the other segments of companies. The average age of commercial companies is between 10 and 20 years here alone accounted for 66 % of companies. High difficulty companies have found the distribution and trade. The financial issues for half the sample amounted to difficulty level high for the other half of the medium. Difficulty levels mean those organizational and personnel.Here too, the node of the first three years of activity is the Commercial and Financial.This clearly is reflected in the cost structure: commercial ones are 50 to 60 % in some cases ( 50 % ) and from 30 to 40% in others ( 50 % ). Staff costs are those that affect less percentage (10-­‐20%) and structural ones that contribute to the extent of 20-­‐30 % .Equity and bank financing sources of supply initial financial trading companies .In this segment, the research has no or very low weight . All activities are Communication Advertising and product data sheets and also get to spend between 10 and 20% of total costs ( 50% of companies ) . The companies in this segment have no activity alongside the main one, either partnerships or collaborations with other companies. The average of people employed is 5 . Most of the companies 75 % is being assisted by an expert in the field, knowing the properties of herbs, a figure that in most cases coincides with a chemical or a herbalist. What are the criteria by which the company buys or products: quality and comprehensive range of products followed by the price and quality / price ratio .The main suppliers are in the countries of South America and Asia, followed by the Italian products and those from the United States and Canada.Most of the customers are the center and the north of Italy with a percentage impact on revenues 30-­‐50 %, while foreign customers contribute 10% to the turnover of trade enterprises .All have a number of clients in excess of 200 and rely on agents to sell the products.The supports for the trade are provided by all companies both awards amount, which for goals, but also discounts and competitions between the forces sale.The water is supplied by private courier .The nodes and elements of growth are tied -­‐ in the opinion of these people -­‐ the legislative situation .Quality, and price information in order of importance are the variables that affect the process of purchase of the final consumer. The Current situation It is interesting to note that orientation is generalized to medium and small businesses to be located in more phases of transformation Commercializzaione-­‐or-­‐
Transformation-­‐Crop Marketing, to ensure that income can cover the costs. The main companies in the sector, however, have made specific choices in terms of 110
production, in particular, let's see some Aboca (Tuscany), Specchiasol (Puglia), ISMEG(Calabria). An important sales channel herbalists: management. The herbalists are generally small companies and their turnover is estimated to be around 100,000 Euros.Generally are operated by a single person. There are interesting data about the structure of these stores with a special lens for the cosmetic industry proves that one of the growth areas of the market. Over 98% of the herbalists is cosmetic products, a sector that constitutes almost half of the outlets (between 20 and 50%) more than half of the total turnover as evidenced by the data presented below Turnover on the incidence of Cosmetic Chemistsfrom 0 – 10% 5,24% from 11 – 20% 13,20% from 21 – 30% 26,18% from 31 – 40 % 22,74% from 41 – 50% 20, 16% from 51 – 60% 8,32% more than 60% 4,16% The average volume of annual expense of cosmetic products for point of sale stands at around € 15,000.The most widely held view about the trend in sales is that consumption is stable (42%), while another large group of respondents said that the sector is in growth. Opinion is also shared by other channels, pharmacies salons Hairdressing industry experts and opinion leaders who see the natural cosmetics sector is still growing. Over 70% of the herbalists have an area of around 50 square meters and almost all (about 80%) is supplied with 1 or blackberries windows. Another interesting fact: 93% of outlets declared to deal with loose herbs. Another figure for the cosmetic industry: 76% of the herbalists tend to prefer the direct relationship with the manufacturer or a mixed form of delivery: manufacturer -­‐ distributor. However, it can be concluded that the administration of an herbal medicine is often played on personal skills rather than on analysis and strategic choices. The results of our research on the Detail Specialist (natural foods -­‐ health food stores) The survey was conducted in 40 stores located throughout Italy with particular attention to our region Puglia where productive activity takes place. The breakdown of the sample of surveyed points is as follows 25 in Italy, 15 in Apulia It 'was administered a questionnaire by telephone or through direct visit. Data structure First, it should be noted that the legal form of the outlets is the natural Prevail Ltd., 52.5% of stores surveyed possesses, followed by individual firms that are 25% of the total demonstration of the fact that it is still small commercial realities often handled 111
by one person were 3 shops who included employees and it was always shops with interesting dimensions. Figure 11-­‐ the legal form of the outlets La forma giuridica dei punti vendita
52,50%
25%
in
di
vi
du
al
e
2,50%
ia
le
op
.s
oc
er
at
.
2,50%
di
tta
so
c.
co
op
pa
2,50%
sa
sa
s
2,50%
co
5%
sn
c
sp
a
sr
l
7,5%
The average size is prevalent between 30 and 50 square meters, followed by the shops with an area exceeding 100 square meters, in the latter case it is natural food stores and franchises ever individual herbalists maintain that the type of small shop, despite some things are changing. Figure 12-­‐the size of the outlets in Italy Le Dimensioni dei Punti Vendita in Italia
meno 30 mq 5%
oltre 100 mq.
37,5%
tra 30 e 50 mq.
22,5%
tra 50 -80 mq.
17,50%
tra 80 -100 mq.
17,50%
112
Figure 13-­‐the size of the outlets in Puglia La Dimensione dei Punti Vendita in Puglia
oltre 100
mq.12%
meno 30
mq.8%
tra 80-100
mq.20%
tra 50-80
mq.6,5%
tra 30-50 mq.
53%
The situation is different points of sale in Puglia Even here outweighs the small and medium size between 30 and 50 square meters, followed soon after by the size between 80 and 100 square meters., Lower than the national total outlets with larger than 100 square meters. All the more so that in our region there are no stores to free service for which you justify the large size. Only Naturasì arrived in Puglia with 2 stores 1 in Bari and the other in Taranto.Long is the tradition and the preparation of those who work in these outlets, the majority of them ( 52 %), in fact, existed for more than 10 years. The commercial organization and choice of suppliers weigh all the manager which often is oriented to manage product lines with a few suppliers, max 10-­‐20 brands ( 32 % of outlets ) and only in a few cases, the number of brands and then of suppliers, rises to 30 -­‐ . 40 % . Similar situation in the whole of Italy, including Puglia. This finding is very interesting in two respects, firstly highlights the tendency of the manager to boosting customer loyalty towards some manufacturers to the benefit of companies that have been in this industry are doing a good job . On the other hand also denotes an attitude of closure to new business if not supported by massive promotional and image . This is demonstrated by the fact that the companies present at all points of sale are those that have done more than other investments in communications (not always these products are at high quality levels). This suggests that the manager does not always manage to distinguish real quality with quality declared and in any case must always keep an eye on the market ( I decided to take this brand because I demanded it ) and data of the limited volume of sales ..... the manager can not underestimate the demands of its customers, that it is stable or occasional . Thus we see that the most popular brands of herbal products and requested by customers are in order: 113
1. Aboca 2. Erbolario di Lodi 3. Weleda 4. Specchiasol 5. Guam The ranking of visibility and public awareness of changes slightly if we consider only the data Puglia 1. Erbolario di Lodi 2. Aboca 3. Guam 4. Specchiasol 5. Weleda Note that both in the case and in the Puglia Italy are among the best known brands of cosmetics in the first case : Erbolario, Weleda ( German company ), Guam.In the second case -­‐ Puglia -­‐ the index of notoriety puts the Erbolario in 1st place and 3rd place Guam -­‐ famous firm of anti-­‐cellulite products, followed by Weleda here . Among the non-­‐cosmetic brands totaled in order Aboca and Specchaisol, the first leader nels ector herbal teas and plant derivatives, for several years, the second emerged commercially in the past 5 years, it has gained market share at the expense of small companies. And ' interesting to note then that in fact the discourse of brands in relative terms since it weighs just 50% of store managers state that almost never the consumer requests the brand product or sometimes ( 35%). This is because there are, however, the advice of the manager that influence purchasing decisions, much of the advertising aimed directly at consumers. And anyway, the weight is primarily concerned with the natural cosmetics for women's attitude -­‐ women are the main players users of these products, even if the male customers of cosmetics -­‐ so even natural, it is definitely a segment to watch. Figure 14-­‐Customers want the branded product? La Clientela Richiede il prodotto di Marca?
