U'S' Pasta Industry

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U.S. Pasta Industry State of the Union New York,
NY October 26, 2009
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(No Transcript)
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Enough Pasta laid end to end to travel to the
moon and back 600 times!
143,314,200 - Million Miles 756,698,976,000 -
Trillion Feet 6,053,591,808,000 - Quadrillion
Pieces of Gemelli
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Enough Pasta to fill 5 Roman Coliseums!
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1 Lb. of Pasta for Every Man, Woman,and Child on
the Face of the Earth
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Total Mega Pasta Category Sales Trend
CAGR
8.9
Food, Drug, Mass Wal-Mart 52 wk Dollar Sales
2
8
(-1.5)
6.2
26
24
23
13.3
24
4.1
10.8
Dry Pasta at a 13.3 CAGR is outperforming
mega-pasta category
Source Nielsen Strategic Planner 52 weeks 2006
- 2009
Total Food Drug Mass and Walmart
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Total Dry Pasta Category Performance
Both Dollar and Unit growth versus Year Ago
Source Nielsen 52 Weeks Ending August 9, 2009
Grocery Channel
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Dry Pasta Category Dollar and Unit Sales
Both primary segments showing growth vs. Year Ago
Source Nielsen 52 Weeks Ending August 8, 2009
Grocery Channel
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Dry Pasta Sales by Trade Channel
Business is dominated by the Grocery Channel 87
of Dollar Sales
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Dry Pasta Ranking Within US Supermarkets Nielsen
52 Weeks Ending 6/14/09
Dry Pasta generated the highest unit growth rate
amongst the top 100 categories in grocery stores
during 2009
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U.S. Manufacturer Unit Shares26 weeks through
June 20th, 2009
Consumption -5.0
Consumption 13.8
All Other 15.9 -1.5pts
New World Pasta 24.2 1.8pts
Consumption 9.0
Private Label 26.8 0.9pts
Barilla 22.9 -0.8pts
AIPC 10.2 -0.4pts
Consumption 1.5
Consumption 1.0
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Monthly Durum Price Trend (Cost per Cwt)
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Consumer Household Panel Data 52 Weeks Ending
5/30/09
TOTAL U.S. Total Buyers

• Key Observations
• Household penetration up 0.5
• Purchase frequency up 3.5
• Buying Rate up 2.3

Source Nielsen Consumer Facts
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2008 Inflationary Impact upon Pasta Nielsen 52
Weeks Ending 12/27/08

• Key Causals
• Pasta still only 0.20 per servingone of the
  great values in the store
• Pasta rediscovered due to widespread inflation
• Consumption migrating from out of home to in
  home

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2009 Inflationary Impact upon Pasta Nielsen 26
Weeks Ending 7/11/09

• Key Causals
• Quality merchandising is up 16 driving
  incremental growth of 19

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Growth Is Being Driven by Strong Trade
Merchandising

• Consumption vs. PY
• Total Unit 4.6
• Total Base 1.1
• Total Incremental 16.4

Source AC Nielsen YTD ending 10/03/09
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Dry Pasta Retail Merchandising

• Trade is merchandising Pasta aggressively to
  drive customer traffic
• Incremental volume change vs. Year Ago 16
• Promotional weeks change vs. Year Ago 1
• Weeks of quality merchandising change vs. Year
  Ago 19
• of units sold with Quality merchandising
  change vs. Year Ago 12

Source The Nielsen Company, 2009 YTD ending
10/03/09
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Dry Pasta Retail Distribution
Points of distribution are declining by -2 per
year as the trade rationalizes redundant
brands/SKUs
Source The Nielsen Company, YTD ending 10/03/09
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Pasta Consumption by Geography
CDI 89
CDI 149
CDI 94
CDI 87
CDI 110
CDI 83
CDI 87
SOUTHEAST
Source Nielsen Consumer Facts All Outlets
7/22/08
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Pasta Spending Index by Household Size
Source Nielsen Consumer Facts All Outlets
7/22/08
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Pasta Consumption by Household Income
Source Nielsen Consumer Facts All Outlets
7/22/08
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Age and Pasta Consumption
Source IRI Panel Data 2007
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U.S. Population Change 2020 vs. 2000Strong
Population Growth Among 45

