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

Episode 23...

IDV----journey continues....

Managing the international brands portfolio was a task with limited direct reportees. Though Sudeep, Ashu, Gaurav and many others were part of my team earlier but after this division, I found it a bit difficult to get their time and ears....they had their own priorities-first being the delivery of volumes of Green label and others. 

I was given the duty free business too for the entire South Asian countries...Sri Lanka, Maldives, Bhutan, Nepal and of course India.....duty free was big in terms of profitability and a big portfolio of brands.

I was asked to take over the DF business from Rakesh Chopra who quit that time for personal reasons...

Never handled duty free (DF channels are Airport duty free, domestic bonders who supply to consulates and embassies, Port shops, airlines operating overseas routes plus that time the GOI allowed the hospitality sectors to avail a %age of their forex earnings for their requirements of imported items). 

Deepak Roy wanted an intro trip to Colombo and that turned out be a terrifying one....just a day before our trip Colombo airport was bombed by terrorists and two Sri Lankan airways aircraft which were parked there were totally destroyed. We were to land there the next day evening. Those days there were no direct flight from Bombay...so we flew down to Chennai and to Colombo...landed around 1530 and what we saw at the airport was quite frightening....it was like a war torn....not much of passengers and our drive from the airport to the Hilton in Colombo was smooth but there was around 20 spots where our vehicle was stopped and checked by the army with machine guns pointing at us....this was quite frightening....a move by one of the inmates which causes suspicion could lead to getting shot at....till we reached the hotel, we didnt even speak to each other and sat in stillness....but people were moving and traffic was sparse....

My first visit with lots of expectations but everything got floored with this event at the airport and tourism dropping to its lowest as an after effect....whoever we met, were only sharing sob stories.....so started off with a not so great note....Rakesh was not happy leaving this plum post....and hence didnt get any great induction...and I was novice in DF and also dealing with plethora of Brits....under one room...all with a different accent...but as always a few of them became my good friends...the beauty was Alpha was also managing our SL domestic business....plus we had something going with ID Lanka (This was a JV between a local company owned by Mohan Dissanayake - a wonderful SL businessman and IDV) but somehow didnt progress well....Maldives DF was also managed by Alpha and the domestic too....

Bhutan was small and so was Bangladesh....Nepal had lots of potential both in domestic and DF but IDV was stuck with a local agent for managing the DF but domestic was in good hands...Nepal is a great market to work but DF at the airport was run by the government then ( do not know the status now) and it was just pathetic with empty shelves most of the times)...

So the induction was nothing great but I have to create a team asap in an area where there was no team and managed just by Rakesh. 

I have to convince DR on why I need people around and how the business can be improved...

1) Earlier it was just IDV brands and UD was managing their DF business from UK and one person used to visit the customers once in a blue moon as they felt the DF business in the Indian SC was different and didnt warrant their focus and time....

2) After IDV-UDV merger and becoming Diageo-the portfolio grew bigger and with JW coming in to our fold we were looked up....and the DF in SL was shaping up.....with Alpha putting in their expertise in making DF shops an experience for the passengers and the SL airport authorities realising the big buck in that....it didnt dawn on the AAI yet....so the Nepal and B'desh....

3) The bonders business in India and Colombo were also decent but were never focussed.

4) Despite the Colombo airport attack, I still felt we could show a 50% increase on the business with tweaking the supplies and regular follow ups with the operators that included ITDC.

5) ITDC was given to an agent whose job was to get the PIs from ITDC and the payments. HE was given a meagre amount for that....nothing else...no merchandise nothing.

6) I had no one to consult and no data....SL kept it closed to their chest....so I have to base all my strategy based on whatever knowledge I gained from my interactions with my customers and come out with a strategy....upped the numbers by 50%....just gut....created a position to manage SL....one at Delhi....one at Nepal.....and to look after all these guys one GM-DF based at Bombay....Initially DR was a bit furious but with all the logical explanation he approved it....

