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Supply Chain

Wheat Shortage To Push Up Italian Pasta Prices: La Molisana CEO

Italian pasta fans might have to fork out more money for their spaghetti, penne and tortelloni by the end of this year, according to Giuseppe Ferro, CEO of Italy’s third largest pasta factory La Molisana.

Speaking to ANSA, Ferro explained that Canada, the world’s leading supplier of durum wheat, has produced only 3.5 million tonnes this year, compared to the usual 6.5 tonnes.

The heat and drought have affected durum wheat harvest in the country this year. In August, exports of the grain from Canada's west coast ports were 41% lower than in August 2020. Elsewhere, a harsh winter in Russia and a very wet summer in Europe did not help boost production.

Grain Stocks

Although manufacturers are building up grain stocks to last two years, semolina wheat can only be stored for one month.

He has forecast that between March and May 2022 there will not be enough wheat to make pasta.

Ferro pointed out that the repercussions on prices can already be seen, with Lidl increasing the price of pasta by €0.10, adding that consumers could end up paying between €0.15 and €0.20 more for their pasta pack by Christmas.

The warning issued by Ferro comes after La Molisana reported a 15.7% turnover growth in 2020. The positive trend continued in the first half of 2021, with a further 10.7% growth, bucking the trend for pasta in general (-8.3%).

The company attributed this growth to a €42 million investment, involving two new production lines, product innovation, and betting on 100% Italian wheat and sustainability. Recently, the company acquired a new 20,000 square metre distribution centre.

Regional Performance

Exports increased by 50% last year and now account for 42% of its total turnover. Its most important exports markets are the United States, Australia, Japan and Northern Europe.

The company emerged as a market leader in Canada, and achieved positive results in South America, primarily Brazil, Argentina and Venezuela.

The brand’s new wholemeal pasta has seen a 11.2% growth in turnover to €20 million and now accounts for over 10% of the company's turnover. La Molisana recently launched the Rigacuori format which is now sold out in stores.

Ferro told the daily Il Sole 24 Ore that the company is considering expansion to related sectors such as ready-made sauces and dressings, following the example of its competitors.

In terms of sustainability, La Molisana has already switched packaging from plastic to paper for its entire portfolio and expects to become a 100% sustainable company within five years, thanks to energy self-sufficiency, green packaging and zero CO2 emissions.

© 2021 European Supermarket Magazine – your source for the latest Supply Chain news. Article by Branislav Pekic. Click subscribe to sign up to ESM: The European Supermarket Magazine.

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