Università degli studi di Pisa
Dipartimento di Economia e Management
Tesi di Laurea Magistrale in Strategia, Management e Controllo
The Gluten-Free Products Market
The AlpiPan S.r.l. case
Relatore:
Prof.ssa Angela Tarabella
Candidato:
Marco Francescato
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SUMMARY
1. INTRODUCTION: THE FOOD INDUSTRY
...
41.1. AGRICULTURE AND AGRONOMY... 4
1.2. FOOD PROCESSING ... 5
1.3. DISTRIBUTION, RETAIL AND MARKETING ... 5
1.4. INNOVATION AND TRENDS IN THE FOOD INDUSTRY ... 6
2. FOOD PATHOLOGIES
...
7 2.1 FOOD ALLERGY... 7 2.1.1 Kind of allergies ... 8 2.2 FOOD INTOLERANCE ... 9 2.2.1 Lactose intolerance ... 9 2.2.2 Gluten intolerance ... 10 2.3 OBESITY ... 10 2.4 EATING DISORDERS ... 113. FOODS FOR SPECIFIC GROUPS
...
123.1 FOODS FOR PARTICULAR NUTRITIONAL USES ... 12
3.2 FOODS FOR SPECIFIC GROUPS... 13
4. GLUTEN-FREE PRODUCTS
...
154.1 THE GLUTEN-FREE PRODUCTS MARKET ... 15
4.2 METHODS OF DEGLUTINATION... 17
4.2.1 From wheat starch ... 17
4.2.2 From the leavening of the wheat flour ... 20
4.2.3 Innovative methods ... 21
4.3 LEGAL PROVISIONS ... 22
4.3.1 Regulation (EC) 41/2009 ... 22
4.3.2 Regulation (EU) 1169/2011 ... 22
4.3.3 Regulation (EU) 828/2014 ... 23
4.4 COMPARISON BETWEEN LEGAL PROVISIONS: THE USA CASE ... 24
5. LITERATURE REVIEW ... 26
6. THE ALPIPAN S.R.L. CASE... 28
6.1 SECTOR ANALYSIS ... 28
6.1.1 Competitors ... 30
6.1.2 Clients and suppliers ... 30
6.1.3 New entrants and substitutes ... 31
6.2 FINANCIAL AND ECONOMIC ANALYSIS ... 32
6.2.1 Economic equilibrium analysis ... 32
6.2.2 Patrimonial equilibrium analysis ... 35
6.2.3 Financial equilibrium analysis ... 36
6.3 LABELING AND PACKAGING ... 38
7. CONCLUSIONS ... 40
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1.
Introduction: The Food Industry
It is difficult to define with a single word or statement the Food Industry because there are a lot of different activities that can be related to the food, for example Agriculture, Food Processing, Foodservice and Groceries.
The Food Standard Agency1 describes the Food Industry as “the whole food
industry – from farming and food production, packaging and distribution, to retail and catering”.
The United States Department of Agriculture describes the same thing using the expression food system: “The U.S. food system is a complex network of farmers and
the industries that link to them. Those links include makers of farm equipment and chemicals as well as firms that provide services to agribusinesses, such as providers of transportation and financial services. The system also includes the food marketing industries that link farms to consumers and which include food and fiber processors, wholesalers, retailers, and foodservice establishments. Moreover it covers a series of industrial activities directed at the processing, conversion, preparation, preservation and packaging of foodstuffs”2.
1.1.
Agriculture and Agronomy
Agriculture is the process of producing food, feeding products and fiber by the cultivation of certain plants and the raising of domesticated animals. The most important categories of crops are rice, cow‟s milk, cattle, pork and chicken3. The Agriculture sector employs a third of world workforce but it is equal only at the 5.9% of the Global Nominal GDP4. In the European Union the incidence is much less: only the 1.5% of the GVA comes from the Agriculture5. In Italy the situation is similar to the one in the EU with a percentage equal to 2.3%6.
Agronomy is the science and technology of producing and using plants for food, fuel, fiber and land reclamation. It is the combination of different sciences such as Biology, Chemistry and Genetics. In recent years took much importance the Agro-ecology in other words the management of the agricultural system in respect with ecological aspects and the environment.
1
The Food Standard Agency is a non-ministerial government department of the Govern of the UK, responsible for protecting public health in relation to food.
2
PARMEGGIANI (1989) – Encyclopedia of Occupational Health and Safety. International Labor Office – Geneva.
3
FAOSTAT 2012
4 INTERNATIONAL MONETARY FUND 2014 5
EUROSTAT 2015
6
5
1.2.
Food processing
Food processing is the transformation of raw ingredients, by physical or chemical means, into food or of food into other forms ready for human consumption. Food processing includes many different activities like mincing, macerating, emulsification and cooking.
There are a lot of positive aspects in food processing: it permits the transportation and the conservation of perishable foods across long distances; it eliminates harmful substances such as bacteria; it can produce products suitable for people having allergies or other food intolerances.
On the other hand the food processing can reduce the amount of nutrients inside the foods and their bioavailability7. Moreover the food industry uses a lot of food additives, in order to enhance the flavor that can be seriously dangerous for the health if taken in a large quantity.
In order to reduce the negative aspects of food processing, Institutions issued different laws to regulate the substances usable, the hygiene, etc.
1.3.
Distribution, Retail and Marketing
In the food industry we consider also all the firms that permit consumers to receive and consume the foodstuffs coming from the food processing.
Distribution and retailing are strictly linked: the many wholesales supply the supermarkets where the consumer can go and buy the things he needs.
About the Food Marketing, it is mostly used to create awareness among consumers in order to convince the consumer to buy. It can be made both by the food firms and the supermarkets to attract the consumer in its shops. In many countries the communication about food is regulated by the government because it is important to transmit the right message to the buyer about what he is going to eat.
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1.4.
Innovation and trends in the food industry
Although innovation is recognized as important for the competition and to satisfy consumer needs8, the food industry is traditionally regarded as a sector with low research intensity9. The R&D-to-sales ratio10 is one of the lowest of any industrial sector and so for the number of patented inventions11.
In general innovation in the food industry can be classified in: new food ingredients and/or materials;
innovation in fresh food; new food process techniques; innovation in food quality;
new distribution or retailing methods.
Innovation is often seen as a replacement of existing food products or services in order to obey food additive regulations or follow nutritional directions.
This last aspect is an important driver of innovation in the food industry because consumers increasingly believe that food contributes directly to their health12. Thus food is no longer only evaluated for its nutrients but even for its contribution to well-being13.
