Rasna's Piruz Khambatta about the sustainability approach

From 80s icon to modern-day market domineer, Rasna has had a long journey in India, and the group's chairman tells Anupama Sajeet, they're only getting started.

11 Apr 2024 | By Anupama Sajeet

Established in 1976 by Pirojshaw Khambatta, the grandfather of the current chairman and managing director, Piruz Khambatta, Rasna positioned itself as a cost-effective alternative to high-priced soft drinks available at the time.

The homegrown brand has since braved competition from domestic as well global players through the decades, showcasing a steady growth and gaining a significant market share.

A prime illustration of a 'Made in India' brand, the 48-year-old company drew strength from its focus on product innovation, extensive distribution network, and long-standing industry experience while remaining a family-owned venture.

Today the group has over 10 factories spread across the country, and is available in 1.8 million outlets with an enviable  90% market share in the soft drinks concentrate category and a growing presence in more than 50 countries worldwide. From its summer drink’s evergreen slogan of ‘I love you Rasna’ first mouthed by the Rasna girl from the early 80s and its entrenched identity as a homegrown brand, the company has come a long way. 

Where does Rasna stand on sustainability?

I honestly believe that as companies we should have our own sustainable goals, and we should voluntarily adopt the sustainability model, and not just because of taxation or stipulation. The CEO should be the chief sustainability officer and they should ensure that whenever possible, less pollution and less use of plastic is there. In our own example, let me tell you, we are more sustainable than any ready-to-drink company.

When you make a drink from a pouch of Rasna which is hardly two rupees, the gram of plastic inside is exactly 0.2 to 0.3 grams only. When you drink 15 to 20 rupees of the same product in a ready-to-drink form, let us say in a PET bottle, how much is the plastic? 20 grams of plastic. So, imagine what is more sustainable if it goes into the landfill? 

Similarly, when you transport a soft drinks concentrate product as against when you transport a ready-to-drink you are saving on the emissions so obviously there is a saving. For that matter, any powder concentrate manufacturer is more sustainable than a ready-to-drink. And probably that is the reason why a lot of people abroad in developing countries are moving to powder drinks because they believe powder drinks help reduce plastic waste. 

You took over the helm of the company in 1997. From 1976 to 2024, how has the nearly half-a-century long journey been for the brand? 

I joined the operations of the business much before 1997, probably 10 years before that. But yes, I've been leading it in some way or the other, for most part of the 50-year journey too.

I have seen several waves of changes. During the first wave of change, Rasna’s journey and India’s FMCG journey were in parallel. I'm talking about the 70s and 80s, when India was a closed market and there was no competition—to the extent that people had to actually search for a brand such that if they did not get it, they would go to another store to find it.

Those days were very different; there were no choices and even if one had two or three SKUs, you could possibly make a billion dollar brand. So, that was the pre-90s, the first wave.

Then we came to the liberalisation phase of the 90s. FDI (foreign direct investment) came in. With 100% FDI you were allowed to own a company 100% if you were in food processing. With it came all the foreign brands, and they all became very strong because they had the money, and they bankrolled the brands available in India. 

But the Indian market said to them, ‘You may be big in some country, doesn't mean we will buy you, thank you.’ So, most of them then Indianised the products and unfortunately, a few Indian brands also sold off to them. We held on, we didn't sell off. On the contrary, we innovated further, we put more money in distribution, we put more money on the brand. You'll be surprised, Rasna is the only player which has withstood not one but around four multinational onslaughts through all these years. 

What were the major changes you wanted to bring in when you took charge in 1997? And what's on the roadmap ahead for the brand?

I believe the journey itself does not have much value because what is going to happen today or even five years from now is more relevant.  Just this year, we have launched three new product offerings: A product called Rasna 'Himalayan Sharbat', made of real rose oil and rose water. Second, a product called 'Protein Vita', because consumers today are concerned about the available milk beverages, whether they have proteins or more carbs.  And finally, we are launching 'Rasna 100%', without any synthetic flavours, synthetic colours, zero preservatives, and a full day's supply of vitamin C, and more importantly, one third less sugar. 

Rasna has always been two or three years ahead of the competition, that’s how we remained market leaders. And I do believe that our best is yet to come.

In the early 80s Rasna was popularised through the ads featuring the Rasna girl and the tagline ‘I love you Rasna’. Coming to the concept of celebrity endorsements, when was the first time Rasna collaborated with a celebrity?

Interestingly, our very first celeb ambassadors were cricketing legends Kapil Dev not long after 1983 world cup win, and later Vivian Richards. We had a product called 'Yorker Cola' which was the only cola we launched and didn't continue. The Rasna Yorker Cola ads had Kapil Dev. This was in the early 90s sometime.

And then we launched a pineapple flavour, a Caribbean pineapple, because at that time western flavours were somewhat in demand. And we were lucky enough that Vivian Richards [West Indies cricketer] happened to be in town. And coincidentally, our producer knew him.

The story goes that we told him to get a lookalike Caribbean guy. And the producer rings us up and says, ‘No, I can get you Vivian Richards.’ And I said, ‘You're joking. It is not possible. We're not going to go there to shoot it.’ And he says, ‘No, no, he’s in Bombay! If you give me an agreement now, I can probably bring him to the studio in two, three days.’ 