mai 5%
si sempre 1%
qualche volta35%
quasi mai 50%
114
A sign that the customer in most cases, a professional herbalist recognizes your proven enough to accept the proposals and suggestions of the latter. However, the manager feels the need to implement some form of advertising for your store -­‐ 80% of respondents say they are convinced of this intervention and 85% already achieves some form of targeted communication, about half of them are yellow Pages, third is advertising in newspapers and magazines, and another third organizes conferences and seminars. For a more detailed analysis of this aspect shows that 67 % of stores or coopartecipa organizes activities for conferences and seminars, in fact 32% recognize this form as the most effective way to attract new customers and 42 % thought it was quite effective. It seems this is the road that the outlets of the natural follow and confirm other studies in the information field identifying the node -­‐ the point of weakness, but also opportunities in the field of ' natural ' . Another weak point is the low volumes that these stores carry 60% of the customers do not spend more than 30 Euros for a time. Women are still the main purchase decision-­‐makers and the prevailing average age from 30 to 50 years old -­‐ uniform data throughout Italy . It is also interesting to compare the brands that consumers demand, with those which the manager considers invalid.Regarding the herbal scenario changes little ABOCA remains in 1st place followed by a known house of cosmetics German Weleda, then from Specchiasol and Rebis . Erbolario does not appear among the top 5 brands. As for the food brands considered by managers are more reliable and ECOR Baule Volante . This is followed by other brands in local application (BioPuglia) or specialize in certain niches ( Window on the Sky -­‐ macrobiotic) and others. 85 % of stores surveyed ago discounts and promotions despite less than half of them felt that this would affect significantly the amount came, just the customer tends to purchase the promoted product rather than the equivalent without the discount . All promotions are dependent on the point of sale -­‐ there is rarely sharing the supplying company and this helps us to understand the enormous effort that managers do to boost consumption. In order to develop the business volume of their sales managers think they put more products in the assortment, to carry out more promotions and possibly to advertise . Top-­‐selling products in terms of quantity in Puglia, Italy 1. laxatives 2. Cosmetics -­‐ creams 3. Nutritional Supplements 4. Purifying 5. slimming The first type are the most commonly sold laxatives -­‐ both in the North and the South. Then follow cosmetics -­‐ mainly creams and food supplements, interesting in the view of purifying the various operators, teas, syrups and even diet . The types are most popular and best-­‐selling tablets and capsules, and extracts followed by drops, little requests herbs despite the pressures and the 115
attempts of managers to develop this type of consumption, as seen 93% of the herbalist said to have herbs loose . The majority of customers are stable -­‐ 77% -­‐ compared with a rate of 23% occasional, of which 50 % is stable . Consistent data throughout Italy. The reasons for them closer to nature and to the consumption of natural products and herbal remedies are mostly attributable to a greater awareness of their own health, fear of chemistry and ineffectiveness of traditional medicine (official -­‐ Drug allopathic).This shows on the one hand a general growth of the culture of nature, but also the fears that often feed . But despite that -­‐ according to the opinion of the owners of the outlets -­‐ the consumer is not ready yet the statute translate this awareness into a greater economic effort as evidenced by the data on the average ticket ( € 15,000 ) and some variables issues identified by consumers and turn to the service station operators . High prices and lack of information, there are two aspects that consumers often complain with the shopkeepers of the natural. 116
FOCUS APULIA REGION The territory of Apulia region is mainly characterized by viticulture and olive growing, but it can also tell by his other 'crops, its ancient agricultural tradition that over time has changed its face, but methods also retained activity -­‐ such as the collection and cultivation of aromatic and medicinal herbs that have fostered a sense of protection of the territory. The collection and production of medicinal and aromatic herbs has changed dramatically over the years by changing the region of Puglia. The nature of these products also expressed in all its territoriality. The biodiversity of the Apulia region is also identified in the flavors and aromas of herbs which give it a unique taste to the multivariate gastronomic traditions of Puglia. Production of Medicinal Herbs in Puglia The evolution of the total production of medicinal registered at the national level is obviously the result, as is often the case in the Italian case, the dynamics are very different recorded at the local level. A first illustration of these dynamics is proposed in Table 20, in which, for each region, shows the number of companies recognized at the two censuses, its surfaces and the related percentage changes. As can be seen, there are regions in which we are witnessing an increase in both of the companies that we find between these surfaces and the Puglia region (along with Piedmont, Valle d'Aosta, Trentino Alto Adige, Friuli, Emilia Romagna, Marche and Calabria), and other in which both decrease (Liguria and Molise). This is a sign of renewed interest in agriculture to this area of Puglia. Table 21-­‐ Evolution of farms and areas by Region 117
To draw a picture of the evolutionary process is useful to check the position in the plane defined by the two percentage changes (of companies and surfaces) compared to the average location is Italy as a whole. The framework is shown in Fig. 4.5. Here we see that Puglia in the report firms surfaces (between 2000 and 2010) has seen a considerable increase of the surface, given interesting when you consider that companies operating on the territory of Puglia are not many, but those in attendance are important. Figure 15-­‐ Variations of companies and surfaces (2010/2000) 118
Depending on their position relative to the point that represents Italy (ITA) regions can be divided into four types: those with increases in the number of companies and the larger surface area than the national average (the top right quadrant), those showing growth of companies greater than the average, but an increase of the smaller surface (in the lower right quadrant II compared to ITA), those which present variations of both minor variables of the mean (III quadrant at the lower left) and those with variation of Companies and minor variations of the surface more (in the upper left quadrant IV with respect to ITA). Figure 16-­‐ Relationship between variation and change in the surface of the companies * 119
The figure allows to highlight that, among the regions in the first quadrant, Emilia Romagna, Friuli and brands have played a role in the evolution expansive national, while Abruzzo, Basilicata, Sicily, Liguria and Molise have contributed in the sense recessive (quadrant III) . In the fourth quadrant is the only place Lazio, while in the second we observe a number of regions whose development is characterized in terms of a greater fragmentation of production, where we find the Apulia. Organic farms Table 22. organic businesses that operate in the field of aromatic plants, medicinal and seasoning Region Total Whose Whose whose exclusive producers preparatory producers preparatory / and importers preparatory / importers Puglia 13 8 3 2 Emilia 86 56 16 14 Romagna Italy 745 524 151 70 Were also analyzed data from the Annual Production Plan (PAP) that provide information on the farmland and cultivated species for each plot of land that organic 120
operators shall annually report their inspection bodies and certification. These data show the actual productions invested during 2011 . The data provided relate to 614 organic farms for a total of 2227.25 hectares, which cover about 76.4 % of the total estimated hectares nationwide. The order of the companies according to areas of business confirms the high fragmentation of production. The average size is about 3.6 hectares ; as shown in the following table, where we calculated the distribution of farms and areas by class of superficie27, only two companies have more than 90 hectares, concentrating 27% of the total area ; the large number of firms increases in the size classes below . It then states that a significant proportion of the total area (over 27% ) falls within the classes of surface between 1 and 10 hectares. The production then takes place to a large extent also on surfaces of small and very small. Even the list of species cultivated by these companies is a very interesting question, although a portion of the surface temperature is generically referred to as " medicinal and aromatic variety " (140 hectares or 6.3% of the total).The species with the largest area planted with organic methods in 2011 are lavender, coriander, as psyllium and fennel, followed by chamomile, passionflower and oregano . The data on the sweet clover should be interpreted with extreme caution, because -­‐ although there is a tradition passed to this crop in most areas of production -­‐ probably the figure is somewhat oversized compared to that in the opinion of the operators, the demand for market chains considered in this work, both nationally and internationally. In other words, the sweet clover has been grown widely in the past to extract coumarins, however this function in use is poorly developed today and the plant is grown mainly as an essence to renew, or forage mellifera. The farms producing medicinal and Aromatic Plants seasoning (PAMC) -­‐ Deepening After reviewing the main structural dynamics and territorial and have acquired some specific indications in Puglia herbs intended to do a study on farms producing Medicinal and Aromatic Plants Seasoning ( PAMC ), and in particular on organizational aspects, interactions with the PAMC other business activities, and characteristics of some of the factors associated with them.This segment represents an interesting area for the supply chain of the aromatic plants in Puglia. The question of the relationship between specialization and size thus appears to be crucial in identifying the types of companies that make PAMC . In order to analyze in detail the issue have built the joint distributions of the two phenomena, divided into appropriate classes, both in terms of companies that UAA ( utilized agricultural area). The first distribution is presented in Table 23. As an indicator of specialization has been chosen, the percentage ratio between the surface and the PAMC SAU overall business. This ratio for the entire universe of companies is 13.4% . Companies with a ratio lower than the national average were classified as low-­‐skilled ; for companies with an above-­‐average, have been identified 4 classes of specialization ( medium, high, very high and maximum), whereas the thresholds indicated in Table 23. How to detect a substantial proportion of firms that grow PAMC (389) has a level of specialization below average (less than 13.4 %) and a very small size ( less than two hectares). It is in other words a lot of companies where the likely presence 121
