By Sangita Ghosh

Progressive Grocer

February 2009

Transformation in the most popular staple food in India is slow, but definitely on

Rice, which has long held the reputation of being the food of the masses, is witnessing a silent transformation in India. Things have come a long way from the “touch and feel” approach to purchasing rice by the weight to the modern era in which the busy urban Indian consumer is beginning to place his or her trust in branded and packaged rice.

This shift, though spearheaded by the premium varieties of rice, is gradually spreading to other varieties as well, the USP being ease of purchases and quality assurance. This trend is also fueling the emergence of other processed, semi-processed and semi-cooked varieties of the grain.

The harvesting area of rice in India is the largest in the world, with the staple being cultivated in all states of the country. According to a recent research by International Rice Research Institute (IRRI), Manila, the rice production and consumption pattern in the major rice producing and consuming counties are set to change drastically. By 2015, the global rice-eating population is projected to consume over 50 million tones more than it did in 2005. Significant increases are expected in South and South-East Asia and Sub-Saharan Africa. According to IRRL, rice consumption in South Asia is expected to rise by 14.89 million tonnes by 2015. Of this, over eight million tonnes will be in Bangladesh and over a million tonnes in Pakistan. Rice consumption in India is set to soar to 92 million tonnes in 2015.

More than 65 percent of the Indian population views rice as their staple food. The packaged foods incarnation of rice has invaded the Indian consumer’s kitchens in the form of bags, packets and cartons; now, rice can also be purchased in cooked, uncooked, packed, dehydrated and frozen forms. To meet these many special requirements of packaged foods, rice undergoes varying degrees of processing, resulting in variants such as regular-milled, parboiled, precooked brown and many others.

Although the majority of the varieties are still sold under the traditional retailing system, sales through modern trade are increasing rapidly. ‘Accessibility’ is where the presence and growth of modern retail has helped the branded rice segment.

Says Puneet Mahajan, vice president, Marketing & Advertising, Kohinoor foods, “Because of higher margins on loose rice, earlier, selling a branded pack was greatly driven by the inclination of the traditional shopkeeper, but with the presence of modern retail, a consumer has greater choice. Modern retail is definitely working as a catalyst for growth of the branded packaged rice in India.”

According to Technopak Advisors, about Rs. 10,000 crores (Rs. 100 billion) worth of branded rice is sold annually, which is miniscule really, considering that the total rice market in India is reckoned to be worth around Rs. 100,000 crore (Rs. 1,000 billion). Also, only 10 percent of the rice exported from India (around Rs. 3,500 crore to Rs. 4,000 crore) is branded. But, branded rice sales have taken off in recent years and have been growing at around 15 percent in the domestic market compared to five percent for unbranded rice.

The rice retail mechanism comprises branded, packed and loose and ‘open’ selling of the product. Until recently, branding was a feature only in the premium segment, with primarily the Basmati rice variant being sold packed. Today, there is growing evidence of branding in regular consumable varieties of rice along with the premium variants. As in all other food segments, India's growing middle class has buoyed domestic demand. Additionally, rapid evolvement of modern food retail formats has also propelled the packaged food market, facilitating the availability, visibility and accessibility of branded products.

"It is the urban affluent and the upper middle class who are gradually warming to the concept of buying branded rice as of now," opines San¬jay Sethi, VP, Food and Agriculture at Technopak Advisors.

Devangshu Dutta, chief executive of Third Eyesight believes that from the consumer's point of view, the two big drivers for branded packaged rice are convenience and quality, though the shift towards branding is still happening, "since Indian consumers still prefer to see and hold loose grains before they decide to buy."

"Rice brands were always around. But the market has witnessed a rapid increase of the branded rice sale in India recently because of modern retailing and rising brand consciousness of the Indian consumers. In an)' product category, it is a brand that can penetrate the market more than anything else. Rice is no exception," says Dhiresh Kukreti, AGM, marketing, Daawat, one of the major players in the branded Basmati rice market.

According to Sudha Pawa, promoter of Jagat Agro, the scope for branded rice is huge in India because a major percentage of the product is still sold in loose form. "Rising awareness and the changing house-hold dynamics of consumers in recent times have led them to be apprised of the benefits of packaged rice. And modern trade helps in reducing the retail price, which should give a boost to the packaged rice market," he comments.