I was very young, and I thought he was joking. Imagine my surprise when he agreed and we shot the ad. This was one of the first times Vivian Richards shot for a foreign brand in a foreign country!

Thereafter, Rasna has roped in celebrities like Karisma Kapoor, Akshay Kumar, Hrithik Roshan, Anupam Kher, Paresh Rawal, Virender Sehwag, and Genelia D'souza. But yes, the beginning was with Kapil Dev and Vivian Richards.

Currently, what is the market share that you enjoy in pre-mixed drinks? 

In the powdered drink segment where we operate, we have almost a 90% market share because there is barely any competition. Of course, if you look at the whole beverage market we are not the leaders. But then it may not be fair to compare.

I believe that we should stick to what we are doing well. And I think we have become (today) the world's largest soft drink concentrate manufacturer. With something like 12 factories, I have probably more stake in selling powders. To give an analogy of a hotel, we are a budget hotel.  And I don't think a budget hotel brand fits a premium hotel. So, yes, we can do premiumisation in the budget category. But I don't want to be a 5-star tomorrow. So also, I'm not a ready-to-drink and I'm not going down that route.

As you are catering to the mass segment, would it be right to say that your consumer demographic is skewed towards tier 3, tier 4 towns and rural areas? 

No, in Mumbai itself, there are more middle class and lower middle class people than the whole of the country. So, it is not true. 

Having said that, we have products in three buckets: There are the INR one, two, five, and 10 rupee products, which are being made especially for rural India. And, we don't put these products on modern trade, or even on online platforms. 

Then there is a middle-class range of products which is our 32-glass pack, our money saver pack, the 500-gram powder ready drink, 30 rupee product. This we put in the D-marts of the world, the B-shops and A-shops, .

And then we come to the Protein Vitas, the 100% premium products where we are taking on the D2C brands, and like all those brands, we are there on the e-comms, digital platforms, and on our own sites. 

Rasna is growing in all the three segments.

You mentioned e-commerce and how your distribution is split across these platforms.  How has Rasna adapted to today's changing consumer sentiments and evolving digital marketing landscape? And how do you plan to connect with the Gen Zs and the millennials? 

We have a huge presence on all the digital platforms, YouTube, Facebook, Instagram. We have made creatives which are different for that. So ultimately, wherever the younger generation is there, we are there. You go to Nature's Basket, which is a premium store, we are there. And if you go to the wholesale market also, Rasna is there. So we are everywhere. 

In television we are on Star TV also, and we have a marketing presence and a physical presence in all these markets.

Importantly, what we have also done even last year is that we are also tailor making creatives for the market. So the marketing is different, the distribution is different for each cohort. So that is how we are keeping in touch with the latest customers. We are also looking at influencer campaigns, which will start as the summer proceeds, because nowadays, the influencers also have a great presence. 


Tell us about the global market and how your company’s products are performing abroad? How much percentage of your sales would you attribute to exports? 

Around 30 to 35% of our sales comes from exports. It's increasing, and today we can say we are present in 50+ countries. Post-Covid we have actually doubled, almost tripled our exports. With our government policies now, India is definitely a manufacturing destination for a lot of products. Rasna has also been a beneficiary of the production-linked incentive scheme (PLI) scheme of the government. 

Further, we are ensuring that we have increased our marketing spends abroad. We are present in almost all exhibitions, be it Saudi Arabia, Dubai, Paris, and Germany. So, we are trying to increase our presence abroad. 

And more importantly, we also launched completely different products outside and in India. So, if you see our Indian products, they are not the same products we export. We have customised products for the requirements of the countries. Africa is a different product mix. The Middle East is a different product mix. Nepal, Sri Lanka have different products.  And in Saudi Arabia, Oman, and Qatar, we were the first company to launch purely natural products. With changes in regulation, those countries are now requiring more natural products with no artificial colours. And Rasna has been at the forefront of developing such products. 

You have also been a proponent of 'inclusive growth'. At a summit earlier last month, you spoke about the importance of having 'inclusive growth' and why anything less than that would be hollow.  Can you explain what you meant by this? 

When we talk of Viksit Bharat, or 'Developed India' what do we mean? I once again repeat, we are lucky that the government's policies are helping the growth of India. What's negative is that growth in my mind has to be such that the benefits of it trickle down to the bottom layer also—otherwise there is no growth.

So, what I'm saying is that we have to grow in a more responsible manner. We have to ensure that the difference between the rich and the poor, that big gap decreases.

And as industrialists too, because we are basically part of this growth journey, I think we should support more investment in the rural areas as companies. We should also look at inclusive growth by having development in the rural areas, and focus on employment generation too.

 

 

This feature was first published on the Campaign India website. Piruz Khambatta, group chairman of Rasna, spoke to Anupama Sajeet about the soft drink concentrate brand's distinctive approach through the years, intertwining emotional resonance with tangible advantages within its marketing initiatives, and sharing why in spite of taking over the helm in 1997, he does not believe in resting on the company’s legacy or past glories. 

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Which is the sustainable packaging product among MSMEs that is most popular?

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Which is the sustainable packaging product among MSMEs that is most popular?

Bagasse and biodegradable boxes

 

27.27%

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45.45%

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27.27%

Recyclable plastic (bubble wraps, bio-plastic)

 

0%

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