8
MENRAD (2004) – Innovations in the food industry in Germany. Research Policy
9
CHRISTENSEN, RAMA and VON TUNZELMANN (1996) – Study on innovation in the European food products and beverages industry. European Innovation Monitoring System, EIMS Publication, 35
10
According to HUANG (2003) – Food manufacturing productivity and its economic implications; R&D expenditure represents 0.23% of sales.
11
GARCIA MARTINEZ and BRIZ (2000) – Innovation in the Spanish food and drink industry. International Food and Agribusiness Management Review.
12
MOLLET and ROWLAND (2002) – Functional foods: at the frontier between food and pharma. Current Opinion in Biotechnology.
13
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2. Food Pathologies
Every time we have lunch or dinner we choose the food we want to eat: that is the meaning of the term diet. It derives from the ancient Greek and it means “choice,
lifestyle”. The choice and the “food lifestyle” depend on the preferences: someone
prefers vegetables others maybe not. In some cases the choice is not without constraints: some substances can cause some negative reactions in the body from rashes to more dangerous effects. These negative reactions can be caused by food allergy or food intolerance.
In other cases the diet is not balanced: it does not contain “all the essential nutritive
elements”14. The body intake a lot of fats, animal proteins and sugars without compensating with physical activity. This is one of the causes of the obesity.
When the gain of weight is linked to psychological aspects we speak about eating disorder. The eating disorders are “pathology characterized by an alteration of the
eating habits and by an excessive concentration on the weight”15. The focus is both on reducing and increasing the weight.
2.1 Food allergy
The food allergy is a special food intolerance that activates the immune system. The allergy is an “immune alteration” where a substance (usually proteins), normally harmless, is perceived as dangerous for the body. The antibodies attack this substance and try to eliminate it releasing some allergic reactions (table 1).
In most of the cases the allergic reaction is bearable but sometime the reaction can be violent and lead to death. In this case we speak about anaphylaxis. The anaphylactic shock can occur in a few minute and be the responsible of a cardiac arrest.
Not everybody is exposed at a food allergy. The probability of appearance of an allergy is strictly linked to the presence of the same allergy into the relatives: if a parent suffers from an allergy the risk that the newborn has the same pathology is twice the normal risk; if both parents suffer the same allergy the risk grows up to six times the normal risk.
14
abcsalute.it
15
SIPA – Società Italiana di Psicopatologia dell‟Alimentazione
Respiratory Cutaneous Gastrointestinal
Asthma Rash Diarrhea
Coughing Itch Vomit
Labored breathing Swelling Swelling
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Even if the perception of the diffusion of the allergies is high16
, the food allergies are not so widespread. Only the 1-2%17 of the population suffers from
food allergies. The incidence is higher for the children, from 3 to 7%18
. Moreover some allergies can disappear during the life while others can protract for the entire life.
2.1.1 Kind of allergies
Even if any aliment can conduct to an allergic reaction, in some aliments the probability is higher. The most common allergens are milk, eggs, soy, wheat, shellfish, fruit, peanuts and walnuts.
2.1.1.1 Allergy to milk proteins
The milk allergy is frequent in newborns and children especially in those who have relatives allergic to the milk. Fortunately the allergic reactions tends to disappear with aging. The incidence of the allergic children is varied from 0.5 to 4%19. The most common reactions are vomit and diarrhea.
Once the milk allergy is diagnosed, the patient has to balance his diet by introducing the substances missing from the absence of the milk such as calcium, magnesium, vitamins A, D, B2 and B12.
2.1.1.2 Allergy to peanuts and walnuts
The walnuts allergy is a very particular and dangerous allergy. It usually reveals itself in the childhood and protract for the entire life. In the lighter form the reactions are rushes, nausea and swelling of tongue and lips, instead the more dangerous form can cause an anaphylactic shock. The walnut allergy-suffer must abstain from touching these allergens and always bring an antidote.
Other than walnuts this allergy is common with peanuts, almonds, hazelnut and all of the kid of nuts growing on trees.
16
One person out of three thinks the he suffer from a food allergy.
17
EUFIC – European Food Information Council
18
EUFIC – European Food Information Council
19
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2.1.1.3 Other common allergies
Others foods, that are commonly linked to the allergy, are fruit, legumes (also soy sprouts), eggs, shellfish, fishes, etc. Most of these products are industrially treated in order to reduce the impacts for those who are allergic.
2.2 Food intolerance
Even if the reactions can be the same (nausea, diarrhea and stomach spasms), the food intolerance does not interest the immune system like a food allergy. People who suffer from food intolerances do not correctly digest a food or a substance. The reason is that the body lacks some enzymes that permit the correct digestion of the food.
Unlike from the case of allergy, the people that have food intolerance can eat a few portions of the food without having harmful reactions. This is not true for the gluten intolerance.
The most common causes, responsible for the food intolerance, are the lactose and gluten.
2.2.1 Lactose intolerance
The lactose is the sugar contained in the milk. Normally there is an enzyme in the intestine, the lactase, responsible for the digestion of the lactose: the sugar is split into smaller molecules and then absorbed by the blood. If the lactase is not present, or present in a smaller quantity, the milk ingested remains in the intestine where it is fermented by the bacteria. This can lead to symptoms like flatulence and diarrhea.
The lactose intolerance is mostly diffuse in the Middle East, in India and in some parts of Africa. That is because in the people coming from these countries the lactase is lacking. In effect the incidence of the lactose intolerance in these countries is 50-80% of the population against 5% of the European population20.
Furthermore the lactose intolerance depends on the patient: in some cases a glass of milk is not harmful, in others maybe yes.
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2.2.2 Gluten intolerance
The gluten is a protein contained in wheat, rye, barley and oat. When the gluten is ingested by a person who is intolerant the intestine is damaged and the capacity of absorption of the others nutrients is reduced. The common symptoms are diarrhea, loss of weight and abdominal spasms.
The celiac disease is permanent and it can be diagnosed at every age. The diffusion is underestimated: 1 out of 10021 of European citizen is gluten intolerant.
2.3 Obesity
Obesity is often defined as “an excessive accumulation of corporeal fat that
can lead to negative effects to the health with a reduction of the life expectancy”22. The causes of this pathology are a genetic predisposition to the obesity or, much more often, a wrong lifestyle. The overweight person has a high-calorie diet and a sedentary life: in this way he intakes more calories than the ones he uses to carry out his activities. In fact this problem is amply diffuse in the Western Countries where it represents a growing issue and cost factor. It is estimated that the costs linked to the obesity are from 2 to 7%23 of the overall healthcare costs. Effectively the consequences of the obesity are multiples from respiratory and cardiac diseases to diabetes mellitus.
