Piruz Khambatta, chairman and managing director, Rasna International, one of the few home-grown food companies still in the business, thinks India can become the food factory of the world.
He spoke to Suvi Dogra about the company’s growth strategy:
As a value player, what is your strategy?
First is to work on cheaper price points of Re 1 and 50 paise and focus on rural markets. We need to give the consumer new flavours and better options at the entry-level.
Second is to expand in the international market. Third is to grow in the food services sector by launching new products and entering new markets through franchises. Fourth is to fill the gaps across segments.
For instance, we entered the powdered milk shake category before anyone else could.
You have entered the foods business with your retail outlet, Devil's Workshop. What is your plan?
Right now, we are in the process of learning the food business. We are trying to evolve an Indian brand by making our own franchised menus.
We are working on our bakery and ready-to-eat snack food divisions. We offer doughnuts which are on a par with the ones available in the US. We are making Danish cookies and also Rasna beverages in these stores.
How difficult has it been to sustain price points?
It is difficult to tamper with the price points like Re 1 and 50 paise. Even a marginal increase can have a negative impact on sales. The other challenge is modern trade since it demands more margins.
How do we overcome these challenges? The truth is we cannot. So we are looking at value-added products where prices are higher.
If we expand our product basket, increase volumes, automate and adopt new technology we can absorb some pressure. If inflation continues the way it is, consumers should be prepared for price hikes.
Do you plan to enter the catering segment?
With Devil’s Workshop the idea is to grow in the Indian catering market. We are talking to a few flight kitchens. We have put up a pilot plant in Ahmedabad to experiment with different food and snacks for the Indian market. For the overseas market, we are developing special catering packs.
