It is one of the traditional and most durable branches of the Greek economy the flour industry, a fact due to the relatively inelastic demand for flour products (bread and bakery items).

In 2023 according to the results of a sectoral study by ICAP CRIF, the total consumption of flour followed a slight upward trend. An important role in this assessment was played by the increased tourist arrivals in our country and therefore the strengthening of demand from the professional channel (HoReCa), as noted by Stamatina Panteleou, director of economic & sectoral studies of ICAP CRIF. However, the rate of increase was affected by many factors, including geopolitical developments (Russia-Ukraine war conflict). For the two years 2024-2025 it is predicted that the situation will have normalized and consumption is expected to grow at a slightly higher rate (average annual rate of about 2%).

The domestic production of wheat flour shows long-term, small annual fluctuations. In the two years 2018-2019, production grew at an average annual rate of 4%, but this upward trend was interrupted in 2020, due to the Covid-19 pandemic that hit the global market. Domestic production recorded a negative rate of change, as it contracted by 6%, with the market for the professional products of flour mills being more strongly affected. 2021 got off to a rough start, after the first 5 months or so the catering, which is one of the main distribution channels of the sector (restaurants, hotels, catering), operated with strict measures due to the health crisis. However, domestic production rose by 3% compared to 2020. In 2022 the sector’s production continued to increasei, but at a slower pace. In particular, the volume of production is estimated to have increased by 2%.

Imports are at low levels

Domestic production essentially covers demand, as imports fluctuate at low levels, and import penetration has hovered around 3% in recent years. The sector’s exports are also at low levels with the export performance being around 4% in the last five years. It is noted that the war between Ukraine and Russia, two of the world’s largest wheat producers, has driven wheat prices to very high levels. Several of the Greek flour mills were affected to some extent, as they imported quantities of raw material (wheat) from these countries. So they turned to new, more expensive suppliers. High energy costs played an important role in the formation of production costs, as well as increases in transportation costs that began to be observed as early as 2021.

In 2020 domestic consumption is estimated to have decreased by 6% compared to the previous year. This reduction is due to the special conditions created due to the pandemic (Covid-19). The suspension of catering operations (lockdown periods) significantly affected the industry as it is a key distribution channel for products. A large decrease, in relation to the previous year, was observed in the professional products of the flour industry, aimed at artisan bakery and confectionery, while a significant increase was observed in consumer products (for home use). It is pointed out that the professional sector covers most of the flour demand. In 2021 with the gradual normalization of market conditions, domestic flour consumption increased by 2%. The upward trend of the market continued in 2022, with the size of consumption estimated to have recorded an increase of 4% compared to 2021, while in 2023 it is estimated to have increased by 1% (2023/2022).

As far as semolina is concerned, the largest volume of the produced amount is absorbed by the pasta industries, while a smaller amount is directed to other food industries. In 2022, domestic consumption is estimated to have registered a significant increase of 15% compared to the previous year, while in 2023 the rise is estimated to have continued, but at a slower pace, at 3%.

In 2020 semolina production showed a 7% increase. Although the main distribution channel for pasta is the catering, which operated under very strict conditions or not at all during some months of the year, the demand for pasta for home use increased dramatically. In 2021 with the gradual return to normality, semolina production increased by around 2%, while in 2022 production is estimated to have shown a significant increase of 15% compared to 2021.

The financial figures of the sector have improved

According to estimates, the size of the wheat flour market in terms of value (at wholesale prices), recorded a significant increase in 2022 compared to 2021. This increase is primarily a result of the increase in the selling prices of the products. Market factors point out that the rise in prices had a decisive role in shaping the course of the sector in 2022. The large increase shown by several flour mills in their turnover is mainly due to price increases, while sales in volume were at the same levels as in 2021, or showed a small increase.

In the context of the study, a financial analysis of the companies in the sector was carried out based on selected indicators. A consolidated balance sheet was also drawn up, based on a representative sample of 23 companies in the sector, for the period 2018-2022. From the analysis of the consolidated balance sheet, the following emerges: Total assets increased throughout the five years under review, showing the largest increase in 2021 (+9.6%). In 2022, the increase was 8.0%, while the cumulative increase was 22.5% (2022/2018). Equity increased by 3.4% in 2022, while the cumulative increase over the five years under review was 5.9%.

Medium-term liabilities and provisions showed a significant increase of 51.4% in 2022/18, while short-term liabilities also increased significantly by 33.0% over the same period. The total turnover of the companies in the sample followed an upward trend in the period under review with the exception of 2020 where it decreased by 4.3%. 2022 saw the highest five-year increase as turnover increased by 41.6% while cumulatively recording a 67.3% increase (2022/18). Gross profits recorded approximately the same increase in 2022 (41.7%), while cumulatively between 2022-2018 they increased by 26.6%. Net (pre-tax) profits, after successive declines in the two years 2020-2021, showed a spectacular rise in 2022 as they more than tripled, while the cumulative increase in the five years was 44.6%. Also EBITDA increased significantly in 2022 (58.6%) but at a much milder rate compared to net profits. Of the 23 businesses in the sample, 21 (91.3%) were profitable in 2022 versus 19 in 2021 (82.6%).