Rasna betting big on high-end ready-to-drink market

Rasna's recipe for success has always been simple, only a rupee for a refreshing glass of taste and health for two! This will help Rasna fight off Kraft Food's Tang and Coca-Cola's Sunfill and maintain a 90% market share in the instant drink market. But now, Rasna is looking to replicate this success in the high-end, ready-to-drink market through its subsidiary, Rasna Beverages.

Piruz Khambatta, chief managing director of Rasna says,"As India is expanding, there are people who want different drinks. There are people who want a Rs 5 drink, a Rs 10 drink and we can provide that. But there are people who want a fancy drink. They want a Cranberry juice, they want an energy drink, a non-alcoholic beer. We believe India is right for that also."

The plan is to manufacture energy drinks, fortified water and premium fruit drinks under this Rs 100 crore venture.

For this, Rasna is eyeing technical collaborations with two foreign companies. It is setting up three greenfield plants. Its working to increase its sales force from the current 700 to 1,000 by next year and setting up a new distribution network.

"We are also looking at separate distribution network for this project because around 40-50% of the outlets that sell ready-to-drink products are different than powdered drink outlets. Right now we cover around 1.3 million outlets in our current distribution system and our plan is to at least increase this by 15% every year. So we will be definitely going to 1.5 million outlets this year", says Khambatta.

These drinks will hit the shelves next summer but will see Rasna charging over Rs15 a glass. But analysts say that while Rasna will face stiff competition from Tata Global Beverages, Red Bull and Dabur.

Harminder Sahni, founder and managing director of Wazir Advisors says, "They are the same consumers who used to drink Rasna many years ago. They have grown in life, they have more money, they have a different lifestyle and they have different needs now and whoever is fulfilling those needs, will be asking for a certain price and Rasna is doing the same. So if customers are doing it for others, why not for Rasna, which is a trusted brand."

Rasna is clear that it does not want to shed its health-drink image by entering into Rs 5900 crore carbonated drinks market. It is working on a range of beverages that offer nutraceutical benefits which should hit the shelves in 2013. So plenty of reasons to say I Love You, Rasna!