How Rasna, a three-decade-old brand is innovating constantly to stay fresh
Apr 30 2013, 11:38 | By Entrepreneur
In 1976, Pioma Industries introduced a ready-to-drink mix product called Jaffe to the Indian market. "Jaffe came from the name Jaffa, a variety of oranges," says Piruz Khambatta, Chairman and Managing Director of the company.
Khambatta represents the third generation of a family business that has owned and managed the company since its inception. Khambatta's grandfather had a factory that produced flavors and soft drinks, but it was his father, Areez Khambatta, who launched Rasna.
When Piruz Khambatta joined the business at the age of 18, the product was a powder concentrate and a bottle of liquid. "It wasn't made with very high fruit content initially, but we came up with new formulations and a new range of products," he says. It helped that Khambatta was a student of
The brand grew consistently over the next few decades to the point that it now claims to have a 93 percent market share in the powdered soft drink concentrates segment with a large array of products. "We are the Amitabh Bachchan of our category," Khambatta says with pride.
'I love you Rasna'
Besides its first mover-like advantage, Khambatta says that the company has constantly invested in innovation and has remained focused on the category, which helped it keep others at bay. Apart from introducing products with higher fruit content and increasing focus on the health aspect of the product, Rasna also brought in a number of innovations to keep the prices low and affordable for its lower middle-class and rural customers.
"We have been the creators of the product and don't rely on third party R&D. Due to this, we know the product and can understand what the customer wants and incorporate changes with ease," Khambatta says.
A much-talked-about strength of Rasna over the years has been its focused marketing and advertising initiatives. "Distribution has been another one of our strengths," Khambatta says. The company has 700 people on its payrolls working on the distribution of Rasna's products, he informs. "We have not relied on third-party distribution, even in the smallest of towns," he says.
Keeping it steady
Khambatta explains that some of the lower-end products of the company, in terms of pricing, don't make enough money in real terms. However, since these products are targeted at rural- and lower middle-class consumers, he would prefer to keep it that way, he says, betraying more than a sliver of the do-gooder in him. And this is something he believes may not be acceptable to external investors. The challenge is on the other side of the same coin. "We thus have to be careful with our finances and have to maintain tight financial control," he says.
Bigger markets, bigger challenges
"Currently, 300 crore glasses of Rasna are consumed in a year in India. We are highly preferred as a home brand, but outside consumption has been a challenge," he says, adding that the company is working on launching products for outdoor consumption. When it does, it will directly compete with ready-to-consume fruit juices and soft drinks. "Establishing that could be a challenge," Khambatta says. "In categories like juices, where we may need technology or international marketing, we will be looking at joint ventures. We are in fact talking to a few players for a joint venture," he says.
Khambatta says keeping prices low despite the growing prices of sugar and manpower has been tough as has been staying consistent in the face of changing market dynamics, referring to government policies, logistics etc.
Nath also points out that given the large customer base Rasna has in rural areas and tier II and tier III cities, the cost of getting the product out there must make economic sense for the company. "Infrastructural and supply chain related challenges are problems for the entire sector, but considering the locations of Rasna's customer base, these could be major challenges for them," she says.
The trust factor
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