ITALY-USA ON THE RIGHT TRACK

Mau­r­izio Forte, Di­rec­tor of the ICE Agency in New York, con­firms a steady in­sti­tu­tional com­mit­ment to strengthen the suc­cess of Made in Italy in the States.

All About Italy (USA) - - Editorial - Franco Del Panta

The United States is the third-largest mar­ket for Ital­ian ex­ports, ab­sorb­ing more than 9% of our over­seas sales and of­fer­ing, un­like other geoe­co­nomic ar­eas, ex­cel­lent prospects for growth.

To sup­port Italy’s com­mer­cial op­por­tu­ni­ties, the Ital­ian gov­ern­ment, upon the ini­tia­tive of the Min­istry of Eco­nomic De­vel­op­ment, launched a Spe­cial Pro­mo­tion Plan in the USA. In­sti­gated at the end of 2014, this was the largest of its kind cre­ated abroad, with an al­lo­ca­tion of nearly 100 Euro mil­lion over the last three years. Ac­tiv­i­ties were en­trusted to the ICE Agency, which works in strict co­or­di­na­tion with all the sub­or­di­nates of the Ital­ian eco­nomic sys­tem. The agency’s New York of­fice op­er­ates un­der the di­rec­tion of Mau­r­izio Forte, who also co­or­di­nates ICE lo­ca­tions in Chicago, Los An­ge­les, Hous­ton and Mi­ami. He joined the US oper­a­tion in 2015 fol­low­ing stints in Shang­hai and Moscow. Two years into his stay, we met him to as­sess the on­go­ing ac­tiv­i­ties and point out the op­por­tu­ni­ties and chal­lenges fac­ing Ital­ian com­pa­nies. We start off with the de­ci­sively en­cour­ag­ing fig­ures to re­in­force Made in Italy in the USA, fo­cus­ing on the prover­bial love of the Amer­i­can peo­ple for Italy, but also op­ti­miz­ing the use of avail­able re­sources, en­hanc­ing com­munca­tion and tak­ing ad­van­tage of ever more new sales chan­nels.

You have been ICE di­rec­tor in the most prom­i­nent cities in global eco­nomic terms, Shang­hai, Moscow and now New York. How is Made in Italy per­ceived in th­ese three dif­fer­ent mar­kets?

New York, Shang­hai and Moscow have been three ex­tra­or­di­nary ex­pe­ri­ences in coun­tries of pri­mary im­por­tance to Italy. The com­mon point is that, with all their dif­fer­ent styles and at­ti­tudes, peo­ple in all three have a strong at­trac­tion to­wards our coun­try. Cer­tainly in terms of size, com­plex­ity and op­por­tu­nity, the most chal­leng­ing mar­ket is that of the United States. Here we must con­tinue to work hard to in­crease aware­ness of Ital­ian prod­ucts, which is not as wide­spread or as deep as we would like. China is a mar­ket that has grown a lot over the years, where Italy has par­tic­u­larly suc­ceeded in stress­ing the ex­cel­lence of its man­u­fac­tur­ing tech­nol­ogy that rep­re­sents about half of our ex­ports.

The course of our con­sumer goods, in fash­ion, fur­nish­ings and agri-food prod­ucts, is some­what more com­plex. There are dif­fer­ent rea­sons for this: in th­ese ar­eas above all, China is a strong pro­ducer and man­ages to cover a lot of do­mes­tic de­mand. Then, life­styles and tastes are dif­fer­ent and this af­fects the choice in food and fur­ni­ture for homes and of­fices, for ex­am­ple. Ul­ti­mately China has made in­cred­i­ble progress over

The US im­ports from Italy more than twice as much as China and Rus­sia com­bined, which is why this is the main tar­get mar­ket for the ICE Agency.

the course of three decades, dur­ing which it has got to know all the prod­ucts be­ing of­fered. So, in its haste, it has mainly gone for brand names, even they’re not unique, to cre­ate its own wish list. Many great Ital­ian brands, undis­puted lux­ury lead­ers, have taken great ad­van­tage of this con­sumer ori­en­ta­tion, but for so many small Ital­ian com­pa­nies, the chal­lenge is more com­plex. In any case, the op­por­tu­ni­ties are still enor­mous and our agency, as well as the United States, is strongly com­mit­ted to the pro­mo­tion of Made in Italy in China. Rus­sia is a sep­a­rate case: a coun­try that loves and is deeply fa­mil­iar with Italy, with much more de­vel­oped prod­uct cul­ture. Here we are able to con­vey the in­trin­sic qual­ity of Made in Italy, and so even smaller com­pa­nies, with prod­ucts that do not have big names be­hind them, are able to es­tab­lish them­selves. The fact re­mains, how­ever, that the US im­ports from Italy more than twice as much as China and Rus­sia com­bined, which is why this is the main tar­get mar­ket for the ICE Agency.

