Introduction

The beverage industry in india

Retail sales of fruit/vegetable juice grew by 30% in 2012 reaching Rs52
billion
Fruit/vegetable juice competes head on with carbonates.
The 100% juice category registers retail value growth of 38%.
Unit prices increase by 5% in current terms.
Dabur leads fruit/vegetable juices with a 25% retail value share.
Fruit/vegetable juice is expected grow at a CAGR of 19% in retail
volume terms over the forecast period
According to the Associated Chambers of Commerce and Industry of
India (ASSOCHAM), the non carbonated drink industry in India is about
to take a jump from US $2.7bn in
2012 to US $7.9bn by 2015.
This industry consisting primarily of fruit juices, drinks and nectars is
fuelled by the increase in the net disposable income of Indians and the
expansion of urban areas.
Fruit juice segment of this industry is growing the fastest at a rate of
around 35% annually while other components are showing a growth of
around 10%-15%.


Rasna is a soft drink concentrate brand owned by Pioma Industries which is
based in Ahmadabad, India. It was launched in mid-seventies but started gaining popularity
in the eighties when the market was dominated by carbonated soft drinks like Thums up,
Gold Spot and Limca As of 2009, Rasna had a 93% market share in the soft drink
concentrate market in India
[4]
and as of 2011, the company had a turnover of 3.5
billion (US$58 million).

Rasna International is one of the leading companies in the manufacturing, marketing, and
export of instant drink powders, soft drink concentrates and ethnic food products in India.
Rasna International holds a share of around 82% in the market of in- house soft drink
consumption and in the market of soft drink concentrate it holds a market share of around
93%. This shows that the company is a big player in the soft drinks market in India.
Rasna International, in order to export its products to foreign countries set up its export
division. The various products of the company that are exported to various countries include
ethnic food products, instant drink powders and soft drink concentrates.

The products of Rasna International are manufactured in world class standard facilities and
also go through strict quality control measures. The company has a well advanced R&D
center that regularly monitors the developments of the new products and also does quality
control.

The R&D center of Rasna International also carries out continuous experiments in order to
introduce new recipes and flavors regularly. Rasna International company's products are
manufactured in environments that are totally automated. As a result the ingredients are at
no point touched by human beings. The company uses global standard technology to pack
its products in moisture resistant and pilfer proof packs. All these steps of Rasna
International have ensured that its products are of very superior quality.

Beverages, foods, and ethnic foods of Rasna
International are:
Rasna Instant Drink
Rasna Frutants
Rasna Flavors
Disco Mix - Sugar Free Instant Drink
Orange jolt
Rasna Syrups
Rasna Fruit Jam
Rasna Fruit Drink
Rasna Chutneys
Rasna Candies




Countries where Rasna International exports
its products are:
Oman
Yemen
Jordan
Nepal
Pakistan
Nigeria
Malaysia
Maldives
Bangladesh
Haiti

Rasna is a brand that every Indian in the World knows of as standing tall vis-a-vis
quality flavor, and enjoyment in the in-house market of soft drinks. A favourite of the
whole family. Currently Rasna holds close to 93% market share in the soft drink
concentrate market in India and about 82% of the in-house consumption of soft-drink
market, making it a big force to reckon with, in any soft drink category.
Rasna has, over the last 10 years, successfully spread its wings with it's Exports
Division, offering the extremely successful Soft Drink Concentrates and Instant Drink
Powders and Ethnic range of products to the global markets.
Rasna has extended its range to include other products, synergetic to it's basic
activites, by introducing a variety of processed food products for the global consumer.
Rasna has been gain 1st rank in the soft drink beverage category (Source:Brand
quality). Rasna received the 1st FMCG Award in the soft drink concern category



Facilities And Product
Though the company does most of its business in India where it has 5 manufacturing
facilities in Gujarat and 1 in Himachal Pradesh, it has manufacturing facilities outside India
in Bangladesh, Dubai, Saudi Arabia and Egypt as well. The company manufactures soft
drink concentrate in 11 different flavours.
[6]
In India, Rasna earns most of its profits from the
soft drink concentrate market though it makes fruit jams, fruit cordials,
teas, pickles, chutneys, ready-to-eat curries and snacks, majority of which are exported.
In 2000, Rasna launched an aerated fruit drink, Oranjolt. The venture failed, which was
attributed to the fact that the drink needed to be refrigerated at all times and many retailers in
India switch off their refrigerators at night. The company launched juice products in the
market in 2002

and in 2010, it announced that it was entering the health drinks segment.









