Specialty rice continues to pull shoppers into supermarket rice sections, but new varieties must be taken with a grain of salt, according to grocery buyers and merchandisers.
The reason, they say, is that the popularity of new flavors often lasts only as long as their introductory promotions. So to lure customers into the rice aisle, retailers have had to experiment with new rice mixes, while preserving space for
a diverse selection of grain rices, especially white rice. "For the most part, there's varieties that will escalate in sales, and some will diminish. You have to constantly come out with new flavors to keep up the maintenance," said Peter Jost, grocery buyer at Harp's Food Stores, Springdale, Ark.
John Burger, grocery category manager at Randalls Food Markets, Houston, agreed: "The new varieties [of rice mixes] are what's driving the category. It's out with the old and in with the new," he said.
A few years ago, specialty rices boosted overall rice sales, but some products are being dropped because they haven't caught on with consumers, said Dave Renaldi, director of merchandising at Martin's Super Markets, South Bend, Ind.
"The category got overstocked with just too many items," he said. "You're not going to stock that many [brands]. So the weak ones just fell by the wayside."
Specialty rices have cannibalized a spoonful of sales from other rices, but have bolstered the entire category, he said. "What they did was enhance and put some emphasis on the rice section, which was kind of blah and hadn't had anything new in a while."
Despite breathing some life into the rice section, specialty rice growth has slowed, said Dan Grubenhoff, grocery buyer for the Bellefontaine, Ohio, division of wholesaler Super Food Services.
"That was the only growth there was a few years back. And Lipton had a big advantage in that area because they had a spinner rack for all their flavors, which saves on shelf space," he explained.
"There was such a proliferation of flavors when the specialty rices came out that most of the [slow-selling] flavors are now gone," he said, citing broccoli and cheese as his top seller and herb varieties as dead. "With any type of new flavors, they sell well to start with, and then after the initial offering they tend to go down, because you do pay a premium for it."
Advertising has been the key to building rice sales, since customers tend to opt for whatever is on sale, retailers and wholesalers said.
Martin's regularly promotes rice and rice mixes with sales, coupons and buy-one-get-one-free offers. "We probably advertise some form of rice at least once a month," Renaldi said.
Harp's does promotions and advertising four times a year for Rice-A-Roni and other rice mixes. "We've done extremely well with Rice-A-Roni rice and sauces," Jost said.
Rice-A-Roni and Lipton have stimulated sales with a lot of discount and coupon advertising for their rice mixes, according to Lauri Platter, grocery buyer at Fareway Stores, Boone, Iowa. Carl Willoughby, grocery manager at Ream's Food Stores, Salt Lake City, has found advertising for most rice products to be effective. "When we run [ads] on Minute Rice or Rice-A-Roni, it does well," he said. Sales on Minute Rice are offered twice a year.
Supermarkets also are using cross-merchandising to draw more attention to rice, Super Food's Grubenhoff said. "With white rice, they try to merchandise Parmesan cheese and different soups, like cream of mushroom and tomato soup," he said. Martin's has cross-merchandised such items as meat, Chinese food, sauces, prepared foods and produce with rice, Renaldi said. Rice can be put in special displays placed next to meat or produce, or meat and produce can be put in bunkers in or near the rice aisle, he explained. "Basically, anytime we run a special on Chinese food we tie in rice," he added. Rice also lends itself well to seasonal promotions, noted Harp's Jost. "We just did a Chinese New Year promotion and tied in rice products," he said, explaining that grain rices were cross-merchandised with Chinese food and sauces. For Cinco de Mayo, Lipton Spanish Rice was tied in with such products as refried beans, sauces and tortillas. In recent years, rice has become a healthy and convenient meal choice for many consumers, said Harp's Jost. "A lot of people are using rice as side dishes to their meals. Corn and mashed potatoes are being replaced by rice as a side dish." The unit volume gains in rice, according to A.C. Nielsen, Schaumburg, Ill., are in rice mixes.
For the year ended Dec. 10, rice mixes were up 5.6% in dollar volume and 6.6% in unit volume. Overall dollar volume of instant rice rose 3.9%, led by private labels, which had an 11.1% gain. Overall unit sales in the segment essentially were flat except for private labels, which had a 5.5% increase.
Burger of Randalls said he was preparing to revamp the chain's rice section. "I have big plans for it -- just doing a total reset and at the same time doing an SKU rationalization to keep up with what the market is doing," he said.
Burger said he plans to add new varieties from Uncle Ben's, Tony Chachere's and Zatarain's. "The bulk of my business is in rice mixes rather than just white or brown rice," he said.
In rice mixes, Lipton's Rice & Sauce packets have been a comer, Burger said. "I've done well with them since their introduction," he said. But Lipton's Golden Saute line has been sluggish.
Golden Saute may be an attempt to compete with Rice-A-Roni, which in turn has released quick-meal packets to rival Lipton, according to Burger. "It's going to be interesting to see what Rice-A-Roni's new bags are going to do," he said. "I think they [Lipton and Rice-A-Roni] are just shooting at each other with these new products."
Specialty rices haven't cannibalized sales of other rice, Grubenhoff noted. "Specialty rices are bought more by people who fix smaller meals or meals for fewer people, whereas white rice is more of a commodity serving, as in combination with Oriental foods."
Fareway has been seeking a winning combination for its rice sections, trimming space at some locations while enlarging it at others, Platter said.