Microwave rice a boomer

The business, owned by one of Australia's biggest exporters of branded processed foods, Ricegrowers, has also stolen a march on multinational Mars with its range of microwave rice now commanding a 60 per cent share of the domestic market.

Ricegrowers chief executive Gary Helou said both Coles and Woolworths were big supporters of rice-based ready-to-go meals, devoting more than enough shelf space for the manufacturer, and that at this stage there were no private-label competitors looking to undercut the product.

Ricegrowers, which also owns the Always Fresh range of snack foods and has a thriving US rice business, has posted revenue for the year to April 30 of $817 million, down 9.4 per cent on the previous year's $902 million.

Net profit for 2009-10 was $11.7 million, down 85 per cent from the $76.8 million recorded the previous year when historically high rice prices drove a more than fivefold increase in annual profit.

Ricegrowers is listed on the National Stock Exchange.

Mr Helou said he expected Ricegrowers to return to more normal levels of performance as prices for the two leading benchmark rice types, long grain and medium grain, dropped by more than 50 per cent this year because of a sharp increase in international supplies.

Turning to the business, Mr Helou said the double-digit growth of its ready-to-go meals mirrored the supermarket category's success in parts of Europe where nearly 50 per cent of rice and rice food sales were sold in ready-to-go style shelf-stable packages.

"It is an area of growth for us and we are investing behind it," he said. "It's growing very fast and is an area of high-value add and innovation."

From a standing start 18 months ago SunRice's ready-to-go meals have grown from zero to a 36 per cent market share. The company's Asian and Indian flavours will be extended next month with new packaging and a fresh push into other cuisines.

The category already accounts for more than 20 per cent of total business for Ricegrowers.

He said private labels did not yet pose a threat to its ready-to-go meals business. "We haven't seen private labels come in because it is a very new area of innovation and normally they will lag behind until the category proves itself."

Ricegrowers continues to dominate the microwave rice market, with its 60 per cent market share dwarfing that of nearest rival Uncle Ben's, which is owned by Mars and has a 28 per cent local share.