South and Southeast Asia emphasize the role of external quality signals in the development of modern retail

[caption id="attachment_7999" align="aligncenter" width="1014"] File Photo[/caption] Demand for improved packaging, branding and labeling of rice is expected to increase in Asia. Due to the rapid income growth in Asia, consumers are increasingly willing to pay for high quality and healthy products. Second, regulators are becoming more stringent in their food safety policy regarding product packaging and labeling features. Third, external features are also being used to differentiate products to meet the needs of consumers in the urban food market. Consumers cannot directly see the quality of some products. For example, in the case of experienced products, consumers may know the quality of the product when they consume it, but for other classes of products, known as trusted products, consumers cannot independently verify the presence of the feature. In both cases, consumers can rely on observable features before use to judge the quality of the product and ultimately make a purchase decision. In the case of rice, quality attributes can be classified as intrinsic and extrinsic. Intrinsic attributes include color, cleanliness, grain shape and size, softness, and aroma (fragrance); extrinsic quality attributes include packaging, branding, labeling, and information. Packaging can be seen as a first step in the shifting focus from intrinsic to extrinsic quality attributes in the modernization of the food retail sector as it facilitates communication of extrinsic quality attributes, which can inform consumers about food product quality, nutrition, and safety. Therefore, an essential role of governments, policymakers, and markets is to ensure accurate information provision by implementing extrinsic quality cues that can assist both production and consumption decisions and reshape the entire rice value chain. Thailand, one of the major rice-producing countries in South and Southeast Asia, has already adopted a strategy that emphasizes the role of extrinsic quality cues to foster the development of a modern retail sector. Throughout Asia, where most of the world’s rice is produced and consumed, the rice value chain is undergoing a structural transformation— at different stages and in various segments—which appears to improve food safety, nutrition, and equity, by increasing the quality and diversity of rice, among other factors. Notably, the mill and retail segments are undergoing a marketing transformation characterized by:

1. The emergence of packaging and branding that supports the vertical coordination relationship between mills and wholesalers/exporters and between supermarket chains and large rice mills;
2. A shift in selling rice from loose to packaged form; and
3. A bimodal selling strategy of supermarkets to appeal to different income classes by offering a diversity of product types.

These transformations in the rice sector highlight the increasing role that extrinsic attributes such as packaging, branding, and labeling play as quality signals concerning product origin, quality, and safety, which consumers can use in product choice. Therefore, it is crucial to understand consumer preferences for these attributes. There is a growing body of literature on rice consumer preferences in Asia and Africa for:

1. Intrinsic attributes such as fragrance, texture, cleanliness, and other grain quality attributes and
2. Extrinsic attributes such as production standard certification, geographic indication (GI) labels, branding and provision of information on nutrition, technology, and cultural heritage.

Despite the overwhelming evidence of the growing role of extrinsic quality attributes in rice consumers’ purchase decision making, there is currently little-to-no empirical evidence on the drivers of the shift of consumer demand from loose to packaged rice. This is important because food packaging is not only the essential first step towards the provision and governance of food safety; it also offers substantially more opportunities for the communication and promotion of extrinsic attributes that can help consumers actively contribute to food system transformation. The demand for improved packaging, branding, and labeling of rice is expected to rise in Asia. Because of rapid income growth in Asia, consumers are increasingly willing to pay for higher quality and healthier products. Second, regulators are becoming more stringent in their food safety policies regarding product packaging and labeling attributes. Third, extrinsic attributes are also being used for product differentiation to cater to the demand of consumers in urban food markets. Finally and importantly, these critical extrinsic quality attributes can facilitate the communication of other attributes such as quality, traceability, and production practices (e.g., organic, fair trade, and sustainably produced), which could be important drivers for food safety, sustainable value chain upgrading, and reducing climate footprints of rice production. See details. Source: Online/KSU