Rasna Ju-C
In May 2013, Rasna launched its first ready to drink beverage named Ju-
C.
Ju-C which is positioned as a nutritionally healthy beverage having 100
per cent RDA of Vitamin Cis targeted towards 8-14 years old children.
The drink has been launched in four flavours- mango, orange, apple and
mixed fruit.
Ju-C is designed to be consumed not just as breakfast flavour product
but as a snack as well due to its nutritional value.

Rasna launches ready-to-drink beverage; targets Rs
400 crore turnover in 3 years
With an exclusive market strategy in place for its
new brand Rasna Ju-C, Gujarats home-grown player, Rasna, fondly known for creating the
soft drink concentrate category in beverages, is targeting at achieving a turnover of Rs 400
crores and a market share of 4-4.5 per cent at the end of three years. Rasna has recently
forayed into a new category- the read-to-drink beverages with the launch of Rasna Ju-C.
The ready-to-drink beverages industry in India is already a cluttered space with PepsiCos
Tropicana and Daburs Real Fruit juice as the dominant players. Rasna, which, according to
estimates, enjoys more than 80 per cent market share in the powdered and concentrates
category, will need to recreate the same success story for Ju-C to compete in the Rs 5000
crore beverages industry growing between 15-20 per cent.
Ju-C seeks to target kids who are adventurous and its communication approach will also
reflect that tonality. It will organise adventure-centric BTL activities in schools, and in
association with the RWAs. The campaign will hit the market in mid-May and will be
primarily be led by outdoor communication, print and radio. The company has also
introduced a new Rasna girl, Avan Khambatta, who is the daughter of the Chairman of
Rasna, Piruz Khambatta.
Rasna has formed a separate division, Rasna Beverages, which will operate as an independent
business unit and will manufacture and market Rasna Ju-C. In fact, all the subsequent ready-
to-drink formats that Rasna launches will be part of this new entity.

Karisma Kapoor with Rasna girl Avan Khambatta
Ju-C which is positioned as a nutritionally healthy beverage having 100 per cent RDA of
Vitamin Cis targeted towards 8-14 years old children. The drink has been launched in four
flavours- mango, orange, apple and mixed fruit with a 250 ml bottle competitively priced at
Rs 18 and a 1-litre bottle at Rs 65 for mango and Rs 75 for the other flavours.
Arshad Siddiqui, CEO and President, Rasna Beverages Division is of the opinion that save
aside Real, there arent many brands targeting kids, and with the strong brand equity of
Rasna, there is definite traction in this space. Moreover, in his view, the juice market has
move from a healthy positioning towards a lifestyle one. Juices, says Siddiqui, are no longer
breakfast table products but are also consumed as snacks. For Ju-C, Rasna is targeting at
achieving a turnover of Rs 400 crores and a market share of 4-4.5 per cent at the end of three
years.
While Ju-C is priced a tad lower than its competitors, another differentiator that Rasna is
hoping to gain from is the packaging. Ju-C has been launched in a pet-bottle; a move that
Siddiqui feels will help increase the brands appeal among kids, who are constantly on the
move. He also remarks that there is currently no other kids brand offering a pet bottle.
The beverage has been launched in Delhi and NCR and will be launched in the rest of the
country in phases, starting with the North, the biggest market for food-based drinks, West,
South, and East. By March 2014, the company plans to make the product available in all
markets having a population greater than one lakh.
On whether the company is nursing any plans of entering into a joint venture, Siddiqui says
that they are open to tying up with foreign players from a distribution standpoint but not from
an equity perspective.

