Preferences of urban rice consumers in South and Southeast Asia

Marie Claire Custodio (MBA), Consumer Specialist Market Research Team, Social Sciences Division

International Rice Research Institute

International seminar on consumer preference in rice Kasetsart University, Bangkhen Campus, Thailand

17 February 2015

Agenda

• Background

• Consumer preferences in Southeast Asia

• Consumer preferences in South Asia

• Case of Bangladesh: Linking consumer preferences with midstream and upstream actors in the value chain analysis

• Key take-out and implication for rice breeding

Preferences are bi-directional

Market-driven and targeted rice varietal development program

•More and stable income for farmers

•Better targeting of varieties to end market

•More efficient value chains

•More affordable rice for consumers

• Identifying priority rice traits/characteristics per location (intrinsic attributes)

• Estimate demand and potential market size for specific grain quality traits and combinations

• Assess how markets may change

(This work is part of an on-going research on rice preferences of different value chain actors in South and Southeast Asia)

End-market opportunities

Source: FAO. 2014. Developing sustainable food value chains – Guiding principles. Rome

“Given that the VC should be geared toward specific end-market opportunities, the identification and quantification of such opportunities is the starting point for every successful strategy aimed at improving the performance of a VC”

• Identifying priority rice traits/characteristics per location (intrinsic attributes)

• Estimate demand and potential market size for specific grain quality traits and combinations

• Assess how markets may change

Increasing urban population – leverage point

Source: FAO STAT. http://faostat3.fao.org/download/O/OA/E

0

100

200

300

400 19

61

1963

1965

1967

1969

1971

1973

1975

1977

1979

1981

1983

1985

1987

1989

1991

1993

1995

1997

1999

2001

2003

2005

2007

2009

2011

2013

Rural population Urban population

Southeast Asia (Philippines, Indonesia, Thailand, Vietnam, Cambodia)

- 200 400 600 800

1,000 1,200

1961

1963

1965

1967

1969

1971

1973

1975

1977

1979

1981

1983

1985

1987

1989

1991

1993

1995

1997

1999

2001

2003

2005

2007

2009

2011

2013

Rural population Urban population

Annual population by urban and rural (in millions)

South Asia (Bangladesh, India)

Increasing demand for rice

0

20000

40000

60000

80000

1961

1962

1963

1964

1965

1966

1967

1968

1969

1970

1971

1972

1973

1974

1975

1976

1977

1978

1979

1980

1981

1982

1983

1984

1985

1986

1987

1988

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

Philippines Indonesia Thailand Vietnam Cambodia Bangladesh India

Total rice consumption per country 1 (In ‘000 tons)

1FAO data in World Rice Statistics http://ricestat.irri.org:8080/wrs 2GRISP (Global Rice Science Partnership). 2013. Rice almanac. 4th edition. Los Banos (Philippines):International Rice Research Institute. 286-287 p

71.674.463.2

43.151.6

42.5 47.647.0

29.1

69.6

51.746.2

64.2

31.4

IndiaBangladeshCambodiaVietnamThailandIndonesiaPhilippines

Year 2009Year 2000

Rice in total calorie supply2 (In %)

Understanding consumer preferences: Multi-country consumer survey

Objectives • Consumers’ purchase and consumption habits • How consumers choose and value rice grain quality • How these vary

‒ geographically: across and within countries ‒ by urban and rural markets ‒ gender ‒ income level

Survey sites: 7 countries, 24 urban zones

Not included in this presentation: Rural districts (Bangladesh = 12 districts in 4 divisions), (East India = 10 districts in 2 states )

Sample size (n)

Margin of error (%)

Philippines 500 4 Metro Manila (NCR) 200 7 Cebu City (Visayas) 150 8 Davao City (Mindanao) 150 8 Indonesia 500 4 Jakarta (West Java) 200 7

Surabaya (East Java) 150 8

Medan (North Sumatra) 150 8

Thailand 500 4 Greater Bangkok (Central)

200 7

Chiang Mai (North) 150 8 Khon Kaen (Northeast) 150 8

Sample size (n)

Margin of error (%)

Vietnam 300 6 Ho Chi Minh City (South)

200 7

Hanoi (North) 100 10 Cambodia 350 5 Phnom Penh (Plain region)

200 7

Siem Reap (Tonle sap region)

150 8

Sample size: 2,150 urban households in Southeast Asia

Sample size: 1,919 urban households in South Asia Sample size

(n) Margin of

error (%)

INDIA 1,919 2 URBAN SOUTH 619 4 Chennai (Tamil Nadu)

255 6

Erode (Tamil Nadu)

155 8

Hyderabad (Andhra Pradesh)

209 7

URBAN EAST 801 4 Calcutta (West Bengal)

201 7

Guwahati (Assam)

150 8

Bhubaneshwar (Odisha)

150 8

Patna (Bihar)

150 8

Dhanbad (Jarkhand)

150 8

RURAL EAST 499 4 Rural West Bengal 249 6 Rural Odisha 250 6

Sample size (n)

Margin of error (%)

