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Italian Romance: U.S. Company Wins Consumers Worldwide
By Jill Lee
Harry Lucheta had a good business in San Francisco in the 1970s. His fruit, nut and spice syrups were a local hit. They were made from recipes his father-in-law, Rinaldo Torre, brought to the United States in 1925 from Lucca, Italy.
But this quiet, niche market was about to be turbocharged--by a dose of caffeine. Twenty years later, these syrups would go international.
Brandy Brandenberger, formerly of General Foods, couldn’t help noticing the elegant glass Torani bottles in a café in North Beach in San Francisco and thought the flavors would be good in espresso-based beverages. As it turned out, consumers throughout the United States agreed.
Now Torani syrups are enjoying a return engagement in Europe–via the United Kingdom–and Harry’s son Paul Lucheta oversees international markets.
"The espresso application changed the syrup category," said Lucheta. "For many years our company was selling Torani syrups almost exclusively to the Italian community for Italian sodas. Now the espresso application, which began in the United States, is spreading to other countries."
Approximately six percent of Torani’s sales come from overseas. However, that doesn’t mean that selling syrups internationally is easy.
Knowing What To Look For
Most European café or bistro owners know the right ratio of sparkling water and syrup for a refreshing summer drink. But that doesn’t mean they know how to use it in cappuccinos or lattes.
"Many distributors request an exclusive importation and
distribution arrangement for our products. For us to grant such
an agreement, we look for many factors including a commitment to
service. We must educate potential customers to ensure proper
beverage preparation," Lucheta explains. "If a café
uses too much syrup, it may overwhelm the beverage, and the
consumer may only try it once."
For Lucheta, it’s a bonus if the distributor already sells coffees or related products and frequently makes business calls to cafés.
"It is important to develop a complete understanding of the business relationship--distributional territories, payment terms, lead times, ingredient and labeling considerations should all be discussed in advance, says Lucheta. Once a business relationship has been established maintaining contact and support is important."
Making the London Connection
Flavored coffees are not the first U.S. trend to be picked up in the United Kingdom. As the coffee market developed, Torani decided to grow internationally.
"The biggest export challenge for us has been the United Kingdom. The United Kingdom’s ingredient and labeling requirements differ from those in the United States. We made a small modification to our front label and redesigned our back label," said Lucheta. "Among our back label changes were a different ingredients statement, nutritional panel and instructions for use."
Lucheta got some expert help from solicitors and a food barrister in the United Kingdom and their business partner, Matthew Algie Company, Ltd., of Glasgow, Scotland.
"Matthew Algie has been in business since 1864. We spoke with them in the past, but the timing was not right for us," said Lucheta. "We re-contacted them when we were sure we could work with them. Our U.K. solicitors greatly assisted us in determining ingredient and labeling requirements."
Once you have decided that a country is a good target for your products, Lucheta said, you may want your importer to inform their customs about the new product they are bringing into the market.
MAP Makes a Difference
Torani will be advertising its syrups in the United Kingdom in
2000 with help from FAS’ Marketing Access Program (MAP). The
funding, distributed through the Western United States
Agricultural Trade Association (WUSATA), will also help Lucheta
represent his company at ANUGA, an international trade show in
Cologne, Germany, attended by nearly 200,000 visitors.
One of MAP’s goals is to help small food companies get markets overseas. Torani, with 46 employees, is participating for the first time.
"It has been a big benefit for us. While I wish we had found out about the program a little earlier, I am not sure that we were in a position to take full advantage of it until this year, " said Lucheta. "I believe that to best use the funds, you should target the markets that you believe have the most potential."
Using an Intermediary, Sometimes
While Lucheta, like most exporters, would prefer to work with importers directly, he occasionally uses a third party. These firms can work as an intermediary to assist you with import requirements.
When Torani was trying to break into the Korean market, ingredients were again a concern.
"In our product category, Korea restricts the use of the preservative sodium benzoate and prohibits the potassium sorbate. We were able to gain export clearance with the help of a Los Angeles-based exporting company and through flavor selection–our fruit products don’t use potassium sorbate," said Lucheta.
Additionally, the Korean government requested specific ingredient information regarding the family recipe. Lucheta would not release such information. Their business partner in Los Angeles was able to work to resolve the impasse with Korean authorities.
"We were pleased when we finally gained clearance for our product," said Lucheta. "Several other potential business partners had been unsuccessful in working with the Korean authorities."
Using the Web To Find Importers
The Torani website currently focuses on espresso-based drink use, but the company plans to change the site soon as they recently launched a new ad campaign.
"We receive many contacts throughout our website, many from international markets," said Lucheta. "They include importers, café and restaurant owners and consumers."
Finding Fun in Exporting Opportunity
For all the work exporting brings to several different departments of Torani, they are pleased with their success and hope to build upon it.
"Different markets require different approaches, from marketing to flavor selection," said Lucheta. "Some countries buy spices, others purchase more fruit flavors. The key is to work with our business partners to create success."
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The author is a public information officer with the FAS, Information Division, Washington, D.C. Tel.: (202) 720-7939; Fax: (202) 720-1727; e-mail: leejill@fas.gov .
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