Celeb chef Gino D’Acampo wouldn’t touch the budget pasta on UK shelves: it uses soft wheat, which is against Italian law

In the UK, Italian food is synonymous with quality. So it might come as a surprise that Italian pasta manufacturers are flooding the UK with cheap pasta that can’t legally be sold in their homeland.

Sales of value tier own-label pasta have soared by more than a fifth to £69.9m in the past year. That equates to an extra 7.9 million packs. The impact of these lines - some of which fetch as little as 20p per 500g - is clear. Pasta volumes have grown 3%, but value has dipped 0.1% [Kantar 52 w/e 14 July 2019].

There is a more pressing issue than market value at play, though: quality. Take a closer look at lines such as Tesco’s Hearty Food Co spaghetti (20p/500g) and penne (29p/500g), Asda Smart Price Pasta Shapes (29p/500g) and Morrisons Savers Penne (30p/500g), and you’ll see why. All are made in Italy with durum wheat flour, the traditional ingredient of pasta. That’s where the good news ends. Because that durum wheat is mixed with cheaper soft wheat flour to create a blend that contains around 5g of protein per 100g.

It wouldn’t pass muster in pasta’s heartland. Italian law states that all Italian-made pasta sold domestically must contain 100% durum wheat and have a protein content of no lower than 10.5%. Anything less can only be sold abroad. It’s a point of national pride: when the EEC overruled Italy’s pasta imports ban in 1988, newspaper La Repubblica called pasta made with soft flour ‘gluey and insipid’.

“A decline in production means Italian durum wheat prices have risen since 2017”

Whether the pasta being shipped to the UK is that bad is not a debate for these pages. But its rocketing growth suggests Brits are not too picky about their spaghetti and fusilli. So, what does all this mean for the UK pasta market? What’s driving the switch to cheaper materials? And, with Brexit still unresolved, what does the coming year have in store?

As food prices rise, the prospect of a cheap dinner is increasingly appealing. So shoppers are always on the lookout for the best bargain - even in the world of pasta, which averages at just 83p per pack. That has made Aldi and Lidl the standout winners in pasta this year, with respective value growth of 13.8% and 30.8%. The big four have, in turn, started to compete more heavily on price with their value own-label ranges.

This price pressure comes at a tricky time. Because producing cheap 100% durum wheat pasta is an increasingly tough feat. “Italian durum wheat prices have risen by 9.5% since 2017, due to a sharp decline in wheat production, driven by severe droughts,” explains Alana Barros, market analyst at Mintec.

Pasta manufacturers could always use durum wheat from elsewhere. Bumper crops in Canada, for example, have pushed down the price of its produce. However, it’s not that simple. Most Italian pasta brands will only use homegrown durum wheat. That’s because Italy has ‘country of origin’ regulations on pasta, restricting wheat imports. “The regulation ensures all labels for pasta packages include the country origin of the wheat inside,” says Barros.

 

Value tier boost: pasta and pasta sauce sectors by value

Top pasta and pasta sauce sectors by value sales   
  Value (£m) % growth Market share
 Fresh Filled Pasta   97.9 0.1 21.3
 Dry Pasta Shapes   91.6 -4.1 19.9
 Dry Spaghetti   37.7 -2.9 8.2
 Fresh Cut Pasta   36.8 3.9 8.0
 Fresh Noodles   33.6 5.7 7.3
 Dry Fusilli   30.9 13.0 6.7
 Dry Lasagne   9.6 -4.0 2.1
 Dry Macaroni   9.5 0.2 2.1
       
  Value (£m) % growth Market share
Ambient pasta sauce 277.2 -2.5 70.4
Chilled pasta sauce 45.1 3.8 29.6
       
Source: Kantar, 52 w/e 14 July 2019      
  • Own label is the big four’s weapon of choice in staving off the discounters. But some retailers might need to start asking serious questions about the impact of cheaper lines on the pasta category. Sales are in slight value decline despite the supers having sold an extra 16.5 million (3.1%) packs of pasta this year. 
  • Take Tesco. Kantar notes that its bargain basement Hearty Food Co pasta, which features a 500g pack of spaghetti that sells for just 20p, is one of the fastest selling lines. Yet the retailer has seen the value of its pasta sales slump 5.9%. 
  • “The rise of this value range has led to shoppers downtrading from standard tier or brands,” says Kantar analyst Tom Church, who adds the shift to value tier lines is fuelling deflation in the market. 
  • Sainsbury’s has seen its sales fall 5.8%, also partly as a result of growth for cheaper own-label lines, while Asda and Morrisons have achieved respective growth of 3.7% and 2%, suggesting they have struck a better balance between budget and more premium products. Another driver of value own-label growth in the big four is clear: Aldi has grown 13.8% and Lidl is up a staggering 30.8%.

