White hot

Consumers are flocking to the instant potato and rice categories like white on rice. After all, both starches offer outstanding nutrients, great taste and preparation convenience for only pennies per serving.

“The recession has impacted how people are looking at the instant potato and rice categories,” says Mike Seepersaud, marketing manager, Betty Crocker, at Minneapolis-based General Mills. “Home dining consumption is definitely going up and people are on the hunt for value when they go into the store to save money. But they are still looking for convenient meal solutions and time-saving solutions as well. Also, health is still high on their radar screen.”

“In the old days you’d have potato flakes and you’d have to add milk, butter and flavoring,” says Seth Pemsler, vice president, retail-international, at the Idaho Potato Commission in Eagle, Idaho. “Now they are complete and all you have to do is add water. Instant potatoes have become exceptionally convenient, time-saving, less expensive and taste better. All of those things are coming together to drive the dehydrated market.”

It’s a market driving into the fast lane in terms of sales growth. According to Infoscan Reviews from Chicago-based Information Resources, Inc. (IRI) for the 52-week period ended Oct. 4, sales of instant potatoes in supermarkets, drugstores and mass merchandisers (excluding Wal-Mart) reached $331.4 million, an increase of 2.1%. Unit sales during the period also increased 2.1% to almost 216 million units.

According to IRI, the rice business is also quite healthy.  Overall sales are more than $1.5 billion, an 11% increase over last year. However, much of that increase is driven by price increases, with unit volume of plain rice and dry rice mixes dropping slightly. But the microwavable ready-to-serve segment has been on a tear with sales jumping 21.7% to $123.8 million and unit volume climbing 11.9% to almost 58.5 million packages.

“A lot of the food designers and people that cook and entertain at home are using rice as a side dish, and it is getting more into the mainstream, non-Hispanic population,” says Lew Brosowsky, market research consultant, at Secaucus, N.J.-based Goya Foods.

“The rice category has seen tremendous dollar growth over the past few years as the price of rice has increased and value-added segments like ready-to-eat have grown in volume,” says Sean Silk, marketing director for Rancho Dominguez, Calif.-based Uncle Ben’s, a division of Mars. “Still, rice is one of the most cost-effective and inexpensive food options available. White rice is still the largest segment in volume and dollars, but whole grain brown rice, specialty rice (Jasmine and Basmati) and ready-to-heat rice are emerging as key growth segments.”

Some of that growth has been facilitated by increased marketing efforts. “USA Rice conducts a September National Rice Month promotion each year which reaches over 300 million consumers,” says Molly Johnson, director, retail trade and special promotions, at the Arlington, Va.-based USA Rice Federation. “Retailers can contact the USA Rice Federation for a free promotion planning kit, artwork, recipe brochures and merchandising materials. National Rice Month promotional activities contributed to an 8% increase in total pound sales from August to Sep­tem­ber.”   

The U.S. grows some 19 billion pounds of rice a year, Johnson says, with Arkansas, California and Louisi­ana producing more than 80% of the crop. “Eighty percent of the rice consumed by Americans is grown here in the U.S,” she says. “However, imported varieties have driven awareness and interest in aromatic and specialty rices, leading growers to develop domestically grown varieties of aromatic rices to meet consumer demand.”    

That’s where RiceSelect comes in. The Alvin, Texas-based company specializes in breeding seed using traditional hybrid germination processes, says Louis Fernandez, director of marketing. One of the rices it created was an American Basmati, which it merchandises in plastic jars under the Texmati brand name.

A premium product reaching upscale demographics, RiceSelect touts Texmati’s American roots on its label. “Our slogan has been ‘Bringing worlds of flavor to your table.’ We try to do that by bringing you the rices of the world grown by us here in the U.S.,” Fernandez says.

“New for us this year is a Vegetable Medley Rice, which is blended with our Texmati rice, and by the end of the year we’ll be launching six new items, three medleys and three types of pearl couscous, which is a bigger version of couscous also known as Israeli Couscous,” Fernandez says.

