Sustainability in High-Excellence Italian Food and Wine

Laura Onofri

• Publisher: Routledge
• Year: 2021
• Print ISBN: 9781032004761
• eBook ISBN: 9781000439847
• Edition: 1
• Topic: Business
• Subtopic: Food Industry
• Index: Business

This book presents contemporary case studies on selected Italian food and wine products to explore how traditional production and consumption models address and adapt to the sustainability challenges in the Italian high-excellence agri-food sector.

Sustainability in High-Excellence Italian Food and Wine adopts a transaction cost economics approach, which is applied to five case-study chapters, each focusing on a key Italian agri-food product: Parmigiano Reggiano, Mozzarella di Bufala Campana, Amarone wine, Prosecco wine, and Prosciutto di San Daniele. The production and organization of these products face many challenges as they seek to balance competing priorities around economic viability, maintenance of high-quality standards and environmental and social impacts. The book argues that the development of sustainable and quality models requires changes to the structure and organization of the supply chain while also acknowledging that consumers are increasingly demanding authentic, high-excellence products that require reliable labeling systems and designations of origin mechanism. Recommending that hybrid structures, such as cooperatives and consortia, are the most cost-minimizing governance structures for the production, the book highlights that in the case of Italian excellency food, environmental sustainability and economic efficiency are not actually traded off but are reciprocally valorized through the regulation of high-quality standards.

This book will be of great interest to students and scholars of food and wine excellence products, food systems and supply chains, agricultural production and economics and sustainable consumption.

1
Introduction

Introduction

Sustainable actions in the agri-food sector are broadly advocated by national and international organizations. Those actions should primarily address a crucial turning point in consumption habits and production methods and technologies. During the 2002 World Summit on Sustainable Development in Johannesburg, for instance, it was emphasized that the change in production and consumption patterns is one of the main preconditions for achieving sustainable development on a global level. The Open Working Group of the United Nations General Assembly (OWG) has proposed 17 Sustainable Development Goals (SDGs) in the 2030 Agenda. Objective no. 12 specifically pursues the challenge of “Guaranteeing sustainable models of production and consumption”. In this perspective, Europe has long since embarked on a virtuous path with rules aimed at regulating such an important issue. In July 2008, for instance, the European Commission launched “The Sustainable Consumption and Production and Sustainable Industrial Policy Action”, which included a series of proposals for sustainable consumption and production, intending to encourage European industries towards innovation and better environmental policy.¹

The social and ethical goals of advocated sustainability requirements can be achieved with guaranteed access to food and responsible consumption. In this perspective, to guarantee food safety and safeguard the agri-food sector from recurring crises, the European Union has recently adopted the global intervention strategy “From Farm to Fork” aimed at ensuring a high level of protection of human health and the protection of consumer interests, and by this the effective functioning of the internal market is guaranteed at the same time.

A prerequisite of responsible consumption is the consumer’s full awareness of the nutritional value of the food (understood as the absence of contaminants). But it is the guarantee of “quality” (in the broadest sense of the term) that in an increasingly globalized trade context becomes a criticality or strength for the market. Consumers are increasingly becoming careful in considering the intrinsic and extrinsic quality of the products, linked to the production chain and, therefore, to economic, environmental, and social protection in its broadest sense. To promote sustainable and competitive food production, it is, therefore, necessary to develop and promote systemic management at different levels of the agro-ecosystem, aiming at increasing agricultural production and safeguarding natural resources and production inputs at the same time.

On the producers’ side, the sustainable use of resources and inputs necessary for food production is a key issue. Modern agriculture, however, has led to a growing specialization of agroecosystems, with a consequent loss of biodiversity and traditional genetic resources, as well as a greater dependence on external factors such as fertilizers, plant protection products, and energy from fossil fuels.²

Sustainable economic growth is increasingly becoming a strategic objective of organizations at an international level. In this perspective, producers must adopt and implement strategies based on eco-sustainable management of the agroecosystem.³ Addressing the challenges of sustainability also means, in harmony with what is proposed by the European Union, focusing on the production and transformation of renewable biological resources and waste into value-added products such as food, feed, bioproducts, and bioenergy through the efficient use of resources and the development of production systems with reduced greenhouse gas emissions, which adapt to and mitigate the negative effects of climate change.⁴ It is, therefore, crucial to making the current production and consumption model more efficient by aiming to pursue objectives of sustainability. This means, just to mention a few actions, intervening in the agricultural and industrial sector through the use of environmentally friendly technologies and promoting proper management of resources, a reduction in waste, and an enhancement of waste and waste from the supply chain that favors renewable energy and product development. To do this, it is crucial to intervene in the system with a holistic approach, that addresses both the integration between the various players and the exchange of information in the supply chain.

