We’re after the hot, poor countries: Piruz Khambatta, Rasna

29 Mar,2012

In a day and age where cola beverages have captivated the attention and pockets of the youth and masses to a large extent, there are still a handful of juice-based companies like the old-yet-strong Rasna that are still posing a threat to the cola players. In fact, if Mr Piruz Khambatta, Chairman and Managing Director, Rasna Pvt Limited is to be believed, the volumes of colas are seeing a downfall while juice-based drinks are churning out highest volume consumption.

 

On the sidelines of the Mindshare-Brand Equity Compass 2012, MxM India’s Johnson Napier got Mr Khambatta to reveal the secret behind the company’s strong and consistent growth showing, on the need for regular product innovations and what the future augurs for brand Rasna.

 

Q: Rasna has been around for quite a long time. What are some of the new trends that the soft drinks market has thrown up in the recent past?

We’ve been the market leader for more than 20 years. To be a market leader you’ve got to have 2-3 facets right like the need to have a good product, a good distribution chain and a good marketing practice. All these three cannot exist without proper customer insight and knowledge. For example, earlier people wanted soft-drinks, today they want fruit drinks. Earlier, people were looking at drinks only for enjoyment but today they are looking at drinks for the nourishing value that it can bring. There were days when it was believed ‘deeper the colour better the drink’, if it was dark, it was good. But today the reverse is true. Today, if it is dark that means you have put more colour in and as a result the consumer doesn’t want to pursue such drinks.

 

The question that arises is: how do you create a new product, how do you do proper marketing, how do you do proper distribution without customer feedback and knowledge? So I believe that today it is the duty of the top management (decision makers) to be in touch with the customer and know what is the customer’s requirements. Also, it is about doing research in a way that you interpret it correctly. Like I always say, if you are a good doctor you will interpret the X-ray film or the CT scan film yourself; you should not wait for a report card that will tell you what the outcome is. In the same way, companies should be able to read the data themselves – collect the data and find out the problematic areas. All this has to be done in record time as well, as most of the time when the issues are identified and sorted out the trends have changed. So management has to push for research and have it done in quick and record time.

 

Q: At a time when cola products are flooding the market in a heavy manner, how are juice-based soft-drinks manufacturers like yourself keeping pace?

I would say the sales of colas are actually going down. If you see market data, cola volumes are either in the negative or at the least. The highest volume data today is from juice-based drinks. At Rasna, we have never believed that we compete with a cola or a juice company; our actual competition is with water. That’s because the price-point is starting from Rs 1 a glass to Rs 5 a glass while competition starts from Rs 5 a glass. In fact the competition should thank us with folded hands because we are converting people from water to a beverage in the first place so that they can go and reap the benefits of it later.

 

Q: How essential is it for beverage companies to keep innovating products to adapt to the changing palates of the consumers?

At Rasna, based on what the customer wants we have made our products more juicier and fruitier and with more vitamins, glucose, calcium, and so on. I believe that as we have to dress with the times, so also, products too have to keep pace with the times. I could proudly say that most of our products have kept pace with the changing times and most importantly, the heart of Rasna is the value-for-money proposition that we offer our consumers. People consume Rasna because they find it value-for-money. Even today after so many years, we still remain one of the most value-for-money soft-drink companies in India. In Rs 2 nobody can give you as much vitamins and calcium and a juice which is as fresh as a freshly squeezed juice. In fact I think the biggest challenge is to keep the price-point at Rs 2 itself. My products have been priced at Rs 1, Rs 2 and Rs 10 for the past ten years and they haven’t changed as yet despite the slowdown and rising inflation. That is the strength of our strategy and the direction that we want to take as a company.

 

Q: What is the growth that you have put up in the past year and what do you anticipate for 2012?

We have always been growing at a double digit rate which is higher than the average growth rate of the market. In fact we have been growing more than the carbonated soft-drinks market. I always push my team to acquire a larger growth number. It also depends on the intensity of the summer as the soft-drinks market are summer-dependant. For the current year we have two major campaigns, one is with Genelia D’Souza and the other is with Virendra Sehwag. Sehwag will be seen promoting Rasna as an energy drink and not just a soft-drink juice.

 

Q: What are your core mediums for carrying out promotional campaigns? Is digital being considered as an active medium by Rasna?

We do not want to take the digital route as yet for our campaigns. As for Rasna, the vanilla markets could best be reached by television. In fact I am a big fan of television and films and I would also like to put my money on cricket. As for digital marketing, I will only use it as a tool to know what the customer wants but I wouldn’t be pursuing the medium aggressively as yet.

 

Our budgets for television campaigns this year is about 50 per cent more than last year and would be in the range of Rs 30-35 crores. Right now we are going big on Hindi GECs; cricket is something that we are waiting for the broadcast players to quote the right price. I believe the prices will come down and maybe we could look at associating with IPL more seriously.

 

Q: How have you grown across the many international markets that you are present in?

We have our presence in more than 40 countries and we are doing localized marketing across each of these markets. Multinationals who make one ad and try to run that across countries have failed miserably and we do not do that. Some areas we do not advertise as distribution does it for us but in some areas we are on television, in-store etc. It all depends on the needs of the market.

 

Q: Any plans to venture into new and emerging markets in the coming days?

For Rasna, it is the hot and poor countries that we are after. Countries like Vietnam, Egypt etc are our key markets as I believe that powder juices perform well in these markets as they are economical and nourishing. Probably it is not as fun for the sales workforce but for the top management it is fun to be present there.

 

Photograph: Fotocorp

 

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