Made in Italy. Made in Britain. Quality, brands and innovation in the European poultry market, 1950–80

Abstract

This paper compares the development of the poultry industry in Italy with the UK. Earlier research has suggested that the UK poultry industry developed a symbiotic relationship with the emerging supermarket retailers. Italy had a retarded supermarket sector. Its distribution system favoured small-scale, independent butchers rather than chains of self-service supermarkets. Despite this the Italian poultry industry also modernised, adopting US technologies. The catalyst for this modernisation was technological innovation in refrigeration technologies that enabled Italian consumers and independent retailers to be persuaded of the merits of the new ‘technological’ chicken. While the Italian market has become dominated by AIA and Amadori in recent years, the key innovators were the entrepreneurs that created the company called Arena.

Keywords::

• poultry industry
• food retailing
• refrigeration technology
• Italian entrepreneurs
• supermarket evolution

Acknowledgements

Andrew Godley gratefully acknowledges the support of the ESRC, grant number [RES 062-23-1272].

Notes

^1.Potts, Chicken, 139.

^2. Recent contributions include Atkins, Lummel, and Oddy, Food and the City in Europe since 1800; Spiekermann, “Twentieth Century Product Innovation in the German Food Industry”; and Oddy, “From Roast Beef to Chicken Nuggets.” An excellent overview of the vast literature is provided by Hamilton, “Introduction.” Specifically on the poultry sector and in addition to references below, Clar summarises the Spanish experience well in “A World of Entrepreneurs.”

^3. Godley and Williams, “Democratizing Luxury”; and Godley and Williams, “The Chicken, the Factory Farm, and the Supermarket.”

^4.Williams, “The Introduction of Self-service”; Morelli, “Britain's Most Dynamic Sector?”; Cox, Mowatt, and Prevezer, ‘The Firm in the Information Age”; and Cox, Mowatt, and Prevezer, “New Product Development.” More generally, see Burch and Lawrence, Supermarkets and Agri-food Supply Chains.

^5.Baxter and Jack, “Qualitative Case Study Methodology,” 550, on critical case study research design.

^6.Zamagni, Economic History of Italy; Amatori, “Entrepreneurial Typologies in the History of Industrial Italy”; and Amatori, “Biographical Dictionary of Italian Entrepreneurs.” For Italian food exports see Porter, Competitive Advantage of Nations.

^7. The interviewees included (among others referred to below): Dr A. Muraro, President of the National Union of Poultry Producers (UNA) and AIA's manager, date of interview, June 14, 2011, at S. Martino Buon Albergo (Vr); Dr B. Veronesi, President of the AIA Group, June 9, 2011, Quinto di Valpantena (Verona); Dr R. Salvetti, Arena's manager, July 9, 2010, Lugagnano (Vr); Dr G. Fabris, Arena's veterinarian, July 7, 2010, Lugagnano (Vr); Prof. G. Zucchi, Director of the Institute of Animal Economics, University of Bologna, September 17, 2011, Bologna.

^8. For an overview of the Jewish immigrant population in New York see Godley, Jewish Immigrant Entrepreneurship, chapter 4.

^9.Horowitz, Putting Meat on the American Table, chapter 5. Delmarva is an acronym for the three states of Delaware, Maryland and Virginia, across which borders the peninsula carries.

^10. Ibid., 102–16; and Talbot, The Chicken War, 2–5, on Delmarva origins.

^11.Talbot, The Chicken War, 3; Sykes, Poultry – A Modern Agribusiness, chapter 5. Total poultry per capita consumption included turkey meat, and so was somewhat higher.

^12.Talbot, The Chicken War, 4.

^13.Galambos, Networks of Innovation, 126–32 on poultry medicines; and Campbell, “History of the Discovery of Sulfaquinoxaline”; also Talbot, The Chicken War, 5 on the importance of Merck's discovery of synthetic vitamin B₁₂ for poultry rearing.