of the crops in question plays a marginal role, maybe linked to self or to other secondary purposes . There are 90 companies instead of equally limited size but which have a maximum level of specialization, ie in which virtually all of the modest UAA available is dedicated to these crops . Specialization and localization: some results Another aspect on which you are made of depth is related to the links between the level of specialization of PAMC manufacturing companies and their distribution on the territory. A first result shown here relates to the change in the pattern of specialization-­‐meaning, in this case, as the ratio between the surface and the PAMC SAU -­‐ at regional level. In Figure 25 is therefore represented the quotient between the report and the similar ratio determined at the national level (13.4%) . When this ratio is greater than unity it is obvious that the level of regional specialization is higher than the national average. As seen in the figure cited the index in question is greater than 1 in the case of Basilicata, Liguria, Marche, Piedmont and Puglia . In these regions, that is, the total incidence of surface PAMC on UAA is superior to that found at the national level . Figure 17-­‐Indicator of regional specialization In this context, another factor considered is constituted by the relationship between the area planted in different regions and the level of specialization, a connection that, as before, was analyzed through the matrix of contingencies. The result of the processing performed is shown in Table 24 122
Table 23. Companies producing PAMC by region and level of specialization: contingencies calculated based on the area invested in PAMC Classes of low Average High Very High Maximum specialization (<13,4%) (13,4-­‐25%) (25-­‐50%) (50-­‐99%) (99-­‐100%) Regions As can be seen, there has been a high degree of association in the case of Emilia with the low-­‐skilled, while in the Marches of this grade is strongly associated with high levels of specialization. In the case of Piedmont a high level of association is found for very high levels of specialization, and finally in that of Puglia for maximum levels of specialization. Some indications of human capital and innovation The latest insights developed concerning the relationship that exists between the cultivation of PAMC and the qualitative characteristics of some important business factors (among other interrelated): on the one hand, the hardware and software capital, and, secondly, the capital human . As regards the first have been considered some equipment and skills in the field information and communication shown in Table 4.13. On all the 548 companies analyzed, 18.7 % have computer equipment; 357 (12.2%) use the Internet for their activities ; 452, more than 15%, and 205 have a website using electronic commerce for the sale of their goods and services. As can 123
be seen considering the last column of the table are percentages cited are far above those of "average", ie relating to the collection of holdings reported by the Census . Even in this case was carried out the analysis of the links between the variables considered and the level of specialization using the matrices of contingency and also in this case, such analysis is not shown for reasons of space, also because there is no evidence ties of particular consistency between the two types of phenomena considered ; the rest do not seem to be no specific assumptions about the ability of specialization in PAMC to solicit the use and learning of information technology. Turning to human capital results of some interest seem to emerge from the analysis of the distribution of the conductors of the companies with PAMC based on the title of the study, the distribution shown in Figure 26. Figure 18-­‐ Companies PAMC: education of the conductor Source: Based on Istat data As can be seen most of the wires -­‐ just over 800 -­‐ is equipped with a middle school, and a significant proportion has qualifications still lower. However, one can not emphasize the significant frequency of conductors with a high school diploma and college degree, particularly with diplomas and degrees of "non-­‐ agricultural " . Important information on this topic can be drawn from an examination of Table 24. in which are compared the relative frequencies of the different degrees calculated in the case of companies with PAMC and the "average" calculated on all the companies taken over by the Census . As can be seen, the level of education of the conductors of the companies analyzed is on the whole higher than average, it suffices to observe that the percentage of those who have earned a high school diploma (other than agriculture) 124
amounted to almost 23% -­‐ compared to an average of around 15% -­‐ and that of those who have a degree exceeds 11%, compared to 5.4 % which characterizes the set of conductors. The analysis of the contingencies would suggest that an association between a low level of specialization and the latest types of qualifications mentioned. Ultimately, the cultivation of PAMC seems to some extent supported by a level of training and skills articulated enough, not strictly sectoral, able to articulate a vision that interacts with the "modern" technology and communication. DISTRIBUTION AND CONSUMPTION TRENDS IN APULIA REGION As already pointed out the situation of the national scale distribution and trade is diverse enough .The situation of the outlets of the Apulia region: Figure 19-­‐The size of the points of sale in Puglia Even here outweighs the small and medium size between 30 and 50 square meters, followed soon after by the size between 80 and 100 square meters. Lower than the national total outlets with larger than 100 square meters. All the more so that in our region there are no shops to free service for which you justify the large size. Only Natural arrived in Puglia with 2 stores 1 in Bari and the other in Taranto. Long is the tradition and the preparation of those who work in these outlets, the majority of them (52%), in fact, existed for more than 10 years. The commercial organization and choice of suppliers weigh all the manager which often is oriented to manage product lines with a few suppliers, max 10-­‐20 brands (32% of outlets) and only in a few cases, the number of brands and then of suppliers, rises to 30 -­‐. 40%. Similar situation in the whole of Italy, including Puglia. This finding is very interesting in two respects, firstly highlights the tendency of the manager to boosting customer loyalty towards some manufacturers to the benefit of companies that have been in this industry are doing a good job. On the other hand also denotes an attitude of closure to new business if not supported by massive promotional and image. This is demonstrated by the fact that the companies present at all points of sale are those that have done more than other 125
investments in communications (not always these products are at high quality levels). This suggests that the manager does not always manage to distinguish real quality with quality declared and in any case must always keep an eye on the market (I've decided to take this brand because I demanded it) and data of the limited volume of sales ..... the manager can not underestimate the demands of its customers, that it is stable or occasional. Thus we see that the most popular brands of herbal products and requested by customers are in order: 6. Aboca 7. Erbolario di Lodi 8. Weleda 9. Specchiasol 10. Guam The ranking of visibility and public awareness of changes slightly if we consider only the data Puglia 6. Erbolario di Lodi 7. Aboca 8. Guam 9. Specchiasol 10. Weleda Note that both in the case and in the Puglia Italy are among the best known brands of cosmetics in the first case : Erbolario, Weleda ( German company ), Guam. In the second case -­‐ Puglia -­‐ the index of notoriety puts the Erbolario in 1st place and 3rd place Guam -­‐ famous firm of anti-­‐cellulite products, followed by Weleda here . Among the non-­‐cosmetic brand stood in order Aboca and Specchiasol, the first leader in herbal teas and plant derivatives, for several years, the second emerged commercially in the past 5 years, it has gained market share at the expense of small companies. And ' interesting to note then that in fact the discourse of brands in relative terms since it weighs just 50% of store managers state that almost never the consumer requests the brand product or sometimes ( 35%). This is because there are, however, the advice of the manager that influence purchasing decisions, much of the advertising aimed directly at consumers. And anyway, the weight is primarily concerned with the natural cosmetics for women's attitude -­‐ women are the main players users of these products, even if the male customers of cosmetics -­‐ so even natural, it is definitely a segment to watch. 126
Figure 27-The client requests the brandname product?
