Love, Italian style: Italian imports strengthen private label offerings
Can private label get a larger slice of America’s love for Italian food?
It’s no secret that American’s love their Italian specialties. In a 2019 YouGov survey, 88% of Americans said that they like Italian food, making it the country’s most popular non-American type of cuisine. While many Americans are most familiar with pizza, there also is the fact that pasta, sauces and olive oil have become pantry staples nationwide, and the profile of these items has only been increased by the pandemic — in particular those sourced from Italy.
Earlier this year, Italian market research firm Doxa carried out a survey on behalf of the Italian Food Union and the ICE Agency that found 56% of American respondents saying they eat consumer pasta between one and four times per week. One in four of the 5,000 people surveyed across Italy, Germany, France, the United Kingdom and the U.S. reported increasing their pasta consumption during the COVID-19 lockdown. Additionally, pasta consumption increased by 40% in the U.S., Canada, Australia and Romania, outpacing the growth of such countries as the United Kingdom and the Netherlands.
The International Pasta Association noted that, per the Italian Food Union, 1 in 4 pasta dishes in the world is Italian, and Italian pasta exports have seen 25% growth in the first six months of 2020. That’s growth on top of the export record that Italy set in 2019, when it grew exports by 7.5% over 2018.
So how does private label cash in on this trend? The answer, many say, is to encourage retailers who are looking to build out their Italian imported product selection — and make some money — to offer more variety and different price points in that section of products. That will allow options for those shoppers who might not be big spenders but still insist on quality and value.
“Retailers generally have low, mid and upper tiers, and it’s inside that mid-tier where they find a lot of value for imports,” said Anthony Laudiero, vice president of operations at Consorzi Foods, which has headquarters in New York and Manassas, Va. The family-owned company deals 99% in private label, with a majority of their imports being dry pasta in the mid- to upper-tier product range. The company also imports canned tomatoes from Southern Italy and olive oils, both European Union blends and 100% extra virgin olive oil.
Most recently and notably, Target introduced Good & Gather Signature, an offshoot of the private brand Good & Gather it debuted last fall. The line includes an extensive selection of imported pastas and sauces. Many of the price points are slightly higher than the retailer’s standard Good & Gather selections, offering a slightly more upscale product at a price that still won’t break the bank.
Laudiero said that retailers are increasingly realizing that they are able to import products from Italy to offer a high-quality product in a way that maintains similar margins to those seen by retailers who use domestic products.
Many retailers might hear the term “import” and immediately start to worry about how bringing in products from Italy might impact their bottom line. Laudiero said that imported products can offer a similar value to domestic products, while bringing their made-in-Italy bona fides to the table.
“The great thing about Italy is that there are no import tariffs,” he said. “So Italian organic pasta can actually compete on a price basis with U.S. organic pasta. On organic, there’s a big opportunity, it offers the retailer similar, maybe higher margins because it’s made in Italy and they have an opportunity to offer a higher-quality product at a similar price.”
Organic products in particular are a growing part of a retailer’s private brand offerings, with Kroger and Albertsons standing out as leaders of the pack as they also expand into less mainstream pasta shapes or different methods of creating it, including Bronze-cut options, which food site Epicurious explains in a 2017 article is a more traditional method of pasta cutting that largely was replaced by Teflon dies for cost reasons. “Bronze-cut pastas are a little coarser, a little more porous — and, thus, a better surface for sauces to cling to,” the report said. All of the Good & Gather Signature Pastas are bronze cut and includes several less common cuts, including trofie, pennoni, orecchiette, lumaconi and tri-color arcobaleno and farfalle.
Laudiero noted that such offerings can benefit retailers in two ways. “I think retailers are seeing this focus on more specialty and higher-end imported pasta, which gives them one, the ability for more margin,” he said. “And two, it helps build brand loyalty to that brand label in an indirect way — if they offer a special cut of pasta that other retailers don’t offer.”
Beyond pasta, the market for imports from Italy also encompasses sauces and oils — two areas where Commack, N.Y.-based Botticelli Foods looks to assist retailers. Started in 2002, family-owned Botticelli began with a focus on olive oil and has expanded to include a range of sauces, vinegars and jarred specialty items.
Botticelli recently rolled out an ad campaign to promote its eponymous branded items, but Joe Asaro, the company’s director of customer development, said that Botticelli is more broadly focused on bringing quality at a value to the space with its retail partners.
“I think people are looking for more premium-quality offerings at the right price points, and that’s something that we firmly stand by,” Asaro said. “It’s all about accessibility as well as making sure you’re not the most expensive brand on the shelf and also providing that to our retail partners on the private label side of the business by providing premium-quality offerings that are very different from anything else you can really find in the store right now.”
He said that when retailers work with companies that have solid sourcing capabilities overseas, they are able to keep up with emerging trends and subsequently add unique offerings to their private label portfolios.
“Obviously, you need your mainstream flavors to drive productivity, but since we have multiple facilities in Italy and across Europe, we try to bring our private label partners different ideas,” he said. “This includes things that maybe aren’t available right now in a store in the United States, but we’re seeing as an emerging trend in Italy. These different types of formulations that we can provide bring that value and mainstream flavors, as well as a unique flavor that you wouldn’t often find in a private label brand to create some more value around the store brands that we’re supporting.”
Among the unique imported offerings among Target’s Good & Gather Signature line is the Alfredo Truffle sauce and a Butternut Squash sauce, which accompany mainstays that include marinara, arrabiata and tomato and basil, and a Rustic Vegetable sauce.
A critical part of distinguishing imported items in the mid- to upper tiers is making it stand out on the shelf. Laudiero said that he has seen retailers upgrade packaging to opaque matte plastic and outer paper with a plastic interior.
“They’re obviously setting up a stand-alone brand like they’ve been doing for a while, but now they’re putting an effort into the brand, the story and the packaging design,” he said. “This is a trend that’s been happening for quite a few years and it doesn’t seem like everyone has caught on yet — but they’re getting there.”