Food production in Greece

MachinesTechnical ArticlesSouth-East European INDUSTRIAL Мarket - issue 1/2024 • 18.03.2024

Food processing is a key sector in Greece, accounting for 10% of employment. The food industry accounts for 28% of all manufacturing enterprises in the country. In 2020, the sector generated a turnover of approximately USD 15 billion. The subsectors with the highest revenues are meat products, milk and dairy products, cereal-based products, confectionary, and beverages.

Key market drivers include the gradually (pre-Covid) improving economic climate in Greece; consumers’ higher spending on packaged food in 2019; an increasing interest in healthy and functional foods; an aging population; and a trend to follow the Mediterranean diet – mostly in order to reduce expenses and receive the best price possible.
Food processing also holds the biggest share in terms of gross value added (24,6%), while it ranks second in value of production (24,3%) and turnover (25,2%). The subsectors with the highest revenues are meat products; milk and dairy products, cereal-based products, confectionary, and beverages.

The Greek food and drink industry is diverse, with a variety of sectors ranging from dairy production to fruit and vegetable processing and drinks. The top 5 sectors (dairy products, bakery products, drinks and beverages, fruits and vegetables, and meat products) represent three-quarters of total turnover and more than 70% of the total number of employees and companies.

Compared to other manufacturing sectors, the Greek food and drink industry is a key job provider and a relatively stable employer. The food sector is dominated by small companies: both in food (95%) and drinks (87%). The vast majority of enterprises are small, employing no more than nine people. By contrast, in terms of turnover, large companies (employing more than 250 people) account for large shares of their respective sector, 36% in food and 57% in drinks, respectively.

Greece imports significantly more food and beverages than it exports and is reliant on imports to meet the demands of Greek consumers for food products. Greek food and beverage exports continue to grow despite slowing world trade, underscoring the continued demand for quality Greek food products and consumer preference for the heart-healthy Mediterranean diet.

After almost a decade of double digit growth, Greece’s export boom slowed down last year with many of the country’s main markets close to or entering recession. But the latest data from the Hellenic Statistical Authority shows Greek food and beverage exports continuing to explode on world markets – in some cases more than doubling in the first seven months of 2023.

Among them: olive oil exports, which were up more than 100% in value terms to around EUR 1 billion last year; and exports of fresh fruits, which last year surpassed EUR 600 million in value and which represented an increase of more than 20%.


Aquaculture and fishing

Aquaculture and fishing are important food sectors in Greece and are closely associated with the country’s extensive island chains and territorial waters. About two-thirds of Greek seafood is produced from aquaculture and the remaining third from commercial fishing. Greece is one of the leaders in aquaculture production of Mediterranean species at the European and international level.

Greek aquaculture produces 100 000 tons of fish a year in more than 300 facilities around the country. As a leading producer of Mediterranean fish, the aquaculture industry has seen a spurt of foreign investment and consolidation in recent years, and is a top exporter in the food and beverage sector. Great care is taken in the Greek aquaculture industry to produce fish responsibly and in line with European Union regulations, for the best consumer experience.

The main varieties produced are sea bream and sea bass, native to the Aegean and prized for their lovely flavor and smooth texture. Other varieties include meagre, a very tender fish high in Omega-3 fatty acids, pagrus major, and amberjack.


Dairy industry

Greece’s dairy market and industry have been struggling to deal with major inflation impacting the sector, with an annual year-on-year increase of 23,1% in March 2023 for dairy and eggs, with 25,2% in February, according to the Hellenic Statistical Authority (ELSTAT).

Greek farmers and dairy producers are still struggling with rising energy, animal feed and packaging costs. The cost of animal feed, which represents 85% of livestock breeders’ costs, increased by 100% in 2022, compared to 2021, according to the Hellenic Livestock Association. Greece’s government had been helping livestock producers and farmers cope by offering animal feed subsidies in 2023. However these hand-outs were considered too small to make a real difference.

This has depressed demand as well as production. Based on data from the Hellenic Agricultural Organisation (ELGO-Dimitra), the primary advisor to the ministry of rural development and food, in November 2022, a year-on-year decrease of 4,26% in quantities of cow’s milk and 5,4% in goat’s milk was recorded, even though producer prices had jumped. The General Federation of Consumers of Greece (INKA) notes that that cow milk can cost up to EUR 2 per litre today, whilst the price for the same product in 2020 was EUR 0,84 per litre. The price of feta cheese, the widely consumed traditional Greek white cheese, has also risen – it started from EUR 7,10 per kg in 2021 and escalated to EUR 12,50 per kilo in 2023.

