Political Factors

All US pasta manufacturers must operate in accordance with the laws of the USA.

- Public health policies (e.g. National School Lunch Program (NSLP)) are pushing towards

the production of foods with lower sodium and sugar intakes in order to strongly decrease

obesity and health diseases linked with food. So, pasta manufacturers are affected by these

regulations and they are developing healthier pasta options.

- Pasta manufacturers have to comply with: government regulations regarding hygiene, health

and food regulations, food standards, licenses, inspections by Health and Food ministry

department.

- Since 2018 US government imposes a 25% tariff on steel and a 10% tariff on aluminum

imports. These tariffs may affect those manufacturers producing canned pasta.

- Since 2019 US government impose tariffs on EU goods import (dairy products, hams,

shellfish, citrus fruits, juices and liquors). At the moment import of EU pasta is not affected

by these tariffs.

Economic Factors

Food interest rates, taxation, and consumer spending affect the options and opportunities presented

in the pasta industry.

- The inflation rate determines the rate of remuneration of employees and affects the price of

food products. Annual inflation in December 2019 was 2.29%, with a 0.4% increase with

respect to the end of 2018. (Source: U.S. Bureau of Labor Statistics)

- The price of food affects the customers demand (inelastic) and the suppliers profit

expectations. According to the United States Department of Agriculture (USDA), at the end

of 2019 the price for food away from home +3.1% higher than 2018 (2020 forecast: +2% to

+3%) and prices for food at home showed an increase of +0.7% 2020 forecast: +0.5% to

+1.5%) with respect to the same period of time.

 - Unemployment rate and minimum wage level affect directly the demand for food products.

The U.S. Bureau of Labor Statistics shows the constant decline of the unemployed US

population over the last 10 years from 9.8% in 2010 to the current 3.6%. As of January

2019, 29 states had a minimum wage rate above the federal minimum wage of $7.25 per

hour, set in 2009.

Social Factors

Lifestyle, social values and consumption habits strongly affect food trends.

- Healthiness is more and more the main focus regarding food in many countries. This target

is established not only by governments, but also by consumers. Diets and lifestyle changes

effectively affect the marketing decision. As a result, what’s happening is a strong increase

in the demand for organic and whole foods. As an example, Pasta manufacturers are

replying to these habits’ changes with production of reduced-carbohydrates products and the

explanation of their nutritional benefits.

- Appearance: How foods appeal to people is even more based on how their brands appear.

Mainly with the younger generation, food consumption is strictly related with the people

status and lifestyle. As a consequence, pasta brands are stressing their images of authenticity

and uniqueness (e.g. the presence of famous sport athletes in advertisements: Federer-

Barilla) in order to reach that population segment.

Technological Factors

- Technology is necessary to the production of food, its packaging and labelling. Old brands

can have a competitive advantage over the newer ones in terms of available technologies.

- The development of new technologies allows food companies to reach customers in new

ways, increasing the speed of distribution (e-commerce, online groceries).