India Gate Basmati Rice eyes Rs 200 crore revenue with regional rice revolution

In India, linguistic diversity is mirrored in rice consumption habits, with preferences shifting every 50-100 kilometres. While Sona Masuri rice finds popularity in certain regions, others favour Ponni rice, and in different areas, preferences extend to varieties like Kolam, Samba, or Gobindobhog.

India Gate Basmati Rice is capitalising on this trend by implementing strategic regional marketing tactics in India and introducing distinct product lines tailored to specific audiences.

The company has launched Sona Masoori Rice curated for the southern market, Kolam Rice for the western market, and Gobindobhog Rice for the eastern market. 

According to Kunal Sharma, head of marketing and business and head of modern trade and e-commerce, KRBL (the parent company of India Gate Basmati rice), basmati rice only contributes 2% of the overall rice consumption in India, otherwise, it is regional rice. 

With this initiative, the company aims to clock around Rs 200 crore in revenue in 2024, i.e. around 6% of the overall domestic sales. 

“We aspire to achieve an ascent to the 10% milestone, accompanied by ad campaigns around it,” he adds. 

Regional strategy 

India Gate enjoys a 75% market share in the southern market, as the market tends towards packaged rice as compared to loose rice, mainly used to prepare biryani.

While formulating the strategy, the brand witnessed a trend in markets like Chennai, Mysuru and Bengaluru. Consumers in these regions are experimenting with Basmati rice in diverse culinary creations, like lemon rice and coconut rice. 

Targeting this, the company launched the #ExperimentsWithBasmati campaign, illustrating how Basmati rice can elevate flavours of dishes like lemon rice. 

“The journey commenced last year, and is projected to span in the next five to six years mainly focused on digital platforms,” Sharma explains.

The company is also partnering with the upcoming season of MasterChef India-Tamil. It had previously collaborated with the latest edition of MasterChef India. 

In the western market, the company currently holds the second position in the market share, as the company was traditionally focused on north India due to proximity of the manufacturing unit, and south India due to prevalent consumption patterns.  

“For this (west India) market, we’re strategising to recraft the entire marketing mix from product to marketing to packaging. We endeavour to seamlessly integrate our products into diverse markets, tailoring them to local preferences and optimising distributional channels,” he elaborates.

For the east, West Bengal is the focal market for the brand, where it has implemented a regional campaign. In the market, its strategy is to transition consumers from loose rice to packaged offerings.

Going Ahead 

According to Statista, India ranks second in global rice consumption after China, with 118 million metric tonness of rice consumed in 2023. 

As per Sharma, India constitutes around 1.8 million metric tonnes of basmati rice in terms of volume, and only one-third is packaged rice. “There’s a huge opportunity for branded players like us to gather the unpackaged market share,” he emphasises. 

He adds that India Gate Basmati holds a substantial 36% market share in general trade and a 41% market share in the modern trade sector.

The company's focus is on accelerating the shift from loose packaging, utilising media and communication to drive its initiatives. 

In January 2023, the company released a campaign with Pankaj Tripathi, urging consumers to switch from loose to branded basmati rice. 

According to Sharma, the company revolves around three pillars: 

Hygiene: Addressing consumer concerns related to touching the product and combating adulteration in Basmati Rice. In August 2023 FSCCI (Food Safety and Standards Authority of India) ensured that the product can be labelled as Basmati only if it contains no more than 15% non-Basmati rice.

Status value: Recognising the emotional value consumers find in their purchasing decisions, the brand's campaigns incorporate nuanced elements that resonate with consumers on an emotional level.

Product differentiation: Acknowledging the challenge posed by limited consumer awareness, primarily centred around price points and grain length the company is partnering with International agency Landour. 

This partnership aims to create differentiation by repositioning its entire portfolio and infusing purpose into the products.

With this approach, the company aims to launch a media campaign and explore avenues to educate consumers at the point of sale, with a major focus on metro markets.  

Beyond rice, the company is also expanding its footprint into the broader staples market to become a staple provider in India within the next 5-10 years. 

“In the upcoming year, we plan to introduce a healthy oil category, further solidifying our presence in the market. While oil serves as the initial focus, we’re actively exploring and evaluating other staple categories to diversify the offerings,” he states. 

Media strategy 

The company primarily leverages television and digital platforms, allocating 75% to television, and 25% to digital. The e-commerce expenditure constitutes approx 30% of digital spending. 

“For us, the media strategy is tailored to product ranges. For premium offerings, the focus is on connected television and HD platforms to enhance brand visibility,” Sharma mentions. 

He further adds, “In terms of frequency, for products purchased on a monthly cycle, the brand maintains a strategic presence in the first and fourth weeks of the month, ensuring consistent engagement with its audience."

The brand has chosen to not partner with the IPL 2024 and has instead dedicated its focus on the upcoming Lok Sabha elections. “Our 30% of the marketing budget will be contributed towards elections, to have good visibility across markets,” he says.  

Revenue Split 

KRBL derives 22% of its revenue from e-commerce and modern trade, while the rest is generated through general trade.

Notably, quick commerce constitutes a significant 70% of the company's e-commerce sales.

“The advent of quick commerce is extending its reach to lower population segments, providing a strategic opportunity for us to play a pivotal role in transitioning them towards packaged rice,” he states. 

The company observed a trend in the Q-comm mode, focusing on selling lower-range rice products tailored for daily usage. 

“This is providing us with a huge opportunity to cultivate a premium portfolio. For this, we distribute samples of our premium rice alongside lower-range products, especially during festive seasons,” he adds. 

The company has also employed wet sampling for its newly launched India Gate Classic Biryani Masala. “The conversion rates in wet sampling are twice as effective as compared to traditional sampling methods.”

In the realm of rice, Sharma acknowledges that sampling might not be a key driver as consumers are well-versed in their preferences. Instead, for the category, the brand has set up experience zones, where the brand takes shoppers through an immersive experience of visiting from farm to fork.