Pasta means history. It is one of the most mature food categories. Ingrained in the development of human civilization. There is no clear evidence of when exactly pasta started existing. Some trace it back to the 4th century B.C. seen in Etruscan tombs. Some others claim Marco Polo introduced pasta to Italy 13th century after returning from the Far East. History continues when Thomas Jefferson supposedly first brought pasta from Italy to North America in the late 18th century. Since then it never left the continent. Not only that, but also found permanent homes in most households and absolutely every food retail outlet in America.
According to Walmart Canada’s category manager grocery, Ivo Petroff, “North American pasta market is expected to grow 30% within next 9 years. An impressive number for one of the most mature and well-developed packaged food categories.
Growing by a third requires production, capacity, and availability. Something that happens to be a challenge even now.” Solid and growing demand means also great investment opportunities. “North America is the most promising growth market in the Western Hemisphere for investing in new food production. Real democracy with an established rule of law. Capital and assets safety, excellent banking system. Predictability of macro environment. Good infrastructure and logistics. Consumerist society is a most powerful engine for growth,” Petroff underlines.
High volumes, high-velocity bulky businesses such as dry pasta are also uneasy to be managed efficiently (and competitively) as a continuous pure import. Like it or not, the majority of North American markets are still highly promotional. Abrupt promotional spikes in volume demand can lead to substantial supply chain disruptions and bottlenecks. Not to mention all container and shipping risks, port strikes, delays, backlogs, etc.
According to Petroff, this means imported pasta has two basic options:
- To stay in specialty (branded) import territory with limited mass market growth opportunities.
- Considering local production or various forms of local partnerships or joint ventures to unleash the full potential of the market.
“Authentic Italian brands produced in Italy would have mixed emotions about that. I know,” Petroff says. One major concern for branded players could be maintaining brand authenticity. Shifting production out of the cultural domain of historical origins might conflict with brand values and brand legacy. This is a controversial but certainly reasonable argument. However, there is one more important question that pasta brand owners should ask themselves: ‘Enter the global stage or stay authentic local’? “There is no wrong answer. Both are just two different strategies with different business implications and different growth scenarios,” Petroff says. “Today’s diverse environment is full of opportunities. One option should not be necessary excluding the other. Keep authentic brand imports but leverage expertise and launch local production on foreign markets. A possible scenario that taps into both worlds. Experience and expertise in production have no national boundaries. Everything is possible in a diverse and dynamic world.”
After all, there is one more overarching consideration. “Growing political sentiment for support of local production in the US and Canada: this will dominate government agendas for years to come, regardless of elections outcomes or swings of political pendulum. Supporting local is more relevant than ever. Supporting local food can reunite the nation. This is more powerful than any brand of pasta. Businesses can’t ignore this fact if they consider North American markets seriously. Food import vs locally produced food is no longer just a logistics conversation. It’s the concept of smart business that will dominate the future of Food,” Petroff concludes.