Cucina Pasta - Download MS Word file

Company Overview
Leitrim Foods is the only Irish manufacturer of fresh pasta that is sold under the brand name `Cucina Pasta’. Despite being a very small company, the founder decided to adopt a branding strategy rather than supply own-label. The lack of competitors in the market enabled the founder, Kieran O’ Donohoe, to enter a niche market and build a brand with little or no advertising.

Kieran O’Donohoe is a chef by profession and he spotted a gap in the market while working in the flour import business. Secondary data indicated that sales of fresh pasta had been growing steadily in both the US and the UK. He felt that the Irish market was ripe for the same product. Furthermore, the "Dolmio" brand was the only fresh pasta brand on sale in Ireland. However, Dolmio was experiencing logistical problems since the product was not an easy one to handle. The need for temperature control made transportation and handling of the product in retail shops difficult. Delays in delivery from the UK meant that the optimum shelf-life of the product was only 7 to 10 days. Immediately O’ Donohoe recognised the opportunity for a local supplier that could improve distribution and cut delivery time, thus winning the vital edge over multi-nationals.

The consumer
The product was aimed at the buyer who does not always have the willingness, or ability, to prepare meals. It was positioned as a high quality convenience food that was nourishing, healthy and tasty. The market was mainly comprised of young, affluent professionals with busy lifestyles, well-traveled, who eat alone - even if they live as families. Chilled pasta is partially an impulse buy. As a result, the attractiveness of the product, the impression of freshness, the assortment of products, all help stimulate and maintain consumer interest.

Product and branding
The product is made from natural ingredients such as durum wheat and fresh eggs, and is instantly distinguishable from dried pasta, being soft, moist and easy to cook. O’ Donohoe was able to offer retailers a fresh pasta product with a shelf life of 21 to 28 days. In the first year of operation, the number of products consisted of seven pastas including three tagliatelles. The founder was able to use his training as a chef to develop new products. He extended the product line by offering two home-made sauces (Palermo and Pomodoro) which were sold as an accompaniment to the main pasta dish.

The brand name `Cucina’ (the Italian for kitchen) was chosen to emphasize the Italian origins of the product. O’ Donoghue claimed that the word caught his attention when he was leafing through a cookery book one day. Considerable thought has gone into the packaging design, so that it stands out in display areas and communicates the product’s quality. The product was vacuum-packed for freshness, and the package was vibrant and colourful, with yellow, green and scarlet cleverly incorporating the colours of the Italian flag.

Price
The founder of the company decided to use a premium pricing strategy. He knew that retailers would be willing to stock a high margin product and felt that consumers would be willing to pay a high price for a high quality product.

Promotion
Leitrim Foods is a small company with no capacity to build a brand through intensive advertising. However this is not considered to be a major disadvantage due to the lack of competitors in the market. The company relied mainly on in-store testing, product presentation and word-of-mouth advertising to attract consumers.

Distribution
Cucina Pasta sells to multiple stores with fast turnover (such as Quinnsworth, Superquinn, Tesco, Roches, SuperValue, SPAR, Mace, Londis, L&N and Petitts). The convenient nature of the product means that it is generally an impulse purchase and it fits the store image of city centre convenience stores and garage forecourts. Small, independent grocers do not have sufficient turnover or sophisticated enough distribution systems to overcome problems of short shelf-life and difficulties of temperature control which together would result in high wastage levels.

The future?
The founder managed to attract funding necessary for expansion. The company’s share of the fresh pasta market was estimated at 40% in 1997. The future challenge for the business is in keeping the product range fresh. Consumers tire of eating the same products on a regular basis and expect novelty products. Mindful of this fact, the company introduced three new lines during 1997 (Chicken & Bacon Ravioli, Mushroom Sauce Tagliatelle and Spinach Tagliatelle). Tesco entered the Irish fresh pasta market in 1998 and launched its own range of competitively priced fresh pasta and sauces. Kevin Blessing, the marketing manager of Leitrim Foods, was undeterred by this new challenge:

"When we became aware that Tesco was coming into the market it was a nervous time for us because we didn't know what was going to happen. But although we lost shelf space, we weren't de-listed, and we're now beginning to fight back. Tesco has a big product range and this will be good for the market because I believe that a greater presence of fresh products will grow the category over all."

Questions
To what would you attribute Leitrim Food’s initial success?
Perform a SWOT analysis of the firm and/or the fresh pasta market.
Where does Leitrim Foods go from here?

By Dr. Breda McCarth
Lecturer in Marketing, School of Business, Waterford Institute of Technology

This case was developed as a basis for class discussion, rather than to illustrate either effective or ineffective handling of an administrative situation.