SHAPING UP

RICHARD TURCSIK

Pasta sales are on the rise, and retailers see them remaining "al dente" for the foreseeable future.

A lot of factors are supporting the trend.

"The high-quality prepared sauces make it so simple to make a good pasta dinner today, and they are very economical, too," explained William Vitulli, vice president of government and community relations at A&P, Montvale, N.J. "Pasta can be bought on sale at a darn good price, it makes a very fast meal and, dietwise, pasta is very acceptable, all helping the category to grow," said Vitulli, summing up the opinions of most other retail executives who spoke with SN about pasta's momentum.

In a category that often tops 100 stockkeeping units, supermarket chains have been able to spur pasta sales by broadening their selections beyond the traditional macaroni, spaghetti and noodles to include nontraditional shapes such as pin wheels, spirals, twists and angel hair.

In some markets, that

variety comes from imported brands, while in others their domestic counterparts are supplying the new shapes.

"We find that unusual shapes play a great role in increasing pasta sales by adding variety and fun to the category," said Mike Shultz, senior vice president at Hughes Family Markets, Irwindale, Calif.

"The novelty shapes are kind of taking over, and people are using different shapes for pasta salads, as opposed to the traditional elbow macaroni and spaghetti. Items used for pasta salads are really showing increases, and that goes back to people eating healthier," said Butch Smathers, vice president of merchandising at Western Supermarkets, an 11-unit Birmingham, Ala.-based chain.

"Without a doubt, much of the category growth is coming from different shapes. Although spaghetti, macaroni and ziti are still our most high-volume items, for variety people are buying other shapes," said A&P's Vitulli. "At this time of year, for the holidays, lasagna sales go through the roof, and we'll have it on feature."

Some of the more unusual shapes that are popular on both coasts have begun to take hold even in the Midwest, said Mark Knowlton, category manager at Kroger Co.'s Columbus, Ohio, division, based in Westerville, Ohio.

"We're starting to see more of the fettuccinis, the angel hairs, and some of the twists and bow ties. I'm starting to see a little more usage and awareness in those types of varieties," Knowlton said.

Supermarket pasta sales reached $1.1 billion, an increase of 6.5%, in the 52-week period ended Aug. 14, 1994, according to scanning data analysis from Information Resources Inc., Chicago.

Scanning data also shows macaroni is the largest pasta segment, followed by spaghetti and then noodles and dumplings. Data from Nielsen North America, Northbrook, Ill., for the 52 weeks ended June 11, 1994, shows macaroni had sales of $515.9 million, up 6.9%; spaghetti sales reached $461.7 million, up 4%, and noodles and dumplings sales climbed 2.6% to $210.6 million.

One way retailers are increasing their pasta sales is with imported varieties, especially operators nearer to either coast and in major metropolitan areas.

"People have been responding well to imported pasta," said Emily G. Holdstein, senior vice president of Wonder Market Cos., Worcester, Mass. "The imported pasta sales are rising a little bit faster than the domestic sales. Although it is still only 15% of total pasta sales, that number is up. We think that trend may continue as we continue to get deals on inexpensive imported pastas. We do see that happening now."

Wonder carries an inexpensive imported line, along with Pastene and De Cecco, its top-of-the-line pasta products. Wonder's domestic brands are hometown favorite Prince, Mueller's, Ronzoni, private-label and Pennsylvania Dutch egg noodles.

Doug Rodden, director of purchasing at Minyard Food Stores, Coppell, Texas, said his chain's upscale stores have had success carrying imported pasta that is direct store delivered.

"We have had some opportunities to carry some of the imported pastas, but we decided not to carry them in the warehouse because we don't have any space. The companies that specialize in direct store have their own space, and basically they can stock whatever they want," he said.

While some imported pastas aim to hook shoppers on Old World quality, price appeal is reeling shoppers in as well.

"There is no question that price helps to drive the pasta sales. As a general rule the pastas have very heavy allowances on them, which encourage us to promote them and to have a much better price," said Minyard's Rodden.

"We find that sales of the dry pasta appear to be price driven, and we attribute our increase in pasta sales to the hotter retail feature ads that we have been running more frequently," said Shultz of Hughes. "Our dry pasta price points range from 59 cents to $2.59, depending on the item. The margins are and have remained fairly steady throughout the category."

"The long goods -- the traditional spaghettis -- are still kind of price driven, and I like to use multiples, especially on the one-pound packages," said Kroger's Knowlton. "But as you get into the ties, twists, bows, fettuccinis and vermicellis, they are not quite as price sensitive as the other items."

Vitulli said A&P frequently has Creamette on sale at three boxes for $1. "With pasta there does not seem to be a great deal of brand loyalty," he said.

Holdstein said there is a direct correlation between pasta sales and the economy.

"In uncertain economic times, we have something called the pasta quotient or the pasta factor. How much pasta people buy is based on their uncertainty about how much money they are going to have to spend on something else. Pasta is an inexpensive healthy meal, and the consistent promotions by manufacturers certainly contribute to people's willingness to buy more pasta," she said.

Frequently advertising pasta helps draw shoppers into the stores.

"Price promotion is the key to driving pasta sales, and we have had great success with our own in-store and no-clip coupons," Holdstein explained.

"We usually advertise pasta at least once or twice a month and that really helps to sell product. We also cross-merchandise it with spaghetti sauce and that helps us get that tie-in sale," said Chuck Lutz, director of purchasing at Virginia Supermarkets, Norfolk, Va.

"To increase sales we have been advertising pasta more as the promotional allowances increase, and promotional allowances have been on the rise," said Aubrey McDonald, director of purchasing at Byrd Food Stores, Burlington, N.C.

To better handle the abundant pasta section, chains such as Kroger are using their noodle by incorporating category management into the aisle, and straining out the weak players.

Kroger's Knowlton said a recently completed stockkeeping unit analysis of his average 20-foot long department found that many of the imported specialty items were not moving as well as variety products in the name brands.

"We're seeing a trend that way, and the new set is going to reflect that. I put in a couple of Mueller's fettuccini, for instance. We will be doing a little bit of a line extension with the bigger names, vs. getting into the specialty.

"We won't be expanding the section; we will be better utilizing the space. We are into category management and looking more at the day's end supply and adjusting facings there," Knowlton said.

"We will use the old SKU rationalization and look at it from a subcategory view, and not just what is the best and worst seller. It may be a unique item. We are putting the pasta into subcategory groups and then looking at which one of those groups is performing, and readjusting it that way," he said. The new section layout was to be implemented just after Thanksgiving.

Byrd's McDonald is also using category management on the aisle.

"We have been very slowly increasing the number of SKUs that we offer. We fit in new brands and varieties by either discontinuing one product or cutting back on the facings of some of the others."

One reason retailers are eager to implement category management is the vast number of brands struggling for shelf space. Scanning data shows a category dominated by regional brands, mostly manufactured by a handful of players -- Borden, Hershey Foods, CPC International and Quaker Oats. Private label proved to be the largest single factor nationally.

IRI data showed that for the 52-week period ended Aug. 14, 1994, private-label pasta sales reached $153 million, an increase of 5.8%, and a market share of 14.4%.

Retailers said a wide private-label selection is important to the success of the category. For instance, Knowlton said private label is the second biggest brand in his Kroger division.

Hughes Markets in the Los Angeles area is converting its Springfield brand of pasta over to private label, said Shultz.

And A&P has enjoyed immense success with its Master Choice upscale private-label pasta.