Feta cheese export sales bring EUR 630 million per year into the country. Each year Greece produces up to 140 000 tones, 90 000 of which are exported abroad. However, the consumption of feta seems lower, because some Greek businesses sell at higher prices in order to profit.

The picture is similar in other segments. According to IRI, a Greek market research company, yogurt sales by value increased by 5,2% in 2022, while sales volumes fell 6%.

The overall price of yogurt in 2022 was EUR 4,46 per kg in comparison with EUR 3,99 in 2021. Milk sales rose 5,5% by value in 2022, with sales volumes down 6,4%, while the segment consolidated, with 10% fewer producers by the end of 2022, compared to 2021, said ELGO-Dimitra. Looking ahead, after these two years of dairy price increases, some companies have started to drop the price of selected products.

To tackle alleged profiteering in the food and energy sectors, the government of Greece approved a reduction of unfair profiteering phenomena regulation during the first Covid-19 lockdown in 2020, and capped the gross profit margin of companies until June 2023 at levels earned during September 2021, with sanctions and fines of up to EUR 1 million for companies that do not obey the law.

Also, in November 2022 the government worked with supermarket chains to hold down prices on 51 essential items under a so-called “household basket” scheme, which covered fresh and evaporated milk, feta and other cheese products, cream, powdered milk and yogurt.

Another initiative designed to help the industry and consumers is a plan released by the ministry of tourism to promote agro-tourism by opening dairy factories in Greece to tourists. According to the ministry, more than EUR 17 million from the EU Recovery and Resilience Fund for Greece, will be spent on the promotion of agro-tourism and culinary tourism in Greece between 2022 and 2025.

Moreover, looking across food production, Greece’s EU Common Agricultural Policy (CAP 2023-27) strategic plan, worth EUR 13,4 billion was approved by the European Commission in November 2022.


Olives and olive oil

Olive oil has been an important part of everyday life in Greece since ancient times. Up to 60% of the country’s land is covered with 130 to 150 million olive trees, with the main olive growing regions being the Peloponnese peninsula and the island of Crete. There are over 2800 olive oil mills located across the country: this comes to one mill for every 47 square kilometres.

Greece is among the top three olive oil producing countries. Over the past five years, Greece has produced between 174 000 and 429 000 tonnes of olive oil annually. Between 75 and 82% of the total production is categorised as high quality extra virgin olive oil, a very high percentage compared to other olive oil producing countries.

For the 2022/23 crop year, Greece was the only European country that has seen an increase in production. This was estimated at 340 000 tonnes, a 55% increase from the previous crop year. This put Greece in the position of second largest producer after Spain. Production figures in both Spain and Italy have dramatically dropped due to drought conditions and high summer temperatures.

Table olives and olive oil dominate Greece’s agricultural exports. Greece is among the three of the world’s top exporters of olive oil, with one third of its total production exported each year. This represents between 126 000 tonnes and 200 000 tonnes a year.

There are many different olive varieties cultivated in Greece for olive oil or as table olives, while some varieties produce both. The highly prized Koroneiki variety is king when it comes to Greek olive varieties, with 60% of olive oil produced from this variety. Other common varieties include Manaki, Kalamata (also called Kalamon), Athinolia, Tsounati, Chalkidiki (also called Halkidiki), Amfissa, Konservolia, and Megaritiki, to name only a few.


Top companies

According to the latest data from the Association of Greek Food Industries, the domestic food and beverage industry consists of 1225 companies. At the top of the list, based on turnover, is Coca-Cola 3E, which had sales of EUR 573,6 million in 2022, a 22% increase compared to 2021. The company mainly engages in trading raw materials and finished products from other companies within the group, especially The Coca-Cola Co. It also pays support fees to the group’s companies.

In terms of Greek business interests, the largest player is the Hellenic Dairies Group. The group, which manages the brands Olympus, Tyras, Rodopi, Kliafa, Doubia, and AGNO, had sales of EUR 493 million in 2022, up from EUR 427 million in 2021. Of the total group sales, 55% were exports. In recent years, the group’s consistent goal has been further expansion in both the Romanian and wider Balkan markets, which was evident through its recent acquisition of the United Milk Company by Delta in Bulgaria.

Additionally, the company holds a particularly strong position in Romania, where it initially invested EUR 55 million to establish a factory in 2011, making it a strategically important market for the group in recent years.