We recruited Arun Kumar to manage SAARC DF.....a nice, non controversial person with a great network with bonders and operators....but no experience with DF. But with his charm and soft approach he managed to get things done....

Promoted Jasraj and transferred him to Colombo to manage SL and Maldives.....A huge jump for him but lots of convincing required.

Rahul Kashyap - who was in Delhi domestic, transferred to my division and  was made to look after ITDC and Delhi bonders based at Delhi.

Ravinder Kaul new recruit for Kathmandu...

Yasmin to assist Arun....

A small team but to deliver triple size of the profit to India....

Fabulous guys....tough and unknown terrain for many of them....and a tougher boss...but managed and quickly learnt the nuances....Jasraj was a bit reluctant to shift as he didnt want to shift his family to Colombo but he settled down well.

Let me brief you all about this DF in these SAARC countries....

 Our move didnt go well with our trade partners...Alpha-Paul Topping the boss, expressed his concerns as he felt there would be too much of interference....they were used to run the business on their own-typical DF model and they have never experienced anyone looking at the business on a daily basis....brand owners or execs used to visit them once in a while--visit means--an hour at the airport shop on arrival, few domestic shops-meeting with the team-finalising the promo calendar, dinner and fly out....but some one based locally along with a visitor from India every month?....too much for them to handle....but we didnt bother....as we had a huge plan for Lanka....

It started off on a negative note with the airport bombing - Alpha was all negative about the business---they in fact started negotiating with the SL Airport authorities for a waiver of the fees and also cancelled some of their orders...but I felt, dont know why and how, that the business wont suffer long and hence decided to up our visibility and noise levels at the airport departure and arrivals ... a chunk of the airport departure business was by the 'kuruvi' guys (Kuruvi in Tamil but actually they are traders from Chennai and Trichy--kuruvi is sparrow-the quick flyers) -they would take the morning flight from Chennai-pass the immigration at Colombo (it was just a visa stamp on arrival those days), off load what they got from Chennai, which were primarily the spices et al and depart immediately taking good quantities of alcohol brands from the departure shops....they managed both the airports well....once in a while this channel would go quite but that would be very temporary....this channel was a huge contributor for JW.....we targeted these guys and made some fabulous offers and managed to get back our volumes.....Paul Topping was quite surprised and rather impressed that we managed our volumes well. It was quite a sight at the Alpha departure shop looking at these traders packing their bottles....one need strong arms to carry such huge baggage and that too as overhead baggage...its not just men even women 'kuruvis'....I used to be at the airport few hours earlier to observe this and to get some ideas.....These trading was typical TN centric....Chennai, Trichy and to some extent Trivandrum and mostly by a particular community from Chennai's Burma Bazaar.....the flight was just an hour from Colombo to Chennai and around 40 minutes to Trichy.....Jasraj was given a permanent visitor pass to personally manage this channel....apart from ours, on the arrival shop, Chiva's was gaining traction and Teachers due to its pricing and promos....We countered Teachers with J&B and B&W with some fabulous offers.... and in the domestic market we made the Alpha team to sweat out....the business was primarily from Colombo and very little from Kandy and Nuvaralia.....and the domestic business of Lanka was dominated by local arrack....

I enjoyed visiting Colombo as it was one of the inexpensive places and also Hilton Colombo was a great place to stay....everything is walking distance from there including Alpha's office. Food was not a problem. And I loved the Lankans.....excellent people to move with...the airport staff of Alpha were fun loving and ever ready to extend a helping hand. Paul Topping is a great guy to partner with. Full of energy and had his team's adoration and respect. Martin was the boss of procurement but was based at UK....another great guy to work with.

CIAL-the Cochin airport was managed by them. Cochin airport was the first airport built with private and government partnership. Kurian was the boss known for his clean image...Alpha entered in to an agreement with them as their procurement partner....The departure and arrival shops in Cochin airport were much better than the shops run by ITDC, those days in the major airports. So we built quite a good rapport with Kurian and his team too.

