RICE CAKES STAY HEALTHY

Rice cakes are still selling like hotcakes.The category, now a $217 million business, has tripled in dollar volume within the last five years, it's still logging double-digit increases and it's arguably a textbook case of a "specialty" product riding the wave of healthier eating into the mainstream.

p growing overall. Several said they are adding stockkeeping units or adjusting the mix of products to accommodate new flavors.

Some sources said rice cakes' momentum is slowing a bit, compared with the big gains of several years ago. But the business is not slouching. Dollar volume was up 16.4% for the 52 weeks ended Sept. 10, 1994, according to scanning data supplied to SN by Nielsen North America, Schaumburg, Ill. Unit volume was up 14.4% for the same period.

Here are some highlights from SN's interviews about rice cakes:

Rich Ehrhart grocery buyer Fleming Cos.

York, Pa., division

I know our business here was up over 100% from the prior year. But there are no rice cake deals and I haven't seen any in a long time. They don't have to deal, so why should they? I think sales are still increasing a little bit; but not like it was. You're looking at a time right now where it's going to increase because of New Year's resolutions. There is really no set place to merchandise rice cakes. But we have them in the gourmet snack aisle near the popcorn. I think that's the place where they belong. But I've seen them every where from the prepared food aisle to the cereal aisle.

Clyde Daniel direct-store-delivery buyer Piggly Wiggly Memphis Memphis, Tenn.

We're seeing that a lot of the flavor rice cakes, like honey nut, are picking up. We just recently picked up a line from Hadden House that is doing real well. We also carry the mini, bite-size rice cakes.

Of course, the regular rice cakes do well at this time of year, with people watching their weight and fat grams. All of those kinds of items pick up. And we're seeing a surge in that item right now. But, as the year wears on, you'll see some of it slow up.

There's very little dealing in that category. You don't see a lot of fluctuation in prices.

Usually, in our stores, they're merchandised with the fat-free and healthy type products. That is generally where we put them and that really has not changed. I have seen them cross-merchandised in the cereal aisle and various other places in some stores.

We now probably carry 25 to 30 SKUs, which is up from 15 a year ago.

Buyer California division of a

major supermarket chain

That category is doing great, even without a whole lot of promotion. I think it's been a bigger item here in California for a longer time than in other areas of the country, but it continues to grow. There seem to be some loyal buyers out there who consistently buy the products and those buyers are complemented by new people looking for a healthy snack.

We've increased our space for rice cakes to about eight to 12 facings, depending on the size of the store. They're bulky items, so that's a bit of a drawback.

We've cross-merchandised them through displays in other parts of the store, especially near things like peanut butter.

Peter Jost grocery buyer Harp's Food Stores Springdale, Ark.

We haven't dwelled too much on rice cakes, to be honest with you. But rice cakes are a growing segment. A lot of the growth has come from the different flavors that are available.

Right now is really a good time to be selling rice cakes because everybody starts their diets at the first of the year.

We merchandise our rice cakes at the end of our diet aisle. We carry Quaker and Hain's.

We take on the new flavors as they become available, and generally when we take on a new flavor we will re-evaluate the category and discontinue a slow-mover.

John Allen vice president Macey's Food & Drug Sandy, Utah

It's growing here; there's no doubt about it. What's remarkable is that there's no promotion. The main player here is Quaker. I get a promotion about once a year, so we're not promoting it and trying to aggressively attack it, just because they're not.

In the same sense, it's popular. It's popular this time of year particularly with diets and things like that. January and February are my biggest months for rice cakes. It's growing, but just because people are going for it; it sure isn't because Quaker is trying to make something happen.

I do a Roman Meal product that I'm promoting right now. They have brought a deal to me and I'm promoting that. I bought a couple thousand cases and it's doing fairly well. That's the first time I've seen those guys come to the table, too.

We've had to expand the section, just to accommodate the variety.

Steve Reynolds

director of purchasing

Lem Markets South Boston, Va.

Due to the variety increase, we've increased the SKUs on it and we've picked up a few extra sales. You have a certain customer who buys it -- the people who are still really health-conscious; it's a snack they can use. Manufacturers have added some new flavors, and that's probably going to help sustain it as an item over the long run.

We only carry the Quaker rice cakes. And they're usually pretty good with promotional funds, but they just never bring up rice cakes. We've added shelf space because of the variety increase. Because if you carry one of them, inevitably, you're going to have customers come in and want all the flavors. We carry three flavors -- caramel, butter popcorn and white cheddar -- and the minicakes.

We keep it in the hot cereal/ snack section in the cereal aisle. And I think for the longest time, in the grocery store, nobody knew where to put them. It's one of those oddball type items. We've got it set in the hot cereal section with snack items (like NutriGrain bars or instant breakfast). And, actually, it's not a breakfast food. It's a health-type thing, so it kind of gets lost in the store.

Robert Hanson grocery buyer

Treasure Island Foods Chicago

Rice cakes have been a growing segment for us for the last two years.

In some stores we merchandise the rice cakes in the health food department, and in other stores we merchandise them in the cereal department.

We carry about three different brands of rice cakes.

When it comes to rice cakes, we run them on sale. We do a lot of things with rice cakes. We've been working on them for two to three years, which is more than [our competitors] have ever done.

Susie Gregg buyer Certified Grocers of California Los Angeles

"It's flat here. There are so many items that there's a proliferation of varieties now. The line is very, very thin.

There are a couple of off-brands that are just getting into it. Mainly, Quaker is the player. We don't have a private label.

Ross Nixon VP, merchandising Dahl's Food Markets Des Moines, Iowa

We carry two or three different brands, and a total of probably 14 to 16 different SKUs. So we still carry a pretty broad variety.

Some of those types of items become trendy, and I think they peaked some time ago. They still sell, and are not a bad item, but they are not nearly the item that they were a year or a year and a half ago.