Sauce Investors Want Lasorda to Pitch More : Food: The Dodger manager’s pasta sauce company in has been losing money. An upcoming TV commercial, which features Lasorda and baseball superstar Darryl Strawberry, may help.

Ask your average television watcher to name the food product most closely associated with Los Angeles Dodger Manager Tommy Lasorda and the probable answer will be diet milkshakes.

But disgruntled investors in Lasorda Foods Inc., a small Fountain Valley company controlled by Lasorda and his wife, Jo, would prefer that the manager spend less time displaying his trimmer waistline and more time promoting the premium pasta sauce that bears his name.

The cheerleading is needed because Tommy Lasorda’s Pasta Sauce has performed more like a hapless minor-league baseball club than a big-league pennant contender since its introduction in 1989.

The company has been losing money and the spaghetti sauce has been losing market share to other celebrity entries from the likes of Paul Newman and Frank Sinatra. Its stock, which peaked last year at about $4 a share, has recently traded at less than 40 cents a share.

Lasorda dismissed any suggestion of problems with his pasta sauce. “It’s going great,” he enthused.

But some food industry executives aren’t so sure.

“I’ll be honest with you,” confided Terry Stadheim, a buyer for Hughes Markets. “If the Dodgers had won the World Series, I think (Lasorda’s pasta sauce) would be doing better.”

Lasorda and other company officials say there are reasons for optimism. The company has taped a TV commercial featuring Lasorda and new Dodger outfielder Darryl Strawberry. The company also has hired a new food broker to shore up supermarket sales. And despite losing $340,450 for the first nine months of 1990, officials expect a strong fourth quarter to push the company into the black for the year.

Food industry insiders blame the company’s problems on a lackluster--some say virtually invisible--marketing and advertising program.

One industry executive, who asked not to be named, said Lasorda Foods has been urged to advertise, issue discount coupons or create flashy supermarket displays. So far, the company has failed to heed the advice.

“I think they’ve got the money. They have just been reluctant,” the executive said. “There is a tremendous amount of potential if they can get behind the product.”

With little promotion, Lasorda’s sauce--which beat out the Sinatra and Newman brands in a Los Angeles Times taste test--hasn’t been a big hit with shoppers. As of last month, it had captured only a scant 1.3% of the Southern California market for premium spaghetti sauces. And some grocers who originally carried the Lasorda brand have pulled it from their shelves.

“It didn’t start real strong,” said Gary Rocheleau, head grocery buyer for the 225-store Southern California division of Lucky Stores Inc. supermarket chain. “The product never achieved the volume level that was needed in the warehouse.” Lucky discontinued the product after just six months.

Awhile back, the Ralphs and Vons supermarket chains were considering dropping Lasorda’s sauce. But Mike Clark, director of a Los Alamitos food brokerage recently hired by Lasorda Foods to distribute the sauce, says his firm was able to persuade the two chains to continue carrying the product.

Vons does not regret the decision. Vons spokeswoman Vickie Sanders said that even though the chain originally stocked the sauce as a favor to Lasorda, it has proven itself in sales.

“We wouldn’t stock it if it didn’t sell,” she said.

Lasorda President Steven Fox said Lasorda has been hurt by its refusal to pay “slotting fees,” the fees that markets charge companies that want shelf space for new products. Instead, he said, Lasorda gives grocers one of the highest profit margins of any sauce, in an effort to obtain good eye-level displays in crowded grocery aisles.

As pasta has soared in popularity among health-conscious diners, pasta sauce makers have piggybacked their way to higher sales. The market for all Italian sauces has increased about 9% a year since 1986, to an estimated $1.5 billion last year, according to Packaged Facts, a New York research firm. And the future looks promising: Pasta consumption is expected to double in the 1990s.

Meantime, sauce makers are introducing a variety of products to meet the demand.

Tommy Lasorda’s Pasta Sauce, Frank Sinatra’s Sugo di Tavoli and (Paul) Newman’s Own brands are considered “premium” sauces, which command roughly $1 more per jar than such standbys as Ragu, a product of Ragu Foods Inc., and Prego, made by Campbell Soup Co.

Premium sauces account for about 7% of the U.S. spaghetti topping market, according to figures supplied by Borden Inc., maker of the top-selling premium sauce, Classico. But some data shows that premium sauces sell better in the Southland than other parts of the country.