As viewed by Rajnish Ohri, director, Tilda Riceland Pvt. Ltd., the advent of modern trade and the hospitality business are opening new avenues for branded rice in India. "There has been a rapid shift from non-branded loose rice to branded packaged rice; the major catalyst in this transition has been modern trade. However, this could also be attributed to inorganic growth triggered off by retail expansion from 2004 to 2007."

Therefore, the main consuming sectors of branded rice could be the middle and upper-middle income consumers, though Basmati is still a niche sub-category in India. "It is not just the allure of higher quality or hygiene; the small, convenient and attractive pack sizes also encourage consumers to make the shift," says Arvinder Pal Singh, MD, Lal Qilla rice.

"At HyperCity, we retail all major brands - Kohinoor, Daawat and India Gate, among others. I would say that modern trade on an average contributes 40 to 50 percent of total packaged rice sales in India,” says Ashutosh Chakradeo, head, food & grocery, Hypercity Retail (India) Ltd.

There is plenty of room to boost branded rice consumption, and innovative marketing can help in pushing the envelope, says Viney Singh, MD of max Hypermarkets. “Packaged rice consumption can be enhanced by competitive pricing compared to the open market and communicating the consistent quality, value additions of the former with effective marketing strategies and regular promotional activities.”

According to Spencer's Retail, in India 98 percent of the total rice trade is in the non-Basmati segment. There are huge governmental controls in terms of paddy and rice prices from time to time and until now there has been no effective control by major brands over the larger market. "The trade is mainly dominated by millers who are trying to build popular regional brands, leading to a trend that sees branded packaged rice operating in some niche segments, as of now," says Samar Singh Sheikhawat, vice president - marketing, Spencer's Retail Ltd

Organised milling and processed rice

In India, rice is primarily consumed in the form of polished, par boiled, parched and flaked rice while the demand for branded rice – particularly Basmati – is increasing both in domestic, as well as in export markets. Therefore, the market for processed rice has expanded, which has also led to the growth of organized milling. According to a recent study by Rabobank, in 2003, rice mills in organized sector had a growth rate of three percent in terms of volume and value of milled rice. As per the research this growth rate would be doubled to six percent in the period of 2005 – 2010 – 2015, both in terms of volume and value.

Packed to perfection

There are few staples that are found in such a wide range of packaged formats and so extensively in so many combinations as rice. In packaged forms of various brands, rice is processed in varying degrees and forms including the regular-milled, parboiled, precooked, quick or instant rice in various forms of broken rice, brown rice, glutinous-rice, instant rice, frozen rice, organic rice, paddy rice or rough rice, parboiled rice, red rice, white rice or milled rice. Although the most premium and ubiquitous packaged rice is the Indian Basmati, growing awareness and innovation are now driving a 'certain set of consumers to try processed rice variants such as brown rice and organic rice.

According to Ohri from Tilda Riceland, the share of brown and organic rice in total category sales may be insignificant as of now but the industry is expecting to see a new line of informed consumers coming in. Singh at Lal Qilla is also hopeful about future prospects, saying, "The market for processed rice is growing, especially in the western countries and metropolitan cities of India. Therefore, we have already introduced brown Basmati and now working on the concept of organic Basmati."

Viney Singh at Max Hypermarkets believes that organic and brown rice sales have already been able to carve a niche for themselves in the overall category. Technopak's .Sethi confirms that brown rice is the cur¬rent talking point. "Organic rice is here to stay, as their health benefits are being endorsed more seriously. However, it is pesticide-free rice that that has the potential of being scaled up much more as a concept. Organic rice, though definitely healthier, still belongs to a niche market. Besides, pesticide-free rice appeals to a mass market, and not a niche market."

Brown Rice: The whole kernel remains intact and is still surrounded by all layers of bran. After the husk is removed the remaining product is called brown rice. This is what lends brown rice its quality of being more nutritious than the conventional white rice.

Red Rice: Is made by parboiling the paddy before husking, leaving a part of the bran on the grain giving it a red colour. It is consumed in select parts of India, especially in Kerala and Goa.

Organic Rice: For rice to be certified 'organic', the field used must have gone for three years without use of pesticides, fertilizers, or any chemicals and the crop must be grown, harvested, stored and milled under organic conditions.

