Memoirs.....Musings of a sales guy at heart.....

Episode 18....

IDV----journey continues....

The business was slowly picking up but we had serious issues with our own plant at Nira in terms of  increasing our output as the unit was a very old one and infested with issues. So we started getting in to 3rd party bottling. The first one was KAPL, Kerala and the second one  was Khemani Distilleries at Daman. Ashok Khemani the owner, was a well known bottler in Daman with his Royal distilleries and in the same complex he built Khemani distilleries, a bottling plant, very modern and well constructed. We tied up with him to bottle our brands primarily Green Label for exports out of Daman. If you wonder why bottle in Daman for exports to other markets in India, the rationale was that the export pass fee and the proximity of Daman to markets like Rajasthan and MP and also the modern facilities built by Ashok in that plant weighed well. So Daman started with Green Label. The irony was that there was nothing else available and everything has to be brought from outside....including the molases.

We had issues with Polsons in Kerala as they were not able to invest much on their unit and I approached KAPL owned by Shiva Distilleries in TN. KAPL was in the borders of TN and Kerala and on Kerala side. A new unit and with great capacity and new bottling lines...This is the first tie up for bottling from our side and Khemani was the second one.

We shifted our bottling from Polsons to KAPL and with improved supplies our Men's Club range and Louis XI brandy (both being the acquired brands of IDV from Polychem), started doing better...these brands had some traction in Kerala already. 

IDV also tied up with an unit in Haryana and one in WB to cater to North and East respectively.

As mentioned in my earlier post, I moved the willing ones from AP to different parts of South and west....Srinivas and Raghu were sent to Kerala along with Ravi...Kerala was split in to two....one managed by Hari and other one by Ravi....

When Sudeep got transferred to Pune, we brought Ravi to Bangalore to head KTK. There were lots of uncertainties in South due to AP going dry and TN was closed for players like us.

Lots of efforts put in by us and the team at HO to establish all the brands we launched but barring SMV and Green Label, none of the other brands picked up nationally...Malibu and Archers were okay but with very low volumes and catering to small segment of consumers. Kellys was a disaster with quality issues on the liquid getting cuddled....Lots of time of the FF went in to managing these issues.

SMV picked up damn well and we made sure that we own the key on trade with SMV....Many places we got the pouring contracts with decent payouts....

Ten Downing Street started off in Hyderabad. A theme pub...Vinod and Mohan Reddy were the owners and great guys to partner with. They wanted to expand and opened one in Pune but wanted brand partners..Vinod approached me, due to the relationship we built with them earlier and came down to Bombay for a meet. He made a proposal to me that IDV invest 10 lakhs in his pub upfront and in return would enjoy complete branding rights and pouring status for SMV....Those were initial stages for us too and investing such a large sum in an outlet which was yet to start was a tough call to take. But knowing Vinod and Mohan I felt that investment would help us in the long run and went with the proposal to DR for his approval. I also got Mahesh Madhavan on my side. The proposal was okayed and these guys never let us down....TDS as it is popularly known had been our partners of choice ever since. Sad Vinod is no more...wonderful friend and a great business associate. Their USP was not only the pubs atmosphere but also the food served there. TDS Hyderabad was well known for its 'curd rice' (!) apart from many other mouth watering dishes.

In Bombay too we tied up with some excellent pubs one being Ghetto near Mahalakshmi....That was a happening pub then....Raspberry Rhinoceros in Juhu. In Blr our guys didnt leave a single one for competition, despite pressure tactics from UB beer division. Purple Haze was a hot spot in Blr and we got them in to our fold. The Club on Mysore road was always a supporter of us. Ms. Kusum was the boss and she had a soft corner for our team..Bacardi also became very aggressive and Mahesh Madhavan left IDV and joined Bacardi as their Marketing Manager.  

Bhanu Kaila was our on trade manager for Bombay metro...Bhanu did his hotel management from Oberoi and after serving them for a while came in to IDV...a great chef and with full of ideas..great energy and built a fabulous relationship with key on trade exploiting his 'Oberoi' tag well....after our ASM Bombay left-Deb Mitra, we transferred him to sales but he left us and joined Bacardi based at Blr....so IDV became a hot poaching place for competition and we have to protect our flock....