The quality products of agricultural tradition might be linked to elements of modernity, without changing their identity. Furthermore, considering the role of multifunctional agriculture and referring to the qualitative aspects of the production process in those societies that are more aware and sensible to environmental and cultural dimensions, one should consider accepting an additional price when they comprise factors which nowadays are considered essential.

Quality and sustainability in agri-food markets

The issue of quality and sustainability in agri-food markets is a central theme in the international debate faced by a multiplicity of international organizations, such as FAO or the World Health Organization, and affects trade and the agreements that regulate them. The development of sustainable and quality agri-food sectors requires changes in the structure and organization of supply chains (producer associations, vertical integration, organization of networks) and policies that accompany these processes, ensuring an efficient creation and equity-based distribution of value.

The quality and sustainability of agri-food supply chains aim to contribute to the definition of development trajectories of agricultural and forestry systems that combine the three pillars of sustainable development: (1) economic (development of competitive sectors); (2) social (ensuring the coexistence of different types of subjects, companies, and territories); and (3) environmental. Sustainability is defined as a three-pillar equilibrium, based on social, economic, and environmental sustainability requirements. (UN, 2015). In this perspective, the challenging task is finding the equilibrium between forces and dynamics that often produce a trade-off.⁵

On the other hand, consumers increasingly demand authentic products obtained with specific and traditional methods. Reliable labeling systems and designations of origin are some of the tools used to communicate product characteristics and production methods to buyers and consumers. A system of effective rules, controls, and sanctions is needed to protect consumers and producers from unsustainable and low-quality product trading practices, with particular attention to public regulation and voluntary certification systems including organic farming or the standards required by producers. Moreover, the pursuit of quality can represent an important antidote against the dangers of product homologation.

In this context, it is crucial to define the boundaries of quality in the agri-food sector. The concept of “quality” in the production of food is complex, and for this reason, it might be often misused. There are many possible meanings of “quality” in the agri-food system. This concept of quality is becoming a global, multidimensional paradigm that can be analyzed from different perspectives and many points of view since it incorporates objective and subjective components. Global quality includes tangible and intangible factors and concerns both product and production process.

A preliminary distinction must be made between (1) product quality, referring to particular qualitative characteristics that differentiate a product from another of the same category and (2) system quality, referring in general to the ability of the producer, processor, distributor, or retailer to produce foods with characteristics that meet customer expectations over time. Both concepts, however, implicitly presuppose that the hygienic integrity of the food in question is ensured. In other words, when it comes to product or system quality in a food company, it is assumed that the food or food products produced by the company itself cannot harm human health. Otherwise, it would not be lawful to associate the term “food” with the product.

Several factors affect and determine the total quality of agri-food products, and processes are in place to identify selected ones: (1) hygienic/sanitary quality,⁶ (2) chemical nutritional quality,⁷ (3) legal quality,⁸ (4) organoleptic quality,⁹ and (5) quality of origin.¹⁰

In the end the quality of agri-food products is often guaranteed by a certification (product or system) mechanism issued by independent third parties and strictly connected to the quality concepts listed earlier. In this perspective, it is possible to distinguish between (1) product certification and (2) system certification. Product certifications guarantee that each product sold and marketed by a firm complies with specific requirements expressly stated. In any case, certified products must possess specific characteristics as compared to products of the same kind. In turn, these certifications can be divided into (1) regulated certifications that are governed by legislative provisions (generally of European derivation), typical examples of which are the PDO, PGI, TSG certifications, linked to the territorial origin, and the organic certifications, linked to the methods of cultivation, breeding, the transformation of primary materials; (2) unregulated certifications that are based on specifications containing product requirements, specially prepared by the firm. System certifications guarantee that the firm can meet the customer’s expectations by ensuring that the qualitative characteristics of the product (which do not necessarily have to be higher or different than those of similar products) are those that are declared.