^14. The best summaries are in Talbot, The Chicken War, 5; Sykes, Poultry – A Modern Agribusiness, 7; Boyd, “Science, Technology, and American Poultry Production”; and Corley and Godley, “The Veterinary Medicines Industry.” For trends in US feed conversion ratios see Talbot, The Chicken War, 9; and Sykes, Poultry Farmer, 9.

^15.Derry, Art and Science in Breeding, chapter 6; Horowitz, Putting Meat on the American Table, 113.

^16.Rogers, “Broilers – Differentiating a Commodity,” 12–18; James, Klein, and Sykuta, “The Adoption, Diffusion, and Evolution,” 252–3.

^17. Of US poultry sales only 15% was frozen meat in the early 1960s. By contrast sales in the UK were 90% frozen in the early 1960s, falling only to 85% by 1974. See Sykes, Poultry – A Modern Agribusiness, 48 (USA), and Richardson, “The United Kingdom Broiler Industry,” 37.

^18.Mitchell, Abstract of British Historical Statistics, 83, shows poultry numbers rose from 49 m to 73 m from 1927 to 1935 before falling to 64 m by 1939.

^19.Mathias, Retailing Revolution, 25–8, on middle-class family consumption of 20 to 30 fresh eggs per week, poor family consumption of fewer than 12 eggs per week.

^20. Mathias, Retailing Revolution, 27–8, says over 3 billion out of an annual British egg consumption of 3.9 billion (or around three-quarters) were imported before 1914. Williams, The Best Butter in the World, 35–6, 93 (imports) on eggs; Jeffreys, The Distribution of Consumer Goods, Chart I. On eggs from China and Russia see Chang, “Vertical Integration”; and Thompstone, “Bab'ye Khozyaystvo.”

^21.Clarke and Binding, The History of Lloyd Maunder, 85, on slaughtering ‘spent’ hens.

^22.Poultry Farmer, January 16, 1954; Short, “The Art and Craft of Chicken Cramming.”

^23.Sykes, Poultry – A Modern Agribusiness, 104–5, 149; Holroyd, Trelford, and Wells, History, 159, 166 – Chunky Chicks Nichols was acquired by Ross in 1961. Godley and Williams, “Chicken, Factory Farm,” on the importance of the 1953 derationing of animal feedstuffs.

^24.Sykes, Poultry – A Modern Agribusiness, 149. Fisher smuggling story in Godley and Williams, “Chicken, Factory Farm.”

^25. Holroyd, Trelford, and Wells, History, 165.

^26. Cargill acquired Sun Valley – a leading processor in 1980.

^27.“First Process Your Chicken,”Guardian, July 2, 2008.

^28.Cox, Mowatt, and Prevezer, “New Product Development,” 139.

^29.Corley and Godley, 839–46.

^30. Godley and Williams, “Democratizing Luxury,” 277; Sykes, Poultry – A Modern Agribusiness, 44.

^31. Godley and Williams, “Democratizing Luxury,” 280; Richardson, “The United Kingdom Broiler Industry,” 37.

^32.Williams, The Best Butter in the World, 135; and “Mr Alan Discusses,” JS Journal (April 1947): 13; Emerson, Sainsbury's: The Record Years, 49–50. MacFisheries began as a personal indulgence of Lord Leverhulme, but was amalgamated into Unilever after his death. Its history is nevertheless a neglected part of that empire. See Wilson, The History of Unilever, vol. 1, 261–3. Despite its initial embarrassment to the parent company, with 360 stores it went on to become an important source of profits for Unilever (311). Wilson, Unilever1945–1965, gives a very occasional reference to post-war developments. Jeffreys, Retail Trading in Britain, 244–52, esp. 248 on MacFisheries; and Jeffreys, Consumer Goods, 179–89. For its late 1950s development see PF&P, September 19, 1959, 19, on MacFisheries' new Manchester store.

^33. Godley and Williams, “Democratizing Luxury”; Alexander, “Format Development and Retail Change”; Shaw and Alexander, “British Co-operative Societies”; Shaw, Curth, and Alexander, “Selling Self-service.”

