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The taste of things to come
Joydeep Ray |
May 10, 2003
Is Piruz Khambatta's glass half full or half empty? The youthful chairman of Rasna, the homegrown soft drinks company, has no uncertainties on that score. He firmly believes that his glass is brimming over and he's bubbling with enthusiasm about the future.
In the next one year he is hoping to double sales from 2 billion glasses to over 4 billion glasses. That will mean doubling Rasna's turnover from around Rs 225 crore (Rs 2.25 billion) to nearly Rs 400 crore (Rs 4 billion).
That's an ambitious gameplan, especially since he's up against giant rivals like Coca Cola and Hindustan Lever, which are making equally big plans to ensure that Indians guzzle more brightly coloured liquids than ever before.
But Khambatta is unfazed by the prospect of competition and says that compounded growth for the last five years has been 240 per cent. "Despite the competition we've retained our numero uno position and are increasing business every day," he says nonchalantly.
Khambatta has reason to forecast a brightly coloured future. Rasna has defied the prophets of doom who predicted that it would be wiped out by competition from the multinational giants which would muscle onto its turf.
Instead, it has gone vigorously on the offensive. This season it has launched two new ranges. One is the cheaper Ek-Ka-Do and the other is the slightly more upmarket Juc-Up.
But that's only the beginning. This year Rasna is spreading its tentacles and aims to install 10,000 vending machines that will dispense Rasna juices plus tea and coffee.
Currently it has about 1,000 machines. The company is spending more than Rs 20 crore (Rs 200 million) to install the machines.
The vending machine blitzkrieg is already underway and it should raise Rasna's visibility and availability enormously. Rasna has already tied up with Railways Catering Corporation of India and it's in the process of tying up with department stores like Pantaloons and Shoppers' Stop.
Besides that it plans to install machines in offices and airports around the country. It's starting the saturation coverage in Gujarat and Maharashtra.
Rasna is being forced, willy-nilly, to expand from juices and soft drinks to coffee and tea. That's because it can't sell only juices in the machines. Says a Rasna executive: "We want the vending machines to be used round the year. In winter, people might not drink juices that much."
Certainly Rasna is staying a few steps ahead of the competition as it launches new ranges that will taste good for customers who want to pay 50 paise a glass and for others who want to pay Rs 4. Ek-Ka-Do comes in three flavours and sells in Re 1 sachets.
Each sachet contains enough powder for two glasses. Ek-Ka-Do is being promoted as an all-season soft drink that's fortified with calcium and glucose.
For those willing to spend a bit more on their soft drinks, there's the Juc-Up range, which comes in five flavours. Juc-Up is a pre-sweetened instant energy drink fortified with ingredients like fruit powder, vitamins and glucose and it's priced at Rs 2 per glass.
The company has covered all its bases. There's Rasna Utsav, launched eight months ago, which is priced at 90 paise a glass. And in the premium range, it has Rasna Fruit Booster, a concentrate which the company says is a healthy, energising instant drink priced at Rs 4 per glass.
Rasna Utsav comes in 10 flavours including mango, orange and the more exotic-sounding Masala Soda, Shahi Gulab and Kool Khus. Says Khambatta: "We do constant research and keep introducing new flavours."
The company has also ensured that it stays in front in other ways. It has broken new territory by introducing the mosambi flavour for the first time as a concentrate in the Juc-Up range. The other flavours in the Juc-Up range include mango, pineapple, nimbupani and orange.
How are other companies reacting to this burst of activity? Coca Cola has made it clear that it isn't ignoring the concentrates segment. It has recently launched Sunfill and is putting its advertising might behind the brand.
Khambatta points out that Coke has recently bought 8'o clock, the largest selling soft-drink concentrate brand in the Philippines and Indonesia. Says Khambatta: "Powders are a big draw there, and in countries like India and South Africa."
Obviously, Rasna will be making a big leap forward in the coming months. But to reach out to a wider and larger audience the brand will also have to be carefully repositioned. Once it gets into offices through vending machines the advertising message will probably have to be subtly changed.
The changes, however, won't be too big. That's because Rasna has always done extremely well with its child-centric advertising and slogans like 'I love you Rasna'. It was, after all, one of the first companies to realise that the smartest way to reach consumers was through children.
This year, the advertising strategy, hasn't turned away from children. A few weeks ago Rasna's latest ads went on air with characters like Mangoman and Miss Nimbupani.
Nevertheless, Khambatta doesn't believe that Rasna is a totally child-centric brand and he prefers to call it a 'family brand'. Also, he says that flavours like Ek-Ka-Do with flavours like nimbupani will be consumed in large quantities by adults.
The company has just launched a massive advertising campaign focusing on hoardings, outdoor panels and kiosks.
Why is there an impression that the company hasn't been able to keep pace with the changes that have taken place in the last decade and the ultra-competitive conditions in the marketplace?
Khambatta insists that these impressions are incorrect and that the company has constantly updated its brands.
He says that Rasna's packaging has changed every two years and that the company has constantly introduced new flavours and prices. We are among the few Indian companies which have been trying to keep the brand always alive and active," says Khambatta.
He admits, however, that the brand has lost some of its visibility. But he puts this down to the proliferation of TV channels and the advertising clutter. "The main problem is the proliferation of the media has changed. During the 80s, we had only a few channels and 10 spots of advertising used to give a lot of visibility."
To be sure, the figures back his assertion that Rasna is still way out in front. Rasna, according to AC Nielsen/ORG data, is the leader of the Rs 250 crore (Rs 2.5 billion) soft drink concentrate category with an 86.9 per cent volume share. That makes it one of the world's largest producers of soft drink concentrate.
But it isn't going to be easy to stay far in front. Rivals like Coke are pushing hard and so are others like Hindustan Lever which has returned to the fray with its Kissan range. Hindustan Lever tried to enter the segment back in the 80s but pulled out after failing to make headway.
Rasna has had its setbacks in recent years. Its Orangejolt, launched during the 90s, didn't make an impact and was withdrawn. Then, its attempts to diversify into food products like curry paste, pickles and powder-paste failed to find place on Indian plates.
Khambatta says these products were mainly meant for export and the company didn't make a serious effort to sell them in India. "Our curry pastes, pickles and powder pastes are doing excellently abroad."
Khambatta says that Rasna won't hold an IPO in the near future. But, he admits that the company would like to buy a midsized food company. If that happens Rasna will have a banquet of products to go with its multi-coloured array of drinks.