Common cents

The “pastabilities” are endless: Spaghetti with meatballs, baked ziti, lasagna, fettuccini Al­fredo, linguine with clam sauce, tuna casserole, macaroni salad…. The number of dishes that can be made with a dollar box of pasta goes on and on. Astute retailers are promoting pasta as a great value that can drive traffic to higher-margin areas of the store.

“A pasta meal is a great value for families during these recessionary times,” says Kirk Trofholz, president of Bannockburn, Ill.-based Barilla America, manufacturer of the nation’s leading pasta brand. “When you think about a pasta and sauce, and if you want to have a salad with that, you can have a complete meal for a family of four for under $6. That is why we expect to see the pasta category performing well in the coming years.”

“An interesting thing about pasta is if you sell a dollar in pasta you are going to sell $10 in related items,” says Jack Hasper, vice president of sales and marketing in the St. Louis Park, Minn., office of Carrington, N.D.-based Dakota Growers. “That’s why pasta is a very good marketing tool. You have the pasta, sauce, hamburger, bread, wine, olives,” he says.

Hasper suggests retailers build end caps featuring pasta and ingredients to make a complete meal. And think outside of the box a little. “Elbow macaroni and tuna to make a hot tuna casserole is a great idea,” he says.

According to Camden, N.J.-based Campbell Soup Co., manufacturer of Prego brand pasta sauce, research shows 52% of Americans are eating out less often. Retailers can capitalize on that trend with better merchandising strategies, says Jeff Davis, brand manager, Prego Italian Sauces. “We encourage retailers to take the opportunity to display Prego with companion foods, like chicken and bread, to suggest that shoppers prepare an even more substantial simple meal,” he says.

Pasta prices have been going up, but are still perceived as a great value, manufacturers say.

While this past year’s dismal crop in Europe caused more wheat and pasta to be exported, resulting in skyrocketing domestic pasta prices, Hasper sees things leveling off. “The price has come down and we expect the price to continue to come down for durum wheat,” as well as a key ingredient in pasta, he says.

“We are seeing durum wheat prices come down a little bit, but they are still 60% higher than they were at the end of 2006,” notes Trofholz.

Farmer-owned cooperative Dakota Growers is a major supplier of private label, counting Wakefern, Safeway and Kroger among its clients. Its main private label competition is Kansas City-based American Italian Pasta Co. The two companies basically split the private label supermarket business, with AIPC counting A&P and Pathmark among its labels, along with Wal-Mart and Sam’s Club.

“The real trend in dry pasta continues to be the growth of healthy pasta alternaives, such as whole wheat and all grain,” says Pat Regan, senior vice president-marketing and sales strategy for AIPC. “We have conducted a custom research project that shows that a successful retailer with this category needs to emphasize store brands, maximize shelf space with store-brand SKUs and offer multiple store-brand sizes on key volume drivers.”

Regan adds that the research also shows that retailers should feature store brands with multiple tiers, including premium private label brands and maintain a price gap between national brands and store brands.

Fairlawn, N.J.-based Vitelli Foods, LLC, imports a line of pasta from Italy and Mexico that is distributed primarily in the Northeast, with a concentration on the greater New York market. “We’ve been here since 1885, so this is our home market, but we do have outside distributors and sell in Los Angeles, New Orleans and parts of Florida,” says Roy Taormina, vice president, sales.

Another key Italian brand is Rienzi & Sons, which is celebrating its 40th anniversary in 2009. The Astoria, N.Y.-based firm imports a host of products, including pasta, juices, mineral water, wine and extra virgin olive oil.

The pastas distributed by New York-based Rao’s Specialty Foods are artisan, made by hand in Puglia, Italy, using bronze cuts and air dried on screens for up to 30 hours before packaging, giving them a very detailed exterior and dense interior. All of that painstaking workmanship and quality comes at a price, making Rao’s a premium player in the category.

Still, Rao’s is a good value, says Deb Crisan, senior vice president, sales and marketing. “I feel the economy has not yet forced shoppers to compromise their palates and preference in taste,” she says. “If your customer is going to spend $8.99 on a jar of pasta sauce, I think they would serve it over their favorite pasta and not compromise it to serve over a 99-cent box of pasta. I suggest retailers create a ‘meal solution’ display using a premium/super premium pasta, pasta sauce, wine, parmesan cheese, and San Pellegrino or similar imported sparkling and flat bottled water.”                   

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