^34. Williams, “Sainsbury”; Emerson, Sainsbury's: The Record Years, 40.

^35. He said ‘the two actually drove each other because one couldn't survive without the other’, quoted in Godley and Williams, “Democratizing Luxury,” 287.

^36.Clarke and Binding, The History of Lloyd Maunder, 43, 46–7; JS Journal 1959 on East Anglian supply chains; and Emerson, Sainsbury's: The Record Years, 49–50, on the company's egg-collecting operations that preceded its forays into poultry farming. Jeffreys, Retail Trading in Britain, 195, confirms that Sainsbury's closeness with suppliers differentiated it from other British provisions merchants. Holroyd, 168 on the poultry industry organisation and market shares in 1964.

^37.Poultry Farmer and Packer, May 29, 1965, 18–19, on Fine Fare; and ibid., June 12, 1965, 17–19, on Marks and Spencer. Also see Sieff, Don't Ask the Price, 240–1 and 253.

^38. This is well explained in Sykes, Poultry – A Modern Agribusiness, 30, 48.

^39. Ibid.; Holroyd, Trelford, and Wells, History, 168. When Ross acquired Buxted in 1964, that firm then had also its breeding business as well.

^40. Horowitz, Putting Meat on the American Table, 103 and 111. The ‘Chicken of Tomorrow’ contest prompted breeders to develop superior strains, Boyd, “Science, technology”, Tedlow, New and Improved, chapter 4, covers the history of A&P, but without referring to any role in the poultry industry.

^41. Jim Woods, Sainsbury's Merchandising and Marketing Manager, claimed that Sainsbury's did 12–15% of all available trade in the regions where their shops were present, which mapped onto those locations where poultry demand was disproportionately high (London and the Home Counties). Given that Sainsbury's was particularly competitive in poultry, it seems not unreasonable to assume that its share of the nascent broiler chicken market was at the very least around this figure. (See letter from Jim Woods to Anthony Tennant of Mather & Crowther advertising agency, January 20, 1960, Sainsbury Archive, Museum of the Docklands, London.) With far more stores than Sainsbury's, MacFisheries could not have been far behind. For the other regional grocers see Emerson, Sainsbury's: The Record Years, 66 and 156; and PF, October 2, 1954, for David Greig, another leading regional grocer. Sykes, Poultry – A Modern Agribusiness, 30, states that with ‘8 to 12 [chains] dominating Britain's food retailing’, it was far more concentrated than the US.

^42. Richardson, “The United Kingdom Broiler Industry,” 6, Table 1.

^43. Butcher reluctance in the UK is covered in Godley and Williams, “Chicken, Factory Farm.” Richardson, “The United Kingdom Broiler Industry,” 90, mentions ‘others’ as retailing the balance of 20%, but it is not clear what this category contains.

^44.Morelli, “Britain's Most Dynamic Sector?”

^45.Cox, Mowatt, and Prevezer, “New Product Development.” They also emphasise the shift from frozen to chilled food as causing market power to move to the supermarkets, but the move to chilled was itself dependent on existing markets for frozen.

^46. UK: National Food Survey, various years. Italy. Unione Nazionale Avicoltura (UNA). US: Horowitz, Putting Meat on the American Table, 116. For a detailed description of the Italian consumption's evolution see D'Apice, L'arcipelago dei consumi.

^47. Author's interviews with G. Mercanti, Arena's solicitor, June 14, 2010, Verona; Dr B. Veronesi; and private documents, report Note sull'avicoltura italiana, 5. See also Zucchi, “La rivoluzione strutturale dell'avicoltura,” 23; Cornoldi, Quattro chiacchiere a mò di presentazione, 7; Montanari, Interessanti prospettive per la produzione, 23.

^48. Dr P.G. Politi, Arena's veterinarian. Interview with author, September 30, 2010, Ferrara; Mr R. Salvetti. Interview with author.

