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News

Tomatoes made in Italy : still a promising business idea?

20/01/2022 - François-Xavier Branthôme

Francesco Mutti is the fourth generation to run Mutti Tomatoes, a Parma-based company founded in 1899. Mutti decided to change the business in a very special moment.

For Francesco Mutti, tomatoes are a family matter: he is the fourth generation to run Mutti Tomatoes, a Parma-based company founded in 1899. When he took over from his father in 1994, Mutti made high quality and sustainable production a basic requirement of his work. And he set a goal to make the Mutti name known.
"I decided to go in a completely different direction from my father and focus on building a brand on tomatoes,” Mutti said. “Everyone told me it was an absolutely crazy idea. In the beginning, I didn't sleep so well".

Competitors from China
He did not choose the easy route. The tomato market - with sales of around 190 billion U.S. dollars at last count - has always been competitive. In the 1990s, farmers and harvest workers suffered from the price pressure exerted by discounters. Today, cheap goods from China are flooding the market. Around ten times as many tomatoes are produced there as in southern Europe – and their deceptive packaging means they often end up on our plates. "Made in Italy" does not necessarily mean that the tomato was grown there, but perhaps only packaged.

"Sustainability is the big element of transition."
Francesco Godani, R&D Manager at Mutti

At Mutti, the route from field to factory is no more than 100 kilometers. This saves CO2 and ensures more flavor: the less time there is between harvesting and further processing, the fresher the taste of the tomatoes, even in the can.

This quality comes at a price. "Our costs are 13 percent higher than that of standard production in northern Italy," says Francesco Godani, who is responsible for research and development at Mutti.

Quality pays off
In total, the family-owned company has invested 32 million Euros in better infrastructure and better pay for its employees. The consistent course toward quality has paid off. Mutti has won the trust of its customers. Increased awareness of regional, high-quality products and the trend toward sustainability have also fueled its success. The company not only sells 580,000 tons of tomatoes annually, but has also been able to increase its sales by 23 percent. In 2020, Mutti generated 465 million euros, demonstrating that quality and sustainability can be economically successful.

"The key for having a fresh product is to reduce the time from harvesting to transformation."
Francesco Godani, R&D Manager at Mutti

Francesco Mutti has long recognised the importance of sustainability – for society as a whole and for companies in particular. "It’s the engine of change,” he says. So it was on his initiative that the company developed its own research and development department. There Mutti is working on plans to save water on the fields and in further processing – also cooperating with farmers and the World Wildlife Federation (WWF).

But it is also clear to the entrepreneur that more needs to happen to effect long-term change: "As a community we need to act in a completely different way."

Innovation, sustainability, ethical values
The processed tomato industry is undergoing a particular phase, both in terms of production - with the climate change and the related sustainable policies - and in terms of new trends towards processed products that meet the changing needs of consumers. In this regard, the Italian Mutti Group rewards producers who deliver top quality tomatoes through a premium pricing policy. Here are some comments from Massimo Perboni, Agricultural Services Senior Manager of Mutti SpA group.

Climate change, drought-resistant varieties and varietal innovation
"When we talk about the quality and excellence of our tomatoes, we cannot ignore the impact of climate change and global warming. According to the Intergovernmental Panel on Climate Change (IPCC), the global temperature in the first two decades of the 21st century (2001-2020) was 0.99°C higher than the temperature found in the period 1850-1900. In parallel, the occurrence of meteorological phenomena is increasingly atypical. With regards to tomato varieties, our first need is to select varieties with excellent organoleptic characteristics and that, at the same time, are productive and tolerant to the physical stresses caused by climate change in the north, but especially in the south, of Italy. A good example is the tolerance to physiopathologies, such as apical rot. For this reason, our dialogue with seed companies is constant, we provide a contribution to their activity of varietal innovation by bringing them our experience and our needs."

