IT TAKES two days to make panettone, the fluffy, dome-shaped cake speckled with candied fruit that Italians devour at this time of year, explains Gianluca Corsini, the quality manager at Corsini Biscotti. Founded in 1921 in the Tuscan village of Castel del Piano, the family baking business has annual revenues of €14m ($17m), no debt and is growing.

That is despite Italy’s prolonged downturn, in which the domestic market has shrivelled as unemployment has reached record highs. The average family’s monthly shopping bill fell by €129 to €2,359 between 2011 and 2013. The smaller, often family-owned manufacturers that are the backbone of the Italian economy have been hit especially hard: between 2008 and the first half of 2014, a fifth of them went bankrupt or into administration, or were voluntarily wound up.

One of the main reasons so many have gone to the wall is that they are too focused on the home market. Italian businesses of all sizes are much less likely to have export customers than German or Spanish ones, according to a recent study by SACE, Italy’s official export-credit agency (see chart). Italian cuisine is popular all over the world, but Italy’s countless small food producers get only a morsel of this huge global market: exports account for a smaller share of the Italian food industry’s output than in either France or Germany.

The small food producers that have survived the long downturn are often those, like Corsini, that already had a presence in foreign markets and made strenuous efforts to export more. Taking an adventurous step for a firm of its size, Corsini hired a sales manager in London to develop the British market, where its products were already sold in Sainsbury’s supermarkets. It has paid off: they are now in Harrods, Selfridges and Lakeland stores, and Britain now provides a quarter of Corsini’s sales. Western Europe’s other big economies have a more consolidated grocery business, and each has at least one giant supermarket chain with extensive branch networks outside its home country, such as Tesco (Britain), Aldi (Germany), Carrefour (France) and Dia (Spain). Small food producers complain that such giants drive a ruthlessly hard bargain, but their scale and reach mean that the manufacturers have to deal with only a limited number of big customers, and those retailers often do the exporting for them, stocking their products in foreign branches. Italy, in contrast, does not have a globalised food retailer on the same scale, and its domestic market is fragmented: even those chains with national coverage often stock different products in different regions, chosen by different local purchasing managers. Eataly, a fast-growing international chain of delicatessens, is bringing Italian-made foods to a wider global audience; but so far it is relatively small. For Italian food producers, getting into the biggest European supermarket chains is now even harder than it was before the euro-area downturn. Deep discounters like Aldi and Lidl, which offer only a restricted range of products, most of them under their own labels, have been taking market share from conventional grocers which sell a broader range, including many products bearing their manufacturers’ brands. Corsini has rationalised its range, so that it does not have to support too many product lines. It provides some products for supermarkets to put their own labels on—a low-margin business, but often a stepping stone to selling branded goods to the same retailer.

Corsini has also adapted its traditional recipes to please big foreign customers. It makes an orange and cranberry panettone which Sainsbury’s sells under its own label, and unusually large cantuccini, traditional Tuscan almond-packed biscuits, for Starbucks—unimaginable in Italy but perfect for the American coffee chain’s oversized cups. Some other Italian food firms are doing the same: Barilla, a larger company best known for its pasta, has just launched ready-made dishes modified for the Chinese market, where appetite for Italian fare is growing. Italy’s wine exports have risen 42% since 2008, to €3 billion, thanks in part to the growing popularity of its sparkling prosecco. In volume terms, this now outsells France’s champagne worldwide.

Rete d’impresa, or company networks, are helping small firms reach new customers, by letting them pool resources on such things as market research, training and purchasing. Italy has a long tradition of informal co-operation among clusters of companies operating in the same industry, but a law introduced in 2009 has made it easier to formalise this by contract. Since then, according to a study by Intesa Sanpaolo, a bank, firms which have entered into such agreements have outperformed those which have not, on a number of measures. Nearly a quarter of microfirms (those with revenues of under €2m) which are part of a rete are exporters, compared with just 12% of those which are not.

As smallish food producers seek new markets beyond Italy’s shores, foreign investors have begun to realise their potential. Bright Food, a Chinese state firm which controls Weetabix of Britain, recently bought a controlling stake in Salov, maker of the Sagra and Filippo Berio brands of olive oil. Earlier in 2014 Ebro, a Spanish food company, bought 52% of Pastificio Lucio Garofalo, a pasta-maker. Idea Capital, an Italian private-equity firm, has launched a “Taste of Italy” fund, which it says is attracting American and European investors. More such deals are likely. Over four-fifths of Italian food manufacturers are family-run and with annual revenues of less than €10m. With their home market still struggling, a rich foreign backer may be just what they need.