Against the grain
The fresh thinker
The Amira Foods chief plans to transform the commodity-led rice market by introducing attributes such as taste, quality and sustainability.
Group managing director Karan A Chanana is the fourth generation of his family to lead Indian rice company Amira Foods. He has increased the company’s turnover to $330m and led the flotation of the group on the New York Stock Exchange in 2012. The brand has recently had its Basmati rice listed at Morrisons in the UK.
Marketing Week (MW): When Amira launches onto UK shelves, how will its price and positioning compare to its rivals?
Karan A Chanana (KAC): There will be a marked difference [it will have a higher price], mainly because there is a marked difference in quality. Supermarket own brands are there to serve a purpose of being at the right price, which is not something we subscribe to. It is supermarkets coming out with their own version of what consumers want, and we don’t share that thought process to a large extent. However, we respect their position, we are not going to fight them on it. We believe it gives us an opportunity.
MW: How will your brand be different from other rice suppliers currently in the market?
KAC: The industry has given us a platform by being quiet. Basmati suppliers have never addressed the consumer because they have never thought of the consumer. Amira will do.
Rice brands have been taking consumers for granted. It’s a classic thing in the food and beverage market. You can only lead by re-benchmarking quality [or changing how people think good rice should taste, by raising the quality to the best type of Basmati] if you want to build a brand, otherwise you are just selling a product. And you can only do that when you can address the consumer.
Open a pack of our product and you will see that the grains are visibly different. We provide the best you can buy because I believe people can afford it and will appreciate it.
People buy rice eight to 12 times a year and don’t remember if they paid £4.49 or £4.89 for it but what they do remember is the experience. That is why we are confident of success. When people get Amira into their kitchen and cook it they won’t go back to anything else.
Basmati rice specifically is classified as a ‘super grain’. Not only because of the flavour but also the aroma and the texture are so superlative that it sits on top of the gourmet pyramid. It has a low glycemic index, it is allergen-free, cholesterol-free and good for the planet.
MW: What is Amira’s approach to corporate social responsibility (CSR)?
KAC: Indian Basmati uses just over 50 per cent of the water that ordinary rice uses to grow, so it is highly sustainable. And in our business we have CSR built in, because as a result of the quality of the product and its consumption by people you actually get an equitable distribution of wealth. The farmer gets a much higher return on Basmati rice than he gets on ordinary rice because it is more expensive for the consumer to buy.
I believe that sustainability is where the East leads the West. If you look at India, for example, a lot of the population live off the land and eat fresh products, so a lot of them eat organic – not by design but by default.
Organic is definitely a better value proposition for humans and that is why it is a higher price. I believe that the consumer should be encouraged to pay a higher price and enable brands to be higher priced down the supply chain.
MW: Why is an organic product so important in creating a sustainable food chain?
KAC: The majority of the population of this planet is in Asia and their income is mainly from farming. Higher food prices help down the line as a mechanism of equitable distribution of wealth. Today, sourcing organic is based on how much of a premium you will pay over conventional natural. You can only encourage farmers to move over to organic by paying them a premium. So I think that the process itself is fair, should be encouraged, and as well as that it is good for people to eat organic.
MW: How will you communicate your organic or sustainable credentials to consumers?
KAC: We have coined the phrase ‘food connect’. Everybody talks about ‘farm to fork’ but people don’t understand that, it’s just a piece of catchy terminology. Our phrase says that from the farmers we buy the produce from, all the way to our consumers, there is a connection.
We work closely with our farmers, giving them advice for best practice, updating them on what is required. We have agronomists who work in-house. We follow the best practices available in our industry across the globe. This is all in the vision of connecting people through the language of food and experience of food.
As our brand matures we wish to communicate how what you buy here in the UK connects you to a farmer back in Asia. [It will be about] authenticity, traceability, adaptability and the global reach of the brand itself.
MW: Are you seeking listings with the major UK supermarkets?
KAC: We have relationships with supermarkets across the world. For example, we are the number one Basmati brand in Walmart India. We just received a best partner award from them, and we work with other European supermarkets, including Carrefour. We are also with Costco in the US.
We don’t expect everybody to stand up and say: ‘Hey boys, come right in’ but there is a major market opportunity here helped by our commitment and the consumer benefit.
Our ambition is to be the number one brand in what we do and that is the path we are walking down. We are here to lead, through our brand and our portfolio of products, which we plan to expand. We are all finite products on this planet. So what will outlive us? Brands.
Marketing Week (MW): Why is the UK market a target for expansion?
Karan A Chanana (KAC): The UK is a flagship market for many businesses but if you look at the total rice ‘universe’ in the UK, it is worth approximately $750m to $800m in dry white rice. And it is almost 50 per cent Basmati rice. So rice is not just for ethnic populations – the mainstream UK population is consuming it.
Appreciation of Indian food in this country has increased a lot. The market has gone from opening balti houses to [more authentic] Indian restaurants, which is a very encouraging change. I think the next phase is going to come in a manner similar to the Japanese restaurant Zuma: cuisine tailor-made and implemented for Western-style servings.
We have gone into Indian restaurants that are being done up in a Western style; we need to change the cuisine for smaller, more sophisticated servings too.
You also have high-end restaurants making Basmati rice risotto, you have Chinese restaurants making fried rice with it, because of its taste. You can have steamed or boiled basmati rice as a side dish rather than having bread full of gluten; the product is so good for people and no brand has addressed that. This is an opportunity for us.
Coming into the UK, which is a mature market, there is no real [branded] competition. It is only a matter of time before we come in and establish ourselves. And we believe that the UK is a bedrock of creativity, with lots of people to work with.
Recipe for success
Amira Foods was founded in 1915 and sells its Basmati rice in more than 40 countries. It recently launched a range of snacks and is hoping to gain a foothold in the UK market. It is headquartered in Dubai but was listed on the New York Stock Exchange in 2012, making it only the second Indian company to gain a listing there.
Group managing director Karan A Chanana (pictured) wants to make Amira the world’s leading rice brand, introducing people to what he says are new standards of corporate social responsibility in the process. It is listed in Morrisons and is in talks with other supermarkets.
The UK is the largest importer of rice in the EU, according to the CBI, and we are increasing our consumption: the UK market was worth £430m last year, compared to £398m in 2010, says Mintel.
Developing nations are increasingly importing Indian rice, as is China – itself the largest producer of rice in the world. In volume terms, India’s rice exports rose by 10 per cent in 2012/13.
Rice is an unusual product in that most of it is consumed in the region where it is grown, with relatively little made available for export. Chanana estimates that globally only 6-7 per cent of rice is sold outside the growing area.
Basmati, which has particularly long grains, is produced in Himalayan areas in India and Pakistan and the product is aged for up to two years before sale. Its growers consider it to be ‘the king of all rices in the world’ because of its taste, fragrance and texture.