The poultry industry in Italy: cost analysis and profit drivers

The chapter analyzes the structural characteristics of one of the most self-sufficient and greatest GDP contributors in the agri-food sector: the poultry industry. Various factors, both institutional and market-related, have affected the profitability and the structure of the sector in the last two decades, resulting in a substantial abandonment of small and medium-sized rural forms of production in favor of broader industrialization and strong vertical integration, which has favored the increase in economies of scale. The first part of the chapter explores the evolutionary path of the poultry sector, focusing on the factors and strategies that have enabled enterprises to overcome repeated crises, by recovering a part of their profit margins. The operational characteristics of the supply chain are then analyzed, with particular regard to the cost drivers and profitability of the primary actors in the supply chain. The second part of the chapter explores the transformation process of the poultry industry, as well as the economic benefits of the processing industry and the criteria for determining the costs of supply. Additionally, evidence of the diversification of the products and of the features of the value chain is given. The analysis is completed with the study of a business case, an example of Italian excellence in the poultry sector. The chapter concludes with the authors' remarks on the future prospects of the sector.