Sustainability in terms of quality and production
"Quality is not true quality if it is not sustainable for our territory. Our perspective is that the projects we choose to undertake are always concrete and, at the same time, long-term. For this reason, since 1999 we have been certifying our products with the Certified Integrated Production label, as a guarantee of agricultural production that is naturally more focused on sustainable principles, without compromising quality. In addition, since 2010 we have been collaborating with WWF Italy, with whom we are engaged in a project aimed at finding sustainable solutions to reduce CO? emissions and water consumption in the cultivation and processing of tomatoes. Thanks to this collaboration, we have carried out an analysis of the water consumption of our production, defining solutions to reduce our environmental impact. We support, for example, drip irrigation because it uses much less water."

In addition to promoting the use of good agricultural practices, farmers associated with the Mutti group have been implementing the use of DSS (Decision Support System) in recent years. These are digital decision support systems, which recommend the use of active ingredients or molecules only in case of emergency, thus optimizing their use and minimizing the amount introduced into the system. Therefore, as in the past, there is no longer the need to schedule treatments, but we intervene only when there is a threat.
"We have described these and other sustainability projects in our Environmental Report 2020 (see related articles below), drawn up for the first time in order to systematize what has been already implemented so far and also to start monitoring processes on an ongoing basis, capable of supporting the company in defining a strategic roadmap and improving actions in the field of environmental sustainability, even in the face of an initial investment of 1.5 million euros in the period 2022-2024, dedicated solely to environmental sustainability projects."

Ethical values for all the whole supply chain, where each operator is guaranteed the right remuneration: as a market leader, Mutti has the responsibility to take action in the present to inspire greater change in the future. For this reason, group therefore pays close attention to ensuring that all actors in the supply chain pay attention to quality and to the implementation of good practices.
"Our company applies a premium pricing policy for tomatoes, aimed at remunerating those who confer a quality product. In 2021 alone, our company has awarded farmers more than 6.3 million euros for selecting tomatoes that meet Mutti's standards. These rewards are in addition to the market price."

In addition to these bonuses, there are other initiatives such as the Pomodorino d'Oro award, a recognition not only of economic value but also of a very personal appreciation that Mutti assigns to those who have particularly stood out during the campaign.
“In terms of best practices, since 2018 the company has achieved a full transition to mechanized harvesting on all types of tomatoes and in all production areas. This reduces the risk of exploitation of laborers, associated with manual picking, and ensures a less tiring, but also more stable and consistent work pattern.

In addition, the company requires that all of its suppliers adhere to the Italian Quality Agricultural Work Network and/or to certifications on ethical aspects such as the Global GAP form GRASP or the SA8000 standard. The Quality Agricultural Work Network, released by a third-party audit process, certifies that the supplier company has not been found guilty of criminal activities or administrative sanctions for violations of labor and welfare laws, and that it has paid its social security contributions and other insurance obligations.

Corporate social responsibility regarding labor employment has already completed for the suppliers of our Salerno plant and is currently being implemented for our plants located in Parma.”

The trend for peeled tomatoes
"Despite the trends, peeled tomatoes remain an iconic product for us. In particular when it comes to foreign countries, it is an identifying product, and since it is strongly characteristic of our country, Mutti supports it with a dedicated line whose raw material is produced entirely in Apulia.”

Strengths and weaknesses of the processing tomato chain in northern and central southern Italy
"More than highlighting the differences, it is important to highlight how both supply chains that contribute to Mutti are united by the same intent, that is to deliver the best tomatoes. The combination of these two supply chains generate an extraordinary synergy that we will strive to maintain and further improve,” concluded Perboni.

Some complementary data
Mutti was founded in 1899 in Montechiarugolo in the Italian Parma province. The family business is producing quality tomatoes in the fourth generation.

From the beginning, quality has been one of the core values of the company. Producing tomato products exclusively allowed Mutti to focus on one single fruit and gather over 120 years of experience.

All tomatoes are, on average, grown within 60 miles of our factories and all are processed within 24 hours of harvest. The Mutti logo was registered in 1911, presenting two lions who protect Mutti’s first quality award.

Sources: freshplaza.com, db.com

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