neve 5%
alw ays 1%
sometimes 35%
almost never
50%
A sign that the customer in most cases, a professional herbalist recognizes your proven enough to accept the proposals and suggestions of the latter.However, the manager feels the need to implement some form of advertising for your store -­‐ 80% of respondents say they are convinced of this intervention and 85% already achieves some form of targeted communication, about half of them are yellow Pages, third is advertising in newspapers and magazines, and another third organizes conferences and seminars. For a more detailed analysis of this aspect reveals that 67% of the stores or coopartecipa organizes activities for conferences and seminars, in fact 32% recognize this form as the most effective way to attract new customers and 42 % thought it was quite effective. It seems this is the road that the outlets of the natural follow and confirm other studies in the information field identifying the node -­‐ the point of weakness, but also opportunities in the field of ' natural '. Another weak point is the low volumes that these stores carry 60% of the customers do not spend more than 30 Euros for a time Women are still the main purchase decision-­‐makers and the prevailing average age from 30 to 50 years old -­‐ uniform data throughout Italy. It 's also interesting to compare the brands that consumers demand, with those which the manager considers invalid. Regarding the herbal scenario changes little ABOCA remains in 1st place followed by a known house of cosmetics German Weleda, then from Specchiasol and Rebis . Erbolario does not appear among the top 5 brands. The 85 % of stores surveyed ago discounts and promotions despite less than half of them felt that this would affect significantly the amount came, just the customer tends to purchase the promoted product rather than the equivalent without the discount. All promotions are dependent on the point of sale -­‐ there is rarely sharing the supplying company and this helps us to understand the enormous effort that managers do to boost consumption. In order to develop the business volume of their sales managers think they put more products in the assortment, to carry out more promotions and possibly to advertise. 127
Top-­‐selling products in terms of quantity Apulia Region 1. Laxatives 2. Slimming 3. Cosmetics Natural 4. Nutritional Supplements The first type are the most commonly sold laxatives -­‐ both in the North and the South.Then follow cosmetics -­‐ mainly creams and food supplements, interesting in the opinion of the managers of the various treatment plants, teas, syrups and even diet .In Puglia, the first product laxatives are always followed by diet and natural cosmetics. The types are most popular and best-­‐selling tablets and capsules, and extracts followed by drops, little requests herbs despite the pressure and the attempts of managers to develop this type of consumption, as seen 93% of the herbalist said to have herbs loose. The majority of customers are stable -­‐ 77% -­‐ compared with a rate of 23% occasional, of which 50 % is stable. The reasons for them closer to nature and to the consumption of natural products and herbal remedies are mostly attributable to a greater awareness of their own health, fear of chemistry and ineffectiveness of traditional medicine (official -­‐ Drug allopathic). This shows on the one hand a general growth of the culture of nature, but also the fears that often feed . But despite that -­‐ according to the opinion of the owners of the outlets -­‐ the consumer is not quite ready yet to translate this awareness into a greater economic effort as evidenced by the data on the average ticket ( € 15,000 ) and some variables issues identified by consumers and turn to the managers of the stores. High prices and lack of information, there are two aspects that consumers often complain with the shopkeepers of the natural. About the presence of refrigerated in the stores -­‐ which indicates a greater potential or increased consumption of processed fresh food, frozen food -­‐ it is interesting to note that in the rest of Italy, 92% of respondents shops are equipped with it in the face of a poor 13 % in the Puglia region . Protein vegetables, milk and dairy products, but also frozen vegetables and frozen some of the products contained in the showcases. The managers seek to identify interesting areas such as those of fresh foods, processed and also phyto-­‐ therapeutic use, environmentally friendly products for the home and frozen foods. The areas identified are such because in the opinion of management there is still room in the market, in the sense that the relationship Question-­‐ Offer is not yet in equilibrium, so in the face of the needs expressed or latent, there is still room for new realities productive or larger quantities . The views of the manager give some indication of the areas of development -­‐ herbal -­‐ Green products for the home -­‐ Processed foods and frozen foods. In this regard it should be noted that the opinions to be purged from personal visions, in fact many of the managers being sympathizers or herbalists and experts in the industry offering a more radical -­‐ but also more correct than the phytotherapeutic medicine, certainly, but the preferences of consumers and the trends in purchasing 128
motivations show an approach to the world of health and natural product, not always staffed, so often those who purchase natural cosmetics, would never dream of buying a herbal product for therapeutic purposes. The role of Pharmacies It matters that in our country there are about 17,000 pharmacies that have a sector herbal inside. A small percentage of these, approximately 10-­‐15% has an area with herbal structured within an industry expert. Opening signal of interesting main distribution channel of official medicine against those cures that are defined as ' alternative ' -­‐ homeopathy, herbal medicine .This channel can be considered as the outlet of these products, especially for what concerns the phytotherapeutic The large retail supermarket chains (GDO) As for the GDO is to say that the sector is still marginal derivatives and herbs are organic products while they do the lion's share in this distribution channel.The cosmetics industry and herbs and teas are more developed within the stores.So from our visits and interviews in 10 Italian GDO shows an interesting fact that some of them are establishing albeit still experimental areas dedicated to natural cosmetics, while herbal teas and supplements are combined to supply natural and organic sectors, when they have of dedicated spaces.The management of large-­‐scale distribution is centralized, so the margins of the great decision of the Director of Warehouse are modest and often almost zero -­‐ the strategic choices are taken from above -­‐ say those responsible.The criteria were used in selecting suppliers, are continuity of supply and guarantee the homogeneity of the quality standards laid aspects of the natural companies -­‐ especially those in power are a bit ' lacking.So by the operators on the one hand, there is great openness to the other there is a booming caution against potential new suppliers OPINION OF CONSUMERS Research on real Consumer Below are the results of a research conducted on a sample of 240 consumers of natural products, respondents exiting the store, in five regions of south and central Italy (also Apulia Region)." The respondents are consumers of organic products since the point of sale of organic products often coexist herbal products, from research can trace the profile of the consumer of herbal products." The areas analyzed can be divided into 3 main areas 1 ) Descriptive analysis of the sample 2 ) How to change the purchasing behavior and perception of quality with respect to some variables 3 ) Aggregation of consumers into three groups The results of the first level can be summarized as follows . Prevail female shoppers (men are thirty percent of the total) . There are all ages, but " the average consumer is 38 years old ." The characteristics of the family are " typical of the Italian population : 18 % live alone, 82 % in the family." 129
Good level of education: 55% had a high school diploma, 27% a university degree. E ', then, an unexpected finding emerged : the lack of information that the buyer has the biological product, " the consumer often does not know what they are buying ." The press, which many read as well, is not able to influence purchases ; compared to the purchase is often influenced by "word of mouth " among friends. The second level of reading shows the frequency and mode of purchase. " Only 42.7% is a regular customer." Failure to purchase in 51% of cases is attributed to high prices, the distance of the point of sale, difficulty in obtaining the products. In Figure28- Regularity in purchases
other 6%
regular
purchases
43%
occasional
purchases
51%
16% of cases culprit is not a clear distinction between shop. The consumer does not perceive the mark as a guarantee of quality, but relies on the manager of the store . -­‐ Since emerged also according to the views of the manager outlets.Instead, "the price is perceived in a subjective way . Asked what the difference in price between a biological product and a conventional, there are those who responded 30 % more and who is 300% more ." But perception does not always affect the purchase price . And here we enter the third level, which analyzes the behavior of consumers, combined them into three groups: fundamentalists, skeptical, explorers. Fundamentalists represent 53 % of the sample and buy on a regular basis for many years. They have a very favorable perception of quality, lack of appreciation of the difficulties of purchase (such as the distance of the point of sale ) or the price. Skeptics (31%) are consumers for many years but I am not convinced of the superior quality compared to conventional products. They need more information and the price for them is an important variable. The explorers (16%) recently approached the area, they are looking for health products, but have not yet made a choice. Strategies The market may widen further acting on the categories of skeptics and explorers that can be brought to the sector through better information . "The field of herbal has been stagnant for a number of reasons: the absence of a law defining the powers professionals; the lack of growth of the market for natural compared to other countries ; the low-­‐profile cultural-­‐ professional operators ; the chaotic image of the exercises ; excessive intrusiveness of some large suppliers that superimpose their image to that of herbal whole. 130
Research on potential consumers The survey conducted on 240 randomly selected consumers in Italy studying the buying habits of consumers ' conventional ' trying to find their inner needs and niches in which they can grow the consumption of green and natural . So in our sample underwent a telephone questionnaire of 15 questions designed to identify the buying habits and propensities to consume and to determine how many of them were green and many consumers were willing to become one. Thus we see that 44 % of respondents choosing products for their food on the basis of value for money or just based on the quality (36 %). Data show that a certain consumer's attention to what you eat. 59% of respondents said they consume fruit in a garden abundant signal of a greater attention to the power supply is interesting to note that a low percentage of consumption with little green cross at points of sale of the natural frequency, as if those who have the awareness that you have to consume large quantities of fruits and vegetables have somehow developed greater awareness towards green consumption, regardless of whether they buy organic fruit and vegetables. The criteria under which they buy fresh produce is seasonal (47.5% ), quality (26%) and in any case also the quality / price ratio (15%) and freshness (7.9%) are criteria purchase of fresh products. What are the places of purchase of Italian The Supermarket is frequented by more than half of the sample (66%), followed by local markets -­‐ 42% makes purchases and sales point of trust (35%). In Puglia, the percentage of shoppers in supermarkets is even higher, at 64%, against 41% who attends the local markets and 37% who purchases in the store of trust. Lower the percentage of those who normally purchase food in the stores of natural (10%). The numbers change completely if you ask if they have ever shopped in stores of natural (herbal shops and health food stores), hence the 69% claim to have done acuisti, that in Puglia percentage drops to 60%. The frequency with which they made purchases in the stores of natural ranges from 1-­‐5 times a year (44.5%) to 5-­‐10 times in a year (21%) to 10-­‐20 times (12.8% ) only 11% say they usually go with a frequency of 2-­‐3 times per month. In Puglia, the annual frequency of purchase are a bit 'different Puglia data on frequency of purchase annual 1 time 8,2% 1-­‐5 times 56,2% 5-­‐10 times 17,8% 10-­‐20 times 8,2% 20-­‐30 times 2,8% More than 30 times 6,8% 131
It should be noted that in Puglia the habitual consumption is much lower (6.8% make purchases for more than 30 times a year) when compared with that of the rest of Italy ( 11.9%) . Three main types of purchase at the national level we have the following ranking: 1. Herbs and Herbal Teas 2 . Foods and Beverages 3 . Cosmetics Products 4 . Phytotherapic products In Puglia, things are a bit ' different prevailing consumption : 1. Herbs and Herbal Teas 2 . Cosmetic products 3 . Foods and beverages 4 . Phytotherapeutic products . In both cases, and consider the national data that we have 2 aspects of the regional basis, the primacy in the use of herbs and teas and the last place in the consumption of herbal products . With a relative change with respect to natural cosmetics, which according to our consumers is the second type of product in Puglia and the third in the rest of Italy . However it is quite aware consumers, the price is only identified as discriminating by 34% of consumers, while 58 % believe that natural products have no problem matrix or price or quality -­‐ Italian data . In Puglia, the weight price is a bit ' higher -­‐ indicate it as problematic element of the purchases natural 38,3 % of those who shop . The most purchased products in Puglia 1. Herbal Teas 2 . Cosmetics Beauty 3 . Nutritional Supplements 4 . Phyto therapeutic use Ranking uniform for the rest of Italy. Data that intersect in part with the views of the manager -­‐ that the best selling product of all are laxatives, confirms cosmetics and herbal infusions ( purifying ... ) May the hand of these consumers was approached by accident and curiosity for some choice of life or health reasons. More on the advice of friends and acquaintances -­‐ the power of word of mouth -­‐ . Two main expectations of these products : 1. Few side effects 2 . Increased Security . 3 . Then followed by greater efficiency and environmental friendliness. Then there are those who have never shopped at a natural point of sale . 132
More than 60% of those who have never shopped in stores natural are willing to do so in the future. Italy has the unanimous opinion on this front Several reasons: -­‐ Some out of curiosity -­‐ Others to try organic products . The irreducible instead do not buy and do not intend to buy because in 66% of cases have no interest . 133
4.
