Barilla America, Inc.

Pasta is prologue┬áBring your appetite along as we follow the quick ascendance of Barilla America in the US pasta market. April Terreri has the story. Scholars might argue over the country of origin for pasta, but whether it was China, Greece, Arabia or Italy, they are missing the point. Citizens of the world today understand that the best pasta recipes without question come from Italy. The most notable pasta producer in Italy, with that countryÔÇÖs top-selling pasta brand, is family-owned and family-operated Barilla, operating in Italy since 1877.Barilla first began testing the American pasta market in 1996, when the company entered the retail space by importing its pasta products from Italy. Just two years later, Barilla America began operating in Ames, Iowa, in a new 350,000-square-foot manufacturing facility with an adjoining semolina mill. Barilla America today ranks first in the country with 28 percent of the market nationwide, leaving the No. 2 brand in the dust with only single-digit market share, reports Fabio Pettenati, vice president of supply chain for the Bannockburn, Illinois-headquartered Barilla America. So how did the company so quickly achieve its outstanding position in the US market?The Barilla story begins in 1877 in Parma, when Pietro Barilla followed his dream to make the freshest, most delicious food that families in his neighborhood could share and enjoy. Today, PietroÔÇÖs dream continues to serve families around the world with high-quality pasta products.Once the company began importing its products into the American market, continued healthy sales meant Barilla faced a momentous decision. ÔÇ£We knew that if we wanted to continue expanding the business, we needed to be able to produce in the space, so we decided to build a factory and mill in the States,ÔÇØ Pettenati says. The Ames location was the perfect midway point in the country from a distribution perspective, and it was also close to the wheat supply.As Barilla began its operations, it discovered another surprise: the wheat from the North American plains was of a higher quality than that found in European and Italian markets. In fact, the company exports wheat from America to its Italian factories and mills to produce high-quality specialty pastas and bakery goods for the European markets. Barilla AmericaÔÇÖs product offerings include a variety of boxed pastas and sauces. Its shelf-stable pastas, produced in Italy, are also available in American markets.In 2005 the company discovered it needed more capacity than the Ames plant could provide. ÔÇ£We conducted a thorough study of the benefits of either expanding the existing plant or building a new facility,ÔÇØ explains Pettenati. ÔÇ£Since we did the first study 10 years prior, oil prices had risen, so the cost for distribution throughout the country became significantly different. The analysis suggested that investing more capital in a second plant was beneficial from a cost perspective.ÔÇØSo Barilla built a second manufacturing plant in Avon, New York, about 20 miles south of Rochester and 50 miles east of Buffalo, where railcars deliver semolina produced at the Ames mill. The new 320,000-square-foot factory allocates about 120,000 square feet to manufacturing and the remaining 200,000 square feet to finished products. Both manufacturing facilities have warehouses operated by 3PL Jacobson Companies, located in Des Moines, Iowa. Pettenati notes that the Northeast, with its high concentration of consumers, accounts for about 50 percent of sales. Barilla is the only national brand that consumers can buy anywhere in the country. Strategy played a major role in this achievement, as Barilla was determined to become a national brand when it first entered the US market in 1996. ÔÇ£We started distribution throughout the country immediately and the investment was fairly significant in terms of advertising nationally on television,ÔÇØ explains Pettenati. ÔÇ£In 1996 and 1997 we were the only brand of pasta advertising on TV, and we are still doing TV campaigns every year to advertise the range of our products.ÔÇØTodayÔÇÖs economy feeds into some of the companyÔÇÖs current growth. Pettenati notes that, according to Nielsen Media Research, the pasta category is up 5.5 percent over last year in terms of consumption. ÔÇ£This is because pasta is very affordable; itÔÇÖs a healthy and delicious food, and you can feed a family for just a few dollars.ÔÇØConsumers have come to expect consistent high-quality products from Barilla. This, again, is due to the companyÔÇÖs heritage philosophy. In fact, the companyÔÇÖs Italian experts visit the two US facilities to teach time-honored pasta-making techniques. Barilla continually conducts tests that compare the quality of US production with that of its Italian production so that no matter where it is made, Barilla pasta always maintains a pleasing and consistent taste.Equipment design is another critical component necessary to deliver consistent and high-quality products. Barilla operates two Tishma Innovations machines in the Avon facility. ÔÇ£We and Tishma redesigned the machine significantly from their standard machine to suit our particular requirements,ÔÇØ notes Pettenati. The machine weighs the product and then fills it into BarillaÔÇÖs signature blue pasta boxes. The high-speed machine runs 240 cartons every minute.Pettenati attributes BarillaÔÇÖs continued success to its focus on consistency and quality. ÔÇ£We have to account for differences in the raw materials we receive, and by using different blends of wheat, we can ensure product consistency. I think this is what is driving our business, not only in retail but in foodservice, which depends so heavily on reliability and consistency.ÔÇØ Consistent training also contributes to success. ÔÇ£WeÔÇÖre always giving our people the opportunity to understand their responsibilities so they can become engaged in the business.ÔÇØThe future for Barilla is to keep growing and discover other products in categories close to its core business. For instance, the company recently introduced Barilla Plus pastas, made of premium, multi-grain pasta, high in protein, fiber, and ALA omega-3 fatty acids, says Pettenati. ÔÇ£We will keep developing new ideas to create new opportunities for consumers looking for other pasta options.ÔÇØ ÔÇô Editorial research by Tim Conlon┬á