Basmati Rice market in UAE & GCC

Basmati Rice Market in the FMCG Industry of the UAE: Import, Brands, and Positioning

Import and Brands

The Basmati rice market in the UAE's FMCG industry is diverse and competitive, with numerous brands offering various types of Basmati rice. These brands often source their Basmati rice from different regions, primarily India and Pakistan, known for their high-quality and aromatic Basmati rice.

Brands popular in UAE Retail market

1.????? TILDA – Dominate the consumer packs of 1kg & 2Kgs pack

2.????? INDIA GATE – Strong presence in Retail pack of 1kg & 2kgs pack, also launched other variants

3.????? DAAWAT – Present in retail pack of 1kg & 2kgs pack

4.????? SINNARA – available in bulk packs of 5kgs, 10kgs & 20kgs

5.????? ZEEBA – 5kgs packs sells maximum

6.????? ZAFFRAN – 5kgs packs sells maximum

7.????? KOHINOOR – few outlets has small packs but more 5kgs packs are seen in displays

8.????? CROWN – have around 5 variants of Basmati rice out of which Opal & Delux are most visible ones

9.????? PARLIAMENT – very limited presence

10.? NOORJAHAN

11.? AZMAT

12.? DUNAR

13.? MEHRAN

14.? DEVAAYA

15.? AFRAH

16.? GREEN FARM – strong rice brand in other varieties of rice with little presence in Basmati rice as well

17.? PRIDE OF INDIA

18.? NELLARA- Strong brand in RTC products with wider varieties of rice range including Basmati rice

(Disclaimer – the brand mentioned are not based on sales, volumes or market presence, and if missed any brand to mention, please feel free to update)

Price Variation and Positioning

When you eat Biryani, you might notice that the taste and aroma of the rice can vary significantly. This is often due to differences in the quality and type of Basmati rice used. In the UAE, if you're purchasing a 5 kg bag of Basmati rice for less than 45 AED, it's likely that you're not buying authentic Indian Traditional Basmati rice, which is renowned for its unique aroma and taste.

The Basmati rice market in the UAE is substantial, with prices ranging widely in supermarkets and hypermarkets. You can find Basmati rice 5kgs pack in a price ranging from as low as 19 AED to as high as 60 AED per 5 kg bag in Supermarkets & Hypermarkets of UAE. This price variation can be attributed to differences in quality, origin, and brand positioning. Premium Basmati rice, known for its superior taste and aroma, typically commands higher prices and most of the companies are stuck in the price war to ensure their position.

The Basmati rice market in the UAE's FMCG industry is characterized by a wide range of prices and brands, reflecting variations in quality and origin. Authentic Indian Traditional Basmati rice, known for its distinctive aroma and taste, is usually priced higher, while lower-priced options may not offer the same level of quality but picked up by consumers without second thought due to its attractive pricing. Most of the Basmati players focus on pushing 5kgs packs in promotions participating in weekly offer fliers and palette displays

Factors Controlling the Basmati Rice Market

Rice Millers in India and Pakistan:

The Basmati rice market is largely influenced by rice millers in India and Pakistan. Although there is competition among them, the number of millers is limited, and the competition is not excessively fierce.

Price Pressure from UAE/GCC Supermarkets and Hypermarkets:

The intense price competition in the UAE and GCC markets is driven by supermarkets and hypermarkets. These retailers continuously seek lower prices, pressuring mill owners to reduce their prices. This often forces millers to mix grains to meet the demand for cheaper rice.

Challenges in Quality Assurance

Working in the UAE market and interacting with rice traders with over two decades of experience reveals persistent uncertainty about rice quality. Even large catering companies, operating for over 25 years, insist on cooking rice samples before placing orders, especially when switching brands. Judging the quality of rice by appearance alone is difficult unless the evaluator is a true rice expert.

Compromise on Quality in the Retail Market

The retail market's drive to offer Basmati rice at lower prices often results in compromised quality. This is a key reason why consumers lack knowledge about pure Basmati rice and how to identify authentic traditional Basmati. Basmati brands often keep consumers confused by labeling different types of rice, such as Basmati, Sella, and Pusa, under the same category. Crop consistency in quality can also be a concern. By labeling every variant as Basmati rice, consumers are misled and tend to choose the lowest-priced option available, focusing more on cost than on quality.

Brand Loyalty and Consumer Education

In discussions with brand owners and traders, a common observation is the lack of brand loyalty among rice consumers. This is largely due to inadequate education and inconsistency in rice quality. Consumers often switch brands in search of the rich aroma and taste they expect from Basmati rice. If consumers were properly educated about traditional Basmati and its variants, they would likely become more quality-conscious.

Market Dynamics

Only a few brands in the UAE market have successfully consolidated their position and are able to sell their rice at higher prices. The market has become highly competitive, with most companies pushing their 5 kg packs. However, many brands overlook the importance of offering smaller packs, which could make it easier to convince consumers to try their product before committing to larger quantities. This approach could help build brand loyalty and ensure a better consumer experience.

Challenges for Brand Establishment

One major reason brands struggle to establish themselves is the consistent feedback from supermarkets and hypermarkets about price concerns. To meet these price expectations, millers focus on providing distributors and traders with products that match the targeted price, often without prioritizing quality.

Export Market Share

India is the leading exporter of Basmati rice to the global market, holding a dominant 70% market share. Pakistan follows with nearly 30% of the market share.

