Sourcing Authentic Italian Private Label is Getting Easier

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October 14, 2010

Without question, U.S. consumers are in love with Italian food. In fact, most are willing to pay more for authentic Italian products made in Italy.

Then why is it that most U.S. grocery stores have not yet capitalized on this important and growing customer base with private label offerings? Why are they letting these valuable customers drift to specialty stores and ethnic markets to find authentic Italian products?

The single greatest reason cited by retailers for not developing more authentic Italian store brands is that managing the supply chain is “simply too much work,” the Italian Trade Commission (ITC) discovered during trade missions it hosted this past summer.

ITC is currently developing a pilot program to resolve many of the logistics, administrative and cost obstacles that have challenged retailers in the past.

“Input from U.S. delegates on a recent trade mission confirmed our conclusions from a comprehensive assessment we conducted last year,” said Pasquale Bova, Italian Trade Commissioner in Chicago. “Finding world-class products in Italy is the easy part — making the supply chain simpler and more efficient is the real key to success.”

For more on the Italian Trade Commission’s pilot program click here.

ITC explored the opportunity of authentic Italian private label products in a comprehensive market assessment it commissioned last year. The research findings among 524 shoppers across the U.S. was convincing:

• 89 percent of respondents like Italian food very much, with 59 percent saying it is “one of my favorites” and another 30 percent saying they “like it a lot.”
• Nearly half of shoppers (47 percent) said they wished their stores carried more authentic Italian products. 
• 70 percent believe it is worth paying more for authentic food products made in Italy.

In fact, nearly two-thirds said they were willing to pay an additional 25 percent more for authentic Italian products, which means retailers can command higher prices and profits for these items versus “commodity brands” or traditional domestic Italian private label offerings, according to the research.

Interest in authentic Italian food products is being fueled by the increasing popularity of food-focused television shows such as Top Chef, programs on the Food Channel, and other food events appealing to the growing legions of “foodies” who have developed an affinity for high recognition celebrity chefs, a great many of whom are Italian, such as  Mario Batali, Giada de Laurentiis, Rachel Ray, Rocco DiSpirito, Michael Chiarello and Fabio Viviani.

Despite recent economic conditions, many households now view purchasing authentic products as a reasonably inexpensive simple pleasure in lieu of activities such as dining out. The growing interest in recreational cooking is bringing customers to the store looking for those authentic products with which they can recreate the dishes they see on TV or have tried in restaurants.
There are some private label successes in the market such as Wegman’s Italian Classics, A&P’s Via Roma, Harris-Teeter’s HT Traders Authentic Italian and Target’s new line of premium Italian products featuring Giada de Laurentiis. But that doesn’t mean success creating these points of difference have been easy.

It is ITC’s mission through its new program to make procuring authentic Italian products much simpler. “It is important to recognize that there is no one-size-fits-all approach to solving this issue,” said Patrick Capriati, Senior Marketing Promotion Officer for the Italian Trade Commission Chicago Office. “Each retailer will have its own unique needs.”

For more on ITC’s pilot program to simplify authentic Italian food procurement, click here.

Read These Related Articles:

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• Italian Trade Missions Showcase Authentic Italian Products Opportunity
• Research Reveals Untapped Profits in Authentic Italian Store Brands
• Kmart's CMO is High on Private Label and Social Media
• Walmart Seeks to Cut Costs Through Joint Manufacturer Purchasing Agreements

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