• Insight
• Aging population creates new opportunity for
  targeted pasta products

Source U.S. Census
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U.S. Population Change 2020 vs. 2000Stronger
Growth from Ethnic Consumer Segments

• Insight
• Ethnic influence will continue to impact American
  cuisine as group population grows dramatically

Source U.S. Census
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Four Trends Are Driving CPGs That Are Winning
with Consumers
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Top Health Wellness Claims Across Categories
142
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• Insight
• Many of the largest Health Wellness claims are
  intrinsic to core pasta

Source Nielsen Label Trends, Total U.S.
Food/Drug/Mass Excluding Walmart, 52 Weeks Ending
4/19/08
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Fastest Growing Health Wellness Claims
Source Nielsen Label Trends, Total U.S.
Food/Drug/Mass Excluding Walmart, 52 Weeks Ending
4/19/08
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Global Growth within RTE Meals (U.S. MM)
Source Nielsen Insights 2006
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Pasta Innovation
Garden Delight

Quick Cook
Birds Eye Steamfresh

• Pizza Hut

Bertolli Frozen
Gluten Free
Healthy Choice Fresh Mixers
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Why Do Consumers Not Eat More Pasta?
Industry Opportunity
W25
-
49
W25
-
49
Do Not Cook Dry
W25
-
49
W25
-
49
Pasta At Home
No Kids
Total
With Kids 6
-
17
-
17
(N275)
(N2000)
(N275)
(N2000)
(N140)
(N202)
(N140)
(N202)
50
39
34
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Pasta has too many carbohydrates
50
39
34
38
45
35
31
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Concerned eating pasta will cause
45
35
31
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weight gain
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31
32
29
33
31
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Only have a few pasta recipes and dont
want to serve the same thing too often
want to serve the same thing too often
38
18
12
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Pasta is not a healthy food
38
18
12
14
Pasta is not a healthy food
37
12
7
12
A pasta meal requires too much cleanup
37
12
7
12
A pasta meal requires too much cleanup
35
10
5
10
A pasta meal takes too long to make
35
10
5
10
A pasta meal takes too long to make
30
4
10
6
30
4
10
6
Family doesnt like Italian food
31
3
3
5
A pasta meal is too difficult to make
31
3
3
5
A pasta meal is too difficult to make

• Insight
• Dry Pasta core consumers ranked health concerns
  as the top 2 reasons for not eating more pasta

Source Synovate Omnibus Barrier Study, June 2008
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The Perfect Food
National Pasta Association Communication Campaign

• Objectives
• Increase consumption rate of current Pasta
  consumers
• Regain lapsed users
• Develop platform for national roll out
• Strategies
• Educate consumers on health benefits
• Promote versatility
• Leverage price/value benefit
• Messaging
• Complex carb, low Glycemic Index, energy,
  versatile, value

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Program Architecture
National Pasta Association Communication Campaign
Pasta The Perfect Food
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2009 NPA Consumer Program
Positioning

• The Perfect Food

Location

• Florida test market
• Miami top 20 category index market
• Tampa top 25 market
• Jacksonville top 35 market

Duration

• 6 month continuity campaign

Elements

• Sweepstakes
• Celebrity Chef
• Radio
• Print
• Website
• Media outreach

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The Future of Pasta The best way to
predict the future is to create it." -
Peter Drucker
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A Glimpse into the Future

• More Healthy Offerings
• Health Plus
• Health Minus
• Disease Prevention
• Low Glycemic Index
• Gluten Free
• Heart Healthy
• Reduced Calorie

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A Glimpse into the Future
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A Glimpse into the Future

• Greater Convenience
• Pouches
• Portion Control
• Portable
• Meal Solutions
• Easy Open
• Quicker Cook Times
• Resealable

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A Glimpse into the Future

• Diverse Ethnic Offerings
• Asian
• Hispanic
• Indian
• Thai
• African American

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Everything you see I owe to spaghetti.

Sophia Loren
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Lets Hope That Spaghetti Delivers Similar
Results for IPO Members in 2010!!!! Thank
You Gracias Merci Grazie Danke