The 7Ps of Marketing Mix
Product:
Rasna Ju-C is a ready to drink beverage.
Containing 100% RDA OF Vitamin Cs.
Available in 1 litre,200, 250,300 and 500 ml pet bottles.
200 ml bottles are available in Mango Pop and 300 ml bottles
are available in SIP Sap Cap.
available in 6 flavors i.e. mango, orange, apple and mixed
fruit, Pineapple, Guava




Price:
Ju-Cs 1 litre bottle is available at Rs 65 for mango flavor.
1 litre bottle of mixed, orange, Pineapple, Guava and apple
flavor is available at Rs 75
Its 250 ml bottle is available at a competitive price of just Rs
18 for Mango Flavor and rest of the flavours for Rs 20
300 ml bottles are available for Rs 25 In Sip Sap cap which are
attractive towards children
200 ml bottles are available for Rs 15 only for mango Flavors.




Place:
Rasnas huge distribution network gives Ju-C a competitive
advantage consisting of:
35 depots
2500 stocklists
1.8 million retail outlets
Sales force of around 700




Promotion:
Rasna Ju-C is positioned as a healthy snack drink.
Its advertising strategy targets kids between 8-14 years of
age.
The drink was launched by Bollywood actress Karishma
Kapoor and the new Rasna girl Avan Khambatta, the daughter
of Rasnas Chairman
Sampling was Done in different Schools all over India and
retail Stores like Big Bazaar and Store99 to promote the
Product.
Various offers were used like with 1 litre bottle of Rasna ju-c
get 250 ml mango free


Packaging:
Rasna Ju-C is available in attractive pet bottles.
The name of the drink is made up word with phonetics containing the words
Juice and C, pronounced same as Juicy.
The name also signifies the 100% RDA of Vitamin Cs by the letter C at the
end.
The logo of Ju-C comprises a big C further stressing upon its Vitamin C
content.


Positioning:
Ju-C is being positioned as a nutritional snack drink.

Its trying to capture the imagination of kids as well as the
consciousness of their moms.

Its introductory phrase is Tastier, Healthier and Fun.

People:
Sales, Marketing, Operations and Quality control divisions
are already up and running.

Ju-C is established as a separate SBU of Rasna.



The ready-to-drink beverages industry in India is already a
cluttered space with PepsiCos Tropicana and Daburs Real
Fruit juice as the dominant players.

Rasna, which enjoys more than 80 per cent market share in
the powdered and concentrates category, will need to
recreate the same success story for Ju-C.

Ju-C seeks to target kids who are adventurous and its
communication approach will also reflect that tonality.

It will organize adventure-centric BTL activities in schools,
and in association with the RWAs.



Marketing and Sales

One of Rasna's biggest strength is its Marketing and Sales setup, through which Millions of
Consumers worldwide are experiencing the flavour of satisfaction.
Having commenced international operations in 1993 Rasna is currently marketing it's diverse
Product range in a majority of the world markets. We provide a strong and Proactive
Marketing support to our Distributors and Importers around the World-just so that our
Products stand out, and apart, on the shelves. Timely Delivery schedules of our products
anywhere in the world is what has helped us to reach a strong position in the global markets


Strengths
Rasna's Success story can be attributed to its inherent beliefs and strengths:
Phased and focussed expansion vis-vis Products and Markets.
Flexibility in the development of existing and planned Product ranges, in Product
Formats and Pack Sizes as per the market's specifications and requirements.
Development and sourcing of products from India at competitive prices to stand tall
against popular international brands
Quality Assurance & Prompt Delivery Schedules
Advanced R&D back up :
Rasna is always open to the changing demands of it's customers and is in a permanent
pursuit of excellence. Rasna, an advanced R&D center continuously monitors new-product-
developments, quality control and flavour analysis. It also carries out regular experiments to
introduce new flavours and recipes at regular intervals

Assurance of Quality:
The Products are Manufactured/Processed in State-of-the-art facilities and undergo
stringent quality control measures to ensure high quality standards. Special care is
taken to follow the health and labelling laws applicable in different countries to avoid
any loss on rejection by the concerned authorities.

World Class Technology:
At Rasna all products are manufactured in totally automated environments. At no
time are the ingredients ever touched by Human hands. Yet the flavour and taste
have a very Human touch to them. International class technology is used to pack
Rasna products in world class Pilfer-proof, moisture-resistant packs, which ensure
that the products retain their flavour and freshness for years.