Another multinational player with a significant presence in Greece is Nestle Hellas, with some of the most well-known consumer goods such as Loumidis Papagalos, Crunch,

Maggi, Fitness, Clusters, Cheerios, Korpi, Perrier, S. Pellegrino, and many more. The company’s turnover in 2022 reached EUR 379,04 million, compared to EUR 354.40 million in 2021, marking a percentage increase of 7%. However, due to the impact of the war in Ukraine, sales expenses and the cost of goods sold increased significantly (by 14% and 22% respectively). This was reflected in the gross profit, which saw a 13% decrease. Specifically, from EUR 148,82 million, representing 42% of turnover, it decreased to EUR 129,31 million, representing 34% of turnover.

Among the traditional forces in the Greek market is another dairy company, Delta. In 2021 the company’s performance was positive as its sales increased by approximately 1,6%, reaching EUR 279,57 million. However, the significantly rising trends in energy prices and raw materials burdened operating costs, resulting in pre-tax, depreciation, and financial result profits of EUR 16,7 million in 2021, compared to EUR 24,5 million in 2020. The Delta Group reported post-tax profits of EUR 2,9 million, compared to losses of EUR 0,8 million in the previous year.

With its dynamic century-long presence in the food industry, the Papadopoulos biscuit company (E.I. Papadopoulos S.A.) continues to innovate and adapt to today’s standards. In 2022, the company achieved sales of EUR 216,16 million (EUR 185.04 million in 2021), marking an increase of 16,8%. Pre-tax profits amounted to EUR 11,86 million (EUR 15,84 million in 2021), a decrease of 25,1%. In addition to the name and reputation it has built in Greece, the company has a strong export presence, as its products are exported to 67 countries.

Among the major players in the food and beverage sector in the domestic market is PepsiCo Hellas, another multinational beverage company. In 2022, it reported a turnover of EUR 201,17 million, showing an upward trend with a growth rate of 17,69% and adding EUR 30 million in turnover to its 2021 performance when turnover reached EUR 170,3 million. The upward trajectory of sales was driven by popular product brands such as Lay’s, Ruffles, Doritos, Kinder, Lipton, and Pepsi.

Loulis Mills, or under their new name Loulis Food Ingredients, is the biggest player and protagonist in the flour industry and the broader food sector. The consolidated turnover of the listed company in 2022 reached EUR 197,91 million, compared to EUR 134,91 million in 2021, marking an increase of 46,7%, part of which is attributed to price increases as a counterbalance to the unprecedented rise in the prices of raw materials, auxiliary materials, and energy costs.

A prominent case is Kri Kri, which in 2023 was set to achieve a milestone by crossing the EUR 200 million threshold for the first time, up from EUR 171,8 million in 2022. An important growth factor for the company in the coming years is exports, which account for 47% and are primarily directed towards Italy (36%), the United Kingdom (35%), Ireland (3.5%), Sweden (3.2%), and other countries (22,3%), making up the company’s total exports. The value of the company’s exports in 2022 amounted to EUR 81 million in terms of its total turnover.

Mondelez Hellas is a particularly notable force, with products such as Pavlidis chocolates. Specifically, the company’s turnover for the year ending on December 31, 2022, amounted to EUR 169,8 million, an increase of 44,05% compared to 2021’s EUR 117,9 million. The company’s gross profits reached EUR 30 million, marking a 61,15% increase compared to the EUR 18,6 million of the previous year. Pre-tax profits more than doubled (108,11%), reaching EUR 6,28 million from EUR 3 million in 2021. After-tax profits also saw a 47,85% increase, reaching EUR 3,3 million from EUR 2,2 million in 2021. It is worth noting that the American giant Mondelez International acquired Chipita at the beginning of 2022, paying approximately EUR 2 billion to Greek entrepreneur Spyros Theodoropoulos.

The Yfantis Group holds a dominant position, with a turnover of EUR 163,2 million in 2021, maintaining diverse activities beyond cold cuts, including frozen vegetables. The group also has a presence abroad with a production facility for plant-based products in New Jersey, United States, through its subsidiary Esti Foods.

MEVGAL, based in northern Greece, has been experiencing continuous growth in recent years. From a past marked by significant difficulties, the company has managed to fully recover and strengthen its position, both within and outside Greek borders. The company’s turnover in 2022 was EUR 153,8 million, marking an 18,68% increase.

Another dairy company, Kolios, based in Kilkis, completes the picture. According to the company’s financial statements in 2022, its turnover reached EUR 119,92 million, up from EUR 102,34 million in 2021. Profitability saw a slight decline, with after-tax profits decreasing to EUR 1,59 million in 2022 compared to EUR 1,86 million in the immediately preceding year. The company has a strong export orientation, as sales in the Greek market amounted to EUR 44,66 million, with the rest of the turnover attributed to exports.