Tactics for Successful Pasta Category Management
Effective pasta category management is instrumental to private label growth—and the entire set.
Insightful assistance with category management is a boon to retailers, and can take a flat category—like pasta—and tactically determine new opportunities for growth. Therefore, retailers must carefully select their private label pasta partners with an eye toward what they can bring to the table beyond simply the supply and manufacture of products.
Ask the Right Questions
When entering into a new relationship with a private label pasta supplier and manufacturer, several key questions must initially frame the discussion. As noted by Mike Wesley, retail sales business development manager for Dakota Growers Pasta Company, these should include:
- What is the corporate mission of private label vs. national brands?
- What is the retailer’s experience in growing private label pasta?
- What are the retailer’s existing food safety protocols and systems?
- Does the retailer have regularly scheduled business reviews?
Retailers should seek a partner that has significant category knowledge, experience and expertise—specifically for the private label segment. The right pasta supplier should also bring data-analysis capabilities.
Analysts have tapped innovation as a requirement for revitalizing pasta (for more on approaches to pasta innovation, see “Better-for-You Pasta Opportunities”). This focus on national-brand-better (NBB) private label brings its own unique questions to the table:
- What is the retailer’s level of commitment to its private label pasta lines?
- Is the retailer’s brand a destination for the consumer?
- Is the retailer committed to growing private label pasta?
- Is the retailer driven to innovate?
Only by asking the right questions can a retailer and supplier begin to enter into a meaningful—and impactful—discussion on how to best approach management of the pasta category with an eye toward future growth.
Core best practices for pasta category management center on “the four Ps”:
- Product—the mix of the proper sizes, shapes and types
- Placement—how to properly balance share-of-shelf
- Pricing—establishing the right price gaps, both on and off promotion, vs. the national brands
- Promotion—executing planning sessions to help ensure private label promotions
A big part of category management involves ensuring retailers maintain the right balance between private label and national brand product offerings—and that the four Ps extend across all brands, including private label. Wesley noted that Dakota Growers works with retailers to “emphasize and grow private label as the consumer brand choice, to make it a destination.”
The value of price shielding cannot be underestimated. “The practice of price shielding is an important basic tactic that can be implemented by a retailer to place their store brand on deal whenever a national brand engages in a price promotion and maintain the store brand price advantage,” said Wesley.
A study by Willard Bishop, “Private Brand Performance Gauge,” analyzed this practice in detail. “A retailer has much to gain when promoting branded items and store brands simultaneously by building excitement and driving traffic to a category,” said Wesley. “The study analyzed 125 national brand and store brand counterparts across 13 center-store categories.” The bottom line? Promoting both national brand and retail brand results in higher returns and greater profitability for the retailer. “Plus, the retailer is supporting their exclusive brand, available only at their store, and creating long-term loyalty and share,” he said. “The national brand is available everywhere.”
Once a retailer has identified the right product mix and established tactics for pricing, they need to follow with the right promotional plan—ideally one that’s committed to high-profile display.
“Shoppable pallets ready to place at end-aisle or in a wall-of-values section are simple and effective ways to build lift of seasonal, high-volume pasta cuts,” said Wesley. “Mixed pallets provide the right pasta shapes that give the store the flexibility to build their own display program and merchandise with related items—from fresh produce to olive oil, pasta sauce or cheese. Display shippers enhance awareness, building and driving trial for new private label item introductions.” Retailers can customize the billboard for display shippers to communicate unique features, such as the benefits of a new better-for-you pasta line.
“We helped one of our private label customers increase their private label sales over the prior year by 17 percent by implementing display pallets into the pasta promotion schedule,” said Wesley. “We recognize retailers’ desire for more efficiency and the need to provide retail-ready cases, and we are addressing case/pack configurations that will conveniently fit into the shelf space.”
Building a Bigger Basket
Effective pasta category management can yield higher returns from center-store throughout the periphery. “We know that peripheral store is where the growth is, and pasta is the perfect recipe builder that brings together fresh produce, fresh meat, dairy and even wine,” said Wesley. Providing recipes that highlight store brands can tie these categories together in new ways.
“We analyzed shopping baskets with and without pasta and found that any pasta in a basket averaged over twice the retail ring than the basket without pasta,” said Wesley. “As related items were added to the basket, including pasta sauce and shredded cheese, the retail ring grew three-fold.”
Retailers can make shopper data work for their own brands. Suggest better-for-you products and recipes to those who exhibit purchase behavior around products with health benefits, suggested Wesley. Offer more-adventuresome recipes to those who like to try new ingredients. Provide convenient or budget-conscious products and meal solutions to help drive incremental sales among core items.
In-store foodservice or prepared foods offer another promotional tactic. “Featuring pasta dishes in the deli using a new shape or better-for-you product that is introduced in the pasta aisle is another way to cross-merchandise and build awareness,” said Wesley. For example, featuring “Chipotle Mac-and-Cheese with Bacon” in the deli and somehow calling out “Veggie Elbows” as a new item in the pasta aisle—perhaps with a coupon to encourage home trial—can help drive shoppers into the center of the store and create awareness of the new products.
The company has recognized that quality, price and service are “greens fees” to be a successful private label partner. Food safety is top-of-mind for many consumers, and it should be for the private label development teams when sourcing a product that they will be putting their brand on. Review the manufacturer’s food-safety records and third-party audits. Look at how extensive the manufacturer’s global food-safety initiative is.
The more that retailers and private label suppliers can connect the dots for consumers to streamline their shopping experience—and home meal preparation—the more intertwined retail branding grows.