Italy’s nimble and dynamic family businesses

For more than 100 years, Acetificio Andrea Milano — a Naples-based, family-owned vinegar-maker — grew its business by producing traditional red and white wine vinegars for a dynamic domestic market.

But, now, while still wholly owned and run by the founder’s descendants, the business is riding a new wave of rapid growth, fuelled by a push into the development of new products in high demand overseas.

“Our company is very flexible, and the family is always very proactive,” says marketing director Fabio Milano, 36, from the fifth generation of family members involved in running the company. “We don’t have the budget of big firms, but we always try to innovate in the market. Since we are still family-owned, we can decide easily which product we want to try.”

More than in many other large European economies, Italy is known for the small scale of its private enterprises, many of which are still family-owned. As of 2021, the average Italian business had just 40 staff, according to the national statistics agency.

The fragmentation of Italy’s private sector into a vast number of small and medium-sized enterprises is often viewed as a drag on the country’s economy, as many such businesses are unable to invest in modernisation or digitalisation. These are seen as factors that contribute to Italy’s chronically low productivity and weak productivity growth.

Yet Italy has plenty of dynamic small businesses, whose owners’ entrepreneurial spirit and nimble decision-making allow them to spot market opportunities and adapt to rapid policy changes — growing their revenues steadily in the long term.

Such qualities can be found both in businesses in traditional sectors, such as food, and in start-ups in newer industries, such as solar power, ecommerce and digital marketing. Dozens have made their way into the FT’s inaugural ranking of Europe’s Long-term Growth Champions.

Acetificio Andrea Milano, which bears the name of the founder’s son, began in 1889 as one of about 100 small-scale vinegar makers in the Naples area, at a time when vinegar was used not just as a condiment but as a medicine and household cleaner.

During Italy’s postwar economic boom, the business built its first modern factory — one of a series of steps that increased the scale of its operations, including a push, in the 1990s, to export to international markets. But growth over the past decade has come courtesy of a novel product: apple cider vinegar, something little used in Italy but whose consumption in the US and elsewhere has surged, especially since the Covid pandemic, spurred by social media influencers touting its health benefits.

Observing this trend, the family decided to experiment. “It started like a joke: ‘Let’s see what we can do’,” says Milano, who runs the company with his father, uncle and brother. “We didn’t expect this success.”

From an initial batch of 30,000 litres around 10 years ago, the business now produces several million litres of apple cider vinegar a year, nearly all for export. The product accounts for 35 per cent of revenues, which have quadrupled from €5.4mn in 2013 to €21.6mn in 2023, and are projected to come in at €31mn in 2024. In three years, the company — 70 per cent of whose revenues now come from exports — aims to hit annual revenues of €50mn.

“This is one of the keys to success for Italian companies — they are still family businesses and can innovate easily,” says Milano. “When the family is involved, it’s easy to launch new products.”

Also born out of a traditional family business is Giglio.com, an online luxury retailer founded by the scion of a Palermo-based family that had a chain of stores, selling textiles then ready to wear clothes, since the 1950s. Giglio.com was initially set up as a in 1996 website to promote the family’s physical stores, but Giuseppe Giglio, then in his late 20s, soon realised that ecommerce could serve a global demand for luxury goods.

Today, Giglio.com, a separate corporate entity, is a full-fledged ecommerce company that serves as a platform for more than 200 luxury retailers and brands, and revenues have risen from just over €800,000 in 2013 to €56mn last year.

Many Italian companies that have logged robust growth in recent years are in the construction sector, revved up by the Superbonus, a government scheme that offered homeowners tax credits of 110 per cent for energy-efficient improvements. However, it blew a big hole in the public finances and is being wound down.

In other, newer growth areas, such as green technologies, entrepreneurs sense plenty of opportunity. SunCity is a small, Pescara-based solar power company founded in 2012 by four friends with renewable energy experience. It has experimented with a variety of business models to promote solar power installations, including one where it bears the upfront costs for installing solar panels for small businesses, and then charges them for the power consumed. Its ability to adapt quickly to changes in the business and policy environment has helped revenues grow from €260,000 in 2013 to €23.8mn last year.

“We have been in continuous start-up mode since 2012,” says co-founder Pietro Pitingolo. “The Italian market is a continuously changing scenario, and you need to pivot very quickly. We maintain a capacity to change and keep up with the market evolution.”

Giugliemo Giordano, founder of veterinary pathology laboratory MyLav, is another entrepreneur whose business has flourished in tandem with social changes — particularly the relationship between Italians and their pets. MyLav, which provides diagnostic testing for vets, began in 2009 as an arm of Giordano’s father’s human pathology laboratory.

His father initially thought the idea was “crazy”. But the privately held business now has 120 staff, many in a new high-tech lab in Milan, and earned revenues of €14mn last year from clients across Italy and, increasingly, other parts of Europe.

“Pet care has grown so much in 20 years because the mentality of the people is changing,” Giordano says. “Now, the animal is part of the family, like a son. They are a centre of affection . . . so pet owners spend a very high rate of money to care for them.” He says that, because MyLav is still a family-held company, he has the freedom to follow his instincts on company strategy.

But many small Italian businesses also recognise that moving to the next level of growth can require a leap in terms of raising outside capital and company structures.

When Giglio.com expanded to become an international ecommerce business, the family raised capital from external investors. In 2021, they listed the company in Milan and brought in outside expertise.

“Not many families would have the mindset of going public and losing ownership,” says Vincent Troia, a luxury ecommerce veteran who was appointed managing director in 2021. “But this family is really looking forward: they know the importance of competing in a very challenging market and that they need to get investment to grow.”

Acetificio Andrea Milano’s owning family is also considering whether to bring in outside investors and strengthen its internal structures. “When you grow 50 per cent a year on revenues,” says Milano, “you have to make all the organisation ready to support growth both in terms of the internal organisation and financially.”