Most rice exporters are reluctant and hesitate in accepting the challenge of launching brands that would invariably fetch better returns.
As a result, Pakistan has been unable to retain its highest-ever export volume of basmati rice achieved in fiscal year (FY) 2010-11.
The country’s rice exports increased during the last few years in terms of value not due to higher volumes but because exporters have been able to get a better price for basmati rice. In FY14, exporters got a record average price of basmati rice in the international market.Pakistan exported $1.85 billion worth of rice in FY14 in which basmati’s share was just $846 million.
However, the situation in the non-basmati rice category is even worse as its brands are almost non-existent.
Is it that difficult to launch a brand or is it just incompetence and complacency?
Experts talk
Successful exporters, who have been able to brand well, have mixed views.
“I used to export basmati rice in bulk,” said Jawed Ali Ghori, managing director at Matco — arguably the country’s biggest basmati exporter. “Over time, I realised that I wasn’t getting the right price and was also playing in the hands of importers who used to misuse their position.”
Ghori is the second generation in the rice business, which was set up by his father 50 years ago in 1964. Today, Matco exports rice to over 65 countries while its flagship brand Falak is sold in over 35 countries.
“Since, I was exporting rice in bulk without branding, I was like any other rice exporter to importers. They used to cancel large deals over a small price difference, which would be as small as $10 per ton. That attitude of importers compelled me to make my product stand out.
“After decades of bulk rice exports, I launched my own brand a decade ago and after a few years of struggle, I am getting the price I want.”
Industry officials say that Pakistan exports most of its rice with no proper processing or packaging, losing out on millions of dollars every year.
“Rice exports in bulk quantity definitely dents the export earnings of Pakistan,” said Engro EXIMP Chief Executive Abdul Samad Khan said.
Engro EXIMP is the subsidiary of Engro Corporation – one of the largest conglomerates in Pakistan – that started its rice business in 2010. Its basmati brand ‘Rymah’ is now available in many countries. The company’s rice sales, including exports, touched 58,500 tons in 2013, up 50% compared to 39,000 tons in 2012.
“Pakistan’s basmati rice exports have declined due to the success of Indian brands in the international market, but we can fight to regain the market share if we introduce good quality brands and invest in them,” he added.
Khan informed that the leading branded basmati rice exporters are getting around $500 per ton higher than the non-branded basmati rice exporters. After taking out all the other expenses including packaging, leading Indian basmati rice exporters are easily pocketing $300 per ton due to branding. In FY14, Pakistan exported 733,860 tons of basmati rice worth $846 million out of which only around 70,000 tons were branded — not even 10% of the total basmati exports.
Why is Pakistan far behind its competitors?
Industry officials say lack of professionalism is one of the reasons behind the low exports. Rice is still part of the small and medium size industries with only a couple of players.
Indian companies crossed that bridge many years ago and have professional managers handling their business who know how to build and manage brands, said Khan.
“Brand building requires investment and patience. The rice sector in Pakistan has generally not been willing to make that investment,” he stressed, adding that the industry also does not possess the scale to be able to afford the kind of investment required.
What it takes to develop a brand?
According to Khan, a good brand-building effort can take a minimum of around two to three years in the international market. It requires introduction in at least six to seven markets in the Middle East and investment during the brand-building period.
The concepts in launching a domestic or international rice brand are almost the same, but the execution for each market is different, he said, adding that the company has to invest in market research separately to gauge consumer product and price preferences, find the right distributors, and ensure placement.
the writer is a staff correspodent
Published in The Express Tribune, August 25th, 2014.
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COMMENTS (47)
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Rice Authority has big expectations for Pakistan to be next worlds largest rice exporter With rising rice prices from Thailand and India Pakistan has one of the most attractive rice prices on the Market not to forget the quality rice it produces.
See current worlds rice prices per country along with the buyer requests for Pakistani rice on http://www.riceauthority.com
Agreed with Mr. Khan, Pakistani rice exporters should have a strategy & vision to enter in any international market. Unfortunately they are blaming to importers but most of the time unable to honor their commitments (multiple reasons). Buyers will take benefit from their drawbacks, if they do not have professional approach or long term sustainable policy. I am living in UAE more than two decades and had experience to meet with many rice exporters, unfortunately most of them are working with short term policy and without any future plan & strategy. Just they want to enter in international market but no knowledge about modern trade and still believe on old traditional business style / trend. I personally discuss with some exporters why you do not develop your own brand when you know basmati or non basmati rice grown in the region is one of the best quality in world. If Indian brands can succeed then why not Pakistani products.
