Thepaper will involve the wheat industry and specifically will look atspaghetti manufacturing. This will help identify different playersthat take part in market value chain of the product in the USA. Thiswill also involve discussing the primary functions each playerundertake in ensuring that the product gets to its final consumer.The diagram below shows different players that are involved in thewheat value chain so as to ensure that production of spaghetti is asuccess. The diagram starts with the primary producers of wheat, thefarmers. The farmers sell their wheat after harvest to elevators.Therefore, the wheat market chain will be specific on the productionand distribution of spaghetti. The arrows in the diagram point in thedirection the raw material or product moves.
E.g. New World Pasta
Millers e.g. ADM Millers
National Association of Wheat Growers
Retailers e.g Publix
Wholesalers e.g Decio Pasta
New World Pasta Company
PartII: Written Document
Theproduct of discussion is Ronzoni spaghetti which is manufactured byNew World Pasta Company. The product is one of leading spaghettibrands in the USA. The product is distributed in most parts of thecountry (New World Pasta Company, 2015). The New World Pasta Companywas formed in 1999 by Hershey Pasta Group. Hershey Pasta Group in the1960’s started purchasing the already established independent pastamakers such as San Giorgio, Skinner, Ronzoni and American Beauty.Hershey was a chocolate company but after acquiring the pastacompanies it ventured into pasta production. New World Pasta Companyis a subsidiary of Ebro Foods (New World Pasta Company, 2015). Thecompany has its headquarters in Harrisburg in Pennsylvania. In 1999,the company became a private company after parting ways with HersheyCompany. In 2001, the company expanded its operations by acquiringBorden pasta business. The expansion was a success and the businesscontinued to be profitable (New World Pasta Company, 2015).
In2004, the company was earning losses and it was declared bankrupt.This made the company to become a fully owned subsidiary of EbroPuleva a world leading company in food production in 2006. In 2012,New World Pasta owned No Yolks and Wacky Mac in the US and Canada.The brands belonged to Strom Products Ltd. No Yolk is the leadingmarket brand in the noddle market (New World Pasta Company, 2015).
Thecompany has its operations in Canada and United States of America.This means that the companies market is a regional one covering NorthAmerica. The company’s manufacturing plants are in Fresno, St.Louis, Winchester and Catelli Foods Corporation which is located inMontreal, Quebec. The market company sells its products tosupermarkets and retail outlets through the wholesalers anddistributors (New World Pasta Company, 2015).
Thecompany is one of the leading pasta companies and this is shown bythe sales the company makes annually. The company is responsible forover 70% of the total pasta market in North America. This means thatit a large company and it has a lot of employees. The company hasworking shifts as a way of ensuring that high concentration ismaintained so as to achieve quality products (New World PastaCompany, 2015). The company also have a lot of production and sellingoutlets both in the USA and Canada. This means that it is a bigcompany that needs a lot of distribution channels so as to reach outto all its customers. The company also has a lot of market brands soas to cater for the growing demand from its customers. The companyhas over 20 pasta products (New World Pasta Company, 2015).
Spaghettiis considered a staple food in North America. According to researchby Mintel, spaghetti consumption is very high in households that havechildren. The statistics states that 73% of spaghetti is used inhouseholds with children and compared to the 57% consumption ofspaghetti in households without children (Mintel, 2014). This meansthat spaghetti is highly to be consumed by children. Since 2011,people are becoming concerned with side effects of taking pasta andall its related products. This has seen the demand and consumption ofspaghetti decreasing continuously. The consumption and demand wasalso affected by economic recession where people opted for readymeals instead of pasta related products (Mintel, 2014). The healthissues related with pasta and its related products include obesity,diabetes and heart conditions. Therefore, people are keenly watchingtheir diets, hence avoiding food stuffs which are seen to be healthhazards (Spark, 2007).
Primary Marketing Functions
Producersof wheat play a very important role because they plant the seeds andensure that the right procedures are followed. This ensures that highquality wheat is produced within the required time. The farmers makethe wheat farmers make it available for the market when the needarises. This means that the farmers add time value to the wheat byensuring it is ready for the market when required. They also takecare o9f their plantations to ensure there is high quality producewhich adds form value to the seed and gives high yields. Therefore,the farmers have significant roles of adding time and form values inthe channel.
Elevatorscome in in the assembly stage they buy wheat produce from individualfarmers in small quantities and sell it later to the millers. A goodexample, of an elevator is National Association of Wheat Growers.They sell the product to millers such as ADM Milling Company. Thismeans that NAGW adds time value to the products because it providesstorage before delivery to the millers. The company also adds placevalue because it transports the wheat from the farmers to theirstorage centres and from the storage centres to the millers. Thecompany also packs the wheat so as to allow easy transportation. Thismeans that the elevator functions are time, form and place values.
Atthe milling stage ADM Millers buys wheat from the elevators andprocesses so as to produce wheat flour. This is adding form value tothe wheat through the milling. After the milling stage the companyensures that the flour is distributed to its main dealers andmanufacturing companies such as New World Pasta Company. This meansthat the company plays the function of adding place value to thewheat. The company also offers storage after milling and this meansthat the wheat can be used by manufacturers at a later date. Thismeans that there is adding time value to the wheat. The functions ofthe ADM Millers are time, place and form values.
Themanufacturer of Spaghetti is the New World Pasta Company. The companybuys wheat from the millers and produces spaghetti and other pastaproducts. This is adding form value to the wheat. The company storesthe finished products in its stores waiting distributing. This isplaying the function of adding time value to the products. Thecompany also plays the role of the distributor in the channel. Thishelps in adding the place value to the products because it makes themavailable to the dealers and customers. The company also plays therole of adding possession value because it owns the products itproduces. The company is known by production of high qualityproducts. The company plays the functions of place, time, form andpossession values.
Themanufacturer distributes the products to the wholesalers so as toallow easy access by the customers. The distributors include DecioPasta a company known by offering discounts to the retailers. Thecompany has the function of distributing the products to theretailers this is the place function in the channel. The companyalso ensures that the retailers access the products when they needthem. This is function of time. Therefore, the wholesalers have thefunction of time and place values.
Thereare a wide range of spaghetti retailers which include retail shops,supermarkets, and grocery stores. The spaghetti retailer is thePublix Supermarket which has over one thousand branches in the USA.The company receives products from the wholesalers and distributorsthis ensures that customers get access of the products with ease.This is playing the function of adding place value to the products.The supermarket also has delivery services to its customers and thismeans that the supermarket plays the function of adding place andpossession values to the products.
Mintel,P. (2014). Consumer Trends. Available on:http://www.ats-sea.agr.gc.ca/amr/6253- eng.htm on 16/02/2015.
NewWorld Pasta Company, (2015). New World Pasta Company. Available on: http://newworldpasta.comon 16/02/2015.
Spark,A. (2007). Nutritionin Public Health: Principles, Policies, and Practicep. 286.