With over 50 euros of GDP per capita, but above all with around 37 euros of disposable income per consumer, the United States is the advanced market with the greatest purchasing power. As well as the largest, considering the resident population of over 320 million people and the middle class of over 220 million. Americans love beautiful things from Italy, beautiful and well made (BBF) products that are able to embed and convey what they most seek from the Bel Paese: culture.
From the data processed for the latest report Exporting la dolce vita (EDV) it emerges that in the USA the cumulative growth between 28 and 2016 of BBF imports from Italy will be at least 2022%. reaching almost 13 billion in 2022 (2,8 billion more over the next six years), confirming itself as the leading market for Italian BBF. This forecast only represents the prudential scenario of maintaining market shares. With the increase in quotas, potential imports from Italy could reach up to 20 billion.
Between 2011 and 2015, Italian BBF products have already conquered a larger share of American imports in most of the sectors analyzed (in particular: food, clothing and home textiles, footwear and eyewear) or, in any case, have allowed the Italy to remain the first exporter from the European Union to the USA (in furniture and gold and jewellery). However, Italy's positioning in the US is still below potential and, therefore, growth in the 50 US states represents a great opportunity for Italian BBF companies.
United States: 50 markets with a potential of 2022 to 13 billion euros by 20
In 2022, the 50 federated states overall will continue to represent the first market for BBF made in Italy products. What makes them particularly attractive is the American consumer's predisposition to quality purchases, deriving from average wealth
particularly high. However, the Italian market share for all BBF products in the USA is three percentage points below the average share held by Italy in all advanced countries, showing a position below potential.
From the data processed for the latest EDV report it emerges that BBF imports from Italy will reach around 2022 billion euros in 13, 2,8 billion more than the 9,8 billion in 2016); a sum estimated in a first 'prudent' scenario, with constant market shares for Italy (Figure A). In a second 'courageous' scenario, in which it is assumed that the Italian BBF, at least in the main federated states, manages to erode shares from the more virtuous competitors, we arrive at over 5 billion more than in 2016 (resulting from a growth margin additional potential of 980 million euros for clothing and home textiles BBF, 366 million for gold and jewelery BBF, 545 million for food BBF, 150 million for footwear BBF, 133 million for eyewear BBF, 129 million for BBF furnishings, Figure B).
This scenario is made very credible by the performance over the last five years and by having chosen only countries similar to Italy from among the benchmark competitors, in terms of positioning or cost structure. Finally, in an 'ideal' scenario, in which it is assumed that it will be able to reach the same average market share in the USA that Italian BBF has in advanced markets (i.e. 8,1% from 5,2%), the potential of growth compared to 2016 reaches almost 10 billion euros, bringing the BBF 2022 import of the USA up to 20 billion euros.
These numbers give the measure of the concrete advantages that companies and the country system can achieve by working together for the success of the Italian BBF. It is a fact that in general, among the over 200 Italian exporters (industry and services), less than 40 sell to the United States; also due to objective factors, first of all the more than 7 thousand kilometers that separate Italy from the American east coast. In particular, however, the lower knowledge of the market, the worse accessibility, due to different and more rigid standards and regulations than the EU ones, and the relatively small size of the majority of the companies contribute to limiting the positioning of the Italian BBF below the potential Italian companies that have the USA as their first outlet market.
The federated states with the greatest opportunities for the BBF sectors
In 2015, Italian market shares in New York and New Jersey exceeded double digits and were at significant levels in Florida and Massachusetts, in both cases above 5%. Italy, in general, has a fair positioning in states where there are large cities. In Delaware, Maryland and Virginia (the states around Washington DC) the Italian share is respectively 8,9%, 4,3% and 4,1%. Adequate supervision of traditional distribution channels, the correct positioning of products, the exploitation of e-commerce and the Italian brand and greater synergies between the BBF sectors and the tourism sector are the main ways to strengthen the Italian presence in the USA. Another lever on which to act is the detailed knowledge of the American federated states, which have a different potential to generate opportunities for the various products of the Italian BBF.
According to what is estimated in the EDV report for imports from Italy, the area around New York (the sum of flows directed towards the same state and New Jersey) will acquire 2022 billion euros in 6,7, a value similar to the current imports of BBF from Italy by the United Kingdom (Figure C). At least 1,5 billion of higher imports are expected for this area in the next six years. A potential that could expand by a good measure if Italy were able to erode market shares to the best performers or to keep the p
primacy where it itself had the best performance. For example, apparel BBF could expand potential by around 650 million if it could repeat the same performance seen in the last five years in this area, food BBF by around 220 million if it equaled Spain's result in New Jersey and continue to be the best performer in New York.