Bacardi took away Mahesh and Bhanu and that made Bacardi our enemy no1...Guys, Bacardi was more popular amongst Indian consumers than Smirnoff...so wherever they launched the product took off well....While there were lots of locally made vodkas which were quite popular and cheaper in prices available across, in the White Rum Category there were hardly any players...and that made life very easy for Bacardi...also largest selling international white rum and the consumers perception that white rum is better than dark...god knows what? But Bacardi is as good or as bad as any other spirit....IDV has to guard and protect our sales and keep growing SMV....with pressure on Green Label and also with so many brands, the team had to be always on their toes....In Maharashtra we could hold well in Vidarbha region but the rest of Maharashtra was always pressure selling. But we had some great distributors to work with. Pappu in Ulhas Nagar, Meher Irani in Pune, Desh Videsh in Nagpur and Dhanu in Kholapur....U'Nagar was the place where most of the distributors for Thane, Kalyan and Raigad operated from. Pradeep Kalani-a well known personality in the industry-had his bottling plant and also running the distribution of Shaw Wallace spirit and beer based at U'Nagar. Became very good friend. I still remember this episode. During one of my visit, I went to meet Pradeep to pick his brains on something....the moment you enter their office, a big bowl of dry fruits and nuts would arrive. Pradeep started cracking the shells of pistachio and within few minutes a hand full of cracked pistachios were handed over to me....I am mentioning this here as this is hospitality at its best. He was a competitor but the way in which they treat their guests is something one has to learn and practice. Also most of the retailers when you visit them wont leave you till you have something....All the guys in U'nagar known for their excellent hospitality. When you go on a market visit, most of the time the lunch is in the distributors home...Pappu was such a great host and his wife Neelima too....many of the guys I still keep in touch.

Selling was always a pressure....the billing used to happen till the 11th hour...tough on the factory guys but despite our best efforts we could not crack this last minute loading--almost 75% of the months sale used to happen in the last two to three days only. The reason being that our secondaries and tertiaries were not in line with our projections. 

Kerala was another night mare. KSBCL has some formulas for order placing......and our guys somehow could not crack the forecast and it was always the last minute rush and many a times we could not meet the last day of the month dead line....The permits have to be sent to the unit from Trivandrum and many a times we used to send our guy personally to the unit.....And the month ends were always pressure and tension packed. 

I shifted my family to Bombay in 96 April and the apartment where I was staying as a guest - Silva croft- was converted as my residence ....that was a great thing to happen. The apartment was on the main road with everything in close proximity. And we had a great time there...so many get togethers and the private terrace we had, was such a huge one and could accomodate around 50 pax...this was a real luxury... The only issue with that building was sometimes power outages and water. My son got his admission in Learners which was just a few steps away. Kiran Talcherkar, a great friend, helped us to get the admission. This school was run in an apartment but an excellent place for the kids. It was a star studded school....(Zeenat Aman's kid was there and also Nasurudeen shah's) just to name a few...run in to them quite often.

Changes were constant in IDV....IDV India managed to send its people on overseas assignment regularly. Tony George managed to get a job in IDV UK and he moved. That was a good thing to happen to me personally as we got Debasish Roy as our HR head...guy with lots of commitment in developing people...we jelled very well...Debasish and Veena, his wife became our neighbours in Bandra....Ashwin Deo another great guy, was seconded to IDV - Yangoon. 

Mahesh Iyer our first CFO quit and in his place we got Ravi Rajagopal from ITC. Completely different from Mahesh. Mahesh was just outstanding...he had a very pleasing personality and a very hard working guy. 

Before the prohibition was implemented in AP, we tied up with an unit in Vijayawada-Continental distilleries. It was a very small unit and we started bottling our Mens Club range there. I remember Mahesh Iyer preparing the 10 pages contract overnight in the hotel room of his where we were staying as the agreement had to be executed next day. The owner of Continental, Subba Raju, a fantastic person. Very rich but very humble and great soul.