RYMAH brand was launched in UAE and getting good feedback from customers but need consistent supply and follow up and long term strategy.
Good distributor and backup from processer will help (consistent supply, maintain quality, international packing standards to be adopted & adopt professional approach for international trade, train your export team / managers).
Pakistan Trade & Commerce / commissions (for export) need to provide advises to improve their standards & exports. They need to seminars, training sessions, trade fair participation and provide adequate information's. learn from Turkey & Egypt how they participate in international fairs and fully supported by country governments.
@Show ur true identity: I'm a brit citizen now. Hope that affords some protection at least. It does not help me in any manner, as in India I cannot buy agricultural land and have had to surrender my Indian passport which invited disapproving looks from people at the Indian visa centre.
@Leela4fun: Loved it Leela... Awesome!
@Pak No. 1!:
I am very sure your post was intended as a joke, because I am born in Denmark too and it would amaze me if you dunno that Lurpak is a Danish butter product,
@Raj - USA: Rooh Afza was formulated by a Unani doctor from Ghaziabad in undivided India. As per Islamic succession law, he bequeathed to a trust which later became a waqf. Rooh Afza is manufactured by Hamdard (waqf) Labs in India, Pakistan and Bangladesh. Rooh Afza is not a Pakistani product.
I had bought once a Pakistani brown Basmati rice her in USA in one of the Indian stores. If I remember correctly, the brand name was "Deer". I liked it very much but unfortunately, it is not available any longer. Almost all Basmati rice sold here in USA are from India and there are many varieties.
Recently, I was surprised to see Green Tea sold here that has a "Product of Pakistan" label. As far as I know, Pakistan does not produce tea and they are one of the biggest importers of tea.
One Pakistani product I like is Rooh Afza. Here in USA, almost all the brands of masalas are "Made in India". MTR is a well known brand.
@dr priyanka: You can but make sure your passport shows your true name and not the one masquerading under an Indian name. Else ,on landing you maybe treated as an Indian spy and be one of the countless missing persons in Pakistan .
@Shera: You are absolutely correct in my opinion. Sales of Indian Basmati rice is on higher volume because of bigger Indian diaspora; not necessarily because of difference in quality.
@R K JAIN: Yours is the sanest comment! In fact the variety of rice grown in SAARC is the most diverse. The Indian varieties from PUSA, and the SRI method of planting, has given a huge boost to rice production in India. We in Pakistan can benefit from that as well as Indian milling and processing technology.
That, along with co-branding (it is cheaper and better to build pan South Asian brands, rather than waste money on competitive marketing, and move the savings to improve packaging and productivity.) will help break into markets where the Chinese and other competitors hold ground.
The customer would benefit too given the variety of options. This is the kind of out of the box thinking that is required of our leaders. MFN status for India?? Who are you kidding? Don't you know who is standing behind Nawaz Sharif in khaki uniform?
@Shera: Basmati is cooked quite extensively in other Far East Asian, Middle Eastern and Latin American homes as well. There is a significant range of offering in terms of varieties of rice in the US and Canada market. Since Basmati is expensive in the domestic market and commands good prices abroad, Pakistani product has a good potential to increase its share of the branded business. And it should. But there is an anti-Pakistan sentiment which has grown over the past six years, and it is because of our political outlook and non-state actors. Our national image and brand have been a casualty of this. Consequently while Indian brands continue to flood the market and shelves, Pakistani brands such as Ahmed, National etc. only grow because a segment of Indians are trying them in stores such as Patel Brothers. Also, Pakistani expats buy Indian brands all the while. Our brands have limited shelf space and a restricted market segment to grow within. Basmati rice is the one rare shining spot.
