This April, Unilever morphs its jar sauce into a box of six individual servings of easy-to-microwave pasta and sauce. It plans to support the new product with an ad budget unprecedented for the category in recent years. The effort is an attempt to grow the stagnant $1.5 billion pasta sauce business Ragu invented 63 years ago.
Neither Ragu, which holds a 39% share of the category, nor Campbell Soup Co.'s Prego, which holds a 21% share, have done much recently beyond line extensions. Now both are poised to take action. Campbell plans to launch a similar convenience-oriented extension to Prego this summer. WPP Group's Y&R Advertising, New York, handles advertising for Prego, which spent next to nothing in the last two years.
"After 30 years of steady growth, the [pasta sauce] category has plateaued," said Walton Clark, director-brand development of sauces at Unilever. "Ten years ago, spaghetti was convenient, but is it convenient enough today? [Ragu Express] is something people could keep in their desk drawer, that kids could cook up in their dorm room. It takes us to places where you don't traditionally cook pasta. Hopefully that will help us grow the category."
Ragu's $25 million in print and TV advertising from WPP's J. Walter Thompson, New York, begins in June; $10 million more will go into consumer promotions. That spending far outweighs the $4 million spent on Ragu in 1999 and the less than $1 million spent last year, according to Competitive Media Reporting. The product is expected to bring in $65 million in incremental growth for the brand.
As a model for Ragu Express' potential, Unilever looked to Kraft Foods' home run with Kraft Easy Mac, a microwaveable version of its popular boxed macaroni & cheese. Introduced in late 1998, Easy Mac sales grew 32% in 2000 to $48 million, per Information Resources Inc.
Pasta sauce competitor Borden Foods last spring introduced It's Pasta Anytime!, a microwave-ready pasta-and-sauce meal under its Classico brand. That entry targets upscale adults, while Ragu Express targets families.
Retailers have mixed opinions. One Midwest retail executive said Ragu Express would do well, since "everybody loves and eats spaghetti and is looking for convenient solutions," while a Northeast retail exec was more skeptical. "It's like marketers are looking down the same avenue as before with microwaveable soups, when they said `this is it, we've arrived,"' he said. "Now, [those soups] sit on the shelf without much attention."