We also roped in some great management trainees in Vivek Aggarwal-logistics-Ashu Kaul and Gaurav Sabharwal in Sales-Kamal Arora and Nihar Das in Mktg, Atul Chapparwal in Finance....All these guys are doing so great in their lives....Atul is still with Diageo managing Taiwan...Hoshang Mehta, Aparna Bhosle, Amit Mathur, Ritu Choudhry and Vibhuti Channa....a full fledged mktg team....

So life was hectic chasing volumes and office used to be some kind of hot oven....DR was always on a blow hot mode....month ends used to be very crazy.....but other days it used to be fun....

1996 was all about establishing our brands in Kerala, UT, Bombay/Maharashtra, MP and Goa....the second distributor in Goa was Mac Vaz....he was given only the international brands of ours viz Smirnoff, Archers, Malibu and Kelly's and the rest were with Rajan Lavande....Mac is a great guy to work with....full of josh and energy....we jelled very well. His wife Marusha another excellent person. We are family friends.

After Harminder left to start his own WS in Goa, transferred J Krishnakumar from Blr to Goa....every potential guy got an opportunity to prove themselves outside their comfort zone....

1997 turned the tables in both ways....Naidu came to power overthrowing NTR and there was buzz that AP would open up for liquor. I was in Kerala on some market visit and got a call from Ravi Rajagopal that I should go to Hyderabad pronto and meet the FM, who is his friends friend and get some first hand info. So I reach Hyderabad....first time stayed at ITC Kakatiya....and fell in love with that hotel...and the entire team...Gautham Anand was the GM and his entire team in the hotel were such wonderful people...I went and met the FM and he didnt give me a very assertive answer but kind of got the hint it prohibition would be lifted sooner.

We had a meeting in Bombay office and I was very buoyant...my pitch was that when it opens up, APBCL would have serious issues of providing stocks to the vendors as the local distilleries/bottling plants would not be ready to start the bottling at-least for a couple of months and added to that was the tender and price negotiation process of APBCL. So we decided to activate Khemani for supplies to AP.

AP announced the lifting of prohibition and things started moving very fast. Satyanarayan Rao was the MD and a great and clean guy. Submitted our prices and the tender, and was called for a price negotiation meeting. Went with Pavan Dave and I somehow didnt want to lose time running between Bombay and Hyderabad and hence compromised a bit and signed the price deal. I told the MD that I want 100k as the first order....he was stunned. He thought I was joking...I told him that none of his local guys would be able to meet the demand together and we can supply him from our Daman unit....he was very confused. And as expected, APBCL got in to deep problem as they could not feed the market. I got a call next week itself from APBCL MD's office and he asked me whether I was confident of supplying and when I said yes, he asked me to give a letter and released the order for 50000 cases but with a commitment, to release the next 50k upon reports on the performance of the brand at the retail level.

It was a hard task for us to organise this quantity as lots of things had to be managed. I rushed to Daman, met up with Ashok K and he was very happy to extend all the possible help. Dr. Puri head of manufacturing and Rajneesh Sharma the incharge of Khemani from IDV side were all on their toes and we started the production. We realised after starting the production that the brand registration for AP from Daman was not submitted and we did it post facto....And supplies started....

The same time, we also participated in the Kerala tender process and took the first order of 15000 cases all Green Label. Competition thought we had gone bonkers and the sales of whiskey in Kerala was very meagre and somehow I felt we can sell of these 15000 cases. Yogesh Gupta was the MD with Sashikant as the secretary and Prakash as the FM....tough guys but built a great rapport with them. They were only used to the local companies and dealing with an MNC and someone very aggressive was a welcome change for them. Sashikanth the secretary was good to talk to and he was quite keen to know how one can change the drinking pattern of the Keralites as they were drinking only brandy and rum....Challenging but we decided to bite the bullet.

So Khemani was under pressure to produce so much from nothing...

And we have to get the team in AP....KGR got relocated to Hyderabad and we immediately built a team....And appointed Sarathy of Anupama as our promoter. Such a gem of a person. He was also the promoter of Tilak Nagar but based at Vijayawada....this is where, in hindsight, our first mistake rather misstep.....