@dr priyanka: Will the trip be sponsored by the Pakistan Edible Deniability Board, chaired by Hamid Gul? Since all the weapons bought by Pakistan, reduces the calorific intake of its needy citizens. (Ditto for India, BTW.) The only thing going for India, is its broad based and growing economy. I'll grant them that, but where in Pakistan do we have that largesse?
The rice industry in Pakistan is going through the same nascent stage that at one time the tea industry passed through. The incredible work done by Tapal to counter "Khuli Patti" with packaged tea is what needs to be done. Matco I believe is in prime position to take up the challenge of unbranded rice.
@Ahmed Durrani: Largest rice exporter as in bulk and branded. The point of the article according to Matco's Director is exactly what you have said. There needs to be a lot more done to unleash the full potential of branding
@goggi (Lahore): You are correct that many Pakistani restaurants call themselves Indian restaurants. The reason though is nit the one you stated. The reason is people recognize India. People either do not recognize India or have negative associations with that. It is the same reason that some Pakistanis pass themselves off as Indians in the US.
@Zubair: I’ve used the Pakistani Zebra brand as well as the best from Thailand. The Indian product is by far more flavorful.
Did you use LurPak, Pakistan’s No. 1 butter, with the Zebra brand rice? I guess not.
One of factors here is buyers. The Indian diaspora is a large buyer of Basmati. And given the growth in the diaspora in the last few years - most of them are first generation and are therefore accustomed to Indian brands. Which explains the large growth in Indian brands.
OK guys chill! The truth is Pakistani rice, pickles, masalas are top class and in no way can India match Pakistan where the food industry is concerned. I live in the UK but whenever I shop for food, I pick up 'made in Pakistan' stuff. A week ago I bought a chilli pickle from Pakistan and it reminded me of my childhood. Each and every masala has it's own flavour. The dal fry masala is out of this world and the Alu bhaji masala, OMG! India has to learn a lot from Pakistan. You can distinguish the flavour of each and every herb/spice used. I realise how much hard work must be going into this. India should import this stuff. It's a big market. All the best to Pakistan! May all your industries flourish. Hopefully I can make a trip to Pakistan in the future.
Odd, that Matco is the largest rice exporter of Pakistan, and yet its branding is so poor and weak. Why not hire a good UAE advertising agency?
@Pak No. 1!: The 'PAK' in LurPak has nothing to do with Pakistan. LurPak is a Danish brand. Also, I run a restaurant in Chicago, and have worked in page E.U. So, I know my sources very well.
I quote from their website, "Danish butter has always been famous for them. Which is why in 1888 inferior butters were prevented from masquerading as their Danish counterparts, by the creation of just one brand for all Danish butter. This was the ‘Lurmark’ – registered on 23rd October 1901 as the trademark for quality Danish butter. You can still see this mark on Lurpak® today. It features entwined ‘lurs’ – Bronze Age musical instruments that have become symbols of Denmark. From 1911 only dairies participating in a rigorous system of regular blind tastings could use the Lurmark Danish Butter brand. These quality controls are still practiced today. In fact, to ensure that the Lurpak® you put in your fridge remains the premium butter you love; our dairies have to submit samples to a trained panel of independent experts every week. Good food deserves nothing less."
@Usman: That is cause India's premium brands are absorbed by the North American and the UK markets. The Indians compete directly with the US Texmati hybrid (a noted bio piracy cause célèbre back in the late 80s). I've used the Pakistani Zebra brand as well as the best from Thailand. The Indian product is by far more flavorful. The article misses a critical point. All the branding in the world can't compensate for quality. True branding is an extension, not a cover, for the product.
In Germany "Himalaya salt" is a trade name for pink tinted rock salt. It is predominantly available in Health Food Stores and New Age Shops for 5,- Euros per Kg whereas their conventional salts cost not even 1,- Euro per Kg. Unlike suggested by the brand name, the salt does not come from the Himalayas, but from our Salt Mines of Khewra!!!
Similar is the case with our Pakistani unlabeled Basmati which is being sold at dumping prices in cheap supermarkets of Germany.
A Pakistani was an initiator of Indian food in Ireland in the 60s. He started with Korma and Pakistani Basmati rice. Today it is worldwide a multi-million thriving business and our Basmati rice of Pakistan still plays the leading role. The most tasty Biryani you can only enjoy in Indian restaurants which are owned from Pakistanis and use our rice. The term Indian restaurant is used as an adjective, referring to our Indian Subcontinent and not the country India.
