FMCG company Marico has decided to exit the branded rice segment with ‘Arise’, which existed under its Saffola brand franchise.
“We have defocused on branded rice under Arise, as it was not going to be the route to profitability in the long term. The brand is currently restricted to certain modern trade outlets,” said Saugata Gupta, Chief Executive Officer, Consumer Products Division, Marico, during an analyst meet recently.
Marico is best known for making a brand out of a commodity such as cooking oils with Saffola and positioning it on the healthy heart. It had tried to brand rice under Saffola Arise, pegging it as a low glycemic index rice (to help in weight management) under the same franchise in 2010.
Not enough volumes
While Marico did prototype the product before launching it formally, getting adequate volumes was an issue. As Jagdeep Kapoor, Managing Director, Samsika Marketing Consultants, says, “Marico had tried to create a niche in staples with Saffola rice, but it did not get substantial volumes to sustain it which is imperative in the staples category. While it did create a niche in the market, there was no market in the niche. It was ahead of its time, and it may take a take a while before such a product gets accepted in the market.”
Paying a premium
Marico had also released a commercial highlighting the benefits of eating Arise and segmented the brand under ‘every day’ rice and a basmati variant.
Abneesh Roy, Associate Director, Edelweiss Securities, added, “Indian consumers will not pay a premium for rice as it is still perceived to be a commodity. However, Saffola is doing well with its oats and muesli that it has launched recently.”
It had also extended itself as a ‘healthy’ snack brand (Saffola Zest) in the past, which was discontinued. However, the product was being prototyped in the western markets and did not have a national presence.
Other brand extensions such as salt and atta for cholesterol management continue under the Saffola franchise. Today, Marico is focusing on the breakfast space with its newly launched Saffola masala oats and muesli.
Growth for the flagship edible oil brand had slowed down in the past few quarters, due to which Saffola had undertaken price cuts between 3 and 6 per cent. “The purpose behind the price cuts was to accelerate volume growth for Saffola and we hope to get back to double digit growth again,” added Gupta. Saffola oil continues to be a leader in the super premium refined edible oil segment with a 58.2 per cent share.