AP is something like this....The Telangana part, Royalaeema, South and north coastal. 

Sarathy was strong in Vijayawada and nothing in Telangana....also not very good in Rayalaseema....he appointed his own guys from coastal in Hyderabad....the dealers of Telangana are of different breed. A mix of Sindhis, Punjabis and locals....and the way they do business is different from the coastal and RS guys.....Sarathy didnt know how it ticks in Hyderabad and we had few members and were so dependent on Sarathy and his team.

Green Label started off very well...Prohibition was lifted in April and in August we did a redistribution of around 88000 cases in one month. When we started AP, DR threw a challenge at me that if I cross 100k in a month, he would send me along with family to US.....and there was world class selling competition by IDV and I was chosen as the winner and of course, DR kept his word and I went to US via London and Brussels on a 15 day trip all paid by IDV India....The launch of SMV in AP was another milestone....the launch party was at Grand Kakatiya with Sivamani's solo on drums....it was one of the best Hyderabad had seen....we were on a song but after doing 88k in August the volumes of GL started sliding....so many stories started on the quality of the product suddenly....as consumers were kept dry for almost 2 years and when the flood gates were opened they went crazy. A news item appeared in the local news paper, showing a dead man and alcohol causing the death...and beside the dead man was an empty bottle of GL....And competition fully exploited it especially McD....I would not say that was the only reason....we supplied AP from 3 different sources....and the Telengana trade didnt patronise our brands much as the market started getting flooded with all the popular brands in 3 to 4 months time of opening up and the initial craze on GL started waning out....and in North coastal and Rayalaseema we could not meet the syndicates demand and Sarathy and team somehow didnt put up a show/fight and in January 18, GL came down to 5000 cases!!!!

And Sarathy had Tilak Nagar and BDA and his business was good with OC and MH....and he started losing interest...(I repeat, he was gem of a guy but there are things which one cant do much...and GL was much beyond his capabilities....sad he is no more now). There was so much of negativity with in IDV due to this AP fiasco. In hindsight, I feel IDV should have reacted better but somewhere we lost it...After that it was just struggle one fiasco leading to another....we tied up with Adi Keshavalu's unit ( AK was a VJM's man-though he is from AP his main business was in KTK and he was exclusively bottling for UB and USL in his units in KTK) in Thirupathy and with a minimum volume commitment. Our volumes started plummeting and we could not fulfil the MGQ. We have to pay him despite not producing and that created a huge hole in our pockets....We closed continental after signing with Adi Keshavalu....our old gold also didnt take off in AP. The only saving grace was SMV...we were battered and bruised....the most difficult times of my career....team was down sized...meanwhile, one of our best ASE in AP was Satyapal Reddy....just a day before our sales meeting conducted in Hyderabad, I came to know Satyapal was involved in some business deal with the retail trade in Vijayawada....so called Satya for an enquiry and when asked he broke down and accepted and told me he had some money of his own and funded some retail guys. Then it stuck to me that this guy would do better as an entrepreneur and I was looking for someone smaller and better to take over our promotership from Sarathy....I asked him whether he would be interested to don the role of promoter leaving the job.....this happened in 1998....today Satyapal is one of the leading promoter operating out of Hyderabad.....

So AP was a disaster for IDV but Seagram (PRG) started gaining grounds and  so Tilak Nagar and BDA....I also made a mistake of recruiting a novice to head AP for us but didnt work out.....

Meanwhile, the other markets doing well and also IDV due to capacity constraints at our Nira plant, tied up with few more bottling plants and both self and Abhijit Dasgupta got promoted as VP Sales and CBU...I was given South and West and East and North with AD....not much of change in the job profile but work load increased. This additional responsibility of managing the 3rd party units helped as the buck stopped with us...and lot more learning on logistics and production planning.

Sanjit Padhi decided to leave IDV and joined Heinz...And we got the amazingly talented Sunil Lulla in his place. A man with so much of energy and sense of humour. He changed the entire mood of the office with his camaraderie across functions....he also brought lots of changes the way the marketing was functioning....and more than anything else managed Deepak well....

More next episode......