As Nusrat Fateh Ali Khan came to Berlin in 1990, his concert was marketed with Posters and advertisements................PRIDE OF INDIA!
@ PAK No. 1! & @Usman: This is heights of illiteracy.....!! hahahaha.....LurPak...it has got Pak so its made in Pak & makes him feel proud....! hahahaa....i will use this one as a joke wit friends! really funny!!! And most Pakistanis cannot live a day without comparing anything with INDIA....! ;-) as all Pak knowns INDIA is way way way ahead in almost every field & technology..... comparing to India will eventually lead to disappointment for you guys.....so better forget comparison & concentrate to improve things for your country.....; this is wat Indians do....peace!
@Pak No. 1!: @Usman:
Riviana is an American company and its best selling brand is "Mahatma", which is Indian basmati. Lurpak is a Danish company. In trying to be "one up on India", you are prepared to believe your own lies!
@Pak No. 1!: Lurpak is a danish brand with nothing to do with Pakistan. Now you will say even Tetra Pak is Pakistani or the Melbourne suburb Pakenham is named after Pakistan.
Just wondering where does the Mass Production of MBAs from priviate universities end up ?
Any comments on or from TDAP ?
"Value addition" and "Branding" quite often.
@ PAK No. 1! Dear LurPak is Danish company not related to Pakistan http://en.wikipedia.org/wiki/Lurpak and Rivianna is American Spanish company, but any way you can dream .
@Pak No. 1!: Ok. Now go back and read the article again.
@zoro Somalia would be just fine
India is NOT an Islamic nation. Please compare Pakistan with other Islamic nations like Afghanistan.
@Usman: Here in Copenhagen, I make my biriyani only with Rivianna and LurPak, Pakistan's No. 1 butter! The butter is so pure just like its name and I feel proud every time I see the name of my country. Biriyani thus made reminds me of my roots in Miram Shah when I and my brothers would tend to the sheep and sometimes make biriyani out of one. Here in Denmark, you only see ads of LurPak and not any Indian brand which everybody considers inferior because nobody has heard of one.
Why compare everything with India ??? Pakistan can compare itself with other countries too... Ethiopia to start with will be a good idea ....
Instead of comparing to India. Why dont we get a life. We cant ourselves by hating India or any other. Instead lets have peace in our mind and try to improve standard.
At-least we should appreciate the fact that the people in this industry are thinking in the right direction which was not the case even a decade ago. Brand building, unlike for the IT companies, does not happen overnight and need constant care and nurturing before it can establish its presence in the market. This requires a lot of investment on the part of the brand owners. If the rice exporters continue to make efforts and do not get influenced by short term gains they will be able to establish brands in the lucrative Middle Eastern markets.
@Usman: It could be that in your area, most Asians are Pakistani looking for cheap rice. Yup, you may not find premium Indian rice there.
@Leela4fun, right now anything coming out of Pakistan is more likely to be: ‘Every mouthful is an explosion of bomb’
@Usman: Rivianna is an American brand (owned by a Spanish company), not Pakistani.
They are among those who import unbranded rice from the rice exporters.
http://www.riviana.com/whoweare.html
https://en.m.wikipedia.org/wiki/Ebro_Foods
@Usman: Rivianna is an American brand (owned by a Spanish company), not Pakistani.
They are among those who import unbranded rice from the Pakistani rice exporters.
http://www.riviana.com/whoweare.html
https://en.m.wikipedia.org/wiki/Ebro_Foods
I see Pakistani's Rivianna rice brand at shelves here in Melbourne, and its the fastest selling of any brands, Indian rice is not even considered 'top shelf'. If all rice producers produces their brand, our rice market would be unmatched. This is basic marketing. Rice owners should hire marketing professionals asap.
@Gratgy: The pun was intended!
@Leela4fun: It might not be wise to use the word "explosion" when talking about Pakistani products
How about the tag line for the basmati rice - 'Every mouthful is an explosion of flavors'
Why did we separate in the first place? Too many things to keep track of now. Even rice and mangoes are not spared.