Energy drinks not premium anymore

In a market like India, where energy drinks are sold at a premium price as compared to carbonated drink, Tzinga, has emerged as a well-priced product. An energy drink brand is all set to grab the Indian functional drink market. Neeraj Kakkar, CEO, Hector Beverages Pvt Ltd, in a one-on-one with Gunjan Piplani, shares his plans from here on and explains what makes them a well-priced brand.

Gunjan Piplani (GP): How are you creating brand presence for Tzinga?

Neeraj Kakkar (NK): We are still a start up at heart, so the need of connecting with consumers and creating brand visibility is what our aim is. It is important for brand progress. We have come a long way from where we started. We started in two cities including Bangalore and Delhi and now we are an all India brand.

For us right now, its word of mouth that is working well. People are trying it drinking it and again buying it. Another platform that we are vouching upon is the online social media, which in today’s time has become the real booster for start ups. Moreover, most of our target audience is on such platforms. We now have more than 365,000 Facebook followers.

GP: What are you aiming at right now?

NK: We are trying to bring in the concept of counter culture in India which isn’t strong yet. Counter culture means that people move out of their shell and try out new brands. In India, people still like to stick to bigger brand and avoid trying out something new.

GP: How did all start?

NK: Suhas Misra was my colleague in Coke and this was his idea. We thought of something in beverages. The idea was culminated and took shape in Europe and our first couple of years was all about product research. We wanted to develop an energy drink which would be superior for Indian market. Once we were done with the product development, we moved further and raised money.

GP: How much money has been invested in the project and where has it been utilised?

NK: We have two investment companies Catamaran Venture Fund and Footprint Ventures and four angel investors who have invested about Rs 8 crore in the company. So overall in the company, total investment made has been $6 million so far. We then set up a state-of-the-art manufacturing capacity in Manesar.

GP: Tell us more about your manufacturing unit. Do you plan expansion?

The unit is Manesar is fully exhausted and produces 80 bottles a minute. We are setting up a second plant in South India which will be three times larger than the existing plant. The investment in this project will be about $2.5 million.

GP: What kind of presence among consumers has the brand achieved?

NK: The product was launched last year in April beginning with Delhi and Bangalore and then to Hyderabad, Jaipur, Jodhpur. We are now a pan India brand. We are the highest selling functional beverage in the South of India and in number two in North.

We are present in office canteens, malls, residential areas, college canteen as we are targeting age group of 18-35. We are there in top 50 towns in almost all outlets. We have a strong distribution channel and the whole team of almost 100 people is technologically sound and equipped. They all carry a tab with which they instantly update the current state of stocks in stores using geo-coding.

GP: With energy drinks being termed as caffeinated, does that effect your brand image? How do you make consumers aware that certain amount of caffeine is fine?

NK: We have been responsible with the packaging labels and at the back of the product it is written in bold letters that the product contains caffeine. The amount of caffeine used in our energy drink isn’t that it would affect, it’s just to boost your daily energy levels. Its same amount of caffeine as you might normally have with your coffee.

GP: The price of your product is very low as compared other energy beverage brands, how come?

NK: If you look at energy drinks around the world, sold as a premium beverage as compared to carbonated beverages. However, the kind of premium is being sold in India is higher than what is it sold at across the world. The reason behind it is that nobody is producing these drinks in India, they are being imported and import duties on finished products is higher. That is why pricing is higher.

We are importing our ingredients from Europe but manufacturing here, so the import duty on ingredients is much lesser than finished goods. This gives us an upper hand in selling the product at a much lesser price i.e. Rs 25. Moreover, the doy pack which we use for packaging is less costly.

GP: How has the response been for doy pack, as using cans is more of a style statement among youth, who is your target audience?

NK: Doy pack was a brave decision from our end. We wanted to offer the price of Rs 20, so if we wanted to launch a high quality product we had think of an innovative packaging. Doy packs are a convenient package for consumers and we have got some amazing response for the packaging. Moreover, doy packaging is less environment damaging as compared to other packaging including cans.