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Barilla: Buoyed by spirited merchandising and marketing programs, Barilla is reigniting consumers' love for pasta.

SOMETIMES IT IS TOUGH TO BE THE TOP DOG. Not only is everyone else trying to catch you, they also look up to you as the category leader--the company that sets the tone for the overall industry.

Say hello to Barilla. The Northbrook, Ill.-based pasta company, a division of the Italy-based Barilla Group, is far and away the industry leader in domestic pasta sales, generating more than $600 million in annual sales and controlling an estimated 27.5 percent of unit volume in a category that seems to be securing its footing at retail shelves and with many previously-skeptical consumers.

"We have a commitment to the overall category," says Tim Knuettel, vice president of sales for the U.S. and a 13-year veteran of the company. "We understand our role here, and it is to be the ambassador and advocate for the pasta industry. There has to be a long-term strategy that grows the value of the category and we see ourselves as playing a big part in that in many different ways."



Pasta has long been an enigma for grocery retailers. On one hand, retailers realize the need to stock a healthy assortment of products to satisfy consumers' dinnertime needs. On the other hand, the category has been plagued with low profit margins and by some bad publicity over the years, especially concerns that it was unhealthy and, perhaps more importantly, not a good choice for those looking to maintain their weight. The result has often been slow growth and declining profits for retailers and suppliers.

Barilla is trying very hard to change all of that through a variety of merchandising and marketing programs that have already seen sales grow by about four to six percent annually over the last three years, and internet search volume grow so significantly that Google called 2016 the year of the "Pasta Comeback." Barilla is also investing in consumer education by actively monitoring trends and enlisting a variety of registered dietitians and nutritionists that tout the health benefits and nutrition of pasta. "As recently as about 18 months ago, we again made the commitment to start speaking up more often and more loudly about the many benefits of the pasta category," Knuettel says. "We want to celebrate the health benefits of this category and reignite the passion for pasta that so many consumers have shown over the years."

Action speaks louder than words and Barilla officials are confident that their various merchandising and marketing strategies are making a big difference. Knuettel says that company officials are working hard to show consumers that they have a broad range of products to satisfy most dietary needs. "It is absolutely shocking how many products we have that did not exist just 10 years ago," he notes. "We have a wide range of products in such categories as gluten-free, organic, vegetable, white fiber and plus-protein. The bottom line is that we asked the consumer what they expected of us, and we listened."

At the same time, Barilla is going after Millennials through a video series featuring YouTube star Hannah Hart. The web series, called While the Water Boils, is part of the company's "Passion for Pasta" marketing campaign. The videos are designed to catch the attention of younger consumers, show them how pasta can bring people together and offer them recipes that include pasta products. Barilla's overarching marketing campaign, called Recipe for Wonderful celebrates the diverse ways in which people come together to enjoy a meal while connecting it to the culture surrounding pasta and sauce.

Knuettel is quick to point out that Barilla is sensitive to concerns about profitability of the category. While promoted prices have increased recently, he noted that, "At the same time, we are doing all we can to bring the consumer back to the pasta aisle. We are educating them on the benefits of pasta, we are offering more recipes and we are giving them more reasons to buy pasta."

Company officials want to take advantage of the Barilla brand, too. They have introduced sauces and entrees to a 235-SKU-strong Barilla assortment, confident that retailers will see the connection between the products and help them cross-merchandise these items with traditional pasta products.


"I think retailers are very pleased with all that we are doing for them and the category," Knuettel says. "This is the 13th largest center store category and research shows that when pasta is included in a consumer's basket, the value of the basket doubles and the average number of items goes from 10 to 33. Pasta means more profits for our retail partners."

Still, Knuettel is hoping that merchants step up even more. He stresses that retailers need to help amplify the message to consumers about pasta's benefits. "We need them to get on board with us," he says. "We have a great reputation among women, particularly parents, who really seem to love us and our products. We have earned that reputation by doing business the right way and taking care of our customers."

Barilla certainly has the pedigree. The company was founded nearly 140 years ago when Pietro Barilla opened a bread and pasta shop in Parma, Italy. The company became a household name in Italy over the next 50 years through a nifty combination of innovation, marketing and production.

Now in its fourth generation as a family-owned business, it made its entrance into the domestic market in 1996 by importing dry pasta from Italy. Facing high tariffs, company officials quickly realized that making the product in the U.S. was much more economical. Barilla opened its first plant in Ames, Iowa in 1998. A second plant, in Avon, N.Y., opened in 2007.


Today, Barilla, with about 500 workers in the U.S., produces 250,000 tons of pasta annually out of the two facilities. But Knuettel is confident that Barilla and the entire pasta category will keep growing and growing.

"We think we have everything covered," he says. "We are the category's advocates and want everyone to grow. But we are also doing what's right for our business, including introducing more sauces, meal solutions and other items to make it easier for the consumer to prepare a meal. We have also made an enormous investment on research and development to make sure we are ahead of the curve with any consumer trends.

"Simply put, our goal is to be around for another 140 years. That can only happen if we continue to put our customers first, by always listening to and anticipating their needs. This approach ensures we're developing the best products for everyone."
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Title Annotation:SPOTLIGHT ON
Author:Mendelson, Seth
Publication:Grocery Headquarters
Article Type:Company overview
Date:Sep 1, 2016
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