Power of the brand

The wide range of packaged rice brands is dominated by the Basmati rice but includes many other processed rice variants as well. Here's what India's major rice manufacturers and marketers are offering at retail:

Kohinoor Foods Ltd.
Satnam Overseas' Kohinoor Foods Ltd. offers a wide range of packet brands of Basmati, non-Basmati, instant and ready-to-eat rice products. The brands are found in almost all the major retail and wholesale chains including Metro Cash n Carry, Reliance Fresh, Food Bazaar, Spencer's, Vishal, Subhiksha, HyperCity, More and Nilgiri's.

The most coveted Basmati rice variants are Kohinoor Supreme, Kohinoor Brown & Kohinoor Organic. Kohinoor Supreme is the pure traditional Basmati rice present in the organised trade for two years. Kohinoor Brown is the healthier choice for Basmati rice. It is an un-milled rice, a kind of a whole grain and carries a mild nutty flavour. Kohinoor Organic is a natural Basmati rice grown under an organic farming pattern. It comes with IMO and Indian Organic certifications.

The company's other famous brands are Trophy Gold, Trophy Royale, Charminar, 365, Nawab and Falcon. Trophy Gold is pure quality superior Basmati rice, while Trophy Royale is an extra-long Basmati grain variant. Charminar and Kohinoor 365 are two other sub-brands under the Basmati category, while Falcon is non-Basmati pulav rice with a long grain, and Nawab is also a non-Basmati long grain aromatic rice.

L T Overseas Ltd (Daawat)
LT Overseas Ltd. is one of the country's leading processors and exporters of packaged rice foods under the flagship brand "Daawat". The brand is among the top players in the domestic branded Basmati Rice market in the Super Premium, Premium and Economy categories. As per market estimates, Daawat occupies a market share of about 25-30 percent. Under the Daawat brand, the company offers Daawat Select, an authentic Basmati rice and according to the company, its most prestigious product. It is retailed in 1 kg, 2 kg, 5 kg, 10 kg and 20 kg packs.

Daawat premium Basmati rice is a traditional pearly white and deliciously aromatic special quality Basmati rice. Available in 5 kg, 10 and 20 kg jute bags. Tyvek paper packs and poly pouches, it is also offered in 500 gm, 1kg and 5 kg poly pouches, 2kg and 5 kg pet jars and a 5 kg festival pack.

Daawat popular Basmati rice is a high-quality, yet economical variety of Basmati rice. The packs are available in 5kg, 10 kg and 20 kg jute bags , 1 kg and 5 kg poly pouches and 5 kg pet jars.

Daawat Gold Basmati Rice is a royal long grain Basmati rice available in 1 kg, 5 kg and 10 kg packs, while Daawat Super, another fine Basmati rice, is offered in ½ kg, 1 kg, 5 kg, 10 kg, 20 kg and 25 kg packs.

Daawat Rozana is an everyday super-economical Basmati rice available in 1 k, 5 kg, 10kg and 25 kg packs.

Daawat Devaaya Basmati Rice is polished, graded with a distinctive pearly texture and has been one of the most popular brands with the masses for its affordability. It is available in 1kg, 5 kg and 20 kg packs, Heritage Basmati rice is yet another quality Basmati rice with slender white grains available in 5kg, 10kg and 20 kg jute bags and kg and 5 kg poly pouches.

Daawat Chef’s secretz Basmati Rice, one of the most powerful brands among the institutional customers, is available in almost all modern and traditional retail stores. It is available in 1/2kg and 1 kg packs.

Elte long grain rice is a non-Basmati polished rice variety, but a long grain rice like Heritage. Available in 5 kg, 10 kg and 20 kg jute bags and 1 kg and 5 kg poly pouches.

Besides India Gate, the company's flagship brand, KRBL also offers other rice brands such as Doon, Nurjahan, Aarthi, Royal, Zafrani, Sonale, Sostha, Train, Rice King, Joy, Football, Taj Mahal, Indian Farm, Sun Flower, Lion, Unity, People's Princess, Sarina, Queen of Hearts and Bemisal. The company is now planning to promote the brand “Made in India" in domestic as well as overseas markets. The brands are found in 1 kg, 5 kg and 20 kg consumer packs on the retail shelves.

Lal Qilla
Lal Qilla Basmati rice, a renowned and traditional packet rice brand in India, claims about 28 percent share in the total sales of branded, packaged rice in India.

Lal Qilla Basmati rice is the flagship brand and is a pure, traditional Basmati retailed in 1 kg poly packs at Rs 130, 2 kg at Rs 255, 5 kg at Rs 640 and 20 kg poly packs at Rs 2,600.

