Dry pasta has steadily grown in stature outside Italy over the last few decades, and now represents a market worth US$1.5bn in the US alone. Which companies are cashing in, and how is the market likely to develop? Pam Ahlberg investigates.
Whether in good economic times or bad, pasta holds a favoured place on US kitchen tables. Back in the 1950’s, when it was called macaroni, this American standby – baked with cheese for a casserole or dressed up with mayonnaise for a salad – was standard, down-home fare. In the 1980’s, as American taste buds grew more sophisticated and people learned the difference between vermicelli and farfalle, pasta’s popularity soared. Despite some minor disfavour due to the anti-carbohydrate fad, demand for this wildly versatile staple continues to grow.
According to a survey commissioned by the National Pasta Association, 84% of US consumers consider pasta to be a healthy food and an important part of a well-balanced diet. In fact, 77% of those surveyed said they eat pasta at least once a week, while a third eat it three or more times a week. In 1998, the US Department of Commerce reported that Americans had been increasing their pasta consumption at an annualised rate of between 2 to 3% for the previous ten years.
According to a 2000 market study by Business Trend Analysts, Inc., sales in the US market for dry pasta totalled US$1.5bn in 1999. Growth is expected to remain stable into the twenty-first century, averaging an expected 2.7% per year from 1998 to 2008.
The word ‘pasta’ comes from the Italian for paste, meaning a combination of flour and water, and describes the myriad forms of spaghetti, macaroni, and egg noodles. Pasta made its way to the New World through the English, who discovered it while touring Italy. But it was Thomas Jefferson who is credited with bringing the first ‘macaroni machine’ to America in 1789 after returning home from serving as ambassador to France.
Antoine Zerega, a Frenchman, opened the first American pasta factory in Brooklyn, New York, in 1848. In 1999 there were estimated to be 60 to 65 major US plants producing dry pasta.
There are three main markets for dry pasta: retail, industrial, and foodservice. Approximately 63% of US domestic production of dry pasta goes to the retail sector, 24% goes to the industrial sector, and 13% goes to the foodservice sector. Brand label products represent about 80% of total retail sales and private store labels represent the remaining 20%. The industrial sector of the dry pasta market includes food processors that use dry pasta as an ingredient in the foods they manufacture.
Before 1960, the US pasta industry was comprised of family-owned, regional companies. In the 60’s and 70’s big food conglomerates such as Hershey, General Foods, Pillsbury and Borden began buying up the smaller producers. By 1998, top US pasta makers included Bestfoods, Borden, Hershey Foods, and American Italian Pasta Company. At that time, eight companies controlled over 50% of total production. However, in the late 90’s many of these companies began unloading their pasta businesses, making room for some new players.
In 1998, Dakota Growers Pasta Co. (DGPC), based in Carrington, North Dakota, purchased Primo Piatto, Inc., a company created by the 1997 sale of two Minnesota Borden pasta plants. Dakota Growers was formed in 1991 as an agricultural cooperative for durum wheat growers in North Dakota.
In January 1999, Hershey Foods sold its pasta business to Central Pennsylvania-based New World Pasta Co. With that deal, New World Pasta acquired the Ronzoni, San Georgio, American Beauty, Light ‘n Fluffy, P&R, Skinner and Mrs. Weiss brands
In the fall of 2000, Kansas City, Missouri-based American Italian Pasta Company (AIPC) bought the Mueller’s pasta brand from Bestfoods. In June of this year, the company acquired seven regional pasta brands from Borden, including Anthony’s, Globe/A-1, Luxury, Mrs. Grass, Pennsylvania Dutch, R&F and Ronco brands.
Currently, the above three manufacturers compete for the top three spots in the US dry pasta production.
Enter the imports
With the name change from macaroni to pasta, it wasn’t long before upscale, imported pastas began competing for the US dry pasta dollar. Imported pasta currently represents approximately 12.5% of the domestic market. And of those imports, Italy’s Barilla has been the most successful.
Barilla began shipping pasta to the United States in 1995. In 1999, the company opened its first US factory in Ames, Iowa, which, like the operations of Dakota Growers and American Italian Pasta, features integrated milling of semolina flour. Barilla has increased its share of the US market by 50% over the past year, to control 6.7%.
It remains to be seen whether imported pastas continue to pick up greater US market share, or whether product niches such as organic or non-GMO will enter the mix (if Monsanto is successful in introducing roundup-ready wheat to US growers within the next few years). But based on a history that dates back to the fourth century BC, pasta will certainly be here – dressed up or dressed down.
By Pam Ahlberg, just-food.com correspondent
Pam can be reached by email at: firstname.lastname@example.org
To view related research reports, please follow the links below:-
The 2000-2005 World Outlook for Pasta