ADULTERATION SCANDAL AND AFTERMATH: PRAN FROOTO

PRAN GROUP
PRAN-RFL Group is the largest Bangladeshi food-products
corporation based in Dhaka, Bangladesh, founded in 1981. The
word PRAN is an acronym which stands for “Program for Rural
Advancement Nationally”. Pran is the largest exporter of
processed agro products with the compliance of HALAL & HACCP
to more than 82 countries1.

PRAN is the pioneer in Bangladesh to be

involved in contract farming, procures raw
material directly from the farmers. Over the Fact File about Pran RFL Group
years, the company has not only grown in •Type: Private
stature but also contributed significantly to •Industry: Food processing
the overall socio-economic development of •Founded: 17 March 1981
the country. With a view of thriving into global •Founder: Maj Gen (Retd.) Amjad Khan Chowdhury
•Headquarters: PRAN-RFL Center, Progoti Sarani,
market more vigorously, Pran want their Dhaka 1212, Bangladesh
company as the first multinational company •Export Destinations: South Asia, Africa, North
from Bangladesh. Pran Food’s contract America, Europe, Middle East
•Products: Juice, drinks, beverage, confectionery,
growers cultivate the choicest fruits and culinary, snacks, biscuits, bakery, dairy
vegetables, which are processed in their •Revenue: $300 million a year (2012)
modern and hygienic factories to highest •Employees: 30,000+
quality & international standards. The •Website: http://www.pranfoods.net
company has the distinction of achieving
prestigious certification like ISO 9001:2000.
With more than 30000 employees and revenue of over $300 million a year2, Pran enjoys a
significant market share of processed agro food products industry in Bangladesh.

As one of the leading food and beverage producers of Bangladesh, Pran produces a wide range
of products, which can be categorized into six broad categories. Juice is one of them.

Despite Pran’s effort to high quality maintenance, the company faced allegations of
adulteration. The acceptability of Pran food products became questionable.

1
http://www.businessreviewaustralia.com/reports/Pran_RFL_Group
2
http://www.pranfoods.net

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 ADULTERATION SCANDAL AND AFTERMATH: PRAN FROOTO

PRAN FROOTO
Pran Mango juice was first introduced in 19983. Targeted towards the
nuclear family, the product was positioned for providing Bangladeshi
consumers with a chance to taste their most-beloved fruit all the year-
long. Initially the product was available in 6 taka mini PET bottle. The
product was an instant hit. However, after 2008, the product started
losing its market position. This is mainly because of the brand Frutika
of Akij Group, which was introduced in August, 2008. Frutika became
the market leader overnight4.

To remain in market contention, Pran renamed their juice product to Frooto in 2011 with
similar size and pricing compared to those of Frutika by Akij. Pran went for “point of parity”
strategy with market leader Frutika in this regard. Pran portrayed Frooto as healthy lifestyle
drink with a new tagline “Real Mango”.

Various types of IMC strategies were undertaken with a common theme “আমের ভবিষ্যৎ”
referring to the meaning that only “real mangoes” have the potential future of turning into
Pran Frooto mango juice. With very strong raw material sourcing system, large scale production
facility, extensive retail supply chain and effective IMC activities, Pran Frooto soon surpassed
Akij Frutika in mango juice category by 2012 and became the market leader.

THE SCANDAL
Though Pran Frooto promised its consumers quality healthy lifestyle drink, they reportedly did
not follow “quality procedures” in processing the juice. In
November 2012, Pran was reportedly producing mango juice
made of mangoes mixed with formalin and other toxic chemicals.
A mobile court inspected a factory of Pran at Gangni upazila in
Meherpur district and unearthed the incident of serious food
adulteration5.