Other brands are Golden Qilla, a premium quality traditional Basmati, and Qilla Excel - a Pusa 1121 Basmati. This product is available in 1 kg poly pack at Rs 125 and 5 kg at Rs 650.

Qilla and President are the Dehraduni Pusa Basmati rice variants. The products are sold at Rs 85, Rs 170, Rs 425 and Rs 1,600 packed in 1 kg, 2 kg and 5 kg poly packs, and 20 kg jute bags, respectively.

Shahjahan is a super quality Basmati available at Rs 95, Rs 190, Rs 465 and Rs 1,800 in 1 kg, 2 kg and 5 kg poly packs, and 20 kg fabric bags, respectively.

Golden Chhap Aged Basamati is the second-range aged traditional Basmati retailed in 1 kg and 5 kg poly packs at Rs 90 and Rs 470 respectively and in 20 kg jute bags for Rs 1,700, while Golden Chhap Daily Meal Basmati Rice is the third-range aged traditional Basmati rice. The products are available in 1 kg and 5 kg poly packs priced at Rs 80 and Rs 400 respectively, and in 20 kg jute bags at Rs 1,500.

Lal Qilla also offers No 517 Long grain Rice, a long grain non-Basmati Parmal rice variant priced at Rs 700, for 25-kg in a jute bag, and 507 Biryani Rice - a rice variant also known as Sharbati. It is available in 1 kg poly packs and 25 kg jute bags priced at Rs 55 and Rs 1,150 respectively.

Apart form these, the Lal Qilla portfolio also includes Dobar, Tibar and Mungra rice qualities under the brand 'Golden'.

Shri Lalmahal
Shri Lalmahal provides a wide range of fine Basmati and non-Basmati rice. The main brands are Shri LalMahal (the flagship label), Pargol, Heena, Shanker Bhog .and Mughlai. Shri LalMahal is premium quality Basmati rice sold in consumer packs of 1 kg, 2 kgs, 5 kgs, 10 kgs, 20 kgs and 30 kgs.

The company also has varieties of Organic Basmati, Brown Basrnati, Dehradooni Basmati, Supreme Quality Basmati and Parboiled Basmati.

The company's non-Basmati rice includes varieties such as Indian Long Grain, Medium Grain, Short Grain in raw, White and Parboiled types, broken Long Grain Parboiled, broken Long Grain Silky, Medium Grain and Round or Short Grain rice.

Shrilalmahal Group has won the APEDA (Agriculture and Processed Food Export Development Authority) award for the last nine years consecutively.

Tilda Riceland
Tilda Rice comes from the Tilda Riceland Limited. Tilda is currently retailed in all metros and major towns at chain stores including Big Bazaar, Spencer's, HyperCity, Sabka Bazaar, Reliance Fresh and More. The types are found in Basmati, Long Grain and Regional rice portfolio. There are eight sub-brands that Tilda currently offers, including Tilda Pure Basmati, a traditional Basmati priced at Rs 165 per kg; Tilda Resham, an¬other pure variants of Basmati priced at Rs 150 per kg; Tilda Wandaful Pusa Basmati, whose rice grains are Pusa variety of the milled Basmati rice and are perfect for Biryanis and Pulaos, available at Rs 140 per kg; Tilda Chamak Chhota Basmati, a Basmati that lends an ideal texture to creamy milk puddings, desserts and sweet dishes and is sold at Rs 55 per kg; and Tilda Brown Basmati, the popular, brown Basmati priced at Rs 150 per kg.

In the Long Grain category, the company offers Tilda Khush - long grain rice with very elongated and slender grains, an extremely pure non-Basmati variety and priced at Rs 90 per kg; and Tilda Parmal, also a long grain, flavoured non-Basmati milled Parimal variety available at Rs 55 per kg.

Tilda also offers a unique, regional variant called Tilda Sona Masoori, which is a non- Basmati Sona Masoori variety popular in South India and a staple diet for the region. This is the perfect rice for making tamarind & tomato rice for the south India pockets and is economically priced at Rs. 32 per kg.