SWOT Analysis For Italian and Greek Markets 4.1 SWOT analysis for Greek Market In this part we present the SWOT Analysis concerning the major advantages and disadvantages and the possible threat and opportunities. The material presented below have been emerged from the analysis of the field from the interviews conducted with farmers, formulators, processors and traders of Western Greece area and especially from Achaia, Aitoloakarnania and Ilia perfectures. Main disadvantages and threats of aromatic and therapeutic herbs cultivation sector •
The most significant disadvantage and maybe a possible threat is the shortage of supplies mainly related to certified seed and propagating material. From their side, farmers insist on a well-­‐organized experimental production of seeds and propagating material over large geographical / climate zones and certified native varieties known in advance minimum yield per climatic / soil environment. •
Lack of information for farmers on adaptability, breeding and cultivation techniques. The level of information isn’t only related with the lack of awareness but also with the absence of applications and standards visited cultivations. •
Lack of information for farmers with respect to phyto-­‐sanitary standards and quality directly related to the cultivation, collection and spatial drying plant •
Uncontrolled collection of native plants with inappropriate methods •
Little involvement of traditional cooperative movement to the specific sector. Main advantages and opportunities of aromatic and therapeutic herbs cultivation sector •
Major firms have invested in the cultivation of aromatic and therapeutic herbs and plants in privately owned areas which increases healthy competition and quality standards. •
Increment of production demand accompanied from an increase of the number of producers, land and variety of cultured species. •
In many cases the production has been associated with environmentally friendly production methods and especially with organic farming. •
Few vertical integrated units of production. Thus, a further need for the support of exports is imperative. •
Opportunities for commercial production of propagating material •
Opportunities for training programs for producers of aromatic and therapeutic herbs and plants. •
Improved performance and stable producer prices with decent gross revenue. •
Aromatic and therapeutic herbs and plants meet the need for restructuring the cultivation, modernization of agricultural production and shift to innovative green and non food products. •
There is potential for plant/herbs species cultivation combinations and thus better risk management of agricultural production. •
Their cultivation in mountain and semi-­‐mountain areas offers a significant supplemental income to the farmers of the specific areas. 134
Main disadvantages and threats of aromatic and therapeutic herbs and plants manufacturing sector •
Lack of constant quantity and quality of domestic raw material •
Lack of production of essential oils in industrial scale used as inputs in the pharmaceutical industry, cosmetics and food industry. •
Financial support for producers and aromatic and therapeutic herbs processors. •
The international standards, the standardization and marketing of plant gemplasm and native plants lead to more stringent specifications. •
International standards for herbal preparations in the pharmaceutical sector and the cosmetics industry leads to growing need for standards and certifications. •
Further precipitation of pharmacy and cosmetics industry due to global and especially to Greek current crisis. Main advantages and opportunities of aromatic and therapeutic herbs and plants manufacturing sector •
Existence of strong dynamic firms with strong export activity, presence and development activities abroad. •
The level of marketing and promotion of aromatic and therapeutic herbs, plants and products has reached a level of maturity. •
Available expertise and know-­‐how of scientists and researchers, both in the phases of production, processing and marketing. •
Greece appears to have a potential growth for aromatic and herbs cultivated areas related with the demand and the labor while the economies of scale can in advance reduce significantly raw material prices. •
Existing institutional framework for the exercise of contract farming. •
The geological and climatic diversity fosters different types and active ingredients of high biological value and excellent quality. •
Consumer behavior in West Europe favors the development of concepts referring to nature and natural products. •
Supports the presence and development of family manufacturing units. •
Motivation incentives within the (female) agro tourism sector (private and cooperative). •
The existence of few vertical integrated industries concerning the specific sector reveals the significant opportunities for a further expansion. •
The specific sector has been characterized as advancing from the Ministry of Rural Development and Food and has been included to the support of manufacturing sector •
Temporarily significant increase in processed product exports. 4.2 SWOT Analysis for the Italian Market SWOT analysis was developed with a view to formulating business strategies and interventionist policies in general for designing measures and evaluating choices in a competitive environment variable through the analysis of Strengths, Weaknesses, Opportunities and Threats and their appropriate combination to identify an integrated strategy. 135
The aim of the SWOT analysis is the integration within an intervention program of the intrinsic characteristics of the area and to study the determinants of the environment in which it is or will be executed. By using this methodological tool can reduce areas of uncertainty related to a program or a set of interventions in a sector or a particular region. Thereby, is achieved the determination of strategy to be followed within the framework of the intervention will take place or the program should be implemented. For each segment of the supply chain ector herbs we synthesized strengths, threats and opportunities in order to identify elements and estrinci intrinsic to the system and that can affect the evolution of the same.Were analyzed and summarized data related to the market, the offer and state the question of herbs and aromatic derivatives and identify the critical issues and areas of focus. So in the following tables synthesize SWOT analysis for each segment and then we're going to identify the key actions necessary for development of the sector as a whole. JOINT CHAIN: GROWING BY THE FINISHED PRODUCT SWOT -­‐ analysis THE PRODUCTION 1. General aspects relating to Medicinal Plants Strengths Weaknesses •
Wealth of experience and •
Fragmentary knowledge on the traditions spread of medicinal plants in the country •
Optimization of knowledge •
Overcoming the current •
Great wealth of medicinal species misinformation Compared Of the total number of wild •
Few species cultivated in the species country Opportunities Threats •
Realization official database of •
Resources (variability) the flora officinale •
Alien species •
Great demand for health •
Plants imported products based on Medicinal Plants •
Inclusion in the diets of: functional foods, fortified foods, foods for special medical purposes, food supplements 2. Spontaneous Medicinal Plants Strengths Weaknesses •
recover ancient knowledge •
licensed collector and format (permit application) •
development of the area •
Changes in lifestyle •
biodiversity •
Lack time, which predisposes to •
binders specialized the use of ready-­‐made products 136
•
preservation of germplasm implemented by the Botanical Gardens •
domestication implemented with specific Research Projects •
Sperm Bank and Germplasm Opportunities •
Educational appropriate and / or specific training •
Control Bodies •
revitalization and enhancement of farms •
Domestication of wild plants (research projects) •
food and wine heritage •
changes in the content of active ingredients due to farming techniques 3 Medicinal Plants grown in open field Strengths •
consumer preference towards domestic products •
tradition of some local products (mint, e.t.c) •
wide variability of climatic conditions: diversified farming •
alternative source of income Opportunities •
High domestic demand, predisposes to growth in the sector •
associations and cooperatives •
quality marks •
research to improve crop varieties and their intended use 3. Medicinal Plants grown in open field 3.3 MOLECULAR CHARACTERIZATION Strengths •
Use of genomics and other sciences "omics" for the development of innovative medicines and natural selection of cultivars •
NGS technology has reduced the •
Lack of knowledge of ethnobotanical uses and fitoalimurgici Threats •
Risk of DIY: the importance of perfect knowledge of the botanical identity •
(misidentification) •
Pollution of the harvested product •
IV product range, •
lack of interest in young Weaknesses •
lack of reliable data on the size of the industry •
scarcity of information on cultivation techniques and cultivars available •
lack of liaison bodies between supply and demand Threats •
competition of the raw material from foreign countries (grown or collected from the wild, modest price and quality) Weaknesses •
To date, few studies have been conducted on the molecular medicinal plants 137
cost and time of sequencing of genomes even in •
medicinal plants Opportunities Threats •
Identification of the different •