3
http://bdjournal.com/archives/994/4
4
http://www.studymode.com/essays/Frutika-Report-For-Brand-Management-By-714478.html
5
http://www.amardeshonline.com/pages/details/2012/12/18/177053#.U2O56fmSzw8

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 ADULTERATION SCANDAL AND AFTERMATH: PRAN FROOTO
The court, led by executive magistrate Md Abdus Salam awarded two Pran executives two years
in jail and fined BDT 1.30 lakh each on the charge of mixing
formalin and other chemicals in mangoes that were to be used
in producing juices. Meanwhile, police detained local agent of
the company, Mr. Abdul Majid in this connection. The local
Union Parishad Chairman complained that Pran authority
intentionally did not take prior permission to set up a facility
there to keep people in darkness about their product sourcing.

Country’s major business body FBCCI expressed concern over the heinous incident of the
conglomerate as formalin-tainted mangoes are harmful to human bodies. An FBCCI statement
said, “Formulation of a law is underway to import formalin and its misuse. Awareness building
is also going on among the masses. It is very unfortunate to mix up formalin in mangoes by such
an established food-processing company.”

Meanwhile, Pran officials said their company was never involved in mixing mangoes with any
harmful chemicals. They claimed Pran got caught in a trap. The company rather protested the
seizure of huge mangoes by the mobile court claiming 100 percent standard was maintained
while producing every Pran product and the mobile court was destroying their raw materials to
hamper their production.

During the drive, mangoes worth BDT 2.50 crore and huge toxic chemicals as well as formalin
were seized and later destroyed. BSTI found around 90 tonnes of mangoes were stored in 887
drums. The accused agent, Mr. Majjid said he entered into a contract with Pran to supply 200
tonnes of mangoes. If an element of formalin was found in mangoes, it must have been mixed
by Pran officials, he alleged. The mangoes may have been processed with chemicals for
preservation, he said.6

In the meantime, High Court issued a rule on Pran fruit drinks as the BSTI found that the Pran
drinks contained no fruit juice. The petitioner Advocate Mr. Manjil Morshed said Pran Frooto
Mango juices contained no mango pulp but harmful preservatives, but still those were being
sold in the market with “real mango, no preservative” stickers. He filed a writ in High Court for
putting a halt to the production of such goods as those posed threat to public health. As a result
the license for producing and marketing all juice products by Pran was cancelled.7

6
ETV News, November 26, 2012
7
http://www.amardeshonline.com/pages/details/2012/12/08/177053#.U2O56fmSzw8

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 ADULTERATION SCANDAL AND AFTERMATH: PRAN FROOTO

AFTERMATH OF THE SCANDAL

Pran Group, however, denied all the allegations and declared reward if anyone could prove that
Pran Frooto juice items were adulterated or do not contain any mango pulp. Pran said they
provide 20-40 percent mango pulp in Frooto and announced a BDT 10 lakh reward if anyone
can demonstrate that its juices did not contain mango pulp.

Local TV channels, especially ETV, broadcasted a series of reports on the adulteration scandal.
The adulteration scandal affected Frooto’s reputation regarding food quality. Quality is
something people do not want to compromise when it comes to food product. Pran had a
serious issue of negative brand image which tended to jeopardize its reputation as a quality
food processing company.

Frooto had a market share of 43% and Frutika had 38% in the first quarter of 2012. After this
scandal, the market share of Frooto reduced drastically to 22%8 estimated in the first quarter of
2013.

REPOSITIONING PRAN FROOTO

To restore their consumer belief, Pran had to do something. As a means of gaining back the
public trust in Pran, they posted video in their official website. The video titled ‘Have faith in
us’, where the DMD of the Pran Group tried to defend their stance and also portray the real
production process of Pran Frooto9. They re-managed certification by agencies like BSTI, ISO,
BCSIR regarding the food quality.

INTERNAL MARKETING
Pran started internal branding. They said they ensured fair price for farmers and helped the
farmers to alleviate poverty through their business process. Also, they started portraying
themselves as environmentally conscious and energy preserving citizen. Pran showcased their
equal employment opportunity to candidates irrespective of gender,
race, religions and culture.

Pran focused on their Corporate Social Activities (CSR) aggressively.

