Store Brands

FEB 2017

Store Brands delivers unprecedented strategic and tactical information needed by retail executives to develop and support compelling, differentiated store brand programs to build customer loyalty.

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www.storebrands.info / February 2017 / Store Brands 4 7 Category Intelligence: Pasta, Rice and Grains Image upgrade The addition of healthful items to the own-brand pasta, rice and grains lineup, could bring growth to a stagnant segment By Kathie Canning hether part of a main dish or eaten on the side, pasta, rice and grains long have been diet staples for U.S. consumers. Few other foods rival their versatility, convenience and value. The Washington, D.C.-based National Pasta Association reports that the average American consumes approximately 20 pounds of pasta annually. And Americans eat even more rice. The University of Arkansas — situated in the state that produces more than 40 percent of all U.S.-grown rice — notes that per-capita rice consumption now stands at slightly more than 31 pounds. But data from Chicago-based market research firm IRI reveal little growth for the pasta and rice categories over the past year (see chart on page 48). According to "Pasta, Rice and Grains — U.S.," an April 2015 report from global market research firm Mintel, stagnant sales within the pasta, rice and grains segment can be attributed to perceptions that, in general, the products are high in gluten and carbohydrates and might be too processed. Despite the challenges, there are still opportunties for retailers to grow private brands within the segment. "Brands must provide more healthful options to spur sales," Amy Kraushaar, U.S. category manager of food and drink and foodservice for Mintel, wrote in the report. "Emerging grains can help breathe new life into this category, with additional focus on new flavors and health benefits." Within specialty grains and specialty pasta, Agron Kosova, president of Naperville, Ill.-based Fine Italian Food, points to increased consumer interest in non-GMO ingredients. (It's worth noting that no genetically modified wheat is currently being grown anywhere in the world.) "There is a real focus on quality and traceability — actually knowing where the grain comes from and where it's being processed," adds Paul Laudiero, an associate with GHIGI Food Industries in Manassas, Va. "With that comes a larger emphasis on organics, as well as non-GMO." Liz Housman, director of marketing for Minnetonka, Minn.- based Dakota Growers Pasta Co., says the organic pasta subcategory is growing at an annual rate of nearly 3 percent in dollars and equivalent volume, higher than the overall category. The biggest purchase hurdles for consumers are price and availability at their preferred stores Gluten-free pasta, too, remains in a strong growth mode, Housman says, with data from Nielsen showing 7 percent dollar growth and 10 percent equivalent dollar growth for the subcategory during the 52 weeks ending Nov. 26, 2016. Retailers also should look to whole grains and ancient grains to meet consumer demand for better-for-you offerings. "Consumers are looking for added nutrition from everything they eat, and whole and ancient grains give an added boost of protein, fiber and other nutrients to a very traditional carb-loaded category," explains Brett Vegas, marketing manager for Boulder, Colo.-headquartered Sage V Foods. Indeed, ancient grains came in at No. 14 on the National Restaurant Association's recently released "What's Hot: 2017 Culinary Forecast." And although most consumers are familiar with whole- grain pasta, they might not know that whole-grain rice comes in colors other than brown. The Whole Grains Council offers up Himalayan Red Rice and Do consider adding emerging grains and organic pasta options to the store brand mix. Don't neglect consumers' desire for convenient packaging and ease of preparation.

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