Emphasize the positives

Pasta, rice and grain products are staples in pantries across America — but that doesn’t mean everyone is buying a lot of them. According to data from “Pasta, Rice and Grains — US,” an April 2015 report from global market research firm Mintel, sales for the category are forecast to reach $7.6 billion in 2019, an increase of only 4 percent since 2014.

A key reason for the current sluggish sales growth is that consumers, in their quest for health, are eating fewer carbs and less gluten. But opportunities do exist to drive growth in the category and on the store brand side. In fact, store brands may have the chance to come out ahead.

“In a flat or declining category, store brands have a great opportunity to recapture market share through product offerings and promotions specific to their consumer needs,” says Mike Cunningham, director of private label for Minnetonka, Minn.-based Dakota Growers Pasta Co. “No one knows their customer better than the retailer.”

Price right

The pasta, rice and grain category is one in which shoppers want quality, but they also want value.

“Our view is that pasta is a ‘cheap’ family meal. We think consumers want a quality product at a fair price,” says Pasquale Laudiero, president of Manassas, Va.-based Ghigi USA. “An organic, non-GMO Italian-made pasta for under $1.50 per 16-ounce pack is a great value when feeding a family of four.”

Frank DeMichino, chief operating officer of Brampton, Ontario-based Italpasta, seconds the importance of value.

“I think we will continue to see the consumer demanding pasta as an economical meal,” he says, pointing out that a lower price on store brand pasta does not mean lower sales. “A smart retailer realizes that dry pasta will not be purchased on its own, meaning that a consumer will most likely purchase the ingredients that are required to make their favorite sauces. Therefore, using the store brand pasta as the catalyst for cross-merchandising can definitely lead to an increased ring at the cash register.”

Highlight health

Given that so many consumers are avoiding carbs for health-related reasons, offering store brand pasta, rice and grain products with more nutritional benefits is one key way to counteract the sales slump.

“I think it is evident that there is a consumer who wants a pasta product that fulfills their better-living goals, so the health and wellness trend will continue as it has the past few years,” DeMichino says, mentioning protein and fiber as functional benefits that can be added to pasta, also noting though that the “goal is to help provide the added functionality without a large increase in price.”

Better-for-you pasta options also include whole-wheat, vegetable-infused, gluten-free and organic products.

“Our view is that organics make the most sense for retailers, as that segment makes up a decent part of the pasta market and offers the retailer an opportunity for increased margin,” Laudiero says.

Retailers also might want to focus more on natural store brand pasta offerings rather than flavored varieties, with Mintel data showing that consumers are more likely to purchase unflavored products.

“This reflects a migration away from processed dinners and a growing shift towards simple ingredients and fresh foods,” Cunningham says.

Offer something new

In a number of categories, consumers are bored with the same old products, and according to Mintel, the pasta, rice and grain category is one of them. Increasing interest in emerging products “presents brands with an opportunity to branch out from current product ranges and add varieties that may increase purchases,” notes the company’s report.

So retailers shouldn’t be afraid to expand outside the basics. Specialty pastas such as spinach and red bean are a trend right now, Laudiero notes, although he cautions that retailers should still focus more on mainstream varieties.

And this is an especially good time for grains. While sales of pasta and rice might be down, the same can’t be said of quinoa or couscous. Data from Mintel show that natural channel sales of packaged grains jumped almost 42 percent from 2013 to 2014, with the top sellers being quinoa and fiber-rich farro and freekeh. Grains such as farro might not be mainstream yet, but their sales growth underscores the rising consumer interest in foods that are more healthful and also a bit more adventurous.

Get shoppers’ attention

If retailers really want to realize growth for store brand pasta, rice and grain products, the right marketing is essential.

“Insightful assistance with category management can take a flat category like pasta and tactically determine new opportunities for growth,” Cunningham says, noting the need for retailers to follow the “four Ps” — product, placement, pricing and promotion.

The right assortment also is critical, Laudiero suggests, noting that most retailers have “a complete mish-mash” of pasta brands, cuts and flavors.

“This seems to happen because of a lack of focus or interest in the category from the buyer and the need to satisfy every consumer’s taste,” he says. “Retailers need to put more focus on the category and, through their customer data, come up with the correct mix.”

For pasta, he suggests a tiered approach, with first label products priced at around 99 cents for a 16-ounce box and having the largest SKU offering, followed by a more targeted selection of mid-tier, specialty, organic and gluten-free varieties.

Package appearance matters too.

“Retailers should place a strong focus on the design and branding of their private label brands and focus on making them unique from a design perspective, but also a quality, differentiation and pricing perspective,” Laudiero says.

Convenience positioning matters, too.

“Repositioning the No. 1-selling pasta shape, spaghetti, as ‘pot-ready’ has shown strong incremental sales,” Cunningham points out. “The shorter 5-inch spaghetti easily fits into a smaller-sized pot,” he adds, and could be billed as easier for small children to eat.

Another convenience-focused claim that could increase sales is shorter cooking times, with the Mintel report noting that four out of 10 consumers cite cooking time as important to them. Whatever benefits a pasta, rice or grain item provides, retailers need to make sure the messaging on the package is clear.

“Retailers need to ensure that their packaging communicates all the product benefits. The consumer needs to understand how or why one product differs from another and what the net benefit is,” DeMichino says, adding that packaging also should include features such as recipe ideas and social media opportunities.

When it comes to product promotion, Cunningham says retailers don’t have to push the national brand at the expense of the store brand, or vice versa.

A Willard Bishop study on the practice of price shielding revealed that promoting both the national brand and store brand items simultaneously resulted in higher returns and greater profitability for the retailer. Promotions build excitement and drive traffic to the category, he says, noting that strategies could include display shippers and the use of data from loyalty cards.

Do cross-merchandise store brand pasta and sauces to grow sales of both.

Don’t ignore ancient grains such as farro and freekeh when it comes to new product development.

Do augment basic own-brand pasta and rice offerings with organic and other “healthed– up” options.

Don’t forget to communicate product benefits — and recipes — on the package.