N.P.A. chairman: Pasta industry in 'very good position'
Feb. 24, 2014
by Eric Schroeder
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NAPLES, FLA. – Pasta is pulling its weight. That was the message delivered by Pat Regan, chairman of the National Pasta Association, in kicking off the N.P.A.’s annual meeting on Feb. 24 at the La Playa Beach & Golf Resort in Naples. More than 130 people were in attendance at the meeting, representing one of the largest turnouts at the conference in recent years.
“I think the pasta industry is actually in a very good position right now,” said Mr. Regan, who also is vice-president/general manager of private brands – pasta at ConAgra Foods. “Industry has gone through a lot of change over the last few years and continues to go through a lot of change. But I see some real signs of strength in the industry.”
One of those signs is solid volumes, particularly on the retail side, he said. Citing data from Nielsen and Information Resources, Inc., Mr. Regan said dry pasta volumes are up about 1% over the past year.
“That’s good news for all of us as we know how important volume is to our manufacturing assets,” Mr. Regan said “It’s really the first sign of growth we’ve seen in some time. The last couple of years the industry volumes have been flat. So it’s good to see some growth. Hopefully consumers are coming back to the category. They need us. The category should be purchased by people who are looking for great food, it’s healthy, it’s easy to make, and helps a pinched budget go a long way.”
Mr. Regan said pasta also is getting a boost from the food service industry, a segment that “got hurt very badly” from 2008-11.
“The industry is starting to improve a little bit, and pasta is one of the key ingredients on restaurant menus,” he said. “It’s really key because operators use pasta as a main part of the dish. It’s inexpensive. It allows them to make a high profit in restaurants. So it’s good to see that trend as well. Those things are a little bit counter to what we are seeing in general across the store where we’re seeing food consumption in general very weak.
“For our industry, for pasta specifically, we’re seeing solid trends, and that’s really going to work for us.”
Finally, the industry is seeing some change in terms of ownership of companies, specifically ConAgra’s acquisition of Ralcorp Holdings and, more recently, Post Foods’ purchase of Dakota Growers Pasta Co.
“I look at these two changes and say ‘why did two bigger companies buy these smaller pasta businesses?’” Mr. Regan said. “The answer is they see value in them. That means the industry is strong. Nobody is going to invest in smaller businesses unless they see growth potential and they see good cash flow coming out of these businesses. So, I look at these as real strong signals that the industry is in a good position.”