Chia Meng Marketing Co, the marketer of Hongthong (Golden Phoenix) brand packed rice, has adjusted its business strategy by expanding its portfolio to cover the lower-end segment to help sales reach 2.5 billion baht next year.
The soaring price of hom mali fragrant paddy rice this season to 17,700-18,000 baht a tonne, about 6,000 baht higher than the previous season, has propped up fragrant milled rice.
Gampanard Manathanya, the company's deputy managing director, said he expects the high price for hom mali rice to continue next year, forcing many consumers to choose more affordable grades such as white rice.
"More of the middle class may shift to low-end packed rice if the hom mali price keeps rising next year," he said.
The price of packed hom mali rice shot up by more than 30% to 239-249 baht for a five-kilogramme sack.
Chia Meng plans to focus more on selling white rice and hom mali mixed with white rice. These two grains dominate the local packed rice market, Mr Gampanard said.
A company study found that Thailand's packed rice market is estimated to be worth 30 billion baht in 2018. Of the total, half goes to fragrant hom mali, 40% is white rice, 7% is mixed hom mali and white rice, and 3% is healthy grains.
The leading brands are Royal Umbrella, Benjarong, Hongthong, Panomrung and Mah Boonkrong.
Costly hom mali rice has affected the sales of Hongthong packed rice, as sales are expected to grow 5% to 2 billion baht this year, down from 7% projected earlier.
Mr Gampanard also attributed the slow growth to changing consumer behaviour, with more opting to dine out rather than cook at home. Moreover, about 50% of the population is baby boomers, and they consume less rice, while other generations have more food choices and enjoy buying ready-to-eat items, he said.
In addition to the new product line, the company plans to beef up online sales next year. It began selling bagged rice online two years ago, fetching sales of about 8 million baht this year.
Online sales remain small but have promising growth, charting over 500% gains this year, Mr Gampanard said.
Chia Meng plans to use 20 million baht to install a new robotic system to support packaging facilities in Roi Et and Sri Sa Ket provinces. It also wants to expand rice contract farming in Ubon Ratchathani, Sri Sa Ket and Amnat Charoen provinces to 60,000 rai next year, up from 40,000 rai at present.