In greater Los Angeles, Classico had a 10.5% market share for the four weeks ended Dec. 1, 1990, according to a report from Neilson Marketing Research, a Dun & Bradstreet Corp. unit. During the same period the Sinatra brand had a 3.7% share; Newman, 4.4%; and Lasorda, 1.3%.

The Classico, Sinatra and Newman brands are distributed in most major national markets, but Lasorda’s sauce is sold mostly in Southern California. Lasorda Foods is also making sales pushes in the South and in the Philadelphia area.

Lasorda Foods was founded by a group of private investors, including Lasorda, in 1988. The spaghetti sauce--which features a label showing Lasorda in a blue baseball cap--first hit the shelves in August, 1989. Lasorda says his sauce was developed from a recipe of his Italian-born mother that was passed on to Jo Lasorda, who perfected the sauce in nearly 40 years of preparing it for the family.

In an interview, Lasorda said he and the other investors grew unhappy with the company’s original management. Early last year, Fox, a 25-year veteran of the food industry and former Chicago Cubs player, was brought in as president of the firm. Fox is a former food broker and ex-owner of the Eastern Pacific Pickle Co. in Los Angeles and Stockton.

In May, the company converted from private to public ownership through a stock swap with Discovery Capital Corp., an Englewood, Colo., firm. The deal provided Lasorda with more than $300,000 in funds for expansion and new product introduction, Fox said.

But the transaction did not appear to be helping the company’s financial picture last year. Lasorda Foods financial filings show that, as of Sept. 30, the company had $10,537 in cash, down from $166,933 on Dec. 31, 1989. During the same period, the company lost $340,450. Fox blamed much of the loss on a writeoff of $367,635 that was due from the producer of the sauce, United California Brands.

Perhaps most telling, the company spent less than $5,000 on promotion for the first nine months of the year, according to the filing.

Fox said he expects revenue for the fourth quarter ended Dec. 31 to be up from the two proceeding quarters because of stronger seasonal sales and a radio advertising campaign. He said the company is trying to line up a new source of funding to increase promotion of the pasta sauce.

And some Lasorda Foods investors think that more promotion is long overdue. One investor said he constantly sees Lasorda pitching the Ultra Slim-Fast liquid diet plan, but never hears a word about Lasorda’s pasta sauce.

“I really went into this with a clear expectation that Mr. Lasorda would be committed to promoting a product that bore his name,” said Bruce Rasner, a Costa Mesa attorney who has invested several thousands dollars in the company. “I must say, I am very disappointed.”

Lasorda said his work as a pitchman for the Ultra Slim-Fast product does not conflict with his efforts on behalf of Lasorda Foods. The diet company, he said, has a much larger advertising budget. And he said he has made frequent appearances to promote the pasta sauce at supermarkets. The company is trying to raise money to air the new TV commercial featuring Lasorda and Dodger outfielder Strawberry.

Fox says the company has done the best it can on a shoestring budget. “I would like to say we have spent $5 million on advertising. What we have done on a very limited budget speaks for itself,” he said.

He estimates that Artanis Foods International of South San Francisco has spent roughly $5 million to promote its new Frank Sinatra’s brand of sauce. After only six months on the market, the Sinatra brand had nearly doubled the market share of Lasorda’s sauce in Southern California.

Artanis (Sinatra spelled backwards) officials say they have spent heavily on promotion to establish the brand’s name.

“You can get (shoppers) to buy it one time without a lot of effort, but I guarantee you that’s as far as it goes. After that bottle, you better have a good quality, consistent product,” said Joel Whitfield, Artanis president.

Lasorda, who says he eats three platefuls of his sauce atop pasta a week, puts it more bluntly: “All I have to do is get people to eat it.”

MARKET SHARE OF SPAGHETTI SAUCES

1989 1990 4 weeks ending 4 weeks ending Dec. 1 Dec. 2 Ragu (all types) 47% 37% (Ragu Foods Inc.) Prego 28% 31% (Campbell Soup Co.) Classico 11% 11% (Borden Inc.) All Others 8% 12% Newman’s Own 4% 4% (Newman’s Own) Tommy Lasorda’s 2% 1% (Lasorda Foods Inc.) Frank Sinatra’s 4% (Artanis Foods Intl.)

Source: Nielson Marketing Research

Note: This is for the greater Los Angeles area.