So far 45 varieties of Basmati rice have been notified under the seeds Act, 1966 in India, (43 variants given below)

1. Basmati 217 | 2. Punjab Basmati 1 (Bauni Basmati) | 3. Basmati 386 | 4. Punjab Basmati 2 |

5. Punjab Basmati 3 | 6. Basmati 370 | 7. Haryana Basmati 1| 8. ?Taraori Basmati (HBC 19) |

9. Type 3 (Dehraduni Basmati) | 10. Pant Basmati 1 (IET 21665) | 11. Pant Basmati 2 (IET 21953) |

12. Kasturi, Mahi Sugandha | 13. Basmati CSR 30 | 14. Malviya Basmati Dhan 10-9 (IET 21669) |

15. Ranbir Basmati | 6. Basmati 564 | 17. Pusa Basmati 1 | 18. Pusa Basmati 1121|

19. Pusa Basmati 1509 (IET 21960) | 20. Pusa Basmati 6 (Pusa 1401) | 21. Pusa Basmati 1609 |

22. Pusa Basmati 1637 | 23. Pusa Basmati 1728 | 24. Vallabh Basmati 22 |

25. Vallabh Basmati 21 (IET 19493) | 26. Vallabh Basmati 23 | 27. Vallabh Basmati 24 |

28. Pusa Basmati 1718 | 29. ?Punjab Basmati 4 | 30. Punjab Basmati 5 |

31. Haryana Basmati 2 | 2. Pusa Basmati 1692 | 33. Jammu Basmati 118 |

34. Jammu Basmati 138 | 35. Jammu Basmati 129 | 36. Jammu Basmati 123 |

37. Pusa Basmati 1847 | 38. Pusa Basmati 1885 | 39. Pusa Basmati 1886 |

40. Pusa Basmati 1985 | 41. Pusa Basmati 1979 | 42.Pusa Basmati 1882 |

43. Punjab Basmati 7

Basmati rice in Pakistan are of below variants

1.????? PK 385/386 Rice | 2.?1121 Basmati Rice | 3.?Basmati D-98 / PK-198 | 4.?IRRI 9 – Rice | 5.?IRRI – 6 Rice

How to ensure launch and establish a Basmati rice brand successfully in UAE FMCG market.

Ensuring the success of a new basmati rice brand in the UAE FMCG (Fast-Moving Consumer Goods) market involves several strategic steps. Here are some key areas to focus on:

1. Market Research and Understanding

Consumer Preferences: Understand the taste preferences, cooking habits, and purchasing behavior of consumers in the UAE.

Competitor Analysis: Study existing basmati brands in the market. Identify their strengths, weaknesses, pricing strategies, and market share.

Market Segmentation: Segment the market based on demographics, income levels, and cultural preferences.

2. Product Development

Quality Assurance: Ensure high quality of rice, including aspects like grain length, aroma, and texture.

Packaging: Design attractive and practical packaging that preserves the freshness and aroma of basmati rice. Consider eco-friendly options.

Product Variants: Offer different product variants like organic, aged basmati, and quick-cooking options to cater to various consumer segments.

3. Branding and Positioning

Unique Selling Proposition (USP): Define what sets your brand apart from competitors. This could be quality, sourcing methods, or unique packaging.

Brand Story: Create a compelling brand story that resonates with the local culture and values. Highlight aspects like traditional farming methods or sustainability.

Cultural Relevance: Ensure that branding and marketing materials are culturally relevant and appealing to the local population.

4. Pricing Strategy

Competitive Pricing: Set a competitive price point based on market research and competitor analysis.

Value Proposition: Communicate the value proposition clearly to justify the pricing, whether it's premium quality, organic certification, or superior taste.

5. Distribution Channels

Retail Partnerships: Partner with leading supermarkets, hypermarkets, and grocery stores. Ensure wide availability across the UAE.

Online Presence: Establish a strong online presence through e-commerce platforms and your own website.

HORECA (Hotels, Restaurants, and Catering): Consider supplying the HORECA sector, which can significantly boost brand visibility and credibility.

E Commerce & Q commerce channels: Selling through these modern channel through established platforms like Talabat, Noon, El Grocer and so on

6. Marketing and Promotion

Advertising Campaigns: Invest in multi-channel advertising, including digital marketing, social media, and traditional media like TV and print.

In-Store Promotions: Run in-store promotions, tastings, and discounts to encourage trial and adoption.

Influencer Marketing: Collaborate with local influencers, chefs, and food bloggers to promote your brand.

Cultural Events and Sponsorships: Participate in or sponsor local cultural events, food festivals, and community activities to increase brand awareness.

Digital Marketing: Active engagement, participation and wise investments in Digital Marketing

7. Customer Engagement

Feedback Mechanisms: Set up channels for customer feedback and actively engage with consumers to understand their needs and preferences.

Loyalty Programs: Implement loyalty programs to retain customers and encourage repeat purchases.

Customer Service: Provide excellent customer service to handle inquiries, complaints, and suggestions efficiently.

8. Compliance and Certification

Regulatory Compliance: Ensure compliance with local food safety and quality regulations.

Certifications: Obtain necessary certifications such as Halal, ISO, and organic certifications, if applicable, to build consumer trust.

9. Monitoring and Adaptation

Market Trends: Keep an eye on market trends and consumer preferences. Be ready to adapt your strategies accordingly.

Sales Data Analysis: Regularly analyze sales data and customer feedback to identify areas for improvement and opportunities for growth.

By focusing on these strategic areas, you can effectively position your new basmati rice brand for success in the competitive UAE FMCG market.

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