The World Health Organization defined a method to find out if a person is overweight or obese: calculate the Body Mass Index (BMI). The Body Mass Index is the ratio between the weight and the height of a person:
BMI = Weight in kilos (Height in meters)2
If the Body Mass Index is between 18.5 and 24.9 the person is normal-weight; if it exceeds 25 the person is overweight while obese if the index is more than 30. The BMI is an indicator commonly used by doctors to diagnose the obesity but it has some limits. The first is that it does not distinguish between fat mass and lean body mass. The second limit is that it does not permit to know the distribution of the fat in the body. In fact the fat can gather around the abdomen or the hip. In the first situation the patient is more exposed to the pathologies linked to the obesity while in the other case the patient is more exposed to motor disease.
21
EUFIC – European Food Information Council
22
WHO – World Health Organization
23
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The latest data shows that the obesity diffusion is dramatically growing in particular with children. In the last ten years the incidence of obesity has grown from 10 to 40%24 depending on the countries. For example in Great Britain two third of the men and more than half of the women are overweight or obese25. In Italy 32% of adults are overweight while 11% are obese26. For the children the situation is more or less the same only with a higher incidence for children aged 1127.
2.4 Eating disorders
Eating disorders describe illnesses that are characterized by irregular eating habits and severe concern about body weight or shape. They arise mainly in the teen-age or in the young adulthood and afflict mostly women. Generally eating disorders coexist with other pathologies like anxiety disorders, substance abuse or depression. This pathology can be easily treated but the symptoms, if not promptly nursed, may be detrimental and deadly.
Three of the most common eating disorders are Anorexia Nervosa, Bulimia Nervosa and Bing Eating Disorder. Eating disorders are caused by different factors such as biological factors (irregular hormone functions, genetics), psychological factors (negative body image, poor self-esteem) and environmental factors (family and childhood traumas, social pressure on beauty and thinness).
Recent researches show that the female population afflicted by Anorexia Nervosa is around 0.5% while the one by Bulimia Nervosa is around 2%28. Moreover 10% of the girls at risky age (between 15 and 25 years old) suffer from a partial eating disorder.
24
MONICA - MONItoring of trends and determinants in CArdiovascular diseases study
25
THE INTERNATIONAL OBESITY TASK FORCE
26
PASSI – Progressi delle Aziende Sanitarie per la Salute in Italia
27
29.3% for boys and 19.5% for girls against 25.6% for boys aged 15 and 12.3% for girls aged 15 – HBSC-Italia – Health Care Behavior in School-aged Children (2010)
28
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3. Foods for specific groups
With the term “Foods for specific groups” we mean all the foods that are adapted to the needs of a limited group of people or that do not contain substances not tolerate by some individuals. In this category are contained the products for newborns, the first infantry, specific medical uses, gluten or lactose intolerant, diabetics, weight-control and sportsmen.
The prescriptive cadre of this category of products is very abundant and heterogeneous. Until 2016 the reference law was the Directive 2009/39/EC on Foods for Particular Nutritional Uses. Nowadays the reference is to the Regulation (EU) 609/2013 on Foods for Specific Groups which repeals the previous Directive.
3.1
Foods for Particular Nutritional Uses
The Directive 2009/39/EC on Foods for Particular Nutritional Uses (PARNUTs) codified the Directive 89/398/EEC that was incorporated in Italy by the Legislative Decree 111/92. Foods for Particular Nutritional Uses are products produced in a particular way or that contain particular substances in order to satisfy peculiar nutritional necessities. In this category are included people whose metabolism is disturbed, people in a particular physiologic condition and babies or children. Only for the first two cases we speak about dietary products.
With regard to the infant formulae, the Directive regulates the composition of the products, their labeling and the presence of pesticides. In the Annexes there is a table in which is described the minimum and the maximum amount of milk proteins, soya proteins and other food substances (like vitamins, minerals, amino acids, etc) allowed in the infant formulae and follow-on formulae. When put on the market, these products must be called “infant formulae” or “follow-on formulae” unless they are completely manufactured from cow milk‟s proteins. In this case the name shall be “infant milk” or “follow-on milk”. In the label is mandatory to indicate the energy value, the content of proteins, carbohydrates, fats, vitamins and mineral salts, instructions about preparation, storage and disposal of the product. Moreover it must be stated that the use of these products is subordinate to the advice of a professional. Advertising of infant formulae shall be restricted to publications specializing in baby care and it must not favor bottle-feeding over breast feeding. About pesticides, the maximum pesticide residue level is 0.01 mg/Kg of product. Furthermore in the Annexes there is a list of pesticides whose use, in the production of infant formulae and follow-on formulae, is prohibited.
With regard to the dietary products we distinguish between foods for weight reduction and foods for specific medical purposes. They can be both used as a complete replacement of the daily diet or as a replacement of one or more meals of the daily diet. The products for specific medical purposes are recommended for
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those people who have diseases or disorders of the metabolism. In the label is mandatory the communication of the contents (energy values, proteins, carbohydrates, fats, etc), of the use under medical supervision and of the preparation and storage of the meal. The names under which the dietary products are sold are “Total diet replacement for weight control” and “Meal replacement for weight control” for foods for weight reduction, instead for foods for specific medical purposes the names are specified in the 22 official languages in the EU in the Directive29.
3.2 Foods for Specific Groups
The Regulation (EU) 609/2013 on Foods for Specific Groups was adopted on 12th June 2013 and entered into force on 20th July 2016. The aim of this Regulation is to reduce and uniform the overabundance of the policy framework and to protect vulnerable population groups by strengthening the provisions. Furthermore the Regulation is intended to adapt to the innovations in the market food by eliminating unnecessary and contradictory rules. For example, with the introduction of the Regulation (EU) 609/2013, the concept of “dietary product”30 is abolished.
The Regulation sets the general rules on composition and labeling for infant and follow-on formulae, processed-cereal based foods and other baby foods, foods for special medical purposes and total diet replacement for weight control. The Commission is responsible for the adoption of specific compositional and labeling rules for these products. Furthermore the Regulation establishes a list of substances that can be added to these products including vitamins and minerals salts. The Commission has also the power to decide whether a given food falls within the scope of the Regulation or not.