In 2022 for California, the potential imports from Italy will reach at least 1,5 billion euros, a value similar in terms of magnitude to that exported by BBF companies to Belgium. The ranking of the federated states importing BBF from Italy continues with Florida and Georgia, estimated to settle on an import value of 680 and 550 million euros respectively in 2022. These states (together with New Jersey itself, but also North Carolina or state of Washington) are not only markets, but also important logistic and commercial platforms for attacking other territories.
Emblematic of a potential that has not yet been fully exploited is the positioning of the Italian BBF in Texas, whose share, although growing, is still less than 3%. Texas, which has a population of over 27 million inhabitants with a disposable income exceeding 37.000 euros, will import 2022 million euros from Italy in 438, a value similar in terms of magnitude to the amount exported by Italian BBF companies to the Portugal, which however has a population of only 10 million people with a per capita disposable income of 17.000 euros. If Italy managed to erode market shares from its closest competitors, it could recover this undersizing. For example, in the EDV report it is calculated that both BBF food and BBF gold-jewelry could expand their potential by 100 million respectively if they managed to emulate the performance achieved in the last five years by France, the best performer in Texas in both sectors.
The leadership of pleasure boating in the USA Italian boats, in addition to presenting the typical characteristics of the BBF4, play a key role because they carry other BBF products internally and therefore are real mobile showcases for exporting the sweet life. The case of pleasure boating in the USA represents a useful example of overcoming the obstacles due to 'regulatory divergence'. In fact, at a regulatory level in the USA there are numerous differences in standards for the construction of pleasure boats compared to EU rules, in particular as regards safety regulations, approval systems and gaseous emission limits (moreover very stringent in some States). Technical specifications (such as the different voltage of the electrical systems) require further adjustments of the product to the overseas market.
Despite this, in 2015 Italy won the largest market share in the USA (23,2%) ahead of Canada (12,8%), France (11,3%) and Mexico (10,8%) . The main ports of docking for Made in Italy yachting are Florida and New York (in both states Italy conquers the largest shares, respectively 33,5% and 55,6%); but Italy is also present with significant shares in Rhode Island (12,1%), Tennessee (6,6%), New Jersey (2,6%) and California (2,2%). Ample margins for further penetration of the Italian nautical sector remain in Texas and Washington, manned mainly by Mexican, Chinese and Canadian producers. The CSC and Prometeia estimate that if the Italian nautical industry managed to preside over the states where it is weaker as Canadian companies manage to do, it would have a growth potential of 560 million euros, equal to +7,6% of the export to the USA.
The risks for the BBF in the case of neo-protectionism
However, the specter of neo-protectionism hangs over the good prospects of the BBF in the USA. If implemented, it could condition the medium-term scenarios for American imports, nullifying part of the benefits envisaged for the BBF. The prudent scenario, adopted in the EDV report as a base scenario, incorporates a worsening of access conditions but not actual wars
commercial. Well before the Trump Presidency, the crisis has in fact formed a watershed between the processes of liberalization and creeping protectionism.
As far as the United States is concerned, there will certainly be no shortage of strong declarations or isolated cases of tension. The basic idea, however, is that these will not be followed by real revolutions in American trade policy, at least as regards Italian companies and more traditional and measurable instruments, such as tariffs. The BBF companies will probably have to deal with more subtle increases (further certifications, lengthening of times, new bureaucratic steps), which do not change the orders of magnitude of the demand for goods imported from abroad, but can make the activity of objectively more complex export and indirectly encourage a direct presence on the American territory.
However, it is useful to quantify the cost for Italy of a shock scenario in which it is assumed that customs tariffs return to the conditions prior to the liberalizations of the 1,9s, a useful benchmark for having an order of magnitude of the risks for BBF companies (Figure D). Using an econometric model, the relationship that exists, in each sector, between the level of duties to access the US market and the exports of its trading partners was estimated. For Italy in the BBF sectors, the reaction coefficients (which estimate how much Italian exports drop in percentage following a one-point increase in duties) range between 4,1% for jewelery and XNUMX% % of eyewear. It should be noted that the estimated variations for Italy are on average lower than those of the competitors' average and those of China (the first emerging competitor on the US market).
In this differential there is the strength of the national BBF, for which the price is less relevant in determining a demand looking more for quality than savings. Assuming that the average duties paid by Italian companies return to 1989 levels, US imports from Italy in 2022 would be 1,4 billion lower than in the baseline scenario (11,6 instead of 13 billion in 2022) .