BANGLADESH 1,099 3

URBAN 499 4

Dhaka 200 7

Chittagong 150 8 Khulna 149 8 RURAL 600 4 Khulna Division (Jessore, Jhenaidah, Khulna)

150 8

Barisal Division (Barisal, Bhola, Patuakhali)

150 8

Rangpur Division (Rangpur, Dinajpur, Kurigram)

150 8

Dhaka Division (Gazipur, Myemenshingh, Faridpur)

150 8

Research design Data collection approach: • Door-to-door, face-to-face interviews • Structured pen & paper questionnaire

Target respondents: • Grocery decision maker • Cooks or prepares meal for the household Fieldwork period: • Philippines, Indonesia, Thailand: May to June 2013 • Vietnam and Cambodia: September to October 2013 • India: May-June 2013, Sep-Oct 2013, Jan-Feb 2014 • Bangladesh: Sep-Oct 2013, Oct to Nov 2014

Sampling method: 2-stage sampling: • Random selection of primary sampling units (PSU) • Systematic sampling to select households

Q07. How would you describe the traits or characteristics of rice which your family prefers? Please describe to us the three most important characteristics or traits. It can be in terms of eating quality, physical characteristics of the uncooked and cooked rice, nutritional benefits or cooking quality

Capturing preference through spontaneous elicitation

Most Important: ____________________ Second: ____________________ Third: ____________________

Results: Consumer preferences in Southeast Asia

Aromatic Soft White High volume expansion Chewy

White Nasinya pulen*

Aromatic Soft

Good taste

Soft Aromatic

White Long grains

High volume expansion

Soft Aromatic

Good taste White Firm

Top 5 ranking

Market for aromatic rice is pronounced with shared preference across SEA

Sticky & chewy Aromatic Soft White Good taste

*Nasinya pulen – combination of soft, chewy, not sticky, good taste; “pulen” = soft

Soft

Soft

Soft Soft

Soft

Shared preference for soft texture.

Soft 42% Easily dissolves 31%

Easy to chew 30% Easy to swallow 29%

Top 5 ranking

CM&KK Rank 1: Soft

Rank 8: Sticky

Nasinya pulen*

Sticky & chewy

Chewy

Firm

*Nasinya pulen – combination of soft, chewy, not sticky, good taste; “pulen” = soft

Segment for sticky rice is evident in N VN and N/NE TH

Indonesia: Preference for aroma is widely shared – mostly from Surabaya and those in upper class

32 48 20

Jakarta Surabaya Medan

47 30 11 12

SEC AB SEC C1 SEC C2 SEC DE

Location and socio-economic class of those who prefer aroma (In %)

13

17

8

10

Consumed

Preferred

Consumed

Preferred

All respondents (In %)

Pandan Wangi

Rojolele

(variety, aromatic)

(variety, aromatic)

Most often consumed and preferred rice

Philippines: What is consumed is not necessarily their preferred rice

4023

30

1221

519

19

ConsumedPreferred

ConsumedPreferred

ConsumedPreferred

ConsumedPreferred

“Sinandomeng”

Angelica

Jasmine rice

“Dinorado” (non-aromatic)

(Metro Manila , In %)

(non-aromatic)

(aromatic)

(non-aromatic)

Most often consumed and preferred rice

Philippines: Metro Manila

Market samples1

Price range (P/kg)

Length

(mm)

Shape

(L/W ratio)

Amylose content

(%)

Chalkiness

(%)

Head rice

(%)

Sinandomeng 36‒50 6.7 (Long)

3.3 (Slender)

25.2 (High)

11.4 (Grade 3)

68.4 (Premium)

Angelica 38‒46 6.7 (Long)

3.3 (Slender)

25.4 (High)

11.4 (Grade 3)

57.8 (Premium)

Jasmine 50‒64 6.8 (Long)

3.3 (Slender)

19.7 (Low)

6.8 (Grade 2)

90.8 (Premium)

Dinorado 43‒54 6.7 (Long)

3.3 (Slender)

23.4 (Intermediate)

9.2 (Grade 2)

82.8 (Premium)

120 market samples were purchased: Sinandomeng – 7, Angelica – 5, Jasmine - 4, Dinorado - 4. Market samples obtained in October 2013

• Long and slender grains •Sinandomeng and Angelica (most consumed): High amylose content • Jasmine and Dinorado : Low/intermediate amylose content

Philippines: Metro Manila market samples

Philippines: Long and slender grains are widely available; Preferred rice have soft texture

Greater Bangkok Soft

White Aromatic

High volume expansion Long

Slender (rank 7)

Thailand Soft

Aromatic White Long

High volume expansion

Slender (rank 8)

Top 5 preferred characteristics Khon Kaen

Soft Aromatic

White Head rice

Not mushy Sticky (rank 8)

Chiang Mai Soft Long

Aromatic White

Slender Sticky (rank 8)

Thailand: Segments are evident in preferences of consumers – aromatic, white rice, sticky rice

White rice15%

Jasmine rice76%

Specialty rice9%

Rice types consumed most often Branded or unbranded rice consumed most often (%)

White rice is non-fragrant rice with long and slender grains regardless of variety. Specialty rice includes glutinous rice, red rice, unpolished rice and other fragrant rice.