^49.UNA, “50. 1958–2008,” 10.

^50.Albertini, “Dal pavone dei crociati al pollastrino,” 9.

^51.Author not specified, Notiziario, 143.

^52.NS, “Prodotti avicoli e consumatori,” 81.

^53.UNA, “50. 1958–2008,” 16.

^54. See also Montresor, “Alcuni cenni sull'avicoltura veneta,” 115. On the spread of poultry production see Betti, “Le giornate avicole non possono morire,” 18.

^55. There were of course some earlier precedents. In Lombardia (Caccivio) ‘there were some poultry farms, so-called ‘all'americana’ [American style], which the agrarian economists of those times [1927–28] usually regarded as ridiculous, while considering the traditional poultry farm as irreplaceable’, quoted in Medici, “L'Avicoltura oggi,” 84.

^56. For example, Marinoni in Pavia's countryside, UNA, “50. 1958–2008,” 11.

^57. Author's interviews with Dr A. Muraro, Dr P.G. Politi and Mr R. Salvetti.

^58. Private documents, report, Politi et al., Note sull'avicoltura italiana, 5 and 18.

^59.Cavalchini and Amodeo, “La tecnologia nella storia dell'avicoltura italiana,” 52.

^60. Dr P.G. Politi. Interview with author.

^61. Cavalchini and Amodeo, “La tecnologia nella storia dell'avicoltura italiana,” 52.

^62.Poultry World, June 14, 1973, 21–23, “Push-Buttons Save the Guilders,” article on Stork; Arnoldus, Family Firm and Strategy, 309–18.

^63.Zucchi, “Dall'Appennino romagnolo spiccano il volo pulcini per tutta l'Italia,” 56–7; UNA, “50. 1958–2008,” 14. Montanari, “Interessanti prospettive per la produzione avicola nazionale,” 26, shows Italian imports of Dutch chicks reached 21 million in 1956.

^64.Private documents, report Gli alimenti surgelati, 28. For an overview of the Italian distribution see Scarpellini, Material Nation; Zamagni, La distribuzione commerciale; Ravazzi, Le strutture commerciali in Italia; Scarpellini, La spesa è uguale per tutti; Savini, Dinamica e problemi della distribuzione in Italia.

^65.Zamagni, Battilani, and Casali, La cooperazione di consumo in Italia, 308. See also Labini, Saggio sulle classi sociali; Lugli, Il commercio nell'economia italiana. On developments elsewhere, see generally, Godley and Fletcher, “Foreign Direct Investment in British Retailing”; Godley, “Foreign Multinationals and Innovation in British Retailing”; and Godley and Casson, “Revisiting the Emergence of the Modern Business Enterprise”; Godley and Hang, “Globalization and the Evolution of International.”

^66.Scarpellini, “Shopping American-Style,” 636.

^67.Baviello, I commercianti e i primi anni della Repubblica, 38. Pellegrini also emphasises that retailers provided their suppliers with less stimula to modernisation. Pellegrini, Il Commercio in Italia, 30–31.

^68. Ibid., 24–6.

^69.Calderini, “Convegno di primavera a Forlì,” 149.

^70.Fornari, La rivoluzione del supermercato, 13.

^71. On the licensing system see Savini, Dinamica e Problemi della Distribuzione in Italia, 102–104; Baccalini, Sistema distributivo e tutela del consumatore, 39; Zamagni, Battilani, and Casali, La cooperazione di consumo in Italia. On the evolution of Italian consumptions see Galeotti, Condizioni ed evoluzione dei consumi alimentari in Italia; Chiapparino and Covino, Consumi e industria alimentari in Italia dall'Unità a oggi; Capuzzo, Genere, generazione e consumi; D'Apice, L'arcipelago dei consumi; Spallino, I consumi privati dal 1951 al 1980; , Dalla parsimonia al consumo.

^72.Politi et al., Note sull'avicoltura italiana, 62–9.