Achievement of objectives and species of medicinal plants through late loss of genetic characteristics initial macroscopic and microscopic examination of the morphology of the sample. •
DNA analysis approaches: -­‐ Nucleotide sequence of one or more genes -­‐ Polymorphism of the nucleotide sequence 3. Medicinal Plants grown in open field 3.5.1 GROWING THROUGH ORGANIC FARMING TECHNIQUES Strengths Weaknesses •
Italian soil and climatic •
More insights on the influence of conditions favorable fertilization on the quantity and quality •
Wealth variety of the Italian flora of products Small number of species studied •
Extension of biological methods •
•
Lack of knowledge of elements of for the cultivation of medicinal species chemical fertility, secondary elements •
Improved farming techniques •
Availability and variety of organic and trace elements • Lack of expertise on critical issues relating to the and organo-­‐mineral fertilizers management of soil •
Enhancement marginal areas Opportunities Threats •
increase sustainability •
Increase in the cost of fossil fuels •
Re-­‐use waste biomass to reduce •
Overexploitation of soils and the use of chemical fertilizers climate change, •
Increase the production in terms •
Increased disease "Soilborn» of quality and quantity depending on the request 4. Medicinal Plants grown in vitro Strengths Weaknesses •
Cloning of mother plants •
High cost of equipment and labor •
A selection of chemotypes and •
The need for careful evaluation of conservation of genetic materials and the cost / benefit maintaining biodiversity •
The need for high-­‐tech •
Possibility of programming crop •
It will always be a complementary •
Ease of extraction of active activity to the crop in the field ingredients 138
Opportunities Threats •
Creation of new production high-­‐ •
High risk of competing with the tech extensive cultivation. •
Job opportunities for qualified •
Difficulties in obtaining secondary staff metabolites of interest in the cultivation •
Possible the production of semi-­‐ in vitro (stressors) finished Technical Transformation of Medicinal Plants Strengths Weaknesses •
established techniques •
Knowledge of the basic •
Devices also available in the first procedures •
The need for specialized processing companies •
The need for specific knowledge personnel Few solvents to be used for •
Specific training of new •
health purposes generations of medium and small •
Specific choice of the techniques enterprises of extraction of analysis, depending on the active principles of interest Opportunities Threats •
Knowledge of the basic •
Expensive investments for small procedures businesses •
The need for specialized •
Market entry of low-­‐cost personnel products and poor quality •
Few solvents to be used for health purposes •
Specific choice of the techniques of extraction of analysis, depending on the active principles of interest 8. Potential applications of Medicinal Plants Strengths Weaknesses •
Dissemination of the concept of •
Difficult quality control on the quality -­‐ associated with consumer safety finished product, •
importance of quality control •
already on the market. (from raw materials to the commercial •
Source of raw material (x use of product) pesticides or unsuitable environments in •
Application of the 1\m,1\ current •
post-­‐harvest) regulations on the quality (HACCP, ISO, e.t.c.). •
Cost favorable benefit / risk balance of domestic production •
Close monitoring of the crops 139
according to strict protocols Opportunities •
Reassessment of marginal areas •
Direct control of the total supply chain from raw material Threats •
Increasing the number of quality products is not controlled at the expense of consumer safety •
Sale on the Internet 8.6 FEED THE ADDITION OF PLANTS PLANTS AND / OR THEIR EXTRACTS Strengths Weaknesses •
destination of use of products of •
The need to establish what are vegetable origin: the criteria that distinguish the use of a o
intended solely for the plant officinale as a raw material or as a pharmaceutical and / or therapeutic feed additive. (April 6, 2006 Legislative Decree n. 193) o
raw materials / additives and / or processing aids to improve the characteristics of feed (articulated chain rule) Opportunities Threats •
The European regulations provide •
Responsibilities of operators a high level of protection of animal during the production, processing, health and consumer transportation, the distribution and supply of food 8.8 BEVERAGES AND SPIRITS Strengths Weaknesses •
For crops to the claim of the •
• Presence of exotic plant species system is moderately satisfied in recipes •
Lack of certain standards, harmonized and shared Opportunities Threats •
Overcoming structural barriers •
Pulverization of companies (companies too small, dispersed, without •
Trend towards outsourcing of programming) many production processes •
Potential geographical, business, mechanical 8.9 COSMETICS BASED PLANT Strengths Weaknesses •
The raw materials of plant origin •
lack of resources to cover the should be accompanied by a sufficient costs of innovation number of data and information: •
characterize and identify specimens, •
allow for an adequate 140
assessment of risk Opportunities •
demand for products in the growth •
Excellent opportunity, to growth as innovation and conversion of cosmetic formulation 8:10 NATURAL DYES Strengths •
Income opportunities for farms •
preserving biodiversity •
organic certification •
Growth in the field of eco and bio cosmetics •
Interest from cosmetic companies Threats •
• indiscriminate use of the term natural / organic / green •
• Lack of a harmonized standard and the presence of too many certification marks Weaknesses •
Limited information on cultivation techniques and formulations •
fragmentation of supply •
Limited availability of propagation material to start the culture •
Problems in finding sales channels Opportunities Threats •
National high domestic demand •
Competition of raw materials •
Possibility of transforming the from foreign countries, where the cost of labor is less product coming to market on farm •
innovative end products that incorporate within them the raw material source 8.11 PLANTS CONTAINING NATURAL Sweeteners Strengths Weaknesses •
Liberalization of the use of •
Lack of a structured chain of derivatives as a sweetener plant (eg: production of stevia Stevia rebaudiana) •
Scarcity of information on cultivation technique in open field •
Paucity of information regarding the collection and initial processing Opportunities Threats •
New supplementary sources of •
Extracts of stevioside and income rebaudioside present on the European •
Strong demand for steviol market at competitive prices, although not always with quality standards that glycosides by various industrial sectors •
Interest in obtaining extracts of meet the requirements of the industry. high quality and safe 141
8.12 USE OF PLANTS PLANTS IN WETLANDS Strengths Weaknesses •
safe and inexpensive method to •
not suitable for use in all places restore the environment •
in case of contamination too deep and high concentration of the contaminant is not able to efficiently restore a polluted area Opportunities Threats •
minimize the interference of •
Although the technologies used environmental impact and the ability to currently to be costly and present a leave the soils treated in such conditions •
significant environmental impact, as to be usable again for man. these are mostly used, especially •
for the speed of application, and by the will of economic choices -­‐ policy. 8:13 EXTRACTS OF PLANTS PLANTS AS A NATURAL INSECTICIDE Strengths Weaknesses •
The majority of the molecules of •
Lack of standardization of plant origin insecticide action are not procedures for extraction and toxic to humans, animals and beneficial formulation arthropods. •
The low persistence can give •
These molecules are problems in conservation due to the characterized by low persistence rapid •
The plant extracts often have •
degradability of the product more than one active substance, a •
Issues for the registration of feature that is not conducive to the commercial products emergence of resistance in pests •
Cost-­‐benefit ratio is not •
Can be used in organic farming sustainable in the short term Opportunities Threats •
Increasing demand from the •
Complex interactions of plant company and consumers of healthy molecules with environment resulting in products free of chemical residues difficulty in the analysis of efficacy. •
Increasing spread of the practice •
Alternatively, for now, not of biodynamic agriculture economically viable compared to •
The new European regulations synthetic pesticides have significantly reduced the number of active •
eligible in organic and conventional farming In the light of SWOT for segments filer list below a series of structural measures that I know are necessary for he proper development of the sector in Italy: Regulations 142
In particular, as already shown, it is strongly felt the need for a framework law, especially in the agricultural sector, to reestablish order and modernize the regulation of the sector in Italy taking into account the plurality of aspects that characterize the use of medicinal plants, and covering more specific sectors of herbal, pharmacy, food and phytocosmetics, looking at an increasingly globalized market . Considering that the national legislation of the sector does not have specific rules they need to be filled some gaps in several areas of the sector among which are the priorities related to: 1.
