Closing Case Eataly Excels in Marketing and Supply Chain Management
Eataly is a chain of large-format Italian marketplaces (food halls) comprising a variety of grocery items, bakeries, wine shops, restaurants, and a cooking school. Founded in Turin in 2007 by entrepreneur Oscar Farinetti, Eataly has become a new sensation in 40 cities worldwide where it has opened stores.
In 2002, Farinetti sketched his simple but powerful idea on a piece of paper—according to Eataly’s official website—“to gather under one roof high-quality food at sustainable and reasonable prices for all, celebrate Italian biodiversity, and create an informal, natural, and simple place to eat, shop, and learn.” A fusion of two words, eat and Italy, Eataly stands for “Eating Italian,” which was coined by Celestino Ciocca, a brand strategy consultant. As a marketing concept, Eataly celebrates the history and the food culture of Italy. In practical terms, Italian restaurants, supermarkets, and cooking schools have existed separately for a long time. But they had never coexisted under one roof anywhere else until the first Eataly opened in 2007 in an old wine factory in Turin that was transformed to become the world’s very first multifunctional marketplace dedicated to Italian excellence in food. New York Times reported the first Eataly to be a “megastore” that “combines elements of a bustling European open market, a Whole-Foods-style supermarket, a high-end food court, and a New Age learning center.”
Opening additional stores elsewhere in Italy and in New York had been planned by Farinetti early on. In 2010, Eataly opened its largest megastore in Rome. Also in 2010, the first Eataly outside of Italy was launched in New York City. It is a 50,000-square-foot (4,600-square-meter) location in the Toy Center Building near Madison Square Park, and Mayor Michael Bloomberg came to give his blessings. With lines extending down Fifth Avenue waiting to get inside, Eataly caused quite a bit of buzz.
Since then, Eataly embarked on its journey of global expansion, in cities such as Chicago (2013), Milan (2014), Istanbul (2014), Sao Paulo (2015), Munich (2015), Boston (2016), Las Vegas (2016), New York (a second store near the World Trade Center, 2016), Los Angeles (2017), Stockholm (2018), Paris (2019), Toronto (2019), and Dallas (2020). Currently Eataly has a total of 15 locations in Italy, five in the rest of Europe, ten in the Asia Pacific, and ten in the Americas.
In Eataly’s most recent store in Dallas’ high-end NorthPark Center that was opened in December 2020, a reporter toured the 46,000-square-foot Italian food emporium with 10,000 Italian and local products, three restaurants, and a cooking school (initial classes offered virtually due to COVID-19). “Its vast selection turns a visit into a field trip, where you can spend hours investigating products you’ve never seen or items you can’t find anywhere else. The educational aspect is further enhanced by classes and tasting events.” Eataly Dallas featured a massive selection of breads, cheeses, chocolates, coffee, crackers, desserts, imported canned foods, meats, oils, olives, pastas, pizzas, rare spices, sauces, tea, wines … the list goes on and on. Some highlights include over 500 Italian and domestic salami and formaggi (cured meats and cheeses), and more than 1,200 wines and liquors from all 20 regions in Italy. From a supply chain management standpoint, keeping such a large and diverse assortment of products from near and far in stock, with the right freshness and tenderness, is no mean feat.
As the first Eataly to open during a pandemic, Eataly Dallas took plenty of precautions: mask and glove requirements for all employees, Plexiglass barriers between customers and employees, hand-sanitizing stations, and crowd-control measures to minimize the number of guests inside. In restaurants, tables were spaced six feet apart, and diners were requested to wear a mask before and after the meal.
In such a crowded field of Italian food and restaurants, Eataly has shown that it is possible to inject new (obviously Italian) wine into an old bottle. In Farinetti’s own words, “Eataly’s success is linked to our philosophy, because people can eat, shop and learn, all about high-quality food, three activities that don’t coexist anywhere else. Moreover, our informal style of communication shows how direct and approachable we are, just the way people like.”
Case Discussion Questions
- Using the four Ps of marketing, explain what is behind Eataly’s marketing effectiveness.
- From a VRIO standpoint, identify the features of Eataly’s supply chain management that contribute to its performance.
- Visit an Eataly store or restaurant in (or near) your city. How does it compare with your previous experience of Italian food?
- ON ETHICS: You are the executive assistant to the president of Eataly North America, who was invited by Dallas Morning News to contribute an op-ed piece. You heard about the bad news that in a Boeing versus Airbus case over subsidies adjudicated by the WTO, Airbus lost and the US was authorized to slap punitive duties on $7.5 billion worth of any EU exports to the US (see Chapter 8). As the US government was grinding its axes over French wines, German cars, and Italian cheeses, the president decided to write about this topic to persuade US officials not to mess with Italian cheeses (and other food exports to the US). This piece will not only be published in the major Dallas newspaper, but will also be posted online and sent to US Congressional representatives (especially those representing the eight cities where Eataly has operations) and Italian (and EU) diplomats in the US. Can you write a 500-word draft for him?
Sources: (1) The author’s interviews in Chicago and Dallas; (2) Culture Map Dallas, 2020, Fancy Italian market Eataly Dallas finally has an opening date, November 19: dallas.culturemap.com; (3) Eataly, 2020, Eataly Dallas is now open! December 9: www.eataly.com; (4) Wikipedia, 2021, Eataly, en.wikipedia.org/wiki/Eataly.