Jagat Agro (Jagat)
The 'Jagat' brand was launched in 1992 by Jagat Agro Commodities Pvt. Ltd. Besides being one of the major Basmati rice manufacturers in India, Jagat is now planning to enter the exports market.
The manufacturer retails premium Basmati under the flagship Grand 'Jagat' and offers a wide range of raw Basmati and parboiled rice. In non-Basmati, Jagat Pearl Rice is retailed in the packaged form. The Jagat brand can be found on the shelves at Reliance Fresh,"Big Bazaar. More, Rice World, and Rice Haat (the exclusive company showrooms).
Under Basmati, the company has Jagat Royal, a traditional pure Basmati which is found in 1 kg pack priced at Rs 120 and a 5 kg pack priced at Rs 600. Jagat Malai Basmati Rice is a blend of traditional Basmati 370 and 386 and is sourced entirely from Punjab priced at Rs 120 for 1 kg and Rs 600 for 5-kg packs.
Jagat Khusbbu Basmati Rice is a blend of Taraori Basmati and Basmati 1 and hails from Haryana. The product is sold in 1 kg packer priced at Rs 105 and 5 kg packet at Rs 525.
Jagat Manpasand Basmati Rice is a blend of Bas mati 1, Taraori Basmati and Desi Basmati in an affordable price range and priced at Rs 90 for 1 kg and Rs 450 for 5 kg of packs.
Jagat Sadabahar is a Dehradun variant and a blend of Basmati 1 and Desi Basmati; it is priced at Rs 85 for 1 kg and Rs 425 for 5 kg of packs.
Jagat Everyday Basmati Rice is the economy variant. It consists of 40 percent full grain and 60 percent broken Basmati rice. Super Everyday is sold at Rs.80 for 1 kg and Rs 400 for 5 kg packets and Everyday Basmati at Rs 60 for 1 kg and Rs 300 for 5-kg packs.
Jagat Special Sella Basmati rice is a blend of Taraori and Basmati 1 rice parboiled at the paddy stage with a processing of steaming and drying, while Jagat Pearl is a non-Basmati Parimal Rice variant blended with less than two per cent broken rice and priced between at Rs 40 for 1 kg and Rs 200 for 5-kg packs.

REI Agro
REI Agro, one of the leading players in the Basmati rice category, offers a wide range of brands such as Kasturi, Real Magic, Mr. Miller, Hungama, Hansraj and AI-Tahaan in the segment. The brands are segre-gated into Premium, Midrange and Economy ranges.

Premium range labels include Kasauti and Real Magic; Midrange brands are Mr. Miller and Ikon, while the Economy range includes Hansraj and RainDrop.

Safal Rice
The Safal brand from Mother Dairy offers a range of Basmati pack¬aged rice that is milled, processed, sorted cleaned and packed.

Safal Gold Basmati Rice is the finest traditional long grain Indian Basmati rice. Safal Silver Basmati Rice is Indian long grain Basmati Rice, while Safal Premium Parmal Rice is a long grain Indian Parimal rice. (Safal is regarded as one of the first retailers to sell parmal rice in packaged format.)

Veetee Fine Foods
Veetee Fine Foods started operations in 1992. It offers Veetee Gold Organic Basmati, which is grown under an organic farming process and is certified by control union certifications. It is available in 1 kg mono cartons and 20-25 kg paper bags.

Veetee Gold Brown Basmati Rice is unpolished Basmati rice, containing essential vitamins, minerals, protein and fibre and is available in 1 kg mono cartons and easy-to-use 5 kg jars.

Veetee Supreme Basmati Rice, the flagship brand of the Veetee range, is an elegant supreme quality Basmati, available in 1 kg poly packs and in 5 kg easy-to-use jars and paper bags.

Picric Select Basmati Rice is avail¬able in 1 and 5 kg poly packs, as well as 30 kg jute bags, as is Picric Everyday Rice, the budget brand in non-Basmati varieties, which is available in 1 kg and 5 kg multi layer packaging and in 30 kg jute bags.

Priya Foods
Priya Foods is a part of Ramoji Group offering some popular varieties of rice in south India.

Priya offers Sona Masoori rice, the short grain rice that is popular and the staple food in South India, in 5 kg and 20 kg packs; and Idli Rice, a superior quality rice primarily used to prepare soft and fluffy idlis, dosas and paniyarams, the popular dishes in South India. It is also used to make traditional Kerala food items such as Puttu, Appam, Idiyappam and Pathiri.

Also among the smaller, regional brands is Aeroplane, a label from Amir Chand Jagdish Kumar (Exports) Ltd. It offers several variants under numerous sub-brands: Aeroplane Regular Basmati, Aeroplane Super Basmati, Special Dubar Basmati, Aeroplane Priority Basmati, Aeroplane Wah!, Aeroplane La Taste, Aeroplane 1121 Basmati, World Cup, Palm Tree and Aeroplane Nazia Raw Rice.