effective application of the law of orientation and modernization of the agricultural sector to enable the entrepreneur sector officinale to best use the potential and the multi-­‐functionality of a modern company and to realize additional income ; 2.
adoption of regional standards aiming at the establishment of specific procedures that might facilitate the recognition of producers' organizations, also in accordance with article 6 of Legislative Decree no. N.99/04 as well as to the regulation of specific problems that exist at the local purpose of the protection and promotion of the sector ; Knowledge of the technical and agronomic Then there are certain aspects related to the cultivation or in short supply for most of the species, agronomic and technical knowledge of all phases of the process of cultivation of medicinal and in particular the quality varietal propagation material, nutrition, defense, collection and post-­‐harvest . Against this, however, for a limited range of species, including Mentha x piperita, passionflower, wormwood, dandelion, echinacea, lemon balm, oregano, sage and chamomile, there is a well-­‐established agronomic practices, which allows the production of a advanced and competitive context . It 'clear, therefore, that it is necessary to proceed with the organization / planning processes of local training for farmers (and all stackholders ) through specific synergies between the competent institutions in the territory involving experts from research institutes in this programming considered the great specificity and diversity of topics . In summary it is necessary to "system" but also achieve a restructuring (or structuring ) of the chain up to other European countries with the purchase " facilitated "the technical means for processing ( drying, distillation, e.t.c . ) And equipment mechanized harvesting . Organizations of producers and raw material prices Returning to the field of medicinal plants in general also has specific features related to the geographical location Wherefore deserves careful thought, in fact, the spread of medicinal plants is slowed by obstacles to economic, regulatory, and sometimes related, as noted earlier, technical knowledge and culture . But the most problematic at the organizational level is the lack of aggregation of the supply chain, which in reality does not exist from its own systems from the classical aggregation operators in the agricultural sector (eg, Professional Organizations, Cooperatives and Consortia ) and the low degree of innovation compared, especially, to mechanical harvesting . 143
In fact, the key figures in the agricultural sector remain the operator that provides the right product, herbs, another important figure or the wholesaler and / or brokers specialized (which are few compared to Germany for example ), or even directly to ' industry and enterprises for transformation. In recent years the relationship between the manufacturer and the operators is changed or at least you're trying to change it because the grower of medicinal plants is more visible and present and its importance, professionalism and productive specificity are recognized within the industry. Buyers are starting to be more attentive to the national product, and for the most simple and safe management of supplies and purchases compared to imports from EU countries and third parties is for a generally higher level of quality of the herbs. This is because, as mentioned, the professionalism of the operators but also to the climatic characteristics of the area that are available to remunerate more for the product in exchange for receiving a higher quality standard. In fact Italy for its disposal in the Mediterranean basin allows the cultivation of many medicinal species (150 species cultivated and other potentially cultivable as is apparent from technical ) of the distribution depending on the agro-­‐ biological being able to draw on a biodiversity of vegetation that must be more protected as a common good and as an economic resource . However, the critical issue remains the price of the raw material that forms on the market with respect to production costs incurred by the Italian farmer, however, that should be more than competitive with the product purchased abroad (Asia, Africa or South America) which reflects operating costs such as freight import, customs clearance, controls. From here it follows the inadequate production of the domestic sector as to the difficulty of offering large batches that meet the real demand consequence of small/ medium size that do not have behind them an organization of producers gathered, as already mentioned, which would allow a completely different bargaining power, allowing you to give and offer the product in the quantities required by the market. So it is essential to the creation of a consortium or cooperative medicinal plants that can be grown alongside other traditional crops Supply seeds of medicinal plants and seed producers’ regulatory aspects A fundamental aspect of agriculture, and certainly necessary, as the choice and the official seed certification, given that the current legislative framework for the marketing of seed is complex and deserves the enactment of measures and explanatory and interpretative rules aimed at simplification. In addition, you must also consider the Community legislative framework currently in development. In the national context, however, for some medicinal species are subject to the same rules that govern the certification of seed of agricultural species of great culture and that is the obligation of registration in the registers of varieties, certification (official or officially supervised ), labeling . For others, the same rules apply, except that, being classified as standard seed of vegetable species, certification is the responsibility of the manufacturer and the official control is carried out a posteriori. For still others (ornamental species and some vegetables), the marketing of seed is not subject to certification and marketing is possible without being declared the variety to which they belong, but they are still expected minimum germination, purity, presence of 144
foreign seeds, identity and varietal purity and who sells the seed is responsible for the compliance of the seed with these requirements. For still others, finally, there are no specific rules to be applied in the marketing of seed. From the discussion in progress at Community level, it is expected, for all the species involved in the marketing of seed, the enactment of regulations that basically will set the record in the appropriate register of producers and will require the definition of minimum quality of the "product seed" . Lack of plant protection products The medicinal plants are usually hardy and tolerant of the major parasitic adversity but the fact remains that there are many fungal diseases that afflict these crops and efficient farming and competitive in both conventional and organic, the sector needs a modest-­‐ but efficient range of pesticides. In this context, the search for alternative products with high efficiency, low cost and low environmental impact represents a real challenge for modern agriculture in eco-­‐sustainable. The alternatives include physical methods such as sunburn, biofumigation, biological soil disinfestation and application of biocontrol agents, or the use of natural products. The appearance a plant occupies, therefore, a place of considerable importance in the economics of cultivation of medicinal and aromatic plants. It 'obvious that for a product as a medicinal plant, intended to complement food and / or to benefit a person's health, it is difficult to think that may contain residues of foreign chemicals. The market, in this sense, seems to have already chosen proposing and requesting more and more products of this type (phytotherapy, cosmetics) with ingredients from medicinal plants derived from certified organic agriculture which is not however, possible to make a proper pest management. Being in Italy medicinal plants considered "minor crops" or "minor crops" for the limited consistency and economic interest, there is little information and studies on the major phytosanitary emergencies, and possible intervention strategies. For the same reasons there is interest / convenience by the industries of pesticides to meet the expenses for the registration of specific products. In fact, the active ingredients permitted in Italian herbs for crops are very few and mainly the " fresh herbs ", while in other European countries such as France, Germany, Austria and Poland are far more numerous, have a wider range of substances, and this, of course, it also creates a situation of unequal competition to the detriment of the Italian market. In the bibliography, there is a work of Aiello 2010, in which they reported 24 pa authorized on an unidentified group of "fresh herbs" that include sage, thyme, rosemary, e.t.c To these are added other active substances, not included in the review, including some herbicides registered on peppermint, fennel on (vegetable) and other aromatic vegetables (parsley, celery, e.t.c.). In any case, the availability is insufficient and some crops are threatened in their existence in Italy, due to the lack of active substances and unable to make production cheaper without them. Areas of application development in the field of agricultural engineering In the field of medicinal plants, the last decade has been characterized by the increased level of specialization within the company, in view of the reduction in the number of smaller companies, resulted in the increase of the cultivated areas. This 145
development has made it essential to use efficient, rational and sustainable use of inputs (water, energy, nutrients, seeds, rhizomes, e.t.c ) and other resources (labor, land, e.t.c . ) In cropping systems for the high degree of differentiation production are characterized by a large number of different and complex technical problems. Limiting the analysis to aspects of agricultural engineering, the possibility of mechanical intervention in the execution of farming operations, especially in support of organic production, are mainly related to farming operations of weed control and harvesting, although in some respects it differ in relation to the size and type of production company. The smaller companies, who practice cultivation in marginal lands, require a kind of mechanization able to perform farming operations operating in plots, including hills, small and medium-­‐ sized with reduced room for maneuver at the headlands. Furthermore, the operating machines must also offer the ability to operate with adequate speed and accuracy in respect of the product and maintain the quality level. The small amount of product lost, damaged, or not collected, the low level of impurities present in the crop and, last but not least, the versatility to adapt for use in different crops are characteristics of the machines that are also required by larger companies to help development of local production of the highest quality in the industry. In firms characterized by intensive crops grown on larger plots, the choices are geared towards mechanization equipment, while ensuring rapid response, are able to leverage the technology already in use in precision agriculture. The increase in work capacity for the execution of transactions in the relevant period and reduced the extension of the use of specific hardware and software for the increase in the automatic control of motorized machines and operators in the execution of farming operations are the priorities of development required in the mechanization of all crops with particular reference, also in this case, the needs of weed control and collection of the products. The public research institutions should therefore bear the burden and the difficulties that the industry meet, especially in a time of crisis like the current one, in seeking environmentally and economically sustainable solutions for the consolidation of the competitiveness of the companies that often represent a bulwark against land abandonment and the consequent environmental degradation. In relation to business fragmentation and articulation of the issues that hamper the development of knowledge, the network of public research bodies working in the area offering the synergic effect of intervention in the development of innovation in relation to the variety of species, soil conditions and climatic, cultural differences, and the destination of the final product marketable production obtained from the cultivation of officinal plants Multifunctionality of agriculture and brand identity The multifunctionality in agriculture and the perfect blend with the environment is the reality for many sectors and therefore, it is even more to promote the cultivation of medicinal plants and to supplement the incomes of farmers also encouraging the development of the hilly -­‐ montana. These crops, in fact, are perfectly compatible with the existing environment and agriculture, do not require large amounts of water and are therefore sustainable, even in situations of water scarcity. Within the 146
territorial expansion of crops herbs can promote collateral activities such as tourism and environmental theme, beekeeping and small businesses. In most of the geographical areas where they grow herbs allow obtaining a production of high quality and is therefore able to support a significant productivity. The Apennine foothills and alpine could lead to an additional increase of tourist flow activity related to agricultural issues related to new experiences, in addition to respect and enhance the environment . Vocational Training Of particular importance is the training of the operator is at the level of "basic training" that continuing education. Therefore, the institutions of central, regional and local authorities should put in place specific funds aimed at more efficient transfer of knowledge from research to the operators, so searching for a more direct link between research centers and the world of work. In this sense, must be provided also targeted actions for individual companies to be implemented through the Regional Operational Plans. The ultimate goal is to stimulate a new awareness among the operators to process innovations and product best suited to the specific local soil and climate, and promoting technical assistance measures, they need to see the involvement of institutions, supported and financed by national funds and Community. Reduction of costs The achievement of greater competitiveness of the sector can not be separated from the pursuit of a policy of targeted sector: 1.
