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.
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.