^73. Private documents, Faculty of Sociology at Parma University, A. Bartolini, “Cosa pensa il consumatore delle carni avicole,” 7.

^74.Private documents, Valutazioni in merito al miglioramento impianti, 11.

^75. Ibid., 11.

^76. Private documents, Politi et al., Note sull'avicoltura, 77–9.

^77. Holroyd, Trelford, and Wells, History; Hickinbotham, “‘Productivity Development in the Poultry Industry,” 10.

^78. Even as late as the end of the 1970s, 60% of all chicken sold in Italy was New York dressed. Private documents, Bozza di nota stampa, 3.

^79. Dr E. Guarneri, former President of CipZoo Group. Interview with author, July 12, 2011, Passirano (BS).

^80. Private documents, letter by Arrigo Armellini to the director of Selezione, 3.

^81. About the institutional quality control, see also Caiati, “Strumenti per la garanzia istituzionale della qualità”; Boccaletti, “Il ruolo delle produzioni tipiche,” (18).

^82. F. Fr., Il pollo, questo misconosciuto, 4.

^83. The background to the post-war Americanisation of West Europe is well covered in Bjarnar and Kipping, Americanisation of European Business. On US attempts to diffuse self-service formats, see Scarpellini, “Shopping,” 643, and also Hamilton, “Supermarket USA Confronts State Socialism.”

^84. Dr E. Guarneri. Interview with author. Dalla periferia al centro, 423. In 1965 an American newspaper emphasised the CipZoo's leadership and underlined its way “to solve the Communist problem in [its] small own world,” in Vadnay, “Princes of Progress.” The personnel were: Joseph Valentines, a vet from Maine, chief of the slaughtering plants; Mr Goerding: the person in charge of the rearing farms of hens, Mr Royal: in charge of rearing farms of ‘reproducers’.

^85. CipZoo and Arena (as well as AIA, Amadori and later other producers) produced almost entirely fresh, chilled chicken. Internal firm data are limited, but for CipZoo in 1969 25% of its meat was frozen (2,379,883 kilos of fresh and 805,529 kilos frozen for one quarterly period). For whole birds the share that were sold frozen was much less, only around 6%. Arena only started to produce frozen chicken portions as late as 1971, but again they were only small part of the firm's total output.

^86.Rugiadini, CipZoo (A-1), 151. The contracts, ‘soccida’, were based on nineteenth-century antecedents, which had been used for larger animals. They also largely mirrored similar contracts adopted throughout the US and UK poultry industries.

^87. For a detailed description of the slaughtering plant and spin-chilling see Zucchi, “Polli di ‘marca’,” 44–9.

^88. Dr A. Muraro. Interview with author.

^89.Godley, “Entrepreneurial Opportunities”.

^90.Zucchi, “In ripresa i mercati avicoli,” 81.

^91.Brunoli, “Carlo Ridella ci ha detto che…,” 61; NS, “Divulgazione avicola alla televisione,” 83.

^92. Dr E. Guarneri. Interview with author.

^93.Fornari, La rivoluzione del supermercato, 13–24. And Table 2 above.

^94. Dr A. Muraro and Mr R. Salvetti. Interviews with author.

^95. Scarpellini, “Shopping,” 643.

^96. Dr L. Cozzani. Interview with author.

^97.Casson, The Entrepreneur – on the entrepreneurial function of information gathering and judgment decision making, and Boyce, Co-operative Structures in Global Business, on the economics of networking. The vast absorptive capacities literature was initiated by Cohen and Levinthal, “Absorptive Capacity.”

^98. Private documents, Report; Private documents, folder 15/7, Sipa conversion contract, 4. In 1970 the industry-wide average rejection rate was 2.0% in USA and only 0.3% in Arena.

^99. Arena company report, ‘[Integration] has become indispensable not only for a further modernization of the agricultural activity, but also for aligning the Italian aviculture to the economic realities and to the organizational forms already existing in other Countries, especially those of the European Community, we will be competing against within a month’ (in Private documents, report, 2); see also Private documents, Il Gruppo Arena, 2.

