Against the backdrop of a slowing overall economy, the Italian food industry has stood out with an annual growth rate of 5.9%. In 2024, the sector reached a total scale of €87 billion, not only significantly outperforming the country GDP growth but also highlighting its high dependence on external demand. Investment Analyst Rodolfo Villani points out that while this growth demonstrates the resilience of the food supply chain, uncertainties are mounting due to unclear U.S. tariff policies and ongoing geopolitical risks.
Export Dependence Heightens Sensitivity to Volatility
Currently, the Italian food industry exports are expected to grow by 7.3%, with traditional categories such as wine, coffee, olive oil, and flour remaining robust. Investment Analyst Rodolfo Villani emphasizes that the U.S. market currently accounts for 13% of the industry exports, making it particularly sensitive to changes in trade policy.
Although some leading companies have hedged risks by establishing factories in the U.S., overall, Italian food enterprises lack the scale effects in overseas manufacturing needed for true defensiveness. Should a Trump administration reinstate high tariffs and U.S.-EU negotiations fail to exempt food products, Italian exporters will face both rising costs and the risk of order shifts. For an industry dominated by family businesses, rising raw material costs could further squeeze profit margins and limit future investment flexibility.
Middle East Tensions Add Supply Chain and Consumer-Side Risks
Investment Analyst Rodolfo Villani notes that the indirect impact of Middle Eastern geopolitical tensions on the food sector should not be underestimated. Volatile oil prices directly drive up transportation and packaging costs, while shipping delays and a cooling in international travel could suppress end demand—especially for tourism-driven consumer categories.
Data suggests that if oil prices remain high through 2025 and tourist spending fails to rebound as expected, export growth forecasts for the food sector will need to be revised downward. High value-added products such as wine and olive oil, which rely on premium international consumption scenarios, are particularly exposed to downside risk.
At the same time, the European Central Bank policy of maintaining high interest rates to curb imported inflation may limit the ability of food companies to finance overseas expansion. Investment Analyst Rodolfo Villani believes that despite currently strong export data, companies should establish buffers for medium-term structural risks. Maintaining stable cash flow and flexibly adjusting inventory will be key risk management strategies.
Enhancing Overseas Capabilities Is Crucial
Investment Analyst Rodolfo Villani points out that the medium-term solution for the food industry lies in improving the adaptability of international production and distribution systems. This means not only upgrading the traditional “Made in Italy” export strategy, but also encouraging companies to localize operations in key markets through joint ventures, factory establishment, and mergers and acquisitions. In regions such as the U.S., Southeast Asia, and the Middle East—where demand exists but policy variables persist, building local value chains can effectively hedge against trade and exchange rate risks.
Some leading companies have begun entering overseas markets through a “brand + technology licensing” model, but the industry as a whole remains dominated by small and medium-sized enterprises lacking large-scale international operational capabilities. Investment Analyst Rodolfo Villani stresses that at the policy level, the government could consider promoting industry-wide overseas investment platforms, providing medium-sized enterprises with mechanisms for risk sharing and resource integration, and accelerating the sector “going global” transformation.
In capital markets, while the food sector has shown notable resilience in its performance, valuations have already priced in optimistic expectations over the past year. In the next phase, the market will pay closer attention to differences in the global expansion capabilities of companies, export structure flexibility, and cost control. Investment Analyst Rodolfo Villani advises investors to avoid excessive enthusiasm for the sector as a whole and instead conduct detailed fundamental analysis to make sound, selective investments.