Source: Kantar 52 w/e 14 July 2019

 

Italian first

That preference for Italian durum wheat is only increasing. Last April, the world’s largest pasta manufacturer Barilla said it would cut Canadian imports by 35% and sign no further supply deals after traces of weedkiller glyphosate were found in Canadian stocks. Although the traces were within accepted limits, Italian growers used this as an opportunity to encourage manufacturers to use only Italian wheat, further driving up prices.

“It makes sense that the shortage of Italian durum would be a factor in driving exports of pasta containing soft wheat flour,” explains Barros. “Italy, as the world’s largest producer of pasta, would need high volumes of high-quality durum wheat, but due to low domestic production, the country would have to counterbalance the reduced supply somehow.”

Hence the influx of soft wheat pasta to the UK. “Essentially, Italy is shipping all the crap they’re not allowed to sell there to the UK,” says one well-placed industry source.

“Essentially, Italy is shipping all the crap they’re not allowed to sell there to the UK”

It’s not a completely new phenomenon. Britain’s only dried pasta manufacturer, Pasta Foods, says it uses exclusively durum wheat. But other manufacturers have been less consistent, it claims. “What’s interesting is that in 2017, most own-label pasta did not have a blend of durum and soft wheat but a number of years before that it was quite common,” says sales director Michele Conway. “The use of soft wheat flour in pasta seems to come and go, depending on external factors.”

What doesn’t fluctuate is the opinion of soft wheat pasta. Among the experts, it is universally deemed inferior to the 100% durum stuff. “The issue with soft wheat is that it doesn’t give the pasta the correct protein content, gluten quality and strength to be able to withstand the cooking process properly, so it goes to mush much more easily,” explains Barilla trade marketing manager Alberto Costella. “Pasta is a simple product: if you want to make quality pasta, you have to start from excellent ingredients.”

As retailers scrimp on their own-label offerings, that’s emerging as an increasingly important selling point for brands. Barilla, for example, says it is “100% committed to quality” and points to its “direct contracts with more than 5,000 farmers in Italy”. De Cecco’s #alladececco campaign hammers home its mission to ‘search for the best in everything we do, paying attention to detail’.

Meanwhile, market leader Napolina has launched high-end offerings such as Bronze Die, Organic Gluten-free Vegetable and 50/50 high-fibre pasta lines. “Brands are adding value to the pasta category by focusing on premium ranges that respond to consumer trends and meet demand,” says Napolina commercial director Neil Brownbill.

Amid all this focus on quality, the average price of brands has risen 7.6% while own-label prices are down 7.2% [Kantar]. However, some shoppers are evidently willing to splash out. Barilla, which launched in the UK in 2014, is up 35% to £5.2m [Nielsen 52 w/e 7 September 2019]. De Cecco is up 7.8% to £11.3m. And Napolina has managed growth of 0.3% on volumes up 1.1%.

It may seem at odds with Britain’s love for a bargain pasta dish. But the numbers show there is appetite for both ends of the spectrum: from cheap and cheerful to a more premium affair. That’s even apparent in own label. While 20p pasta is flying, sales of high-end offerings are also in strong growth. Premium tier own-label lines are up 36.4% in value terms, albeit from a small base.

The same thing is happening in pasta sauces. Overall, cheaper own-label versions are winning. Value sales of retailer offerings, which undercut brands by roughly a pound a jar, have climbed 4% on volumes up 4.2%. By contrast, brands are up 1% on volumes down 0.8% [Nielsen].

“Within the Italian cooking sauce segment, volume sales are up 0.9%, achieved at a lower average price per item of 2.3%, resulting in value sales decline,” says Rob Hollis, Italian marketing manager at Dolmio owner Mars Food, quoting Nielsen.

