Invigorate a Fatigued Category

Retailers are seeing pasta sales plateau as consumers look for more healthful and innovative products. Certain rice and grain product alternatives, as well as artisanal and whole grain pastas, could be the key to future sales in the pasta, rice and grains category.

According to “Pasta, Rice and Grains — US,” an April report from Mintel, a global market research firm, dollar sales in the overall pasta, rice and grains category are expected to increase only 4 percent in the United States, to $7.9 billion, by 2019. Concerns about the health attributes in some of the products — particularly carbohydrates, gluten and certain processed offerings — are adversely impacting sales.

“Pasta and rice sales suffer from category fatigue and lack of innovation, while pasta, in particular, is negatively impacted by consumer avoidance of gluten,” says Amy Kraushaar, Mintel’s U.S. category manager for food and drink and foodservice, in the report. “Natural channel sales of alternative grains such as quinoa have increased rapidly, suggesting that many consumers are replacing pasta and some rice purchases with alternative grains.

“Brands must find ways to revive interest in their products, with more gluten-free options and ethnically inspired flavors,” Kraushaar adds.

Think high-quality, artisanal

Tim Schulke, vice president of sales for GHIGI USA, Manassas, Va., says the pasta industry is dealing with the effects of consumers moving to gluten-free lifestyles. Some consumers are doing so because of an allergy to gluten, while others simply perceive gluten to be unhealthy.

“The data tell us that consumers are making these decisions … without a medical reason,” Schulke says. “It isn’t clear how sustainable that is.”

But he says retailers have an opportunity to boost sales of store brand products that appeal to those consumers who aren’t ditching gluten. He says high-quality pasta and artisanal cuts such as orecchiette and campanelle can be a draw. The key is to make such items affordable, under a $2 price point.

“It’s a segment that’s had a great appeal visually but has had a horrific price point,” Schulke says.

He adds that store brands should separate the artisanal cuts from more traditional cuts such as spaghetti and penne to highlight the quality. An artisanal selection could also have a slightly higher price point and higher profit margins.

Mike Cunningham, director of private label for Dakota Growers Pasta Co. in Minnetonka, Minn., says retailers can also take advantage of the boom in demand for organic products. Cunningham points to the February Mintel report titled “Private Label Foods: What’s Driving Purchase? — US,” which states that nearly 40 percent of U.S. consumers feel there are not enough store brand organic products offered.

“Introducing a new organic store brand pasta can be supported with a story and differentiating claims,” Cunningham says. “Tell your shopper where your pasta is made, especially if it’s made in the USA.”

Fresh ingredients are also appealing to consumers. Cunningham says stores could use that trend to show how their pasta products can be the base for a healthful fresh meal.

“It also understates that pasta is the perfect platform to create dishes with fresh vegetables and meats, and fits across many different cultures and ethnic flavors,” Cunningham says.

Whole-grain and gluten-free pastas can also resonate with consumers, but many fear that the flavor will be off, according to Mintel’s December 2013 report titled “Healthy Pasta Innovation on the Rise in the US.”

“The taste of gluten-free pasta is a major obstacle to future growth, and brands should focus on methods such as sampling to win over skeptical consumers,” Mintel says.

Rices and grains

On the rice side, data from Information Resources Inc. (IRI), a Chicago-based market research firm, show that dry rice sales grew 3.4 percent and ready-to-serve rice sales rose 10.4 percent in the 52-week period ending July 12. But sales of dry rice mixes declined by 0.3 percent — and sales of store brand dry rice mixes declined by more than 13 percent.

Consumers are also looking for health benefits when it comes to rice and grain purchases. Brian Wendelschaefer, director of retail sales and marketing for Sage V Foods LLC, Boulder, Colo., says playing up whole grains, non-GMO and gluten-free status, and no-/low-sodium traits could help spur sales. He also recommends simple, clean ingredients.

“If you can’t pronounce it, don’t include it as an ingredient,” he says.

Wendelschaefer adds that retailers shouldn’t overlook plain rice offerings. Medium whole-grain brown rice is the top seller, he says. And jasmine rice is the fastest-growing rice product overall.

“Check out what other accounts are offering and who supplies them,” Wendelschaefer says. “Go with winners, those demonstrating success.”

While some rice segments have seen slow growth, Mintel suggests there is reason to be positive. Asian and Hispanic populations, which both traditionally use rice as a staple in their diets, are growing quickly in the United States.

Mintel’s “Pasta, Rice and Grains — US” report also shows that consumers are giving ancient grains a try. Half of consumers surveyed say they’ve tried couscous, for example, and more than 40 percent said they have tried quinoa. Such products can often be marketed as high in protein, as whole grains or as gluten- and GMO-free.

Convenience and packaging

Another attribute that could boost sales in the pasta, rice and grain category is convenience. Some products — especially long-cooking rices — can take quite a while to get onto a plate. Sales data show, and Mintel reports, that ready-to-use and quick-cooking products are popular, especially with millennials.

“Pot-ready” pasta such as shorter 5-inch spaghetti that fits into smaller pots is selling well, as is pasta that requires no boiling.

“Shorter cooking time, in particular, may be a growth area for brands, and could particularly appeal to millennials, who cook at home frequently but also demand convenience,” says Mintel.

IRI data show that dollar sales for frozen pasta overall increased 2.1 percent in the 52 weeks ending July 12, with private label sales rising nearly 10 percent.

Wendelschaefer says cartons with multiple 4-ounce or 6-ounce individually quick-frozen (IQF) servings of rice have become convenient go-to options for consumers.

“And cartons of IQF rice with multiple ‘steamable’ pouches offer consumers attractive price/value versus single bags or boxes of rice,” he says.

Finally, consumers like to see what they’re purchasing, especially when it comes to products such as artisanal pastas. Schulke suggests that any packaging give at least a window to the product. Cellophane also works well.

“You should showcase the beautiful pasta,” Schulke says.

Do consider adding artisanal cuts such as orecchiette and campanelle to attract shopper interest.

Don’t merchandise traditional pastas right next to artisanal and other high-quality pastas.

Do play up whole grains and non-GMO and gluten-free status when it comes to rice and grains.

Don’t forget that consumers are looking for more convenient rice and grain offerings.