The prosciuotto cluster of San Daniele
by Szabó Balázs
The prosciutto of San Daniele is a world famous ham which is made only by a few town. The business model of this region is based on the experience of decades and the cooperation of local manufacturers.The success roots from the unique production process and the special two-tier cluster system of San Daniele makes the brand even more valuable.
Perhaps most of us have seen the name of „prosciutto di San Daniele” on the European restaurants’ menus. The famous Italian ham is usually served with melon or sometimes with fig. The production of this unique, delicious food is based on the special knowledge accumulated over generations in the territory of San Daniele. The cool air coming from the hills mixed with the salty air of the seaside makes the territory quite suitable for the production of this ham. The first written proof of the high quality production dates back to the 18th century. Nowadays the production is organised by a consortium utilizing the special environmental conditions. Since this business model is very successful, we can draw some conclusions: some small towns, with a high-quality product can remain profitable on this highly competitive market dominated by big companies.
The strict rules applied to the breeders, slaughterhouses and food companies are the basic conditions for the production of this fine product. The pigs can be bred only in the 10 determined regions around San Daniele, and their feeding is highly regulated. The pigs are slaughtered when they reach the weight of 160 kilograms. After the slaughter the meat is cooled down in order to get a steady temperature and humidity. The next processes are the removing of the bones, extruding and salting. The 4-5 month old hams are stored for maturation for 9 months. After having completed the process which takes at least 13 months, if the producers find everything in order, e.g. the size, weight and colour, the ham can get the San Daniele brand name.
This complex and precise process and the special environmental conditions are the basis of the San Daniele ham’s competitiveness. The ham producing business model is based on the cooperation of local manufacturers. The present cluster organization’s predecessor was founded in 1961. Nowadays the cluster consists of 31 ham manufacturers which have business relationships with more than 100 slaughterhouses and 4500 pig farms. The 31 manufacturers produce 2,7 million pieces of hams every year, one fifth of them for exports. The revenue generated from these hams was EUR 335 million in 2010.
The speciality of this business model is the two- tier cooperation among local companies. On one hand there is cooperation within San Daniele ham consortium to produce quality hams while on the other hand there is Agro-food Park, which has the main goal to protect the natural environmental resources. It means that the companies within the territory are responsible not only for the mutual innovation, marketing and brand equity development, for the protection of the environment as well, and they emphasize this role very actively.
Agro-food Park is situated in province Udine, covering the villages and towns in the Friuli-Venezia Giulia area. The park stretches over 168 km2 and has 2500 inhabitants. Agro-food’s objective is to preserve the natural treasure and traditions of the region. It wishes to develop such a sustainable business strategy that will make the region well known in the world. The combination of sun, river, air and mountain on the logo of the park serves this objective. The park’s operations is based on the consortium of more than 100 businesses, which employs 1,000 people and gives a job to 700 more people through sub-contractors. These companies do business in different fields of food industry. The most important food productions comprise dry-cured ham, beef, cured pork products; sweet and savoury bakery goods; diary products; fish and smoked trout; organic products; wine and spirits.
The park assigned an annual budget of EUR 1 million to develop marketing, innovation, international trade and environment protection strategies. However the park may face difficulties to finance these projects as major part of the money has been provided by regional development funds. This shortage in financing will probably be covered by local private businesses.
The second tier of the business strategy is the Prosciuotto di San Daniele consortium, the partnership of ham makers that is integral part of Agro-food. The consortium focuses its effort on quality assurance and marketing. Certain companies outsourced almost all the marketing activities to the consortium, having provided EUR 20 million to manage joint promotional and marketing activities in 1988 - 2010. The ham with the San Daniele logo guarantees the quality of the ham in domestic or foreign markets. This premium market position is further strengthened by the ham from San Daniele having the PDO (Protected Designation of Origin) certificate that guarantees the region of origin of the pigs, quality of the ham manufacturing and maturation processes.
The speciality of San Daniele cluster is visible. The 31 profit-oriented companies that compete with each other are able to manage some key business activities jointly. The possibility for them to cooperate is provided by their mutual traditions and technologies. Both the Agro-food Park and the consortium are vital that a small, apparently unremarkable town can be a match for either multinational companies that produce lower quality ham or prosciutto from Parma region of equally high quality.