Advertising
The company has used national television as a mode of advertising its products since the
1980s. Its tagline "I love you Rasna" is aimed at children. In the original ad campaign, the
Rasna girl was played by Ankita Jhaveri, now an actress in South India while the latest
one, Avan Khambatta is from the Khambatta family which owns the company.Rasna's
distribution was initially taken up by Voltas and after two years of handling, Khambhatta
decided to withdraw and approached Rallis and Corn products (now known as Bestfoods
and owned by Unilever).

However, since that did not materialise, Pioma Industries set up its own distribution
infrastructure. Their brand advertising was managed by Mudra Communications between
1984 and 2005, Dentsu between 2005 and 2009 and from 2009 onwards by Rediffusion. In
the past, Karisma Kapoor, Hrithik Roshan, Anupam Kher, Paresh Rawal and Kapil Dev have
been Rasna's brand ambassadors. Currently, Rasna's brand ambassadors are Virender
Sehwag and Genelia D'Souza As part as a promotional campaign featuring then Miss
India, Pooja Chopra, Rasna made an attempt to break the Guinness World Record for the
"world's biggest glass" in 2009


Competition and Failed Acquisitions
Kraft Foods, which markets soft drink concentrate under the Tang brand internationally,
entered India in 2001 by setting up a manufacturing facility in Hyderabad. By 2003, tough
competition from Rasna among other brands forced Kraft to shut its plant in India. At the
time Rasna was said to be interested in purchasing the plant. However, the plant was not
sold and restarted manufacturing Tang when it was taken over by Cadburys in 2010 as part
of its global buyout of Kraft Foods. Rasna made another attempt at acquisition in 2003 itself,
when it attempted to buy Brown & Polson and Rex Jelly brands from Hindustan
Lever. According to Piruz Khambatta, Chairman and managing director of Rasna, the deal
offered was a licensing deal rather than an outright buyout, hence it fell through. India was
the first market where Coca-Cola launched its soft drink concentrate brand, Sunfill.

This
brand too did not do well and was withdrawn in 2004, failing to break Rasna's monopoly in
the segment. Like Tang, Sunfill too has been recently relaunched in India, in 2011.




