USING THE OLD NOODLE

Russell Redman

Domestic pastas, spurred by some aggressive promotions, are keeping the wave of inexpensive imported offerings at bay.

As a result, while the imports have dented domestic brands' pricing, they have not necessarily done the same in terms of shelf space.

A number of supermarket chains are using low-priced imported pastas from Turkey and Italy primarily as promotional vehicles for their pasta aisle.

"We've carried some of the Turkish ones on an in-and-out basis, but I can't really say they've had an impact on the [pasta] section," said Dave Renaldi, director of merchandising at Martin's Super Markets, South Bend, Ind. "We do a pretty good job with some of them from Italy, and the ones from Turkey we just use occasionally."

Other chains, especially those in strong pasta markets like the Northeast, have made the inexpensive imports fixtures in the section, along with premium Italian imports.

Victory Super Markets, Leominster, Mass., stocks a low-priced Turkish pasta mainly to lure customers. "We only carry one Turkish brand, Luigi Vitelli," said David DiGeronimo, head grocery buyer. "We usually advertise it at three for $1. They sell OK [when not on sale], but they don't really go crazy unless you blow them out at three for a buck. It's just nice to throw a low-ball item in there to be competitive." The torrent of deep discounts on Turkish and some Italian imported pastas has pushed domestic pasta manufacturers to shell out price specials more often. "Most of the [imported] ones with the low pricing have been Turkish imports. Their pricing, basically three for $1 or 39 cents or 49 cents in an ad or every day, has forced name brands to be more competitive with their trade promotions," said Vincent Costanzo, senior grocery buyer at Bozzuto's Inc., a Cheshire, Conn.-based wholesaler. "They are probably at the height, from what I've ever seen, of aggressively coming up with trade programs," he noted.

Pat Redmond, grocery merchandiser at Rosauers Supermarkets, Spokane, Wash., also said imported pastas have squeezed the price of domestics. "The national brands, especially Hershey, have spent more money because of the imported brand we carry, Da Vinci. We kind of use it as a specialty brand. But when we promote it, we promote it strong and deep. So it's caused [domestics] to spend a little more on their promotions."

Armed with more competitive pricing and better brand awareness, domestic pasta has regained endcap space and preserved its shelf dominance, retailers and wholesalers said.

"We're always banging out Prince at five for $2 or Mueller's at three for $1, and Prince once in a while at three for $1. It's still a big Prince and Ronzoni market here; Mueller's is probably third behind those two," Victory's DiGeronimo said. Two buyers told SN their chains don't sell imported pasta because domestic brands are pricing aggressively.

"We had [imported pastas], and they weren't acceptable to our customers. So we do not carry them," said Aubrey McDonald, grocery buyer at Byrd Food Stores, Burlington, N.C.

"We're in a low-price market area here. Everything already is low-priced, so the imports don't have much impact. We offer two for $1 on 16-ounce and three or four for $1 on 7-ounce [domestic pasta] pretty much all the time."

Charlie Simpson, a grocery buyer at John C. Groub Co., Seymour, Ind., said low-priced imported pasta may have more appeal on the East Coast. "In our particular market area, we haven't had any of those items. The domestic is the only thing we have on the market. We carry San Giorgio, Creamette, Ronco and Skinner, and that pretty much dominates our pasta market."

Emil Oles, a grocery buyer and merchandiser at Genuardi's Family Markets, Norristown, Pa., said he's seen the number of three-for-$1 discounts on imports dwindle.

"I think that's passed," he explained, adding that Genuardi's has boned up on premium Italian imports. "Maybe about a year ago I saw more Turkish pasta, [such as] Luigi Vitelli and Portello. They had some monies floating around, but as of late I haven't seen much."

That, in part, may stem from looming tariff hikes on Turkish and Italian imports, which threaten to jack up prices, depending on the manufacturer. (See related story.)

"The Turkish pastas were hit with about 20%, which is going to have some impact for sure," said Peter Carolan, president of La Pace Imports, Mendham, N.J., which imports La Molisana pasta from Italy.

"We're more of a premium-type pasta that blends American wheat with Italian wheat. Premium pastas like La Molisana and De Cecco shouldn't really be affected in sales," he explained. "So I don't think that [imported] niche will be lost." La Molisana and De Cecco are subject to a 3.64% and a 2.68% duty, respectively.

Despite the impending tariffs, domestic pasta companies have found the imports to be heady competitors on price and -- with the higher-priced premium Italian pastas -- appeal.

"They try very hard to compete against the imports, but it's been very difficult," said Jula Kinnaird, president of the National Pasta Association, Arlington, Va., which represents domestic pasta manufacturers and has been vigorously promoting the quality of U.S.-made pasta. "Imports are taking the growth in the market, and I'm sure that has translated into some loss of shelf space."

But imports have seen space pressures as well, La Pace's Carolan noted. "We've paid a lot of money to be in the supermarkets with the slotting fees, just like [other] companies have. I lost space to [Borden's] Classico when it came out. I went from 10 items to eight in some supermarkets. And other brands were pushed aside to make room for it," he said.

If implemented, the tariffs could trim the number of imports in the pasta category and inflate all pasta prices, Carolan said. "Once the prices go up, you're going to see a lot less demand for more offerings in supermarkets."

The low-price structure of some of the imports has led to an intriguing relationship between those brands and private-label offerings. Some chains carry one or the other as their low-cost alternative, while others offer both.

"You can buy some imports, at times, lower than private label, no doubt about it," said Renaldi of Martin's, which sells Roundy's private-label pasta. "But I'd rather push my private label because if I can get people buying it, they're going to buy other things [in the line]. I'm pushing the name I have throughout my stores."

Domestic and imported pastas have competed with Sweet Life brand pasta at Victory, according to DiGeronimo. "Private-label pricing isn't too good. Once in a while we'll throw a deal out, but private label should be a lot better. Prince and Ronzoni deal so deeply, I think they're trying to keep the private label out more [than the imports]," he said.

"If you can't beat the other [brands'] price with a private label, there's no need for it," Rosauers' Redmond noted, adding that the chain's Western Family pasta sells briskly. Total unit pasta sales, however, have been flat as a noodle. For the 52 weeks ended Aug. 13, unit sales dipped 0.3%, reported Information Resources Inc., Chicago. Dollar sales were up 3.9% to $1.27 billion.

Within the category, spaghetti rose 2.6% in dollar sales but slipped 0.5% in unit volume in the year ended June 10, according to A.C. Nielsen, Schaumburg, Ill. Macaroni sales were up 6.8% in dollars and 2.3% in units in that time.

Retailers said they haven't enlarged their pasta sections but have weeded out redundant pasta cuts to fit more brand facings, notably imports and special cuts. Though some consumers are loyal to a brand no matter its costs, a dilemma in merchandising pasta is the gulf between its promotional and everyday price.

"The list price is way too high. They ought to get rid of the deep discounts and go with a more realistic cost," Victory's DiGeronimo said. "You can't really fool consumers. They know you'll run it at three for $1 or five for $2 and then you'll come back off the deal and go up to 99 cents. So they should take a middle-of-the-road 69 cents and try to make profit there."