Two food products which had been classified as dietetic foods under PARNUTs are not within the scope of the Regulation: foods intended for sportspeople and milk based drinks and similar products for young children (often called Growing Up Milk). For these products the Regulation requested a specific report by the Commission in order to analyze the need to establish special rules for them. During 2016 the Commission adopted two reports in whom it states that “there is no necessity for specific provisions” so from 20th
July 2016 these subjects are regulated by horizontal provisions of EU food law.
Even if not regulated by this Regulation, there have been changes in the policy framework of gluten-free foods, foods for diabetics and meals replacement for
29
For instance in Italian is “Alimento dietetico destinato a fini medici speciali”
30
With the Directive 2009/39/EC for dietary product we mean a food whose nutritional composition is modified in order to satisfy peculiar nutritional necessities. In the current food market is easy to find a product produced in a specific way (for example with a low content of salts or energy) so it becomes misleading to define almost all the products as “dietary”.
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weight control. In particulars foods for diabetics shall be regulated by general food provisions and meals replacement for weight control shall be solely regulated by the Regulation (EC) 1924/2006 on nutrition and health claims.
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4. Gluten-free products
For gluten-free products we mean all the foods specifically made for those people who suffer from gluten intolerance. These products are made by wheat, rye, barley and oat (that normally contain gluten) but there is no presence of gluten or it is very low.
The gluten is a substance deriving from the union of two proteins (gliadin and glutenin). The reaction is caused in the presence of water and mechanical energy. The gluten is often used in vegetarian and vegan diets like a substitute of meat31 and it is the base of seitan32. The quantity and the quality of gluten in a flour is an index of the quality of the flour itself because the gluten lends viscosity, elasticity and cohesion to doughs. This is a very important aspect for bread-making. The gluten is not a complete protein because it does not contain lysine.
There are different methods to make the wheat flour without gluten. Some of them are based on the principle of separating the gluten from the wheat starch others from the normal process of leavening of the wheat flour.
To call a product “gluten-free” or “with a low content of gluten” there are some parameters to respect. These values are defined by the European Union by different provisions. The first is the Regulation (EC) 41/2009 on composition and labeling of foods for gluten intolerants. The second provision is the Regulation (EU) 1169/2011, in part modified by the Regulation (EU) 1155/2013, on the information about the absence of gluten or its presence to a reduced extent. The last provision is the Regulation (EU) 828/2014 that extends and clarifies some dispositions of the previous Regulation.
4.1
The gluten-free products market
As the techniques to diagnose the celiac disease develop and the consumers awareness to an healthy diet increase, the demand for gluten-free products is growing at an high rate. According to the Technavio Global Gluten-Free Food Market research33, in 2016 the market has exceeded $4.64 billion with a growing rate of 10.4% by 2021(table 2). The reasons of this trend have to be investigated in the health and wellness, the demand from millenials and the increased marketing activities. The general opinion is that the gluten-free product are perceived as healthier by increasing energy and combating fat gain. Linked to the first reason is the demand from millenials: those born from the early 80s to the early 2000s are willing to pay a premium price for gluten-free products because they are perceived
31
This is for the high content of proteins.
32
It is a dough totally made up by gluten.
33
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as healthier. The last driver of the growing of free-from products is the increase in marketing activities. Firms, such as Heinz, has been using all of the marketing tools (for instance social media marketing) to communicate the benefits of gluten-free products. However these trends point out that the demand for free-from products is detached from the consumption for the treatment of intolerance disease and more exposed to changes in consumers and media-driven opinion.
In Italy the trend is the same: from 2007 to 2015 the market has grown by about 57% passing from €165 million to €260 million34
. Most of this increase is due to the Large Retailers who has made the gluten-free products available for everyone. The demand for this products comes from people who suffer from celiac disease but also from people who think that these products are healthier than the others. Indeed the people who suffer from celiac disease are only one out of 100 inhabitant. The gluten-free firms has grown too: in 2007 there were 280 firms; in 2014 the number is more than doubled reaching 613 units. According to the National Monitoring for the gluten-free food, these firms are more concentrated in the North of Italy (Emilia Romagna, Lombardia, Veneto, Piemonte). They are small and sell mainly to specialized store and Large Retailers. Their index of internalization is low because they sell principally in Italy. Nevertheless there is an Italian firm that owns almost 40% of the European gluten-free market: Dr Schär.
The situation of the market in Europe is more or less the same. In Great Britain, for example, the free-from market in 2016 worth £585.6 million with a
34
NIELSEN (2015)
Table 2
Source: TECHNAVIO – Global Gluten-Free Food Market 2017-2021
$3.818,70 $4.208,21 $4.639,13 $7.594,42 $0,00 $1.000,00 $2.000,00 $3.000,00 $4.000,00 $5.000,00 $6.000,00 $7.000,00 $8.000,00 2013 2014 2015 2020
Global Gluten-Free Market in million U.S.
dollars
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perspective growth of 15% by 202035. 60% of the free-from market is occupied by the gluten-free products36. Instead the situation in France is different. The gluten-free products sales were $41.8 million in 2015 so far from its neighbours, for instance Italy. For this reason France is called “the sleeping giant” and it is the target of many international firms37.
4.2 Methods of deglutination
4.2.1 From wheat starch
According to Schofield and Booth38 there are six general manufacturing processes of wheat starch and gluten separation known as dough, batter, aqueous dispersion, chemical dispersion, wet-milling of whole kernels and non-aqueous separation. However, the last four are currently in disuse due to high operation costs, reduced process efficiency, poor product quality and effluent problems. Thus, only two of the processes are actually commercially practiced. All these manufacturing processes employ refined wheat flour as feedstock and follow the same basic principles of starch vital gluten separation. These processes are known as the Dough System and the Batter System. There are many variations in the plant and equipment used but each variation can be traced back to its origins either in the Dough System or in the Batter System.
The Dough System, also known as the Martin process, is the best example of the dough type separation, which is in common use in the industry. It is especially suited to processing low protein (7-10%), weak flour. Flour is mixed with water and kneaded to form a smooth cohesive elastic dough, containing 55-60% dry substance. It is quite usual to use water up to 35°C to speed the dough development process. There are many commercial mixers which can be operated on a continuous basis to provide suitably developed dough for the washing process (Fig. 1).
35
KANTAR WORLD PANEL – March 2016
36
MINTEL – September 2016
37
SHEPHERD (2016) – What are the next major markets for gluten-free? – France the “sleeping giant” of the sector.
38
SCHOFIELD, BOTTOMLEY, TIMMS and BOOTH (1983) – The effect of heat on wheat gluten and the involvement of sulfhydryl-disulfide interchange reactions.