Ready-to-eat rice

Ready-to-eat rice meals are currently available as self-contained, individual lightweight packs of various rice preparations. There are several bands in India with ready-to-eat rice meals.
In the ready-to-eat segment Kohinoor offers a range of rice dishes in traditional tastes, including Steamed Basmati Rice, Madras Lemon Rice Biryani, Chinese Fried Rice, Tomato & Chili Pulao, Brown Basmati Rice, Mushroom Cheese Pulao, Paneer Tikka Biryani, Kashmiri Rajma with Steamed Basmati Rice, Punjabi Kadhi Pakora with Steamed Basmati Rice, Pindi Chana Masala with Zeera Rice, Yellow Dal with Peas Pulao, Mutter Paneer with Steamed Basmati Rice, Dal Palak with Zeera Rice, Paneer Makhani with Steamed Basmati Rice, Mughlai Kofta Curry with Peas Pulao and Madurai Lemon Rice with Sambhar.

The ITC brand 'Kitchens of India' also has a range of ready-to-eat rice preparations in a wide range of vegetarian and non-vegetarian forms. These include Noormahal Biryani, Bohri Biryani, Yakhni Pulao, and Hyderabadi Mutton Biryani.
Kitchens of India also offer Rajma Masala with Basmati Rice and Yellow Dal Tadka with Basmati Rice meal kits.
MTR Foods Limited is one of the top five processed food manufacturers in India and offers a range of ready-to-eat rice-based combo meals. The varieties are Bisibele Bhath, Rajma Chawal, Diet Delite Rasam Rice, Jeera Rice, Sambar Rice, Lemon Rice, Tamarind Rice, Masala Rice and Tomato Rice.

Ready-to-eat foods from Veetee Foods are popular especially in south India, but also available across India. The products include Brown Bas¬mati Rice, a whole grain ready-to-eat brown Basmati in a 250 gm packet; Garlic Herb Brown Basmati Rice, a whole grain Basmati cooked with natural herbs and garlic and marketed in 250 gm pack; and Brown Basmati Biryani, a cooked combination of whole grain brown Basmati and diced vegetables offered in a 250 gm pack.
Tilda Riceland is also to shortly enter the ready-to-eat segment.

Private labels

Given its voluminous consumption, rice is a category whose numbers make sense for food retailers to participate in. Therefore, in recent times, almost all leading grocery chains have rolled out private labels in rice. Some of these are Max Economy, Max premium, More private label, Shoprite private label, Spencer's Smart Choice Regular, Spencer's Smart Choice Premium Nilgiri's, Food Bazaar, Metro, Heritage, V Fresh from Vishal Mega Mart, Reliance Select etc.
Spencer's, among the more aggressive private label proponents, offers Spencer's Trophy, Nature's Bounty and Smart Choice. "We have private labels in both non-Basmati and Bas¬mati rice segments, under Nature's Bounty and Smart Choice. While almost 100 percent of non-Basmati rice in our, stores is in private labels, it is only 20 percent of Basmati rice that is sold through private labels in our stores," says Sheikhawat.
Private labels at the Aditya Birla promoted More chain include More and More Select.
Spar's private labels in rice are 'Spar Select', 'Spar Value' and 'Best Price', which offer Basmati rice, boiled rice as well as raw rice varieties. The share of stock is 80:20 for private labels to the brands in Spar.
HyperCity sells packaged rice under the in-store label "Hypercity" in Basmati, non-Basmati and Brown rice categories.

Strategies to stimulate

According to Sheikhawat at Spencer's, all top branded Basmati manufacturers are putting up strong distribution networks and focusing intensely on the domestic market. "Hence, stock availability even in small quantities is not an issue now. However, we do face challenges in terms of procurement from across the country when it comes to private label Basmati as the source is only North India."

For the brands, price is one of the important indexes for product placement, segmentation and getting initial market presence. Product superiority, brand authority and merchandising dominance are some of the critical pointers for Indian market, say analysts. According to experts, branded manufacturers have so far not communicated their products' USP's over unbranded products (both in the regular as well as the "value-added" categories) well, resulting in slow growth of the brand¬ed market as a whole.