Look­ing at the re­cent de­vel­op­ments in the in­ter­na­tional mar­ket, what do you think are the most ef­fec­tive strate­gies to in­tro­duce, spread and sell Ital­ian prod­ucts in Amer­ica?

As I men­tioned, the United States is the third biggest mar­ket for Ital­ian ex­ports (the share in May 2017 was 9.2%), pre­ceded by Ger­many (13%) and France (10.6%). Op­por­tu­ni­ties arise from the pos­i­tive dy­nam­ics of our sales and from the propen­sity of the US to ab­sorb the full range of Made in Italy prod­ucts: 24% me­chan­i­cal, 20% chem­i­cal and semi-fin­ished prod­ucts, 16% fash­ion, 15% au­to­mo­tive, 9% agri­food prod­ucts and 6% home­ware.

To this we can add op­por­tu­ni­ties of fur­ther growth linked to high-spend­ing ca­pa­bil­ity and the lim­ited pen­e­tra­tion of our prod­ucts in the in­ner re­gions of the USA. This data re­quires us to present to our Amer­i­can cus­tomers a well-struc­tured im­age, up­dated as much as pos­si­ble for an Italy of the third mil­len­nium. In the fields of me­chan­ics, chem­i­cals and au­to­mo­tives (to­gether nearly 60% of our ex­ports), we must con­tinue to work to con­sol­i­date the per­cep­tion of Italy as a ma­jor coun­try of tech­nol­ogy, in the van­guard of ro­bot­ics and ad­vanced man­u­fac­tur­ing, above all work­ing with the uni­ver­sity sys­tem and re­search cen­ters, whether Ital­ian or Amer­i­can.

The fash­ion in­dus­try is un­der­go­ing mo­men­tous changes in its dis­tri­bu­tion sys­tem, and we are

The pur­pose is to de­fine not only pri­or­i­ties and strat­egy but also a sin­gle agenda that avoids over­lap­ping and ul­ti­mately guar­an­tees max­i­mum sup­port for our busi­nesses.

sup­port­ing it par­tic­u­larly thanks to agree­ments with lo­cal re­tail­ers (depart­ment stores, in­de­pen­dent shops and e-com­merce chan­nels). For agri-food prod­ucts, we have two pri­or­i­ties: to as­sert the au­then­tic­ity of Ital­ian food by bring­ing in the phe­nom­e­non of ‘Ital­ian Sound­ing’ and raise the po­si­tion of Ital­ian wine, of which we are the first sup­pli­ers to the States, but with av­er­age prices too low com­pared to the com­pe­ti­tion.

In both cases, we are aim­ing for more and more com­mu­ni­ca­tion in strong ad­ver­tis­ing cam­paigns through dig­i­tal me­dia (the last fea­tur­ing food ended in 2016 af­ter achiev­ing around a bil­lion im­pres­sions). For food as well as for fash­ion, we use the means of agree­ments with lo­cal re­tail­ers in var­i­ous chan­nels (large-scale trade, spe­cialty stores and e-com­merce). For home­ware (fur­ni­ture, tiles, mar­ble, light­ing, etc), we must al­ways em­pha­size not only the unique de­sign of our prod­ucts but also the high level of qual­ity, in­no­va­tion and sus­tain­abil­ity.

In this strat­egy our best al­lies are de­sign­ers, re­tail­ers and devel­op­ers who de­cide what to pro­pose to their cus­tomers. All this work is sub-di­vided into large, sec­to­rial Spe­cial Plans ded­i­cated to in­di­vid­ual mer­chan­dise di­vi­sions and de­vel­oped in close col­lab­o­ra­tion with Con­find­us­tria and with as­so­ci­a­tions of the ref­er­en­tial cat­e­gories.

As the agree­ment be­tween Ama­zon and Whole Food demon­strates, in­ter­na­tional re­tail­ing is be­com­ing more and more in­te­grated with on­line pur­chas­ing: how can this trend af­fect the ex­port of Made in Italy and con­sumer habits?

I have al­ready men­tioned the pro­found changes that the Amer­i­can sys­tem of dis­tri­bu­tion is go­ing through and which will in­evitably af­fect the rest of the world. Now the multi-chan­nel con­cept is fully op­er­a­tional in this mar­ket and the key play­ers who want to main­tain lead­er­ship for the fu­ture must be present, al­beit with dif­fer­ent com­bi­na­tions from prod­uct to prod­uct, on all plat­forms. In-store re­tail­ing for fash­ion is un­der huge pres­sure as on­line sales grow. In food, both chan­nels are healthy but some prod­ucts are bought in-store and oth­ers by smart­phone. Wine is mainly con­sumed in restau­rants but speaks for it­self on so­cial net­works. The ma­jor lever­age of suc­cess is the con­stant im­prove­ment in lo­gis­tics, cus­tomer-friendly ser­vice and the ag­gres­sive use of dig­i­tal mar­ket­ing that drives many on­line pur­chases. Italy, as pointed out in the re­cent sub­mis­sion of the 2016 Ex­ter­nal Trade Re­port, has to do more to strengthen its pres­ence on e-com­merce plat­forms.