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The aim of the washing stage is to release starch from the gluten without dispersing or breaking the gluten into small fragments. Many devices may be used for this process, such as ribbon blenders, twin screw troughs and rotating screens. A popular choice is a modified ribbon blender known as a “Martin” washer (Fig. 2).
This is a deep narrow vessel with twin open paddle rotors extending the length of the vessel. Fresh water and/or recycled processed liquor is injected into the bottom of the washer. The starch released by the kneading process overflows into a launder and the wet gluten is discharged from the bottom. The gluten leaving the washer is at a minimum protein content of 75% on a dry solid base. The major disadvantage of the Martin Process is that it requires a comparatively large volume of water for its operation, particularly when higher protein flour is used. Eight to twelve tons of water per ton of flour input is common. The large volume of water complicates starch recovery and efficient handling.
Figure 1: The Martin process
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The Batter System is a variant of the Dough System and is in its various forms the mainstay of the industry today. Flour and water in roughly equal proportions is mixed to a smooth sloppy dough with a solid content of 48% to 55%. Higher protein flours can handle lower solids without significant gluten fragmentation. The batter is developed by mechanical working to ensure that the gluten is able to withstand the vigorous washing treatment. When the batter is fully developed, more water is added with additional mixing. The gluten strands coalesce to form a curd-like structure, which can be screened out of the starch liquor. Gyratory screen, sieve bends and rotary screen are all used for this purpose (Fig. 3). The process of water additions and screening may be repeated two or more times until the protein level in the separated gluten reaches a minimum of 75% dry basis.
There have been many attempts to refine and improve the batter process for gluten separation. One example is the Raisio/Alfa-Laval Process that do not use an equal proportion of water and flour but the first depends on the type of the second. Major advantages of this process are high throughout for a low space requirement and low water consumption.
No discussion of the production of wheat gluten is complete without mention of co-products. Wheat gluten cannot be produced without also producing wheat starch and a liquid effluent. The wheat gluten industry has invested considerable effort to overcome the problems posed by the effluent by re-using it for other needs (for example for animal feed, ethanol production, etc). About the wheat starch, it can be used to produce other products, like
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baked products, especially for gluten intolerant since the starch coming from this process has not anymore gluten proteins.
4.2.2 From the leavening of the wheat flour
The process of gluten separation from the leavening of the wheat flour tends to create innovation by the tradition. In effect this method starts from the yeast base. The yeast base is the oldest raw material used for the production of baked products. It consists of flour and water where the leavening occurs by the presence of lactobacillus and a prolonged rest.
In its researches the University Aldo Moro in Bari found out that some lactobacillus and enzymes, contained in the yeast base, have the capacity to degrade gluten proteins (gliadin and glutenin) until their complete elimination with the release of amino acids. Figure 4 shows the gluten proteins degradation: in the column “St” there are the normal gluten levels contained in the wheat; in the column “1” there are the gluten levels contained in an industrial dough; in column “2” there are the gluten levels after the action of specific lactobacillus and enzymes.
The process of deglutination takes place in an establishment where starts the procedure of natural leavening. Usually the dough rests 24 hours at a controlled temperature. In figure 5 is shown the action of enzymes and lactobacillus on gluten proteins: firstly the enzymes attack and separate the gluten proteins then the lactobacillus transform the gluten proteins into amino acids. In this way, after the leavening, the result is a flour without gluten. The gluten-free flour, after the quality controls, is ready to be kneaded with other ingredients to product baked products for gluten intolerants.
Figure 4: Gluten proteins degradation.
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With the process of deglutination from the leavening, the flour that we obtain keeps all of the nutritional characteristics of wheat. In fact it contains vitamins, fibers, mineral salts and especially amino acids. Instead with the process of deglutination starting from the wheat starch all of the protein-based content is washed away. Moreover the intuition of the using of lactobacillus and enzymes to eliminate gluten has been patented.
4.2.3 Innovative methods
In the universities there is always a research centre that tries to find out solutions to everyday problems of millions of people. An example is the University of Bari that invented the process of deglutination from the yeast base. Another more recent innovation is the “Gluten Friendly”: a process that modifies gluten avoiding consequences for gluten intolerant.
Gluten Friendly is a revolutionary method discovered by the University of Foggia that could generate a revolution in the food industry for people that suffer from celiac disease. In fact with this innovative method gluten intolerant can ingest normal wheat without having allergic reactions. The chief researcher, professor Carmen Lamacchia, found out that if the grain of wheat is exposed to high temperatures the gluten, that in the grain is not formed yet, loses its characteristic of generating an allergic reaction. In order to maintain the taste and all of the nutritional values this process is made by using microwaves that reach high temperatures in few seconds. The grain then can be grinded and kneaded to product pasta and other baked products.
The University of Foggia evaluates this discovery as “of absolute
value”39 and for this reason it patented it first in Italy and then in the international market. During the researches the University has had the help of an industrial partner, an international group leader of the commercialization of wheat. In fact the University wants to, after the studies of the Gluten Friendly on gluten intolerant patients, market this innovation. The consequences of the production on large scale could be “an instant reduction of people awareness
on gluten and so a decrease incidence of celiac disease”40.
39
Declaration of the Dean of the University of Foggia, professor Maurizio Ricci
40
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4.3 Legal provisions
4.3.1 Regulation (EC) 41/2009
The Regulation (EC) 41/2009 is the base provision of the entire legislation regarding gluten-free products. It entered into force the 10th of February 2009.
According to this Regulation all of the products intended to people who suffer from celiac disease containing wheat, rye, barley and oat must not contain more than 100 mg/Kg of gluten. In this case the product can be called “with a very low content of gluten”. Instead if the content of gluten in the products specifically made for gluten intolerant is less than 20 mg/Kg then it can be used the term “gluten-free”. On the basis of this provision, the term “gluten-free” can be also used for foodstuffs for normal consumption on condition that the content of gluten is less than 20 mg/Kg.
4.3.2 Regulation (EU) 1169/2011
The general aim of the Regulation (EU) 1169/2011 is to establish the mandatory information on foodstuffs in order to allow consumers to make aware choices. It entered into force the 14th of November 2011.
The mandatory rules concern the composition, the preservation, the presence of harmful substances and the nutritional values of food. This information must not mislead the consumers in their choices: for example an advertisement must not say that a product contain a specific substance when it is not present. Thus, the communication to the consumers must be precise, clear and easily comprehensible. The responsible for this information is the producer or the importer if the producer is set outside the EU. In table 3 there is a complete list of the mandatory indications for food.
