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Desi food brands rival multinationals

Bangalore, Sep 6 (): Desi food brands are giving a tough time to established players by reducing costs through innovation and offering wider varieties to consumers.

Dabur, Pepsico, Red Bull and McCormick are facing the heat from Balan Natural Food, Prataap Snacks, Hector beverages and Amalgam Speciality Foods. These companies have crossed over to fruit juice and seasoning, energy drinks and potato chips . These areas were dominated by big ticket companies with money power. Haldirams, the desi brand stuck to Indian snacks like ‘sev’ and ‘bhujia’.

Hector, about three years ago launched its energy drink Tzinga to challenge the Red Bull which dominates the Rs 845 crore industry. Every month, Hector sells about 1.5 million packs of Tzinga. It was launched in 2009 by three former executives of Coke and Dow Chemicals.

A soft launch of the flavours like jal jeera and aam ras in a drink Paper Boat is testing the market. The success of Desi food brands is inspired by the success story of Thums Up the Indian cola that took on the giants and finally Coca Cola had to buy out the rival.

‘Lays’ brand of potato chips created a market in India and also showed the way to source the ingredients. This made it easier for brands like Yellow Diamond from Pratap Snacks to have a turnover of Rs 600 crore on an investment of Rs 15 lakh.

Sequoia Capital has invested Rs 179 crore in this company. Along with Angel investors, Footprint ventures and Catamaran,it has put in Rs 68 crore in Hector.

Tzinga comes in various flavours while Red Bull has only one and is priced cheaper than the global brand. Balan offers juices of amla,brahmi and jamun and is pitted against Tropicana of Pepsi and Real of Dabur.

It was first dealing with milk products and entered juice market later. Amalgam Speciality Foods sells Italian herbs under the name Keya for Rs 75 while its rival, a multinational sells for Rs 300.

Red Bull costs Rs 95 while Tzinga is only Rs 25. Yellow Diamond offers more chips in the Rs 5 pack than others. The Desi brands offer 5% more commission to retailers to offset the publicity by giants in outlets and through TV.