Distribution




Porter's Five Forces Analysis
Soft Drink Industry
Bargaining Power of Buyers
The soft drink market is the largest group in the larger beverage industry. The
soft drink industry is worth $60 billion dollars. Three firms control 89% of the
United States soft drink sales. To say the least there is plenty of the pie to go
around but it is hard to gain market share.
There are a large number of customers with the average American consuming
over 56 gallons of soda a year. The average soft drink costs under $2 which
makes each individual purchase relatively insignificant.
Because the soft drink industry is very competitive, switching suppliers is
relatively easy and the price difference is rather small. Difference can occur
based on geographic location and how far the products need to travel.
There is no need for information on how to use the product it is a simple task.
The buyer is not aware of the need for additional information because all the
information that is needed is provided. There are no steps to using the product
and all nutrition facts and ingredients are listed on the label.
Because a soft drink is a hard thing to duplicate in your house and takes a
considerable amount of time, manufacturing your own soft drink is inconvenient
especially when you take into consideration how low of a cost the product is.
Customers are highly sensitive to the price of soft drinks and are willing to
change brands if one becomes much more expensive than the other. Soft drinks
are not a need and people wont pay any price for it.
Products are very unique in the soft drink industry and people are very brand loyal to the drink of
their choose. Though many of the sodas are rather similar in type they have distinct tastes.
Firms often provide incentives to customers on the buyer side. These incentivizes are often done
in the form of contests such as win tickets to the super bowl or deals such as get 20% off
admission to a local theme park. These deals can often sway customers to choose a particular
brand.
Bargaining Power of Suppliers
The inputs specifically the materials are extremely differentiated as every firm is trying to create
the best product. Each firm has a different formula, color, and flavor for their beverage. No two
products are typically exactly alike. Product innovation is necessary to fill the buyers need for a
variety of tastes.
Firms can switch between suppliers very quickly and easily. Suppliers for the soft drink industry
do not hold much competitive pressure. Suppliers to the industry are bottling equipment
manufacturers and secondary packaging suppliers. In terms of equipment manufacturers, the
suppliers are generally providing the same products. The number of equipment suppliers is not
in short supply, so it is fairly easy for a company to switch suppliers. This takes away much of
suppliers bargaining power.
It is fairly easy to become a supplier within the industry and thus they would not find it difficult if
they wanted to enter. The companies will choose the suppliers that do the best job and have the
best price. If another supplier does the same job but is cheaper, the firm can switch without
much issue.
There are many current and potential suppliers in this industry. Soft drink companies own a
portion of their own supply companies. For current and potential suppliers it is fairly easy to enter
or succeed in the industry as supplying the soft drinks is not a difficult task. All about price and
how efficient of a delivery job they do. Companies are willing to switch suppliers whenever is
necessary.
Business is extremely important to the suppliers as the soft drink industry is an enormously
profitable market. The main revenue for these supply companies comes from delivering the soft
drink beverages and equipment for the firms to the customers.
Threat of New Entrants
Existing firms have cost and performance advantage in this industry. This is because existing
firms have already purchased large capital expenditures and have economies of scale. They
also have direct supply and distribution channels setup
Soft drinks are not proprietary products because anyone can make soft drinks. The only
proprietorship is on patented flavors and brands.
The majority of soft drinks have well-known brand identities, with the exception of generic
brands. Brand identities define soft drink flavors (i.e. Sprite means lemon-lime, or Coke means
cola)
There are no significant costs in switching suppliers. The soft drink industry is very competitive,
so prices only fluctuate slightly depending on geographical location (transportation) or short-run
sale discounts.
A lot of capital is needed to enter this industry because there are large capital costs needed for
manufacturing. Bottling, distribution, and storage could be contracted out, but it would likely
increase costs in the long run and weaken the supply chain.
A new comer to the industry would face difficulty in assessing distribution channels. The major
brands already control the main distribution channels, such as big supermarkets, gas stations,
and restaurants. They have low costs, competitive pricing, and strong business relationships.
Experience in this industry does help firms to lower costs and improve performance. The major
brands run on economies of scale, and have experienced the highs and low of the industry and
overcome them. New entrants can learn from the first entrants history but do not have first hand
experience.
There are licenses, insurances, and other difficult qualifications required in this industry.
Companies must get FDA approval to sell their product, have licenses to produce and distribute
internationally, and insurance to cover potential lawsuits, accidents, or faulty product.
A new comer in this industry can expect retaliation from current companies. The soft drink
industry is an oligopoly with existing firms having strong distribution channels, relationships with
suppliers, retailers, and brand value to customers. The industry leaders have the tools necessary
to force out new competitors.
Threat of Substitutes
Available substitutes do not have performance limitations or high prices that would justify their
use over the products in the soft drink industry because substitutes are not priced at a high
enough cost where it would affect their use as a mainland product.
Customers would not incur costs in switching to substitutes. The choice of switching to a
substitute for a customer would in most cases be the difference of cents.
There are substitutes for carbonated beverages, like water, tea, sports drinks, etc.
Customers are not likely to go for substitutes because brand name loyalty is a very strong
competitive pressure in this industry.
Rivalry Among Existing Players
The industry is not growing rapidly. The growth rate for the industry is not rapid;
it is in fact relatively small. This makes it very difficult for new entrants to
compete with the already thriving firms in the industry.
The industry does not necessarily have overcapacity at the moment. However, if
a newcomer were to try and enter the industry, its current players would make it
very challenging because of brand loyalty and recognition amongst customers.
The fixed costs are a high proportion of total costs for a firm in the soft drink
industry. Fixed costs act as a firm barrier to entry and can include costs for
warehouses, trucks, labor, etc.
There are significant brand identities among the firms in the industry, which is
why brand names are an important competitive edge amongst new businesses.
It actually would be difficult to get out of business because of money lost from
fixed costs and advertisements, as well as binding contracts with set distribution
channels.
Customers would not incur high costs from switching from one player to another.
The most they may incur would be a few cents because the prices in the
industry do not fluctuate much among the firms.
Since the products in this industry are simple carbonated beverages, there is no
need for significant customer-producer interaction because customers purchase
the products mainly based on taste.
Market shares in the industry are not more-or-less equally distributed among
competitors. This is evident because there are three main firms that own
approximately 90% of the industry, yet there are over 100 companies in the
industry.
.