From quality to excellency in the Italian food and wine sector

A high-quality reputation is increasingly becoming necessary to support the competitiveness and profitability of the agriculture and agri-food sectors, in particular, of the Italian one which, not being able to count on large economies of scale, has always focused on the excellence of its products. Over the years, the agri-food production sector has become one of the most important economic activities of “Made in Italy” brand. In 2019, the Italian food industry was confirmed, with a turnover of 140 billion euros and 54,400 companies and around 8% of national GDP, as the second sector of national manufacturing after mechanics, ranking third in Europe, and close to the German and French food industry. The current challenge for the Italian food industry lies in the ability to look further to enter new markets, as well as defending and expanding the consolidated ones, aiming to conquer European leadership with a view to retain greater sustainability.

In this perspective, the high quality of Italian agri-food becomes “excellent” for some products associated with the “concept of Made in Italy” in national and international markets. Made in Italy is one of the most known and appreciated brands in the world, the trademark of the know-how that distinguishes Italy in the eyes of other countries. Creativity, quality, and Italian lifestyle are expressed mainly in the areas of clothing, furniture, mechanical automation, and agri-food. But the world itself has changed over the years, and “Made in Italy” has increasingly needed precise definitions, legal protections, and rules as a shelter from counterfeits, scams, unfair competition, and from false or misleading indications of origin that mislead consumers.¹¹

The boundaries depend on the sector in question and are identified by legislation that includes various texts. Agri-food excellence incorporates the concept of Made in Italy and attributes, a plethora of characteristics inextricably linked to “lifestyle, beauty, monuments, culture, and undoubtedly to food” to the product, in addition to quality tout court. In particular, some agri-food products, such as Parmigiano Reggiano or Amarone della Valpolicella wine, are iconic representations of Made in Italy. This aspect has been extensively explored under various dimensions, especially under those of communication and marketing to support entry and hold in new markets.

The iconic perspective of high Italian food excellence is scrutinized in this book from the point of view of sustainability and the sustainable dimension of the production of these products. Through the pursuit of excellence and quality, sustainability is achieved, and, conversely, the pursuit and implementation of sustainability reinforce excellence.

The book demonstrates that to gain excellency in Italian food, economic and environmental sustainability do not trade-off and self-enforce each other by adding a high value to the product. Five iconic products of Made in Italy agri-food excellence are selected for five case studies.

These products (Parmigiano Reggiano, Amarone della Valpolicella, Mozzarella di Bufala Campana, Prosecco, and Prosciutto di San Daniele del Friuli) are characterized by production practices that, although innovative and advanced in technology, retain millenary expertise, a capital of traditional knowledge accumulated from a millenary tradition. Parmigiano Reggiano, for example, was born in the Middle Ages from the need of the monks to produce a cheese that could be preserved for a long time. Amarone wine originates from the ancient Roman tradition of wine and is mentioned by the Latin chroniclers.

From this point of view, the excellence of the selected products depends on the dynamics that include, in the making, economic, social, and environmental sustainability.

In this perspective, the book’s main thesis is the preliminary assumption that high-excellence Italian food and wine producers are profit maximizers. However, the profit maximization objective in the case of the selected high excellence agri-food products (and for all Italian high excellency agri-food products) is implemented through a production and governance organization that results in making, in turn, economically efficient, technologically innovative, and sustainability-oriented products.

Main thesis and organization of the book

The book is organized as follows. The first chapter illustrates the main thesis and “sets the scene”. It provides the book motivation and illustrates the adopted methodological approach. It addresses and discusses two main topics.

The first topic is a qualitative, nontechnical but rigorous introduction of the foundations of economic theory and explains why this discipline is useful to address the treated topics. In this perspective, the contribution aims to provide the reader with the foundations of economic thinking for carrying on an independent analysis. In particular, the chapter defines the discipline and an illustration and explanation of the main concepts that are needed to think and analyze in an economic perspective (scarcity, trade-offs, marginalism, (opportunity) costs and benefits, market equilibrium including market demand and supply formation, market failures, externalities, with a focus on environmental externalities and sustainability, among the others). The chapter also offers a synthesis of the analytical toolbox required to perform economic analysis. The reason why economists need to use mathematical, graphi...

Table of contents

• Cover
• Half Title
• Series Page
• Title Page
• Copyright Page
• Contents
• List of illustrations
• Preface
• 1 Introduction
• Part I Background
• Part II Applications: case studies that apply the analytical framework
• Index