A focus on quality and innovation

If you grew up in Pakistan during the eighties, the chances are that you were treated to Shezan orange or mango squashes at birthday parties, weddings or during visits to family and friends. Long before soft drinks took over the market, these squashes – fruity concentrated beverages to which you only had to add water and ice – were popular refreshments, as well as a way to replenish your energy on hot summer days. Every household had a bottle or two in their pantry or refrigerator.

Fast forward to 2019 and we have long outgrown our childhood years, but Shezan squashes (although not as trendy as they used to be) continue to be sold, and despite the proliferation of multiple juice brands, Shezan, the brand, has stood the test of time and continues to be a major player in the juice and nectar category thanks to the company’s focus on quality, innovation and ability to adapt to changing consumer preferences.

Aurora recently spoke to Humayun Shahnawaz, CEO, Shezan International (SI), to learn about the brand’s history and how (as one of Pakistan’s oldest home-grown brands) they have managed to evolve amid growing competition from local and multinational food companies.

Part of Shahnawaz Group of companies – which includes Shahnawaz Private Limited Company (authorised distributors of Mercedes Benz passenger cars and commercial vehicles), Shahnawaz Engineering, Shahtaj Sugar and Shahtaj Textile – Shezan International was conceived as a joint venture between the Shahnawaz Group of Companies and Alliance Industrial Development Corporation (AIDC) US in 1964.

The company today has three factories across Pakistan including Karachi, Lahore and Hattar and employs a total of 1,200 people. “It was during a trip to England that my grandfather Chaudhary Shahnawaz (founder, Shahnawaz Group of Companies) observed people drinking juices in boxes and decided to offer the same to Pakistanis,” recalls Shahnawaz, giving details about the set up of the first Shezan factory in Lahore.

The company first introduced orange juice in 240 ml glass bottles. The recipe was developed by Emmanuel Yokus, the then head of the R&D department. The juice did not prove to be a success as its sharp and tangy taste did not appeal to consumers. Yokus then suggested that Chaudhary Shahnawaz introduce mango juice instead.

“Following the success of mango juice, things began to pick up,” recalls Shahnawaz. In 1971, AIDC sold their shares to the Shahnawaz Group and SI became a publicly traded entity.

As sales increased, more flavours were introduced, including apple, grape, guava, peach, pineapple, pomegranate and strawberry, which were available in glass bottles and tetra packs. (To this day, the original 240 ml glass bottle remains a bestseller in rural Punjab where the brand has a strong presence.)

As the eighties progressed, Munir Shahnawaz (Chaudhary Shahnawaz’s son and Humayun Shahnawaz’s father) took charge of the company and expanded the product line to include jams, ketchup, pickles, sauces and syrups, most of which were made from locally-sourced ingredients. It was also during the eighties when the business was thriving that the company expanded further by opening several branches of Shezan Restaurant in Lahore and Karachi and (one) in London. Although the restaurants did well, Shahnawaz says: “My grandfather decided he did not want to be part of the services sector and sold all the restaurants to a third-party except one in Karachi (Shezan Ampis) and the one in London.”

Today, all of SI’s products are exported to countries and regions around the world (including Africa, China, Germany, the Middle East and Norway) and their largest source of revenue remains juices (a market share of approximately 30%) followed by ketchup and jam with a market share of nearly 18% and 16% respectively.

Their raw materials (fruit and vegetables) are primarily procured from Nawazabad Farms (a sister concern of SI) in Mirpurkhas, Sindh, which are spread over 2,200 acres. However, due to a lack of proper processing facilities in Pakistan, certain fruits (due to better quality), pulp and concentrates are imported.

Shahnawaz believes the recent devaluation of the rupee has changed people’s mindset towards ‘buying Pakistani products’ and this he hopes will help Shezan gain further strength in the market.

“We grow tomatoes but we cannot produce tomato paste because we don’t have the facilities to process it and we import from China. Similarly, we grow peaches and lemons in abundance at our farms, but cannot make concentrates,” clarifies Shahnawaz

It is safe to say that Shezan is a legacy brand that has, over the years, been enjoyed by generations of Pakistanis, and Shahnawaz believes the quality of the products have played a vital role in retaining brand loyalty. However, that is not to say that the brand has not faced its share of challenges over the years.

In Shahnawaz’s opinion, people underestimate a local brand because it does not have a fancy American name. “Nevertheless we are very confident of our quality. Coca-Cola just came up with Tropicana, but we did not lose any sleep over it. Even if you take ketchup as an example, we put more tomato in our ketchup than Heinz do; for every 100 grams, Heinz use 180 grams of tomatoes whereas we use 200 grams of tomatoes per 100 grams.” Technology too has played an important role in helping SI ensure a longer shelf life and consistency of flavour. “We cannot have one box that tastes different from the hundredth box.”

To this end, Shahnawaz says that the company invests heavily in upgrading their technology and rely on the best vendors in the world. Their latest import is a state-of-the-art tetra pack machine in Hattar that produces 24,000 boxes per hour: “six boxes in a second.” (Shezan juices are available in pouches as well as their old-fashioned glass bottles; this is because Shahnawaz believes that their shelf-life and flavour stay optimum in them.)

Innovation too plays a big role and two juice brands have recently been introduced. The first is Happy, which is targeted at children (according to Shahnawaz no brand has come up with kids-only juices so far, despite the fact that they constitute a significant percentage of the population) and is available in four flavours; the other is Happy Farms, a nectar targeted at adults. The prices of Happy and Happy Farm are Rs 10 and Rs 30 respectively, and the reason for such low prices has to do with the fact that the food and beverage category is price sensitive and offering quality and affordability together is the only way to enhance sales and stay competitive.

“We live in a poor country where anything in a dabba (box) is considered a luxury, even if it is milk; the same goes for bottled water. In Switzerland, chocolate is not a luxury but a commodity, here things are different. Since people lack purchasing power, we often come up with offers like ‘buy one and get one free’.”

These strategies are important to compete with multinational companies like Nestlé which “is the largest food company in the world with mammoth marketing and sponsorship budgets.” This is all the more important as new competitors have entered over the years. For context, in 1964, Shezan’s only competitor was Mitchell’s, but with time others have come to the fore: Nestlé is Shezan’s main competitor in the juice category (Shezan sells more in Faisalabad while Nestlé has a strong hold in the city centres). Other competitors include Shangrila, Mitchell’s, Knorr and National in the ketchup category and National and Shan in the pickles category.

Going forward, the company’s focus remains product quality at par with international standards “or even better” and upgrading the equipment and infrastructure of their factories. However, the rising rate of inflation and taxes remain a challenge. “Every year, some company goes up for sale, which indicates that businesses are suffering; the government has recently slammed a water tax due to which all beverage industries now have to be careful.”

However, Shahnawaz believes the recent devaluation of the rupee has changed people’s mindset towards ‘buying Pakistani products’ and this he hopes will help Shezan gain further strength in the market. “People earlier thought nothing compares to Heinz ketchup, but now as the price has gone up, people are looking for local alternatives and are discovering that they are equally good; this is beneficial for local brands.”