Complex Indian rice market

Broadly, there are two subdivisions in the Indian rice market. There is the Basmati rice market, which has a large number of organized players. However, Basmati rice is less than 9% of all-India rice consumption. The real creamy layer of rice consumption in India lies in the regular staple consumption. This is the rice that people use daily at their homes as part of their lunch and dinner. This is still a localized and unbranded market and that is where Adani Wilmar brand wants to narrow-cast to the rice market. The Indian rice consumption market is very dispersed. For instance, in Bengal, the preferred rice is the Minikhet rice. If you look at Uttar Pradesh, then the most popular rice is the Sona Masuri. However, if you go to South India, the most popular brand of rice is the Kolam rice. Obviously, these are very regional and very dispersed tastes and it would be naïve to service all the markets with a single umbrella offering. Most people are very fussy about their core palate and a bad product would kill the idea for ever. That is where Adani is addressing the market with a narrow casting model.  

Regional plan for rice

Adani Wilmar has taken the first step by acquiring a sick rice mill in West Bengal. The idea is to procure the local rice from the farmers, brokers and from the local mandis and then process the rice at the local rice mill and then supply it across the state. This will give a totally local flavor to rice. It plans to invest about Rs.500 crore to acquire rice mills across key regions like South India, UP, which are among the major consumers of rice. What Adani will do is to use Fortune as its umbrella brand. However, the same Fortune brand will sell Minikhet rice in West Bengal, Sona Masuri rice in the state of Uttar Pradesh and Kolam rice in South India. Since rice mills also will be local, the national brand will be backed by the local flavor people are used to. 

A useful template for FMCG

Adani’s bet is that if the game plan in rice succeeds then this model can be very easily extended to other pulses and spices of mass consumption. In India, food tastes and choices shift from one district to another, so state-level narrow casting is the best that an FMCG company can do! It is a bold experiment but if it succeeds then it could be a bold new model for FMCG companies in India. Till date, FMCG has been all about national templates. Now it will be about regional templates. That is where Adani Wilmar has made a start. The next few months will be the real testing time!