In Annex II there is a list of those substances that can cause allergy or intolerance for example gluten, shellfish, eggs, fish, peanuts, soy and milk. For specific categories of food the producer must provide some other information, listed in Annex III, in addition to those shown in table 3. The indications for the consumers must be placed on the package or on the label and they have to be legible, visible and indelible.
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The Article 21 of this Regulation states that in the list of ingredients the substances causing allergy or intolerance listed in Annex II must be “highlighted through a type of character clearly different from the other
ingredients listed”.
The name of the food
The list of ingredients
Any ingredient causing allergy or intolerance
The quantity of the ingredients
The net quantity of the food
The “use by” date
Any special storage conditions and/or conditions of use
The name and the address of the responsible
The country of origin
Instructions for use when necessary
The alcoholic strength by volume
A nutrition declaration
Table 3
The nutrition declaration contains the following indications: the energetic value and the quantity of fats, saturated fatty acids, carbohydrates, sugars, proteins and salt. These nutritious substances and the energetic value can be express “per 100g” or “per 100ml” otherwise per portion and/or per consumption unit.
According to this Regulation some indications are voluntary. These indications are: information on the possible and unintentional presence in food
of substances or products causing allergies or intolerances and information related to suitability of a food for vegetarians or vegans. The Regulation (EU)
1155/2013 modified the Article 36 by adding information on the absence or
reduced presence of gluten in food as a voluntary one.
4.3.3 Regulation (EU) 828/2014
The Regulation (EU) 828/2014 recalls the rules issued in the previous provisions by adding some specifications. It is applicable from the 20th July 2016.
The statement “gluten-free” is possible only if the food sold to the consumer contain less than 20 mg/Kg of gluten. Instead the statement “very
low gluten” can be used only if the food sold to the consumer contain no more
than 100 mg/Kg of gluten. This information can be accompanied by the statements “suitable for people intolerant to gluten” or “suitable for coeliacs”. In addition it can be added the statements “specifically formulated for people
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intolerant to gluten” or “specifically formulated for coeliacs” if the food is
specially produced to reduce the content of gluten or substitute the gluten-containing ingredients with other ingredients free of gluten.
The provision of food information on the absence or reduced presence of gluten in infant formulae and follow-on formulae is prohibited.
4.4 Comparison between legal provisions: the USA case
The Food and Drug Administration allowed manufacturers to begin labeling food “gluten-free” in 1993 but without a clearly definition of when a product can be called free from gluten. Three years later, the FDA issued an Allergy Warning Letter which instructed on good manufacturing practices (GMPs) for gluten-free products. As noted by some authors41, this act was only a guidance and not a law or a regulation. Hereafter a growing number of concerns, for example cross-contamination; incomprehensible or unusual names for products; hidden ingredients; inability or unwillingness to reveal ingredients or processing practices; and mislabeling, came to light. In 2001 the FDA released another set of voluntary guidelines addressing these concerns.
In the following years, a bill was introduced to regulate the label for gluten-free products but the food industry demanded for its removal due to concerns about liability. Between 2003 and 2004, when it became necessary a new allergen law, the food industry worked together with the Congress to develop a final version of the bill. In 2004 the Food Allergen Labeling and Consumer Protection Act was signed and it required manufacturers to label the big eight allergens (milk, eggs, fish, shellfish, tree nuts, peanuts, soybeans and wheat). In this Act, there were no trace of gluten: this was the first compromise of the FALCPA. The second compromise was that the manufacturer could provide data showing that some ingredients would not cause undue consequences to receive authorization to produce. The third compromise was that the FALCPA did not say anything about cross-contamination; “may contain” and “processed on the same line” labels; and the sanctions for the violations of these aspects.
In response to the FALCPA, the FDA proposed a rule where the term “gluten-free” is defined for voluntary use in the labeling of food. According to this rule, a gluten-free product does not contain wheat, rye, barley, and/or their by-products unless treated to contain less than 20 parts per million of gluten. The proposed rule entered into force the 5th August 2014 together with a guide for small food businesses to help them to comply with the final rule‟s requirements. The new rule does not define the cross-contamination and the cross contact between aliments free from gluten and aliments containing gluten. In this case if the product meets
41
DERR (2006) – When Food Is Poison: The History, Consequences and Limitation of the Food Allergen Labeling and Consumer Protection Act of 2004. Food and Drug Law Journal.
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the definition of less than 20 parts per million therefore it can be labeled as “gluten-free”.
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5. Literature review
“We define product literacy as the capacity of the consumer, not just one, but the corpus of consumers in a particular market, to look at a product, to have some comprehension of the product’s attributes, and to have some agency over the meaning and use of the product. We argue that when consumers have a high degree of product literacy, they are able to see products in a broader context and actively engage the product”42
.
Gluten-free is a credence attribute because consumers are forced to rely to manufacturers‟ voluntary labeling, and they depend on full disclosure and accuracy in labeling. Most consumers do not know the amount of gluten in a product labeled as gluten-free at the moment of purchase, nor after the consumption. In fact an Italian study on the contamination of gluten in products labeled as gluten-free and naturally gluten-free products (Verma et al. 2017) demonstrated that almost 10% of the evaluated products contains more than 20 part per million of gluten. In particular most of them are products for lunch or dinner that naturally do not contain gluten like oats-, buckwheat-, and lentil-based items. Therefore information about goods and services needs to be accurate to prevent or eliminate distortions that may hamper the proper function of markets (Smith and Royne 2010). The current trajectory of the gluten-free market is likely to expose consumers living with celiac disease and gluten sensitivity to greater risks.
The prevalence of celiac disease is contested. Estimates suggest a range of prevalence from 1:160 (Biagi et al. 2010) to 1:133 (Fasano and Catassi 2001) passing from 1:100 (Ludvigsson et al. 2014). Moreover some researchers found that undiagnosed celiac disease is associated with increased mortality (Metzger et al. 2006; Rubio-Tapa et al. 2009). However the path to obtain a celiac disease diagnosis is long and difficult, with visit from several doctors and invasive exams as noted by Copelton and Valle (2009). In fact more and more patients self-diagnose the celiac disease by an at-home test or by feeling better after using gluten-free products.
