Instant coffee as a category has evolved a lot in the past few years especially with the push to D2C through the entire course of the pandemic. While a lot of legacy players still enjoy a significant market share, newer entrants are doing well, carving a niche and then progressing towards creating a mass appeal to cater to a larger audience. While competition is fierce, innovation becomes the key USP for brands to attract audiences.
Bharat Sethi, Founder & CEO of cricketer Virat Kohli- backed Rage Coffee shares the insights behind the brand’s recent rebranding, the brand’s association with Virat Kohli, evolving target audience, market share and more in this conversation with exchange4media.
Talking about the brand’s new identity, what was the insight that went behind the rebranding?
When we launched Rage Coffee, our branding was meant for a certain audience which we wanted to immediately go after. Between 2018 and 2022, we have gathered so much momentum and a huge customer base that we outgrew our own mission and what we were doing and the audience we were serving.
The insight was that we want to be more affable, inclusive and non-polarizing as a brand because through that language and the identity, we were talking to only a limited audience. Another insight was also to appeal to the female audience; a lot of women consumers were consuming our coffee, but they felt it to be a little more on the masculine side. However, while rebranding we ensured not to change the essence of the brand and the fundamentals that we really stand for.
You mentioned that you wanted to keep the brand ethos intact. How would you say that the new visual identity is reflecting your positioning?
First thing is that we've become color-agnostic. Also, the coming onboard of Virat Kohli has helped us a lot. He is referred to as the GOAT (greatest of all time) and is very popular among Gen Z and the millennial audience that happen to be our core loyalists. The second hook is the beans that we source, it's coming from the highest altitude and the mountain is very significant and we had mountains in our earlier branding also. Combining these insights, we wanted to have a mountain goat in our branding. The goat is on the top of the mountain, which reflects what we want our consumers to be. We stand for fitness, lifestyle, all of these hipster topics, but we're still massy. With Kohli coming on board, we've become very massy, so we could not be very niche in the way we’re talking to the consumers. We are trying to tell the entire story through this logo and new look and feel.
How has things panned out after Virat Kohli has come on board with Rage Coffee?
I think we would not have gone with anybody else if it was not for Kohli. We really believe that nobody in the category took such a bold step before - even the legacy giants, and traditional players. We got a mainstream A-lister with 200 million followers on social media alone. He obviously embodies the brand as he is fit and talks about fitness a lot. Once he came on board, the growth has been quite significant because he's very popular in South India where we are gaining very quick traction. It helps us with building a relationship with the consumers who have not tried our product yet and helps us to get those eyeballs in the offline world, increasing our presence.
How are you looking at expanding your retail footprint? Are we going to see a dedicated outlet cafe chain starting soon from Rage?
We started as digital-first, but we've always remained omnichannel. Even in the first year of the business, we touched about 200-plus outlets. We've been building the offline wholesale piece since day one. Currently, we have about four CFAs and about 120 distributors pan-India. We can supply stock from say Srinagar or Ladakh to a retailer in Kochi or Rajkot the next day… that's the depth of the trade network. We are present in about 3500 outlets. More than 60% of our sales come from tier two cities or smaller cities today. So offline has been growing phenomenally for us. You will see a lot of action in terms of the cafes that we are coming up with shop-in-shop and a kiosk model.
What percent of your sales comes from offline versus online? How do you see this ratio evolving or going ahead?
Almost 50% of the sales come from online channels, and 50% comes from offline today. In the future, offline will start contributing more heavily because we see massive tailwinds in that business.
You mentioned that tier two and three cities have been working very well for you. So what are your biggest markets at the moment?
Biggest market is Maharashtra. Mahashra is the biggest because there's a lot of effort that has been put in the master market - Mumbai & Pune. Beyond that, NCR is solid. Then there is Telangana & AP. Kerala is coming strong. Obviously, Karnataka is there.
Coffee is a very competitive category. How are you navigating your way through the competition?
We are just innovating. We are increasing our distribution and we continue to build products and innovate around our manufacturing techniques, scale and products. We're just focused on that and not on the competition at all. There is a lot of imitation and very little innovation in this space, especially in the packaged category. Most people just try to have a formula and they want to continue working on that formula, but we do the opposite of that. It's a very unique position we hold in the market, which nobody is not even close to. The story always remains the same: If you're innovating, till you prove that this works, everybody has questions. Once we prove it, then we've already gathered enough momentum.
Please share your overall marketing strategy with us. And also what is your media mix in terms of percentage of budget allocation to different media?
Almost 60-70% of the budget goes to online and digital. The other is all instagram branding, retailer branding, and so forth. Marketing strategy has always been about being uthoritative; a little bit of talking about the benefits of shifting to dates, coffee, about the flavors and the functionality. It's been more around knowledge in UGC. We did a lot of user generated content. A lot of it has been around just getting people who love the brand to talk about the brand through affiliate marketing, YouTube videos, Instagram reels, recipes, ragers and promoting the community of ragers.