 "Branded basmati sales to touch 2.9 mt")
A sharp rise in demand for branded basmati rice has led to processors getting busy in devising branding and marketing strategies, to reach the urban middle class.
According to a Rabobank report, the size of the branded retail rice market in this country almost doubled from 900,000 tonnes in 2009-10 to 1.6 million tonnes in 2013-14. Given the trend, branded rice sales might touch 2.9 mt in 2016-17.
The trend gives hope for exporters, since there has been a sharp recent drop in shipments. Basmati export in 2014-15 was 3.7 mt, worth $4.52 billion at an average realisation of $1,220 a tonne. In April-August this year, the first five months of the current financial year, exports were down 25 per cent over the comparable period last year, to $1.6 bn as the price fell to $920 a tonne.
Adding: “Our research shows a strong preference for small packages of 1-5 kg, and we intend to tap this segment in the beginning.” Better margins are another driving force. Branded rice commands a 10 per cent higher margin over the loose-sold variety.
“Emergence of modern retail platforms has provided visibility to the branded category of rice and the growing consumer awareness is icing on the cake,” says J K Suri, chairman of Amir Chand Jagdish Kumar Exports. He says new hybrid varieties of basmati offer more affordable options for consumers.
Promoter of the Aero brand, he adds: “(Our) exports used to be 70 per cent of sales volumes two years before and it now rests at 50 per cent. The fall in basmati’s price has also helped the value chain and most of the branded players pass it on to buyers. This has also helped increase the sales.”
“Kerala is the largest market for our brand in non-traditional markets and the demand is on an upsurge,” he said. Ashwani Arora, joint managing director of LT Overseas, promoters of ‘Daawat Basmati’, says: “We are going steady in the international market but demand has skewed in favour of the branded segment and that is a boon for the organised sector.”
According to a Rabobank report, the size of the branded retail rice market in this country almost doubled from 900,000 tonnes in 2009-10 to 1.6 million tonnes in 2013-14. Given the trend, branded rice sales might touch 2.9 mt in 2016-17.
The trend gives hope for exporters, since there has been a sharp recent drop in shipments. Basmati export in 2014-15 was 3.7 mt, worth $4.52 billion at an average realisation of $1,220 a tonne. In April-August this year, the first five months of the current financial year, exports were down 25 per cent over the comparable period last year, to $1.6 bn as the price fell to $920 a tonne.
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So, exporters say they’re trying to consolidate their brands in the home market. Vijay Setia, a Karnal-based one with an annual turnover of Rs 550 crore, says: “We have aggressive plans for the domestic market as the branded rice segment is growing exponentially. We have been exporting for many years but the domestic market was not on our radar, due to tepid demand. However, consumer preferences are changing and we are trying to align with the trend. Our teams are doing research on the potential in different parts of India and we will roll out our ‘Maharani Rice’ brand in a phased manner. We have shortlisted towns in Gujarat and Rajasthan.”
Adding: “Our research shows a strong preference for small packages of 1-5 kg, and we intend to tap this segment in the beginning.” Better margins are another driving force. Branded rice commands a 10 per cent higher margin over the loose-sold variety.
“Emergence of modern retail platforms has provided visibility to the branded category of rice and the growing consumer awareness is icing on the cake,” says J K Suri, chairman of Amir Chand Jagdish Kumar Exports. He says new hybrid varieties of basmati offer more affordable options for consumers.
Promoter of the Aero brand, he adds: “(Our) exports used to be 70 per cent of sales volumes two years before and it now rests at 50 per cent. The fall in basmati’s price has also helped the value chain and most of the branded players pass it on to buyers. This has also helped increase the sales.”
“Kerala is the largest market for our brand in non-traditional markets and the demand is on an upsurge,” he said. Ashwani Arora, joint managing director of LT Overseas, promoters of ‘Daawat Basmati’, says: “We are going steady in the international market but demand has skewed in favour of the branded segment and that is a boon for the organised sector.”