We just recently had the Crain’s Business New York team pay us a visit up in the Bronx to talk about the challenges of the food importing world. Anti-dumping tariffs, duties, and skyrocketing insurance rates: the recent news are not exactly comforting. At Gustiamo we’ve been raving about this infuriating topic for a while, and we were glad to finally speak to someone who wants to shine a spotlight on this and spread the word. In the article they published after our interview, they call this a food fight, with local importers bracing for trade war’s impact. We couldn’t have chosen better words.
For 20 years Beatrice Ughi has been importing specialty Italian products, including olive oil, tomatoes and pasta, for American chefs and e-commerce customers willing to pay for the best of the best. Recently, though, her company, Gustiamo, has been spending much of its profits on insurance, as rates have risen to cover 20-year-old anti-dumping tariffs on Italian pasta imposed when the U.S. suspected that Italy was underpricing its pasta exports to undercut domestic producers.
For Gustiamo, the value proposition lies in its ability to provide quality goods that simply aren’t available in the U.S. In 1999 Ughi, who is from Rome and moved to New York for a job as an accountant, founded the company as an e-commerce firm meant to bring artisanal products from Italy to New York, where there was growing demand for specialty ingredients. Soon local chefs who’d traveled to Italy came to Ughi looking for the pasta, olive oil, tomatoes, olives and hazelnuts they had tasted in Tuscany or Sicily.
Restaurants including Del Posto and those in Andrew Tarlow’s group are customers, supporting what Ughi calls a solid business. Gustiamo’s products are not cheap: E-commerce customers pay $8 for a pound of Faella’s Genovesine pasta, four times more than a box of Barilla ziti costs on FreshDirect. (To avoid duties, Italian brand Barilla makes most products for U.S. consumption in Iowa and New York.)
It’s not the first time that the big conglomerates of the food business find their way around inconvenient fiscal rules, debilitating small businesses even more. And the most disastrous impact reaches the farmers and food makers, who see their products outdone by cheaper alternatives, if not Italian sounding or fraudulent fabrications.
“I am completely against these tariffs,” said Ughi. “It’s a nightmare for the world.”
“The pasta we import, it is beautiful, but it’s already expensive.” She said she worries that if prices on all goods double, even the most deep-pocketed customers and the highest-end chefs could look to swap out ingredients. “Our customers have a different approach of what’s important,” she said. “But there is a limit.”
Olive oil is a special case. The best bottles are already pricey—around $39 for 16 ounces on Gustiamo. And 70% of olive oil consumed in the U.S. is imported from Europe; the homegrown industry fulfills only 5% of demand.
Ughi, who said she still hopes to hire two new employees in a push to grow her business, is trying not to despair. “This is what we do,” she said. “We represent farmers who are poor. We have low margins. If you produce things correctly, they are expensive. I would have no idea how to change our business.”
Click here for the full article about Gustiamo on Crain’s Business New York.