The only treatment for celiac disease is a gluten-free diet. This diet is difficult especially for those who are newly diagnosed because it requires an overhaul of the entire lifestyle. Moreover the diet is very expensive. As noted by Lee et al. (2007) a person on a gluten-free diet spends more than 30% of his monthly food budget on gluten-free products. This is because, on average, the gluten-free products cost 240% more than their counterparts (Stevens and Rashid 2008). In particular, in Australia, a research (Lambert and Ficken 2016) showed that a gluten-free healthy food basket costs from 5,78% to 16,67% more than a normal healthy food basket. Moreover the price differential of single gluten-free items varies from 316% for wraps to 574% for flour. Of the same point of view are other authors that made researches in Scotland (Abernathy and Bannerman 2011), in the UK (Singh and Whelan 2011) and in the North America (Lee et al. 2007).
42
WOROSZ and WILSON (2012) – A Cautionary Tale of Purity, Labeling and Product Literacy in the Gluten-Free Market – The Journal of Consumer Affairs.
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Gluten-free products are not only consumed by those who suffer from celiac disease. Other consumers can follow a gluten-free diet as a lifestyle choice because it evokes a cultural-, ecological-, civic-, historical-, ethical- or health-based interest. According to Johnson (2008), “ethical consumerism describes consumption driven by
the ways in which a product is perceived to fit into an individual’s overall lifestyle, to benefit the environment, and/or to meet social goals”. Thompson and Coskuner-Balli
(2007) argued that consumers are “enchanted” by alternative food systems when it connects them to the realities and irregularities of production, to a larger community of people and ideals, and to another time. The consumption can be also political: the people choice producers and products with the purpose of changing objectionable institutional or market practices (Micheletti 2003). Gluten-free products can be also bought for their potential health benefits (Wilson 2011). Michaelidou and Hassan (2008) define those people as “health-conscious” consumers: they tend to improve and/or maintain their health and quality of life. Preston (2008) defines them with the concept “Doctor Me”: consumers are interested in maintaining control of their own health and well-being; “it is a way of taking health care to self-care”.
While the gluten-free market grows, some market observers have highlighted that this growing interest in gluten-free products is just a fad (Painter 2008) that can be easily connected to health claims and advertising (Wansink and Cheney 2005). Another concern is that gluten-free products, and other free-from products, are going to be considered as “better-for-you” products. These products are not necessarily “better-for-you” (Da Costa 2007) especially in the case, like in gluten-free diet, where the consumption prevents from obtaining adequate vitamins and mineral salts (McCabe 2010).
The expansion of the gluten-free market lays concerns about the Conventionalization of the market. The Conventionalization Thesis emerged from studies of the capitalization and industrialization of the organic agrifood sector (DeLind 2000; Guthman 2004) where the concentration of a limited number of major agribusinesses has diluted the meaning of “organic” (Howard 2009; Jaffee and Howard 2010). The same can happen to the gluten-free sector where the attributes and the substantive characters of these products will not be influenced by the celiac disease community. In contrast to the process of conventionalization some authors (Hughes 2010; Hughes and Lang 2006; Lang, Shang and Vragov 2009) introduced the Transmutation Thesis. Transmutation occurs when consumers actively work, in isolation or in partnership with the provider, to change the content and the intrinsic value of a product. A transmuted product may be for personal or community-wide consumption and sometimes transmutation is “carried out by consumers not only to
increase their enjoyment of the product, but also… to use such products as vehicles for their own self-expression”43.
43
HUGHES (2010) – Supplying Web 2.0: An Empirical Investigation of the Drivers of Consumer
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6. The AlpiPan S.R.L. case
AlpiPan is born, since its origins, to dedicate itself to the production of dietetic baked products focusing on the necessities of those consumers that have to follow a daily diet. Set in Altopascio, in the province of Lucca a place where bread-making is still common, AlpiPan S.R.L. operates since 2004 by making its products without gluten and proteins for consumers all over the world. The firm expands on a surface of 8.000 m2, where 3.000 m2 indoor, exclusively dedicated to the production
of gluten-free products. The absence of other products permits to the firm high standards of quality and to avoid the risk of cross contamination due to the presence of the allergen gluten inside the establishments.
The basic philosophy under the operate of AlpiPan is the creation of savory products where the absence of gluten is seen as a “plus” and not as a “minus”. This is made by working directly with the suppliers and the clients and by always developing new recipes and productive technologies.
AlpiPan has a clear mission that has always been communicated to the people working in the organization and committed by them. The mission is to provide every celiac consumer and nephritic patient with the most suitable product for his necessities and tastes. This is thanks to the skills of technicians operating in the Research and Development field that permits high quality levels and flexibility.
6.1 Sector analysis
AlpiPan has two main objectives: offer typical Italian and Mediterranean gluten-free products abroad and decline these products to the tastes of its target markets.
AlpiPan produces especially baked-products without gluten and proteins. In particular it offers bread, flat breads, baguettes, breadsticks and toasted breads, sometimes already pre-cooked. Its production includes also biscuits and
sweet snacks like plum cakes and muffins. For the periods of festivity, AlpiPan also produces Italian traditional desserts like the Christmas panettone and the Easter colomba.
Figure 6: The AlpiPan logo.
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AlpiPan always works together with its clients to develop new recipes and to customize its products to their needs: for example, in a cake, it can be added chocolate drops or almonds.
The productive process of these products is more or less the same as if the products were with gluten. However, seeing that without gluten the dough is no more so elastic and cohesive, the firm has to implement some modifications. For example in the dough is put more starch to replace the lesser quantity of flour. The productive system is almost all automated in order to reduce the contact between men and products. This is because in this way the possibility of cross-contamination is reduce at zero whilst the quality is maintained at high standards. The products are packed in a protective atmosphere inside sterilized chambers called “white chambers”.
In this background it is very important the quality. AlpiPan and its Quality Management System are always in evolution to respect the consumers needs and the changes in the legal provisions. The quality philosophy is put in place not only in the productive process or in the moment of packaging but also in the selection of the raw materials. The quality policy has been defined following these aspects:
satisfaction of consumers needs; compliance with laws;
improvement of the productive processes; satisfaction of stakeholders;
improvement of the supply chain.
The core business of AlpiPan is the product development. In fact, the Research and Development department is one of the fundamental assets of the firm. Its technicians constantly work to develop new products and improve the ones already present in the market. Moreover the collaboration with the clients permits to adapt the products to the requirements of the markets even if very different from the Italian one. The collaboration with the clients is also visible in the development of the packaging. AlpiPan produces its products in different shapes and sizes in order to offer goods suitable for some commercial parameters that its clients have to respect.
