Since its 1988 introduction, Borden's Classico brand has virtually owned the segment, giving it a 9.8% share and the No. 4 spot in the overall category.
But last summer, Unilever's Van den Bergh Food Co. and Campbell Soup Co. started turning up the heat with new entries that are outspending Classico in an effort to grow the $256 million segment and protect their mainstream franchises-No. 1 Ragu and No. 2 Prego, respectively.
While Classico once set itself apart from everyday fare like Ragu and Prego through artful jars and regionalized flavors, Classico's "authentic" Italian charter is now being challenged by Campbell's Barilla and Van den Bergh's Five Brothers.
"With the two biggest players coming right at their heart, I wouldn't want to be Borden right now," said Don Stuart, a partner with consultancy Cannondale Associates, Wilton, Conn.
Until now, Classico sales have largely defined the premium segment-other premium sauces like Newman's Own have a small national share or are regional-and far outpaced total category gains of about 7% annually. Classico sales surged 31% to $122 million for the 52 weeks ended Aug. 13, according to Information Resources Inc.
"Two and a half years ago, we began looking at the premium segment seriously when Classico began doing well," said Steve Luttman, associate brand manager at Van den Bergh.
Five Brothers has allotted a $15 million network and spot TV introductory budget, while Barilla will spend upwards of $10 million on spot TV. In 1994, Borden spent just $6.6 million on Classico and for the first six months of 1995 only $2.6 million.
Borden will probably be outspent again in 1996, though Dave Hardie, VP-marketing, pasta and sauce, said annual spending will rise 20% next year.
Both Barilla and Five Brothers are using their bigger voices to out-Italian Classico when it comes to heritage.
Classico's campaign, from Klein & Solin, New York, is tagged "Taste the difference authenticity makes," with testimonials from consumers with Italian ancestors.
Five Brothers' advertising, filmed in Tuscany by Ogilvy & Mather, New York, tells the story of Italian siblings who work on a farm and make their own sauce. In supermarket tastings and other promotions, Van den Bergh will also emphasize its point of difference: fresh packed sauces with tomatoes jarred within 4 hours.
The leading packaged sauce in Italy, 117-year-old Barilla is a family business that licensed its name, recipe and production process to Campbell, which is still rolling the brand national. Advertising, from Margeotes Fertitta Donaher & Weiss, New York, is tagged, "Italy's favorite pasta sauce, now in America."
Combined sales of both Barilla and Five Brothers are expected to reach $100 million within a year. It remains to be seen if that's bad news for Classico or if the market will support all three.
The good news is that the premium positioning of both Barilla and Five Brothers should benefit retailers and manufacturers.
"It can add new growth to the category and, more importantly, profit," Mr. Stuart said.
But consultants warn premium marketers must also find new sauce uses and varieties to attract consumers who have previously rejected store-bought brands for their own homemade recipes, or at the very least may have used gourmet store prepared brands.
"The opportunity for premium is great, but until we get beyond red sauce, it might be limited," said Larry Lubin, president of Lubin Lawrence, a New York consultancy.