Rasna's health trump card

The company takes a fresh shot at portfolio expansion with the launch of a baked sweet snack Vitos

Rasna, maker of the eponymous fruit-based soft drink concentrate, has forayed into the baked sweet snack category with the launch of Rasna Vitos. It signifies Rasna’s intent to step out of its single-product identity and drive business growth by being a part of the fast-expanding baked sweet snack category. According to Euromonitor, between 2010 and 2015 the sweet and savoury snacks netted 26 per cent to emerge as the fastest growing segment within packaged food.

“As a drinks-only company, Rasna for long has been considering the need to get into product categories other than beverages. Since ‘Rasna’ enjoys high brand equity and a strong retail footprint, it was but imperative for us to leverage both by diversifying our product portfolio,” says Piruz Khambatta, chairman and managing director, Rasna Private Limited.

And, hence, Vitos is the company’s answer to the huge opportunity in the evening snacks and “kids-back-from-school” segment. For the company, the success of Vitos is critical as Rasna’s earlier attempts to diversify its product portfolio failed to create much impact.

“Khambatta, as an entrepreneur, has time and again displayed the zest and boldness for experimentation. However, Rasna’s previous attempts at product innovation have not been too successful. With various new launches, the brand has struggled to understand consumer preferences,” says N Chandramouli, chief executive officer, TRA.

For example, in 2000, Rasna launched aerated fruit drink Oranjolt, which failed to take off simply because the drink needed to be refrigerated at all times and back then most retailers lacked the infrastructure to support a fresh juice product. Similarly, Rasna’s fast food chain “Devil’s Workshop”, launched in 2008, struggled to fire up people’s imagination.

The question then is, how does Rasna — with Vitos — plan to break into a segment that is dominated by salted chips and namkeens?

Khambatta says with Vitos the company wouldn’t take a big brand, be it in chips or namkeen, head on. Rather, Vitos is all about being future-ready. With growing health awareness and stricter regulation around fatty foods there is a clear shift in consumption patterns with more and more people turning to healthier snacking options. Rasna hopes to drive the proposition of evening snacking in a tasty and healthy manner through Vitos.

Khambatta says even if Rasna is able to corner one per cent share of the Rs 5,000-crore savoury snacks market in the launch year teh brand Vitos would be able to rake in Rs 50 crore.

Priced at Rs 10 for a 22-gram pack, Vitos is available in chocolate and strawberry flavours. It is pitted against a brand like Chocos, a breakfast cereal manufactured by Kellogg’s. Also, it has to fight for wallet share in a space where Kellogg’s Corn Flakes is considered a healthy breakfast option for the entire family.

Mindful of competition, Khambatta points out that India is among a handful of markets where people eat cornflakes and other such products because of a lack of healthy options.

He adds that the real challenge with a product like Vitos lies in introducing a new taste and flavour in the category to consumers who are not used to having sweet savoured snacks. Also, the company has to get the product right. During manufacturing it has to ensure Vitos does not end up under-baked or overbaked. It calls for close monitoring of ingredients that go into it and the baking process.

Introducing consumers to a sweet taste would be time-consuming and involve creating awareness. Towards this end, Rasna plans to invest heavily in brand building and take up below the line (BTL) activities to reach out to kids and mothers. Rasna, as a beverage brand, has a history of being on and off the advertising radar and is seen as passive when it comes to marketing by comparison to its competitors.

Khambatta says the company is frugal in its advertising spends. As a beverage brand it is most visible during summers when demand for the drink spikes up the most. Also, with the growing fragmentation of media and loosening hold of general entertainment channels per se, Rasna has started investing in select media vehicles. For example, when it is not making a splash on TV, the brand would rather engage consumers through BTL activities.

With Vitos’ launch, Rasna has to ramp up its marketing and distribution network significantly, as the company needs more salespeople and touch points to be seen in the vicinity of schools and to draw the attention of kids. Rasna is available in 1.8 million outlets, with seven production facilities, 26 depots, 200 super stockists and 5,000 stockists. To support Vitos’ launch, it is looking to grow its retail footprint by 30 per cent over the next few months.

Sweet Challenge

• With past launches, Rasna has failed to diversify its product portfolio. So the launch of Vitos is critical to its expansion plans
• Introducing consumers to Vitos’ sweet taste will be time-consuming and involve creating awareness in a segment led by salted chips and namkeens
• Rasna has to ramp up marketing and distribution network to draw attention to kids