reduce the cost per unit of product through a careful analysis of such operations to identify organizational models and protocols for the rationalization of a sector not yet organized; 2.
introducing the company, once implemented appropriate aggregations of producers, modern enterprise management systems can control the use of resources, to guide the choices of production according to the market and to make use of the most appropriate financial innovations and commercial; 3.
determine, if possible, and in each case, indicators of production, industrial, economic and financial (benchmarking) in order to analyze and compare the efficiency of your company compared to its competitors and identify the levels at which it is possible to improve their productive performances. Enhancement of production The enhancement of production presupposes, first of all, the definition of a minimum standard for shared species marketed. However, at the national level can be obtained by: 1.
Implementation of a system of voluntary certification of products by operators aimed at creating a quality label that complies with the specifications laid down by specific product standards and be recognized by the market; 2.
certification of product and process, with a focus on collective management, so that you can optimize resources by encouraging the obtaining of certificates by small and medium-­‐sized enterprises; 3.
mandatory indication of origin on the label of the product; 147
4.
activation policies for the introduction of effective sales and marketing of new products. Lack of information As a prerequisite for the implementation of any action programming is the knowledge acquisition on the programming segment is necessary to carry out analyzes and surveys in order to provide the operators with the information they need by carrying out specific studies of the markets in Italy and in foreign countries as well as analysis of the economic costs of production, and analysis and investigation of flows and types of products sold. And 'necessary to strengthen the collection and subsequent dissemination of information on the sector as the lack of knowledge is a major constraint for all operators and also for those who formulate policies to support the sector. This work is a contribution in this direction Research and experimentation The research question in this area is particularly complex and affecting all segments of the production chain. For these reasons, the objective of the plan is first to create professional and reference structures capable of carrying out and provide services to individuals especially those entrepreneurs whose structures do not allow them to realize innovations that are also able to identify. Therefore, the overall objective of the Plan, with respect to the research and testing, should be to establish the " Centres of Excellence " in the area able to offer services and support to the producers agreed and qualified in terms of research, innovation and under the aspect of logistics. However, it is necessary for the development of the industry in general, that researchers make available to their different experiences of research in a field as complex and differentiated research in order to better address the common efforts and priority setting. Obviously in these actions synergistic and coordinated action is required of the institutions at various levels as well as stackholders to achieve the goals. Standardization encodings and qualification of production It' needs to put in place a number of programs aimed at standardization of production techniques to achieve effective qualification of the product from the point of view of production and trade through programs that enable the improvement and maintenance of quality even in the post-­‐ harvest. In this sense, it will be necessary to identify the models and organizational protocols and / or service for the supply chain and will also be necessary to characterize the production processes and in the same spot for these benchmarks for different types of production, it will also, required the development and verification of techniques to optimize the quality of the product by product . However, notwithstanding the need for high quality standards and recognized for effective competition in the industry and a good customer retention is necessary to offer a range of additional services to stackholders even in the post-­‐ trade, the nature of the service offered depend on the type of product and client and may involve the provision of information on handling, storage and use, and so on. Communication, promotion and marketing 148
It’s necessary to organize a concrete plan of communication and promotion concerted with all stakeholders and the various entities involved in the sector. The Plan must take account of local products, seasonality, and modes of perception / interest in the product by the consumer or final stackholders as buyers. Interventions must agree to support the promotion through participation in national and international fairs of the sector in order to give visibility to the image of the national industry of medicinal plants nationwide. There are no actions to promozionare to overlook the quality of Italian products which are often preferred over foreign products may be too standardized. In this context, it is definitely a priority to create synergies between the sectors of "Made in Italy" in Italian agriculture, which is so similar between the horticultural sector and the agro-­‐food quality as a whole, enhancing and promoting the best products and thus help market penetration . Growth Strategies • Promote and encourage the cultivation of medicinal plants (PO) cultivated in Italy, more economic value • Support the business of primary production, and distributors in the implementation of quality systems and quality assurance (creation of consortia in outsourcing?) • Certify the "Italian Herbs" and to promote the distribution vs. foreign markets as typical products of the tradition and the "Made in Italy" • Encourage research to find the PO sustainable alternatives to petroleum. 149
5.
USED Analysis The final part of the deliverable concerns the USED analysis from which arise the strategic options in the sector of the production of medicinal and aromatic plants in the project area. We have identified the following potential areas of development HERBS AND DERIVATIVES FACTORS WHICH FEATURES OF THE SECTOR • Increased consumption of natural matrix products over the past 10 years • The new consumer needs related to the ' sphere of safety and side-­‐effects ' and almost never to a global awareness -­‐ differentiated consumption • The law on the regulation of phyto-­‐ therapeutic uses, which limits the production and submits -­‐ a part -­‐ the control of the Ministry of Health • The influence of the New Age with alternative medicine • Growth in the last 10 years the interest around the compartment medicinal and aromatic plants and derivatives. On Face Offer -­‐ Companies heavily concentrated in several stages of the supply chain, Cultivation -­‐ Transformation -­‐ Marketing and or Transformation -­‐ Marketing . -­‐ Companies in integral circuit : some of them side by side activity and higher levels of employment than those of other segments. -­‐ Phase Transformation . high search costs and high levels of expertise, but greater profitability. -­‐ Key role of intermediaries such as wholesalers and individuals market regulators -­‐ Heavy weight of raw materials and finished products from abroad In terms of consumption -­‐ The great prevalence of herbal teas -­‐ High prevalence of natural skincare products -­‐ More content consumption of phyto-­‐ therapeutic use -­‐ according to consumers -­‐ although these products constitute 37% of the market and are designated as those with higher profitability POTENTIAL FIELD OF INTEREST: NATURAL COSMETICS STRENGTHS COSMETIC • Consumption of Cosmetics very high in all of Italy (2nd place after herbs and teas ) • Sector which covers 18% of the total turnover and with growth trend • Consumption of cosmetics with very high penetration rates • Absence of legislative constraints to production • Possible different placements within the cosmetics industry: see male cosmetics ( held up ), a lot of discovery in the natural cosmetics and children interesting in terms of profitability 150
PHASE INTERESTING WHEN POSITIONING PRODUCTION OF SEMI FOR PROCESSING INDUSTRY AND subcontracting ADVANTAGES OF THE PLACEMENT OF SEMI PRODUCTION: • limited the problem of perishable commodities • Seasonal adjustment of supply • same production sector of destination . STRENGTHS OF subcontracting: • limitation of the marketing efforts for the brand 's products are sold to the customer. • reduced levels of expertise and research needed that mid-­‐sized companies fail to support to be competitive. POTENTIAL FIELD OF INTEREST PRODUCTION AND HERBAL TEAS FOR THE FINAL CONSUMPTION • Consumption levels and widespread throughout Italy • Low levels of expertise required, except for the stage cultivation -­‐ technical knowledge -­‐ the agronomic • Presence in all stores (98%) • Capillarity on the whole national territory of the distribution network • Absence of legislative constraints to production 151