US retailer Walmart and the Italian Trade Agency said on Monday they agreed to develop a Walmart brand for a line of imported Italian food products, as part of a broader accord between the biggest US retailer and Italy’s trade promotion agency to boost sales of Italian food and wines.
Walmart will increase its purchases of Italian food products by 16% per year, it said.
The Italian Trade Agency has focused in recent years on boosting Italian food exports to the United States and cutting down on misleading “Italian sounding” food products that are not made in Italy.
Italian food makers are losing billions of euros in possible business each year because of “Italian sounding” products on sale in the US that cost less than the authentic originals.
A study carried out last year by Assocamere Estero in New York, Chicago, Houston, Los Angeles, and Miami showed that authentic diary products in Chicago, for example, were hard to come by, and the local imitations cost up to 50% less. Elsewhere, in some retail chains, the “Italian sounding” Provolone is discounted by 75%, and in Los Angeles, domestic Fontina and Pecorino cheeses lost up to 80% less. The price reductions for dry pasta, compared to Italian brands, vary from 22% to 54%, with invented names and graphics that recall the Italian flag or places in Italy.
“This agreement will help companies that by themselves would have found it very hard to get access to the American market with retailers such as Walmart,” said ITA President Michele Scannavini. “It’s the small- and medium-sized companies that make products that can’t be found anywhere else. We found Walmart to be enthusiastic in support of that goal, because that’s what they are looking for.”
Italian food and wine exports to the US rose 4% in 2016 to €4.6 billion, with ice cream growing 34.5%. Olive oil and wine exports both rose 6.6%. But those figures are dwarfed by “Italian sounding” products, which had a turnover of €24 billion in North and Central America.
The agreement was signed in Milan by Scannavini and Walmart Vice President of Dry Grocery Silvia Kawas. ITA will organize buying trips to Italy for Walmart executives to scout for new products to sell on the shelves of its 3,600 stores across the US. The logo “Extraordinary Italian Taste” will be used to designate Italian products on Walmart’s marketing material (labels, brochures and advertising).
ITA, one of the Economic Development Ministry's operational arms, has been targeting the US market for the past two years, with a budget of €103 million for North America.
As a result in total, at the start of this year, 196 Italian companies (+56%) were suppliers for large-scale American retailers, and 818 new products (+38%) can now be reliably found on the shelves at major American supermarket chains. These products have been selected on the basis of several purchasing missions in Italy.
In 2016, deals were signed with important supermarket chains throughout the US: namely HEB, Mariano's, Wakefern, and Price Chopper, all of whom are among the top 20 food retailers in the United States.
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