Italian Dairy Enterprises : Industry, Markets and Business Organisation (19th-20th Centuries)

Italian dairy production has long been a marginal agricultural activity. Nevertheless, in the last few decades of the 19th century a significant change occurred, as the demand for Italian dairy products from domestic and international markets continuously increased (particularly in England, France and in the Americas, as a consequence of mass intercontinental migration). New scientific knowledge, machinery, technological processes, and preservation and transport systems allowed the production and the exportation of a growing amount of cheese. From 1894 exports of Italian cheese surpassed imports. In 1893-1900 Italy’s average annual export was 9,700 metric tonnes, while from 1901-1904 it increased to 13,200 tonnes. In 1910 exports reached 20,000 tonnes. Northern Italy, along the lower Po Valley, had a long tradition of dairy production, part of which was already being exported to international markets. In the 19th century, Lombardy confirmed itself as Italy’s largest producer of cheese (22,000 metric tonnes out of a total of 73,300 tonnes in 1894) and accounted for 1/3 of all cheese exports (especially grana and gorgonzola). Most of the dairy production was localised in the lower plain (in the area of Milan, Lodi and Pavia) which from the early modern age was characterised by an advanced agricultural system widely acknowledged as one of the most progressive in the European context, where large plots of land were rented out to agrarian entrepreneurs and used for cereals and grass cultivation, cattle breeding and milk-cheese production. The last part of the century also saw the transformation of former small family businesses into larger enterprises and industries, which controlled the purchase of milk and cheese from the farms of the plain, founded new plants, provided the aging process for cheese and sold the produce on domestic and international markets. The advent of new manufacture systems allowed for the pooling of large quantities of milk: large scale mechanised cheese production became possible. Names such as Locatelli, Galbani, Invernizzi (all from Valsassina, the high hills near Lake Como, which specialised in aging cheese) or Polenghi Lombardo (from the Lodi area) are some of the most important enterprises which emerged during this period, whose brands have lasted until today. In 1950 these companies employed nearly 40% of all the workers in the dairy industry. The paper will first focus on the origin of the family firms, particularly Locatelli, Galbani and Invernizzi, examining their relationships and the leading role they played in the collection, aging and trade of cheese; the article will then outline the growth strategies which they pursued and their financing systems (credit, banks). Finally, the paper will discuss the organisation of production and trade, focusing on innovation (scientific and technological) and on the development of commercial relations and new markets, which seem to have been particularly important in promoting the growth of production.