Says Dutta from Third Eyesight, "Branding needs sustained and significant marketing support, as well as a clear distinctive positioning, which is more robust in the branded wheat flour market than in rice. From the very beginning rice manufacturers have focused more on export and international consumers, than on the domestic market."

According to him, packaged flour takes two intermediate steps away from the consumer's chores by not just providing an assurance of quality of the grain but also the step of grinding it into flour, so the benefit perceived by the consumer is significantly higher than in the case of rice. For rice, premium products such as brown rice and organic rice are still driven by occasional purchases, which need to be augmented by promotions on recipes, benefits and positioning as wholesome meals. "There is still lackluster demand for brown and organic rice. Though Indians are becoming health conscious, the benefits of these varieties are yet to be communicated,” agrees Pawa at Jagat Agro.

Technopak's Sethi from Technopak opines, "Brown rice is the latest rage in India, and manufacturers should exploit the 'word of mouth' publicity. Other rice-based foods and formats - rice cakes, rice snacks, puffed and flattened rice, instant rice and food service outlets focused on rice - can also boost the trend."

Some retailers point out that the benefits of brown rice and organic rice also need to be promoted by doctors and health clinics. Some companies are also reportedly planning to come up with Health Management rice, which is basically low GI (Glycemic Index) rice meant for diabetics and weight watchers. "The next innovation that can revolutionise the segment is the introduction of genetically modified Golden rice, which supplements beta-carotene, a precursor of pro-vitamin A in the edible parts of rice," says Sheikhawat.

"Retailers can share the responsibility of promoting a new brand or variety by' making the customers aware of the benefits and through sampling. Regional or local varieties of rice also need promotion; this could boost overall consumption of branded rice," says HyperCity's Ashutosh Chakradeo. "However, proper category management is required to introduce and promote different varieties and brands in rice so that the consumer is focused and not overwhelmed or confused by the plethora of brands," says Ohri.

Besides product placement, brand positioning and product innovation, one crucial thing that the brands point to is innovation in pack sizes. According to Singh from Lal Qilla rice, "Small and handy packets of the rice for daily consumption en¬courage consumers to go the branded route."

Clearly, there is also a vast opportunity for private label development in this category. Most private labels are currently positioned at the entry level of any category, thereby providing the retailer more flexibility in pricing, better control over quality and higher margins. "The

HyperCity in-store brand is positioned at the mid level and provides consistent quality and value pricing. As a brand it is the highest seller in the staples category and contributes to more than 40 percent of the category sales," says Chakradeo.

While currently private labels are not a great threat to the established brands, things may change over the next couple of years, as Ohri from Tilda Riceland states. According to him, "Ultimately it is the quality, experience and the brand promise, which will playa crucial role. Whosoever is able to deliver the elements will be able to establish itself as a long term player."

Lal Qilla's Singh however, believes that brand positioning for private labels will be difficult and a time consuming process.

"Private labeling is like a commodity business, in which no doubt the volumes are big but the room for brand positioning is nil," he says.

Jagat Agro's Pawa says that while as of now private labels are only sold in the retailer's stores and brands benefit from a wider distribution net¬work, in an evolving scenario brand positioning has to be strengthened to be a sustainable player.

Commenting on the challenges, Singh from Max Hypermarkets comments that a fair amount of in-vestment and time is needed to build a brand with regard to spending on advertising, promotional activities and space allocation. "Brand placement is quite crucial, as a retailer has to be very clear where he has to position and pitch against the manufacturer’s brand. The brand placement, pricing and quality carry significant weight age,” he says.

On positioning, Sheikhawat says, “We are thinking of various routes to position rice, based on regional requirements and use. The challenge really has been to get the best quality at the optimum price because even brand loyalty has been shifting from high priced brands due to affordability factor.”

Regardless of which brands or labels make it to the top draw, there is little doubt that branding will propel branded rice consumption in India. “Family packs – created around eating habits of different regions – will have to be promoted aggressively. Focus on segmental offering of products like for regular use, specific or occasional use should be taken care of. There is a huge promise from health-conscious consumers which can further drive consumption towards packaged rice,” Sheikhawat suggests.

“We expect new brands to emerge out of creation of new efficiencies, which will go on to dominate or capture a big share of the market in the next five years,” predicts Sethi from Technopak. Kohinoor Food’s Mahajan confirms that the shift may be slow, but is clearly happening. “As is the case for categories like spices, salt, sugar, and even household cleaners, we see a shift from local to branded; we foresee a similar pattern for the branded packaged rice as well.”