This is also an im­per­a­tive for the ICE Agency, which is work­ing hard to con­clude or re­new agree­ments with play­ers in var­i­ous sec­tors, start­ing with the US.

One of the weak points of Made in Italy in the past was the lack of syn­ergy be­tween eco­nomic pro­mo­tion and the ac­tiv­i­ties of Ital­ian in­sti­tu­tions abroad. How has this re­la­tion­ship changed?

Our agency op­er­ates un­der the di­rec­tives of the Min­istry for Eco­nomic De­vel­op­ment, which in turn de­fines the pro­mo­tional strate­gies of Italy abroad in the gov­ern­ing body for Italy In­ter­na­tional chaired by the Min­is­ter for For­eign Af­fairs & In­ter­na­tional Co­op­er­a­tion and the Min­is­ter for Eco­nomic De­vel­op­ment. Abroad we work in close co­op­er­a­tion with em­bassies, con­sulates, cul­tural in­sti­tutes, cham­bers of com­merce and other Ital­ian in­sti­tu­tions: the pur­pose is to de­fine not only pri­or­i­ties and strat­egy but also a sin­gle agenda that avoids

over­lap­ping and ul­ti­mately guar­an­tees max­i­mum sup­port for our busi­nesses, the ac­tual end goal of our ev­ery­day work. This is a com­plex mech­a­nism, in­volv­ing many play­ers but in re­cent years has been driven with con­vic­tion on the part of the gov­ern­ment. Much re­mains to be done but over­all I think we’re on the right track.

How does ICE work to sup­port in­ter­ac­tion be­tween Ital­ian op­er­a­tors and US distrib­u­tors, es­pe­cially with re­gard to large-scale re­tail chan­nels?

Within the US Spe­cial Plan, par­tic­u­lar at­ten­tion and re­sources have been de­voted to agree­ments with US re­tail stores for fash­ion, jew­elry and agri-food (depart­ment stores, large-scale part­ners and e-com­merce chan­nels). The nov­elty is not in the means per se, al­ready in use for decades, but in the mag­ni­tude of the in­vest­ment, in the multi-an­nual con­ti­nu­ity of ac­tions and mech­a­nisms of ever more pre­cise and mea­sur­able agree­ments. The oper­a­tion is far from sim­ple: ne­go­ti­a­tion times are long, the mar­ket has its own rules (not al­ways easy to fol­low for our com­pa­nies) and part­ners are al­most al­ways large-scale ones. Just think that the last deal was con­cluded with Wal­mart, whose turnover is al­most a quar­ter of the Ital­ian GDP! How­ever, it is a great achieve­ment to have linked many Amer­i­can re­tail­ers to Italy, in­creased their at­ten­tion paid to au­then­tic prod­ucts and stim­u­lated the in­clu­sion of new sup­pli­ers, es­pe­cially SMES. Our com­pa­nies are the chief judge of the work we do but the num­bers we have achieved so far are en­cour­ag­ing: 39 pro­mo­tions, 2,255 Ital­ian com­pa­nies in­volved, 648 new sup­pli­ers placed on shelves and a pub­lic in­vest­ment mul­ti­plier of more than ten (for each euro in­vested in pro­mo­tion we have “re­turned” to our com­pa­nies over 10 Euro of ad­di­tional pur­chases of Made in Italy prod­ucts).

If Don­ald Trump’s pol­icy has reper­cus­sions on the eco­nomic flows be­tween Italy and the USA, it will only be vis­i­ble in the medium term. How do you judge the in­flu­ence of the pres­i­dent’s mea­sures on this is­sue so far?

The an­swer is not an easy one be­cause there are no re­li­able el­e­ments on which to base anal­y­sis and fore­casts. Cer­tainly Pres­i­dent Trump’s an­nounce­ments dur­ing the elec­tion cam­paign cre­ated great con­cern over trade but so far no ac­tual mea­sures have been taken on this is­sue. Un­doubt­edly, we no­tice a more ro­bust lan­guage and a tight­en­ing of im­port con­trols, but at the mo­ment noth­ing more. Ob­vi­ously we all keep the Ital­ian Em­bassy in Washington as our spear­head, on “sen­try duty”, and we con­stantly mon­i­tor how the sit­u­a­tion is evolv­ing, hop­ing that pro­tec­tion­ist mea­sures will not come. To date, the mes­sage we can give Ital­ian busi­nesses is to con­tinue to look to the USA with in­ter­est and con­fi­dence. I con­clude by point­ing out that the ICE Agency, not only in the States but all over the world, stands along­side our com­pa­nies with a re­newed and ex­panded range of cus­tom­ized as­sis­tance ser­vices and a rich pro­gram of pro­mo­tional ini­tia­tives.

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