Situation located on November 1994.

It was October 1988, and the Pasta Perfect board was discussing a change in strategy, from development of a chain of specialty retail shops, to selling fresh pasta and sauces through supermarkets. Pasta Perfect, headquartered in St. Louis, Missouri, operated 14 fresh pasta shops in the St. Louis and Chicago metropolitan areas. THE CHANGING PASTA MARKET THE PASTA INDUSTRY IN THE LATE 1980's In 1987, the top five leading brands were Mueller's with sales of $154 million, Creamette with sales of $125 million, General Foods' Ronzoni with $92 million in sales, San Giorgio with $67 million in sales, and Prince with sales of $59 million. Together, however, these five brands accounted for only about one third of the pasta sold nationally, with the remaining share of market spread across a variety of regional brands. <Amenaza> Sales of refrigerated fresh pasta, which was soft and flexible, rather than dried into rigid sticks, had risen 30 per cent per year since 1985, and was approaching $100 million in 1988. Sales were predicted to top $150 million by 1990 and $250 million by 1995. <Oportunidad> By late 1987, there were over 50 manufacturers of refrigerated pasta who marketed their product outside of their immediate neighborhood. <Amenaza> This rapid growth of refrigerated fresh pasta had been made possible by the recent development of gasflushed packaging technology that extended the shelf life of the product. <Oportunidad> The soft fresh pasta was manufactured using new, high-tech equipment, which gently folded the pasta and placed in an attractively labeled clear plastic container, which was then filled with a mixture of nitrogen and other gases. This packaging prevented the growth of mold and kept the pasta fresh and appealing for 90 days. <Oportunidad> MARKETING OF PASTA PRODUCTS THE ORIGINS OF PASTA PERFECT With the growth he saw in the pasta market, combined with the burgeoning trends toward fitness and nutrition and his retailing background. <Oportunidad> By October 1988, there were ten stores in St. Louis and four in Chicago, with the newest Chicago store having opened in June. <Fortaleza> The young company's growth was helped along by favorable articles in the St Louis newspapers, whose food writers sang the praises of Pasta Perfect's products. <Fortaleza> As of late 1988, Pasta Perfect had encountered little direct competition in its offerings of fresh pasta products. Several stores specializing in fresh pasta products had emerged in New York and California, <Amenaza> Pasta Perfect was the only specialty retail chain in Missouri and Illinois. Packaged, refrigerated fresh pasta was just starting to appear in St. Louis and Chicago supermarkets. <Oportunidad>

THE PASTA PERFECT STORE CONCEPT Pasta Perfect stores were designed with two-income families in mind, <Fortaleza> Pasta Perfect stores were located in high traffic urban locations or in strip shopping centers anchored by major supermarket chains for easy access. <Fortaleza> fresh pasta sold at a premium price over the conventional dried pasta products found on supermarket shelves <Debilidad> Seven of the stores featured limited seating for 8 to 15 people, and offered, in addition to Pasta Perfect's assortment of take-home products, a light lunch menu consisting of cold sandwiches, soups, pasta salads, desserts, and beverages. <Fortaleza> Pasta Perfect had found it difficult to lease locations as small as the 400 to 500 square feet needed. Thus, some stores were as large as 2000 square feet. <Debilidad> Furniture and equipment in the stores consisted principally of a pasta cutting machine, refrigerators, display and storage cases, counters, display and storage shelving, and various smaller equipment such as a cash register, scale, and bowls and jars for product display and utensils. Stores which served prepared items also contained tables and chairs. <Fortaleza> Pasta Perfect offered fresh pasta in five regular flavors -- egg, herb, spinach, black pepper, egg-free -plus weekly specials such as lemon and tomato basil. <Fortaleza> Pasta Perfect's best-selling pastas were fettucini (wide), linguine (narrow), tagliarini (thin), and angel hair (fine). <Fortaleza> Pasta Perfect also sold its own sauces for pasta, plus various fresh and frozen specialty products including salads and other Italian specialties such as ravioli, manicotti and lasagna. <Fortaleza> Pasta Perfect also offered other food and non-food products, including fresh bread, various imported and domestic food products, Italian cook books, and utensils. <Fortaleza> Operations

Pasta Perfect took great care in its selection and training of managers and provided a detailed training and operations manual to each manager. <Fortaleza>
PASTA PERFECT FINANCIAL PERFORMANCE THE FUTURE