New products are also sprouting at Uncle Ben’s. “In 2009, Uncle Ben’s introduced Boil-in-Bag Whole Grain Brown, a great new way for consumers to get their whole grains in a portion controlled package, with minimal cleanup and ready in just 10 minutes,” says Silk. “We have seen a tremendous response to this product at retail locations and continue to see growth in sales as people look for quick and nutritious meals to cook for their families. We’ve also introduced Ready Rice Jasmine and Basmati, which bring convenience and great taste to the fast growing specialty rice segment.”

In addition, in early 2010 Uncle Ben’s is adding Roasted Garlic and Chicken Medley to its Ready Rice Whole Grain Medley line.

Zatarain’s, the New Orleans-style foods division of McCormick & Co., is also expanding its rice portfolio in 2010. “Some people think our products are a little on the hot side, so in January we are introducing  a mild version of our Jambalaya,” says Ken Beals, director of marketing at Gretna, La.-based Zatarain’s. “The converse of that is that people in the South can’t have it spicy enough, so in the South and Southeast we’re launching spicy versions of our Jambalaya and Red Beans and Rice,” he says, adding Jambalaya will now be available in Original, Mild and Spicy varieties, while Red Beans and Rice will be available in Original and Spicy.

The Mild products will be available nationwide, while Spicy will be sold along the Gulf Coast. “If it does well, we may expand the Spicy ones beyond there,” Beals says.

Goya’s Brosowsky says a challenge facing bulk rice purveyors is getting Caribbean Hispanic consumers to increase their rice intake. While 20-pound sacks of Goya and Goya Canilla rice can be found in just about every Hispanic-oriented store, huge price hikes over the past couple of years have caused these consumers to switch to other starches.

Brosowsky says he has been noticing a trend to Jasmine rice. “Jasmine rice has become so popular within the last couple of years that there is a lot of private label in the Jasmine rice sector,” he says.

“We offer our members a complete line of rice products, such as long grain, instant, parboil, boil-in-bag, organic and rice mixes, plus specialty varieties like Basmati, Jasmine and Arborio,” says Chuck Harris, director, business management, at Topco Associates, the private label co-op based in Skokie, Ill. “Consumer demand is fueling the need for retailers to offer a full menu of products. In fact, we’ve seen many retailers favor private label rice SKUs over national brands and dedicate a high percentage of their rice category shelf space to them.”  

Private label instant potatoes are also gaining in popularity, experts note. Topco, for example, offers a broad selection of instant mashed, Au Gratin, scalloped, sour cream and chive and Julienne varieties. James Bolton, program management, suggests retailers merchandise them throughout the store. “In addition to center store, they can be merchandised with international items and in the healthy/gluten-free area,” he says. “Cross-promotion works well and grocers can highlight the health and wellness features of these products through brochures or in-store sampling.”

Observers say dramatically improved quality has provided a sales boost. “Today we have a one-pass process that immediately dehydrates the potato at the peak of freshness and maintains peak optimum levels of flavor and texture,” says Dan Fitzgerald, retail marketing director for Idahoan Foods, based in Lewisville, Idaho.

Idahoan markets instant potatoes in 11 different flavors, including Buttery Homestyle, Four Cheese, Roasted Garlic, Baby Reds and Loaded Baked. “It’s the flavored mashed potato that has been driving this category,” Fitzgerald says.

Idahoan is taking convenience one step further with its new single-serve packets. Modeled after variety packs of instant oatmeal, 10 single-serve pouches in four flavors are packaged in a box. “This was created in direct response to unaided input from consumers,” Fitzgerald says. “They can be eaten as snacks, at work, the kids can make it themselves.”

The folks in Betty Crocker’s test kitchen have also been hard at work improving the flavor of their instant potato products. Betty Crocker recently introduced two SKUs of pouch mashed in Loaded and Baby Red flavors, which are priced around $1. According to company officials, they offer consumers great taste and are an excellent source of fiber for only 80 calories. “It is almost like comfort food with zero guilt,” Seepersaud says.  

This entry was posted in Center Store. Bookmark the permalink.