PILING ON THE PASTA

Pasta, the perennial meal solution, is gaining more shelf space at retailers from coast to coast.Most of the category growth is being generated by upscale, ethnic and organic items in a variety of new cuts. For example, six months ago, Dahl's Food Markets' unit on the south side of Des Moines, Iowa, added 8 feet to its pasta and sauce section.The 37,500-square-foot unit now stocks 26 feet of dry pasta.

Pasta, the perennial meal solution, is gaining more shelf space at retailers from coast to coast.

Most of the category growth is being generated by upscale, ethnic and organic items in a variety of new cuts. For example, six months ago, Dahl's Food Markets' unit on the south side of Des Moines, Iowa, added 8 feet to its pasta and sauce section.

The 37,500-square-foot unit now stocks 26 feet of dry pasta. The store has added a variety of upscale, imported pastas, as well as new cuts. The section also includes a 4-foot refrigerated case of DiGiorno refrigerated pasta merchandised between the dry pasta and sauces.

Why dedicate so much space to one category? Ross Nixon, vice president of merchandising for the 11-store Des Moines-based chain, had five reasons: "It tastes good, it's easy to prepare, you can fix it 2,000 different ways, it's healthy and it's cheap."

Plain dry wheat-based spaghetti and macaroni continue to have the largest market share of the multibillion-dollar pasta industry. But they are getting competition from specialty pastas like tomato basil rotini, red chile fettuccini, carrot spaghetti and garlic angel hair. Moreover, pastas are now made with rice, quinoa and other wheat alternatives and are available in a variety of shapes, from cows to pigs.

Although upscale and exotic specialty pastas still account for a relatively small portion of total pasta sales for most stores, they represent a huge growth area, Nixon said. In addition to a wider assortment of pastas, retailers are stocking more specialty sauces.

For retailers, specialty pastas have been a boon. While plain pasta has profit margins in the low to mid-teens, specialty pastas have margins approaching the low 40% range.

Wild Oats Community Markets stocks pastas priced from 99 cents for standard spaghetti to $6 for a pasta made with exotic mushrooms. These higher-end products have margins ranging from 38% to 45%, said Dale Kamibayashi, director of grocery purchasing for the Boulder, Colo.-based chain of natural-food supermarkets.

Pasta can be found in several areas of Wild Oats stores -- dry in grocery and bulk, frozen in the freezer, and refrigerated and fresh in the deli case. Wild Oats stocks a variety of frozen tortellini and ravioli, filled with such eclectic ingredients as wild mushrooms, gorgonzola cheese and walnuts.

"We're seeing a lot of value-added pastas," Kamibayashi said.

Genuardi's Family Markets dedicates 4 to 8 feet of its 32-foot pasta sections to specialty pastas, said Emil Oles, category manager for the 30-store chain, based in Norristown, Pa. Dry pasta ranges from plain spaghetti at less than a $1 a pound to Al Dente tricolor fettuccini at $3 a pound. The company recently brought in rice pasta.

"We want people to know that when they come into Genuardi's, they'll have a large variety of cuts and flavors," Oles said. "We want them to know that when they come in, they'll get something interesting."

Balls Food Stores, a Kansas City, Kan.-based supermarket chain, has added 6 to 8 feet to its pasta sections to accommodate the new imported and flavored pastas, said Larry Brown, director of purchasing for the 24-unit chain. Now most stores carry 16 to 24 feet of shelf-stable pasta and 8 to 12 feet of pasta sauce, he said.

In addition to the dry pasta, Balls carries Contadina fresh pastas in refrigerated cases.

"The entire category has been a big growth area for us," Brown said. "People are forgoing a few hamburgers and tacos for pasta."

Nearly two-thirds of consumers keep three or more boxes of pasta in their pantry, and 11% of this group store eight or more boxes at a time, according to the American Pasta Report, produced last year by the National Pasta Association, Arlington, Va. Seventy-seven percent of people surveyed said they eat pasta at least once a week, while nearly a third eat it three or more times a week, the association reports.

Dry pasta leads the category, with sales of $1.1 billion for the 52-week period ended May 24, 1998, down 1.4% from the previous year, according to Information Resources Inc., Chicago.

During that period, sales of refrigerated pastas dropped 6.7% to $153.7 million. Refrigerated pasta appeals to consumers seeking healthier and fresher food items. Its higher price and shorter shelf life, however, can be a deterrent for some shoppers.

Frozen-pasta sales, which rose 2.5% to $257.4 million during that period, are expected to climb over the next few years, fueled by sales of frozen ravioli and tortellini. By 2006, manufacturers' sales of frozen pasta will grow by 8% per year to reach $620 million, according to an analysis of the U.S. pasta market by Business Trend Analysts, Commack, N.Y.

Although dry sales were down slightly, retailers are still reporting healthy activity in the pasta aisle.

"In some areas, we're seeing double-digit growth over the past year," said Bryan Ryckeley, grocery buyer with H.G. Hill Stores, a Nashville, Tenn.-based chain of 14 stores. "Pasta is almost the perfect home meal."

Retailers and manufacturers are doing their part to increase pasta sales. Through product development and cross merchandising, they have been able to maintain excitement in the category.

For example, Mallard's, a Modesto, Calif.-based fresh-pasta manufacturer, introduced Mallard's "Cooking Made Easy" meals in February 1996. Sold in the deli section, these products package fresh pasta with chicken or beef. To create a meal, the customer only has to cook the pasta and heat up the sauce. Cooking Made Easy, which serves two to three people and retails for about $5 a package, is sold at a variety of retailers, including Raley's, Albertson's, H.E. Butt and Save Mart.

At Genuardi's, pesto sauces and dressings are merchandised near the pasta to promote its use for different kinds of meals. Working with Borden, Columbus, Ohio, H.G. Hill created a special promotion that used end bunkers to display pasta, sauces, bread and other items as a meal solution.

Wild Oats often creates elaborate displays in its produce department, using fresh vegetables, olive oil, pasta sauce, pasta, bread and canned tomatoes to help customers build a meal. These displays have boosted sales, Kamibayashi said.

"You want to make them eat with their eyes," he explained. "The display sets the mood and gets them going in that direction when they walk in the store."

Wild Oats also uses endcaps and side stacks in-aisle to promote pasta, as well as demonstrations and free samples.

"All these efforts work in synergy to bring extra products into the basket," he added.