Rice, noodles & pasta 2021: perfect storm batters rice & pasta brands

The prosperity bestowed upon rice, noodles & pasta by pandemic-driven stockpiling is a thing of the past. Combined sales have plummeted £91.4m on volumes down by 2%.

Rice lost most with a £54.8m slump. But, as evidenced by the much gentler 0.5% volume decline, these value losses can’t all be explained by unfavourable comparisons with the initial panic-buying of 2020.

For the real reason, look no further than the UK’s biggest rice player, Ben’s Original. It has suffered a £31.2m blow as it wrestled with the added challenge of transitioning from its previous Uncle Ben’s moniker (see p148). Its reliance on ready to heat (RTH) pouches – the sharpest falling format in rice – was a key driver of its performance this year.

“A widespread move to EDLP teamed with own label price drops has challenged ready to heat rice brands’ ability to retain the value gains made last year,” says NielsenIQ senior insight analyst Adam Paulson. “The growing presence of own label, particularly in RTH, is the main threat to rice brands.”

At the same time, brands are facing ever more pressure on their prices, due to a perfect storm of higher import costs arising from Brexit, skyrocketing freight rates, driver shortages and squeezed raw material supplies caused by Covid’s catastrophic impact in India and political unrest in Myanmar.

Still, brands remain optimistic. “We hope to be able manage these sudden price increases and believe prices should settle soon,” says Jonathan Calland, head of external affairs at number two rice brand Tilda, whose sales are down by £9.5m.

And there are pockets of the market where brands continue to thrive. Bulk rice, for instance, has “escaped the value declines seen in the total category” says Paulson. “Growth is hard to come by but there are notable exceptions.” See bulk brand Trophy, which racked up the largest value growth in rice thanks to distribution gains.

Number three rice brand Laila similarly grew sales – up 3% to £20.9m – due to increased distribution. Harry Dulai, MD at brand owner Surya Foods, also points to its Laila Gold variant as a strong performer. The easy-cook premium basmati rice has done “exceptionally well” during key festivals

The UK’s biggest rice player, Ben’s Original, has suffered most, losing £31.2m, as it wrestled with the added challenge of transitioning from its previous name, Uncle Ben’s, and distancing itself from its negative connotations. The brand’s reliance on RTH formats, which have suffered the greatest losses in rice, was another driver of its losses.“Bulk rice has escaped the value declines seen in the total category,” says Paulson. “Growth is hard to come by but there are notable exceptions. Bulk rice brand Trophy is the biggest value grower, jumping from 12th to sixth in the value ranking.”

Trophy’s £4m growth is largely down to distribution gains, as is number three brand Laila’s 3% growth to £20.9m. Brand owner Surya Foods’ MD Harry Dulai says Laila Gold, an easy-cook premium basmati rice, has done “exceptionally well” during key festivals such as Ramadan and Diwali and its new size formats, including 1kg and 2kg brick packs, have scored listings with Tesco, Morrisons and Ocado.

NPD has also helped power growth for Veetee, which launched a swathe of new products this year under the ‘Rice Unleashed’ initiative. By targeting health-conscious and plant-based shoppers, the brand has managed to bump sales up by 2.1% and bag our category Top Launch award with the Plants & Rice range (see pXX).

Pasta plunges

Like rice, pasta has also taken a plunge, with sales falling by £36.2m or 12.5%. Many of the challenges affecting rice right now are also playing out in pasta. Brands are bearing the brunt of the decline as own label gains share and the prospect of price rises are looming as a result of stretched supplies. “We could see cost price rises in dry pasta due to the durum wheat shortage in Canada and supply issues in Italy being passed on,” says NielsenIQ analytics team lead Rhian Evans.

With pasta brands suffering a combined loss of £35.7m, higher prices are unlikely to go down well with shoppers already feeling the pinch of increasing demands on household budgets. Particularly given retailers’ focus on own-label, which Napolina owner Princes Foods director for Italian products Andy Hargraves says has “made it challenging for brands to receive the space they deserve”.

Napolina has certainly been hit hard. The UK’s bestselling pasta brand has seen revenues drop by £18m. That’s almost half the overall category’s decline.

Still, some brands managed to record growth. “Barilla and Garofalo are in growth with Barilla’s 6% price cut helping to drive a volume uplift of 11.4%,” says Evans. “Garofalo has moved up to sixth place showing that shoppers have an appetite for premium pasta brands. This and own-label’s volume growth has squeezed the middle.”

Over in noodles, similar polarisation is taking place. Own label has stolen share and brands with strong world food or convenience credentials have prospered. Amoy suffered the greatest loss, £1.6m, while number two brand Sharwood’s lost £1.1m.

“Much of Amoy’s decline can be put down to resetting post stockpiling – its value remains higher than it was two years ago,” says NielsenIQ’s Paulson. “Amoy’s price is 12.7% higher than the category average and shoppers have punished them for this.”

With price pressures mounting for suppliers, brands are going to have to do more to justify their premium over the coming year. Andrey Sokirkin, brand director for cooking sauces & accompaniments at Sharwood’s owner Premier Foods says shoppers are showing more interest in healthier lines.

“Our Wholewheat Noodles help cater for this demand,” she says. “Before the pandemic, health was on the agenda. This desire to make healthier choices has now accelerated.”

But will playing the health card be enough to restore brands to full health?