Issue #13. Fake Cheese in Italy & Digital Consumption in the Philippines
How a company in Italy defies traditions, and why the Filipinos spend so much time on the web.
Hello dear reader,
I recommend not reading this one while you're hungry.
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Company of the Week: Dreamfarm
It wouldn’t shock you if I told you that Italy is the fourth largest cheese producer in the world. And the king of all Italian cheeses? Mozzarella. Its relative popularity is the highest in Italy. In 2022, the country exported €837 million worth of mozzarella, marking a 172% increase since 2015. Alongside this, Italy's per capita pizza consumption is the fourth highest in the world.
Italy also ranks among the most 'organic' countries. It is home to 17% of all organic producers in the EU and is the largest organic food exporter, totaling €2.9 billion. Italians aren't big fans of ultra-processed foods, either. Only 13.8% of their energy intake comes from such products, the second-lowest rate in Europe. This contrasts sharply with 32.5% in Finland and 41.3% in the UK.
The country's aversion to ultra-processed foods is so strong that the Italian government is considering a ban on lab-grown meat production, as well as other synthetic foods like fish and milk. If passed, violating this ban could lead to fines of €60,000. The push for this ban comes from agriculture lobbies, which have gathered 500,000 signatures to protect natural food. They enjoy full government support, as evidenced by Francesco Lollobrigida, the Minister of Agriculture and Food Sovereignty:
Laboratory products do not guarantee quality, well-being and the protection of the Italian food and wine culture and tradition, to which part of our tradition is linked.
Well, Dreamfarm, an Italian plant-based food producer begs to differ.
The company and the business
Dreamfarm entered the market in 2021 after spending two years on R&D. They now offer two products: a plant-based spread (priced at €2.99) and mozzarella (€3.6 for a 125g ball). The company's concept is fairly straightforward. While there are vegan options available, many are not particularly healthy. Dreamfarm aims to change this with simple ingredients like almond base, vegetable fiber, lactic acid bacteria, and salt. Despite bucking conventional wisdom, Dreamfarm emphasizes its Italian heritage, particularly its locally-grown almonds. Dreamfarm makes it easy: no PhD required to sidestep E235 mysteries, plus you get less fat and more fiber. Protein? A tad less, but still good
The numbers
Dreamfarm distributes its products through traditional retail channels and is available in 164 stores across Italy, with four additional locations in Barcelona. While the company hasn't released specific figures, they claim to be outselling competitors by 5x. This success was achieved without marketing spend, relying instead on viral interest in their mozzarella. Revenue is likely in the tens of thousands per month, considering their small market presence and the fact that the total plant-based food market is just €628 million, compared to €186 billion for the entire food market.
The recent €5 million funding round was first used to build a production facility in Sala Baganza. Now, Dreamfarm plans to expand further into Spain and Belgium, where vegan cheeses have seen a 28% sales increase between 2020 and 2022.
The future
Apparently, Italians are on a health kick. The Smart Protein Project reports that 54% are reducing their meat and dairy intake for health reasons — more than in any other surveyed European country, except Romania. Interestingly, Italians rank second to last in environmental concern. There's a prevalent belief that reducing dairy, including cheese, will improve well-being. However, Italians are critical of the taste and affordability of plant-based alternatives.
So, we have:
Italians' preference for non-processed foods;
The government's inclination to ban 'fake' foods;
A growing desire among Italians to reduce animal-based food consumption for health reasons;
Dreamfarm's natural, healthier non-dairy cheese alternative.
We’ll see what happens in the coming months and years. Especially considering the looming government ban.
Random Story of the Week: Insane Online Consumption in the Philippines
The Philippines stands out uniquely in digital engagement. Virtually every metric related to digital consumption places the Philippines at the top. But why is this the case? Let's delve into that, starting with an overview of the remarkably high digital engagement in the country.
Beginning with the basics, Filipinos spend the third most time on the Internet globally, averaging 9 hours and 14 minutes per day, trailing only South Africa and Brazil. They lead the world in time spent on mobile devices at 5 hours and 31 minutes. Much of this time is on social media. While Internet penetration isn't extraordinarily high, nearly every Filipino with Internet access uses social media, with penetration rates of 73.1% among Internet users and 72.5% in the general population.
However, Filipinos' web use isn't limited to social media. They engage more actively in various digital content forms than the global population:
65% engage in online learning, compared to 43% globally;
96% play video games (mostly mobile games), versus 82% globally;
54% use video calls, compared to 35% globally;
and more.
We’ve established that the Internet, and digital content in particular, is a highly sought-after commodity in the Philippines. But why is this the case? Here are several reasons:
1. English Proficiency. About 58.2% of the population speak English, compared to 27.1% in Thailand or 22% in Cambodia. This higher proficiency allows access to a broader range of content, increasing consumption. More options mean algorithms are more likely to present content that suits your needs, encouraging longer platform engagement.
2. Overseas Filipino Workers (OFWs). There’s a significant group known as OFWs — migrant workers who leave the country to work abroad and support their families. In 2022, they contributed $36.14 billion in remittances, accounting for 9.1% of the country’s GDP. To stay connected with family, they commonly use WhatsApp and other messaging apps.
3. Close Family Ties. While migrant workers globally use apps like WhatsApp to connect with families, the strength of family bonds in the Philippines is exceptional. This country registers some of the lowest scores on Hofstede Insights' individualism scale, highlighting a prevalent collectivist culture where family ties are especially significant.
4. Digital Literacy. Access to the Internet isn't enough; knowing how to use it is crucial. The large business process outsourcing (BPO) industry in the Philippines, which employs 1.6 million people and contributes 7.5% to the GDP, ensures widespread digital literacy. Most BPO jobs are Internet-dependent, providing workers with both the skills and means to access the web in their leisure time.
5. Government Initiatives. The Philippines adopted a digital strategy in 2014, ahead of many regional neighbors like Indonesia and Thailand. The government continues to launch more digitalization initiatives.
With Internet penetration now crossing the 70% mark, we can expect both relative and absolute growth in digital consumption.