“Brands are adding value to the pasta category by focusing on premium ranges”

Still, there is also appetite for more premium fare - as evidenced by Italy’s number one canned tomato brand Mutti winning listings in Sainsbury’s and Tesco this year. Claiming to use ‘100% Italian tomatoes with other highest quality ingredients’, Mutti has seen its retail sales more than double in the past year [Nielsen].

“We’ve created some real traction for Mutti in 2019, building on our highly successful launch into wholesale, speciality and foodservice,” explains Jess Bartkowiak, brand manager for Mutti at distributor RH Amar. “This was made possible by shoppers demanding more premium products in cooking sauces and the core ingredients for making their own sauces.”

To meet this demand, the brand is launching a range of premium pasta sauces (see right). Belazu, meanwhile, launched a quintet of premium pestos - including truffle, artichoke and rose harissa variants - last September. It claims to be the UK’s fourth-biggest pesto player in Nielsen rankings.

“It is important for us to understand and innovate for our consumers, who are often focused on health and flavour,” says Belazu partnership manager Alice Jarrett-Kerr. “People are looking for authentic, ‘clean’ and interesting products that have strong provenance and traceable origin.”

 

Big losses in instant meals: top 10 pasta brands by value

Top ten pasta brands by value  
  Value (£m) % growth
Napolina 33.1 0.5%
De Cecco 11.3 7.8%
Barilla 5.2 35.0%
Pasta Reggia 4.6 157.1%
Marshalls 3.3 -2.2%
Garofalo 2.8 14.8%
Rummo 2.4 44.9%
Happy Shopper 1.6 1.3%
Seeds of Change 1.4 34.2%
Buitoni 1.0 -71.5%
     
 Source: Nielsen, 52 w/e 7 September 2019    
  • Pasta brands seem to be benefiting from the budget own label boom. While own label is down 2.7% in value, the majority of the top 10 names in pasta have managed to gain sales by focusing on quality credentials. Only Marshalls and Buitoni have suffered a drop in value in the past year. 
  • Barilla is a prime example of this strategy. It has gained £1.4m by hammering home a quality message, growing distribution and running marketing that aims to broaden Britain’s pasta repertoire beyond just spag bol.  
  • Market leader Napolina, which is up 0.3% on volumes up 1.1%, has focused on high-end products. “One of our key strengths is the breadth of range offered that appeals to the younger, millennial demographic,” says Napolina commercial director Neil Brownbill, pointing to the brand’s 50/50 and vegetable pastas. “The Bronze Die premium offering has recently seen strong distribution gains.”
  • Outside of the dried pasta market, though, things aren’t looking so positive for pasta brands. That’s especially true in instant meals. Premier Foods’ Batchelors Pasta ‘n’ Sauce lines have only scraped a £200k (1.9%) increase and Symington’s Mug Shot has suffered a whopping £1.3m drop (30.1%), as it faces increased competition with more premium instant meals. Heinz’s canned pasta lines are also in decline, down 0.7% in value and 3.3% in volume.

Source: Nielsen 52 w/e 7 September 2019

 

Questions for the mults

This poses some serious questions for the major mults. Because as they focus more heavily on cheap and cheerful options, their value sales are slipping. Tesco has seen a 5.9% slump and Sainsbury’s, which began selling a 5kg pack of penne for £4 earlier this year, is down 5.8%. Insiders say they have seen “terrible” category management at play, which is encouraging shoppers to opt for value tiers over standard lines or brands.

“People are looking for authentic, interesting products that have strong provenance”

Still, soft wheat pasta isn’t likely to go anywhere soon. Especially as authentic pasta is set to face further pressure in the immediate future. “We are seeing indications that durum wheat prices are likely to go up in coming months,” says Conway at Pasta Foods.

“This is the key time for harvesting in Canada and they are struggling to harvest because they’ve had heavy snowfall. If you’re a retailer looking at the pasta category for next year, you will be thinking about the prospect of increases in raw material prices.

“And then, of course, there’s Brexit,” she adds. “If you are buying in the finished product from Europe, you’re likely to face tariffs, which would push prices up, along with all the extra paperwork and resources needed to import it.”

In short, if times get harder, our pasta is likely to get softer.

 

Innovations in pasta & pasta sauces 2019

 

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