Thailand: First mover in branding rice

% of households

GBKK Chiang

Mai Khon Kaen

Jasmine rice 78 95 59 White rice 22 3 15 Specialty rice 0 2 26

0 20 40 60

Unbranded rice

Branded rice

Jasmine White rice Specialty rice

Results: Consumer preferences in South Asia

Bangladesh

Urban Bangladesh

Good taste

White

Slender

Short size

Aromatic Top 5 most preferred rice characteristics

Preference ranking

India

Urban East India Urban South India

Rank 1 Slender Good taste

Rank 2 White White

Rank 3 Medium size Slender

Rank 4 Aromatic Medium size

Rank 5 Good taste Smooth texture

South Asia: Size and shape matters; Slender grains: Market leader effect of India

6% 9%

40% 45%

71%

80%

21%

31% 31%

29% 13%

71%

29% 24%

Calcutta Dhanbad Patna Bhubaneshwar Guwahati

Short Medium Long to extra long

Base: Those who consider size as a priority trait

n=116 n=67 n=92 n=127 n=23

Different grain sizes are preferred by consumers in different cities in East India

54%

16% 28%

29%

57% 23%

17% 27%

50%

Dhaka Chittagong Khulna

Short Medium Long to extra long

Preference for grain size varies by location in Bangladesh

Base: Those who consider size as a priority trait

n=143 n=28 n=26

Case of Bangladesh: Linking consumer preferences with midstream and upstream actors in the value chain analysis

Stacked survey with different segments: FGD with farmers In-depth interviews with midstream actors and retailers.

Bangladesh: How are preferences transmitted?

Long slender grains Length: 6.4mm Shape: 3.5 L/W ratio (vs. 3.3 L/W ratio of BRRI dhan 28)

Consumers: What matters to them? What do they eat and what do they prefer?

47

42

Consumed

Preferred

All Dhaka Chittagong Khulna Unbranded Miniket 96% 95% 97% 94%

Aarong Fresh Miniket 13% 21% - -

PranMiniket 10% 17% - -

Awareness of “Miniket”

Consumption, Preference of “Miniket” (%)

“Miniket” grain quality evaluation

Top 3 most preferred rice characteristics Good taste, white, slender

Bangladesh: How are preferences transmitted?

•Yield •Resistance/tolerance to biotic & abiotic stresses

•Short duration •Profitability (price and market demand) - fine grains, tasty, not sticky, high volume expansion

• Boro: BRRI dhan 28 • Aman: Swarna, BR 11,

Traditional varieties (Jamaibabu, Malshira, Khirshabog)

Priority characteristics & considerations Preferred varieties

Upstream - Production

Farmers: What matters to them? What do they grow? What do they prefer?

•Good taste, white, slender • “Miniket” Consumers

Downstream - Retail Midstream - Wholesale,

distribution - Processing - Trading

Bangladesh: How are preferences transmitted?

Priority characteristics & considerations Preferred varieties

Retailers and midstream actors: How are they capturing value?

Downstream - Retail

Midstream - Wholesale,

distribution - Processing - Trading

•Market demand: influenced by grain classification as fine, medium, coarse

•Quality: purity of variety, no bad smell, good taste, white grains, translucent grains

• BRRI dhan 28 • “Miniket” • Swarna

• BRRI dhan 28 further polished

• BRRI dhan 29, BRRI dhan 23 mixed with processed BRRI

dhan 28 and labelled

Miniket’s price premium over BRRI dhan 28: •Processors 12% •Wholesalers 9% •Retailers 18%

Lesson from the Bangladesh story

Consumers: more slender grains = “Miniket”

Farmers: What needs to be done? Better targeting to end market to address the gap

Midstream actors: • Demand of consumers through further

processing and labeling • Capture the benefits of higher retail

prices and consumers’ willingness to pay for quality rice

Key take-out and implications for breeding program

Key take-out and implication for breeding program

• Southeast Asia: Priority traits are texture, aroma and color (white) • Market for aromatic rice is evident. • Texture is an important trait but different characteristics are preferred.

• Shared preference for softness . • Different types of texture: Chewy in Philippines, nasinya pulen in Indonesia,

sticky in NE Thailand, sticky & chewy in Vietnam, firm in Cambodia

• South Asia: Priority traits are size, shape, color (white), taste and aroma (sweet) • Size and shape matters for South Asian consumers. • Regional preference for slender grains. • Preference for grain size varies geographically.

• Case of Bangladesh: Better targeting to end market will allow farmers to capture the

benefits of consumer’s willingness to pay for quality rice

• Implication for rice breeding program: The identified priority rice traits will guide breeding program in product profile development to match the demands of consumers.

– must traits, range traits, value added traits.

Market Research Team @IRRI: Dr. Matty Demont

Dr. Alice Laborte Ma. Lourdes Velasco

Catalina Diaz Jhoanne Ynion

Neale Paguirigan Dr. Rosa Paula Cuevas

Thank you!