They started promoting education and supporting several schools in
running their operations. Pran started donating to mosques, temples

8
http://businessmanstar.blogspot.com/2011/07/markating-plan-on-pran.html
9
http://www.pranfoods.net/press_release.php

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 ADULTERATION SCANDAL AND AFTERMATH: PRAN FROOTO
& churches. They initiated a collaboration with Red Crescent, collecting and donating blood,
working for the disabled. They started helping the community in natural calamities working
together with ‘Save the Children’. Pran also started providing airport support for the Hajj
pilgrims.

IMC ACTIVITIES
Pran started using extensive IMC campaign to regain its positive brand image.

1. Repositioning: Instead of focusing on purity, this time

Pran decided to portray Frooto as a fun product with a
new tagline “সেয় অসেয় - ফ্রুম োেয়”. This
statement emphasizes the message that no matter
what situation it is, Pran Frooto is with everyone and
for everyone. The packaging was modified.
2. Sponsorship: Pran started sponsoring cultural, sports and television programs and news at
a larger extent. The management of Pran realized that the TRP rating
of Indian Bangla channels are higher than local channels. So, Pran
started sponsoring popular children reality programs like “Dance
Bangla Dance Junior” in Zee Bangla Channel to ensure that they can
tap the market of young people watching this series who are usually
faithful customers. The hugely popular comic show “Mir Akkel” was
exclusively sponsored by Pran Frooto. To regain trust of the journalists
and media, Pran sponsored the BSJA Media Cup Cricket 2013 with the participation of all
major media houses of the country.
3. Leveraging the festivals: Iftar in Ramadan, Pahela Baishakh Bangla
New Year celebration are two occasions that emphasis on food. Pran
tried to leverage these festivals to their favor. Promotional campaigns
were carefully designed to this end. They sponsored the elite Dhaka
Club’s Baishkahi Program to regain acceptability towards the conscious
class of people.
4. Penetrating the student niche: Students of schools, colleges and
universities comprise a big portion of Pran Frooto’s target market. To
ensure that atleast each student gets one bottle of Frooto, Pran ran this
campaign. They went to all primary, secondary schools of the country to
provide free juice packs and a health brochure. Also, they sponsored the
SSC result celebration 2013. The successful students were given reception
from Pran. Pran sponsored the Inter-School Science Fair 2013 National
School Debate 2013 as well to reach this target group.

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 ADULTERATION SCANDAL AND AFTERMATH: PRAN FROOTO
5. Engaging the consumers: To engage the consumers and keep in touch
with them, Pran organized various competitions, trips, seminars all
around the year. Pran arranged sms/online based competitions, the
winners got to travel to various exotic destinations with Pran sponsored
fooding and accommodation. This kept the consumers engaged.
6. Collaboration with Robi: Pran Frooto collaborated with mobile service provider Robi on
co-branded bonus campaigns. For a particular recharge or use
of talk-time from Robi connection, Pran Frooto was provided
as gift. Again, for a certain bulk quantity purchase of Pran
Frooto was awarded with free talktime of Robi.
7. Attractive New Ad: Just immediately after the scandal Pran Frooto gave
famous ad agency, Adcomm Limited the responsibility to design a new
attractive ad for them. Adcomm came up with an attractive jingle by popular
musician Habib shot at beautiful locations in Cox’sbaazar. The ad vouched for
the theme “সেয় অসেয় - ফ্রুম োেয়”. The ad was a hit because it chose the
timing of Bangladesh New Zealand Cricket series, then World T20 Cricket and
IPL tournament.

IMPACT OF IMC
With extensive IMC campaign and by increasing the profit margin of the retailer, Pran was
eventually able to overcome the scandal. Pran Frooto, though not the market leader now, is
very close to market leader Frutika. The market share of Pran Frooto is now 35% while that of
Frutika is about 40%.10

Pran Frooto provided a consistent message in the face of such a controversial issue from all
information exit points both to internal and external stakeholders in the same manner. Thus, it
catered the customer confidence both nationally and internationally.

10
http://www.scribd.com/doc/60888147/Strategic-Marketing-Plan-for-Papaya-Juice-Bangladesh

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