^100. Private documents, legal papers, Increase of capital, 2.

^101.Private documents, folder 27/10, Agripol anno 1968, Istanza al I Comando Regione Aerea.

^102. Dr B. Veronesi. Interview with author.

^103.Piccioni, “Il Broiler: necessità industriali ed esigenze gastronomiche,” 50.

^104.Indagine Doxa sul consumo di prodotti avicoli, 23. ‘Doxa’ is Greek for ‘opinion’.

^105. Arena requested a patent for the ‘accosciamento’ trussing technique in 1963 (n. 2364/63, April 18, 1963); Private documents, Sipa, warning from “accosciamento,” folder 26/21. Also see “Pork, Turkey are New Targets for Arena,”Broiler industry, 88; Private documents, Report by Dr P.G. Politi, Quality control in the poultry sector, April 23, 1993.

^106. Interview Mr R. Salvetti. Private documents, Piano previsionale di produzione-punto B, 2. The branded refrigerators in time also led to independent retailers displaying the Arena brand more prominently, becoming Arena-branded stores. By the end of the 1970s and into the 1980s all Arena's competitors in Italy were employing similar marketing devices. It is noteworthy that this successful strategy in the Italian poultry industry in the 1970s mimics Birdseye's similar device in the UK in the 1950s.

^107. Private documents, Sipa, balance 1962, inventory.

^108. Dr P.G. Politi. Interview with author.

^109. Dr L. Cozzani. Interview with author.

^110. Private documents, folder 10/23, papers, Rossi A., telegram from Sicit to Arena, November 28, 1967.

^111.Yeager, Competition and Regulation; Friedberg, Fresh: A Perishable History; Banken and Stokes, “The Trauma of Competition.”

^112. Private documents, folder 10/23, papers, Rossi A., telegram from Sicit to Arena, November 28, 1967.

^113. Interview with Dr L. Cozzani. At least three other Italian firms (Gatteomare, Chicchirichì and Caf) recruited Cozzani to design similar cooling systems. ‘Don't say a word to our competitors’, they all told Cozzani!

^114.Private documents, “The ‘Golden Touch’ of the Italians,” 40–45.

^115.Private documents, report, Valutazioni in merito al miglioramento impianti, 7.

^116. Dr B. Veronesi. Interview with author.

^117.Biondi, “Il contributo della nostra avicoltura all'incremento della produzione carnea,” 39.

^118. Up to 1985–86 Arena remained the market leader. It went bankrupt in 1992 because after the mid-1980s the two main partners, Armellini and Grigolini, started to fight each other and this war continued to the end of the 1980s. In the meantime AIA and Amadori gained larger market shares as Arena did not make the necessary investments to defend its leadership. By 1990 it was too late and the firm was unable to recover.

^119. CipZoo was acquired in 1969 by the UK oil-seed producer J Bibby, which in turn was acquired by Associated British Foods. Essentially similar techniques were entirely independently arrived at by two or three UK processors by the late 1960s and early 1970s as well, suggesting that this innovation was more of a modular innovation, using the Henderson–Clark framework. See Henderson and Clark, “Architectural Innovation.”

^120.Brusco, Piccole imprese e distretti industriali. Porter, The Competitive Advantage of Nations, makes the connection between patterns of innovation in Italian industrial districts and retailer intermediation. Note, however, that in Porter's description Italian independent retailers (in e.g. fashion) assume a supportive role. Whereas the experience of Arena (and others) of small, independent food retailers was that they were far from constructive.

^121. Cox, Mowatt, and Preveser, “Information Age.”

Additional information

Notes on contributors

Alessandra Tessari

Alessandra Tessari is at the Department of Management and Economics, University of Salento, Lecce, Italy

Andrew Godley

Andrew Godley is Director of the Henley Centre for Entrepreneurship, Henley Business School, University of Reading, UK.