. “You can’t trick the consumer with delicious. It’s delicious, or it’s not.”
The Rao’s sauce comes from the East Harlem restaurant of the same name, which opened in 1896 and become a hot spot for celebs such as Robert De Niro and Al Pacino in the 1970s. In the ’90s, the eatery acquiesced to selling its delectable sauces in jars, and Rao’s Specialty Foods was born. The company, however, did not have as many fawning fans as the restaurant—at least not yet.
Sovos bought Rao’s for $415 million in 2017, when the brand had $65 million in net sales and a household penetration of just about 1 percent . But Sovos saw what Rao’s could become: It bumped up the marketing budget from a few hundred thousand dollars a year to $20 million, and expanded the products’ reach beyond the Northeast and West Coast markets where Rao’s had previously been sold.
The pandemic was a big boost for Rao’s, as people were confined to their homes and had to cook their own meals rather than eating out. But even as the world has slowly returned to some sense of normalcy, people continue to splurge on the priceysauce, thanks to its lauded flavor and the fact that it’s still more economical than spending $20 on a single bowl of spaghetti.
Loyalists may worry about how Campbell Soup will handle Rao’s, now that the specialty sauce brand is in the hands of a major corporation. But Campbell CEO Mark Clouse tried to assuage those fears: “We will not touch the sauce,” he toldThe company knows that the secret—and the profits—is in the sauce.