Growing diversity on the rice and flour market

Eating in restaurant less often could have entailed an increase in flour sales, but market players’ opinion is that demand remained stable. – The fact that flour sales did not decrease is the result of strong competition: producers could only sell at a very low price, which did not change the ‘normal’ price of flour but lead to frequent price promotions. As a result of this, the volume of sales in promotion grew significantly – says Norbert Káhn, the sales director of Gyermely Zrt. – Consumers are turning to cheaper private label products and they are buying larger packaging units as well. Among the different retail channels discount stores managed to improve their performance – says Ferenc Sárik, the brand manager of Cerbona Zrt. Norbert Káhn’s estimate is that plain flour in the usual packaging size still represents more than 80 percent of sales. Cake and pastry flour and semolina sales come next in the ranking, while different flour mixes only represent 1-2 percent.

The growing popularity of household bread makers did have a positive effect on flour sales, offering an opportunity to develop special bread flours. Norbert Káhn told Trade magazin that classic brand building is impossible with flour, as only a small profit can be realised from this product. Ferenc Sárik added that Hungarian consumers do not accept the higher prices of premium category flour. Hungary is not a big rice producer, so the domestic market is rather exposed to world market trends, especially in terms of price. Mihály Bencs, the managing director of Riceland-Magyarország Kft. told our magazine that the price of rice on the world market is fluctuating. New rice varieties appear regularly but demand for them grows slowly. According to Patrícia Peres, MARS Magyarország Bt.’s brand manager these special rices – basmati, jasmine – only make up for a couple of percent of total sales. It is noteworthy though that the segment expanded by 32 percent form one year to another. If these new rices enter the market under a well-established brand name such as Uncle Ben’s, consumers will get to know them sooner. But retail networks prefer suppliers who offer lower prices and this policy strengthens the positions of private labels and noname products.

Mihály Bencs told us that in the second half of the year Riceland will introduce new products to the delight of those who like culinary adventures. Patrícia Peres emphasised that today’s rapid pace of life compels many people to choose the fastest solutions when cooking. Uncle Ben’s boil-in-bag rice is ready in 10 minutes and the brand also offers various sauces to make dishes even more delicious. Riceland even sells 1-minute rices which despite their high price do rather well on the market. They reduced cooking time not only in the case of white, but also parboiled and brown rices. As concerns marketing, Riceland recently finished a loyalty programme in which several participants won HUF 1million; the company plans similar promotions for the future as well.