Rasna Enters Packaged Food Space With Baked Snack

Four decades after the launch of Rasna, the concentrated beverages maker has diversified into the packaged food space under the Vitos brand.

Rasna International Pvt Ltd., which has 80 percent market share in instant drinks and concentrates, on Thursday launched a chocolate-filled baked “healthy snack” targeted at children with a price tag of as low as Rs 5 a pack.

The company is looking to capture at least 5 percent of the Rs 5,000-crore packaged food market over the next three years, Chairman and Managing Director Piruz Khambatta told BloombergQuint.

“Rasna has been in this single segment (powdered drinks) for a very long time and has a dominant market share. (But) this is not a growing segment. Packaged food is a contiguous category, which is the most logical move by the company,” said Arvind Singhal, chairman of management consultancy Technopak Advisors.

Khambatta said the company is looking to eat into the unbranded packaged food market. It plans to expand its offerings under the Vitos brand and will add “more ethnic and western flavours”, he said.

The home-grown beverage major has so far invested Rs 100 crore in Vitos and has a current capacity of 500 tonnes a year. The company plans to export the snack to Nepal, Bangladesh and Sri Lanka, Khambatta said.

Rasna, which markets the eponymous beverage brand with the 'I Love You Rasna' tagline, is still studying the packaged food market and is yet to take a call on expanding capacity, he said.

The snacking food segment is growing substantially in India, but it is highly competitive, said Sunil Alagh, former managing director and chief executive officer of Britannia Industries Ltd. “You have everyone there, all the major Indian brands and MNCs. Unless their product is unique in terms of pricing or taste. However, Rasna has a brand and a distribution reach which it can rely on to make a mark in the segment,” said Alagh.

Khambatta said Rasna is not looking to list on the stock exchanges anytime soon as the company does not need capital.

Rasna, which has a distribution reach of 18 lakh outlets with a stronger presence in mid and smaller towns, is planning to strengthen its base Jammu and Kashmir and the north east which are relatively less tapped, Khambatta said. Rasna also has a programme to reach out to smaller outlets and tap schools.