The development of new products starts with the evaluation of the prototype of the new product by the clients who has requested it. Then, if the evaluation is positive, AlpiPan implements that product in the productive system.
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6.1.1 Competitors
The biggest player in the gluten-free market is Dr. Schär. Its market share goes from 50% in Italy to 70% in Germany44. Dr. Schär is specialized in gluten-free products like bread, pasta, snacks, desserts and biscuits but also frozen foods and ready-to-eat dishes. Nowadays the firm has adopted its know-how to the production of other dietetic foods for other categories of consumers. The group is present all over the world especially in the most developed countries where the awareness of celiac disease and well-being is a driver for foods choices. Dr Schär sells its products using five brands. The Dr Schär brand is the oldest and it is present in Europe and America. Its selection is wide and contains both end products and raw materials like flour. The same selection is present in the brand Glutafin that is sold in Great Britain. For the Spanish market instead, the reference brand is Beiker. Beyond the normal gluten-free products present in the other brands, Beiker sells also lactose-free foods. The other two brands are the newest and are the representation of the extension of the selection. Ceres-MCT sells foods to those people who have digestive diseases, especially of lipids. In fact a wide assortment of margarines and oils is sold with this brand. Mevalia is the last brand and sells products without proteins. The Dr Schär group places its products in drugstores and supermarkets. The firm collaborates constantly with its commercial partners with many marketing activities. It is also near to the consumers offering web sites and call centre where to inform about celiac disease and to obtain some useful information.
The other part of the market is divided into other players that have not a gluten-free dedicated production but they buy from specialized producers, like for example AlpiPan, and then resell with their brands. They are usually big players of other markets, for example the pasta market, or of the Large-Scale distributors that want to introduce their brands to the gluten-free market. The specialized producers are small-medium enterprises that usually operates in the local markets but sometimes even in the international markets.
6.1.2 Clients and suppliers
AlpiPan produces exclusively for third parties. Together with the clients, AlpiPan develops the products in different shapes, weights and even ingredients to adapt them to the requests of the market. AlpiPan is also responsible for the packaging of the products. In fact the R&D department of AlpiPan, together with those of its clients, constantly creates new forms of packaging to assure the quality of the products and to grant an easily usability. Those who buy from AlpiPan are big players of specialized markets that have a
44
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strong and known brand. 60% of the client brands are European, especially French, Spanish and Swedish, while the rest are important Italian brands. More than 85% of the gluten-free panettones, pandoros and colombas sold are produced by AlpiPan45. The majority of these products are sold in the supermarkets, whilst a part of them in the pharmacies. That is because before the last European Regulations the gluten-free products were considered as dietetic-therapeutic foods that could be bought only with a medical prescription. In the last years, some stores has specialized in the trade of gluten-free products even in the form of franchising. They are a newness in the market especially in the case that they sell fresh foods instead of pre-packaged foods.
The choice of the supplier is very important principally for the quality of the products. AlpiPan follows a strictly process for the choice and selection of the suppliers. First of all, to the supplier chosen is requested a sample of its materials. Then, the sample is sent to an external laboratory to check the presence of gluten. If the test is positive, AlpiPan proceeds to make an order. Once the raw materials are delivered, the firm carry out another test to verify the conformity both to the order and to the result of the previous test. If even this test is positive, the raw materials received are processed to obtain the end product. The suppliers that arrive at the end of this process are then put inside the list of the reliable suppliers.
6.1.3 New entrants and substitutes
The threat of substitutes is very low. That is because those who suffer from celiac disease have to follow a gluten-free diet. The only option for them is to completely avoid foods containing gluten. Even if this possibility is cheaper, most of the gluten-free products cost much more than their counterparts, it means that the people could not eat every food containing wheat, rye, barley and oat.
On the other hand the threat of new entrants is very high. First of all, the gluten-free market is in constant growth so it is a sector than can attract a lot of new businesses. Second, the legislation is not so cogent. The Regulations governs only the maximum quantity of gluten and not, for example, the requirement of dedicated production sites or some particular production methods. Moreover, the label “gluten-free” is a voluntary information that does not require certain parameters to respect (except for the maximum quantity of gluten). This situation can lead to label “gluten-free” products that contain more gluten than permitted, as it happened in the USA. The third aspect that has to be taken into account is the almost total absence of patents or rights. This characteristic is typical of the entire food market that presents a low
45
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innovation level. The absence of strictly barriers to entry can help new businesses to penetrate this market. There is also the possibility that the customers could integrate themselves upstream; possibility that increases if the market continues to grow.
6.2 Financial and economic analysis
As an overall review, AlpiPan is a solid and growing company. From 2014 and 2015 the net profit has grown of about 45%. In the same period the variation of the workforce has been of 9 units reaching 31 workers, positioning AlpiPan as a Small-Medium Enterprise. All of the value generated by AlpiPan is, then, re-invested in the company. In fact in 2015 there have been new acquisitions of equipments and plants. For example AlpiPan bought a new plant for the automatic micro-dosage that has reduced the materials handling and increased the quality controls on both raw materials and productive process. In this way also the difficulty of the duty is reduced. These new acquisitions did not get worse the finance structure because most of the firm is financed by the equity.
In this financial and economic analysis, we focus on temporal and spatial comparisons. The temporal comparisons are between the balance-sheets of 2014 and 2015 of AlpiPan, while the spatial comparisons are between AlpiPan and the biggest competitor in the market, Dr. Schär.
6.2.1 Economic equilibrium analysis
The first level of analysis is the Return On Equity (ROE). This index measures the return of the capital invested by the associates and is the most concise index of profitability. For AlpiPan the ROE has grown of more than one point per cent passing from 49,30% of 2014 to 50,93% of 2015. This growth is mostly due to the increase of the net profit that in the same period has grown of almost 50%. Inside the amount of the equity is not considered the presence of the assets obtained by leasing because they were entered with the patrimonial method. In fact the amount of the assets in leasing at the end of 2015 was about 560.000. By considering these assets in the evaluation, the ROE grows up to more than 52%. This index signals the great potential of development of the firm. The ROE of Dr. Schär was about 16% in 2014, in constant decrease from 2010 mostly because of the increase of the reserves in the equity. This great difference between the two ROE is due to the dividend ratio. In fact in AlpiPan the dividends distributed in 2015 were about 63% of the net profit of 2014, while in Dr. Schär the same ratio was about 14%.
The second level of analysis is the Return on Assets (ROA). The value of the ROA of AlpiPan in 2015 was 32% while for Dr Schär the value was lower,