Nepal another good market but the DF business at the airport was in pathetic shape with the Nepal government not putting any money behind the business. We had an agent to look after the business but he was quite old and didnt want to leave the business....we had to be happy with whatever we could get...Domestic was also good....it was run by very professional guys-Indians but based at Kathmandu....good team to work with. 

We got Ravinder to manage this business....though it was small in numbers but fabulous bottom lines.....

Bhutan very tiny with airport duty free and domestic retail.....but very tiny....around 2000 cases per annum.

Bangladesh had lots of potential with bonders and airport duty free. Airport DF was run, again, by a government body and hence the potential was never exploited. The bonders business was small as there was lots of restrictions....but our agent Babu did a great job with his networking and perseverance. 

Maldives...Alpha had a hand here too with the DF business....there was no allowance for arriving passengers then and the security used to quite strict with arriving passengers. The business was primarily with the hotels and the rates were prohibitively expensive....small business but DF was decent.

Diageo appointed SANTAN...the company floated by Khilachands as the official importer of our brands.....earlier many of the bonders were buying directly from Scotland but we felt it would be better for the company to have one importer in terms of monitoring the movement and also feed the market well by keeping all the SKUs under one roof. But it had its own issues with customs....in terms of bank guarantee and processes....Nandesh, son of  Shri.Tanil Khilachand was made incharge of this business from their side. I must admit that Nandesh learnt the nuances very fast and did a great job.....

There was this RR international, a bonder based at Bombay. Anil Garg was the owner....when he heard that he has to start buying from Santan his requirements he went ballistic....one day he came to our office to meet me and when I made it clear that nothing can be done with this arrangement, he became so angry and said he would finish off me....but we became great friends after that incident. We had similar issues in Delhi too but Arun managed it well.

The bonder business was different...am talking about late 90s and early 20s....they were licensed to supply to the consulates, embassies and also the hospitality industry who had the license to sell and also the forex earnings and the governments subsidy....but some of the bonders went overboard and did all kind of  nonsense. The bonders of Bombay, Chennai and Kochin, and Calcutta the port cities were also indulging in parallel trading. Parallel trading is business transacted with customers who are not part of your beat....Diageo was very strict and had a department to look in to parallel markets and arrest free flow of stocks from markets which were notorious for such activities. But the trade kept flourishing and even today as this trade knows the trick well and would find its own way of managing it well. Initially there was lots of resistance from this channel to buy from Suntan but we managed to convince the bonders and after the initial hiccups, this got sorted out.

And airlines.....Air India, Jet Airways, Sri Lankan and Bhutan airways were some of the airlines which were under my beat....We managed this channel also very well. Airlines had two kind of business....the first one being inflight consumption and the second inflight duty free....I had posted sometime back how we managed to get in to Sri Lankan on board DF....pl ref that for perseverance.....

ITDC was another operator but their DF shops were not even in line with local standard. The shops were highly unionised especially their Bombay airport shops....they were more in to 'leakages' as the genuine customers never felt like getting in to the shops as they felt ITDC was selling fake stuff-the apprehension coming from the look and feel of the shop and the indifferent attitude of the staff....

But HO was different. There was a separate division handling this....I had the good fortune of interacting with some very nice and straight forward officers....RC Gupta, Dovell and another Bengali gentleman....I will in the next post talk about a major issue we as a company encountered with ITDC.....

Another episode worth mentioning here. Sometime beginning of 2000 immediately after I took charge of the international brands division, we had encountered a problem with Delhi excise. They suspended the sale of Smirnoff Vodka citing some anomalies....We tried out best thru the officials and also approached ' some kind of court' set by the Delhi government to look after excise related issues. But our case could not be heard as the position of the chief of vacant....I discussed this with our agent Deepak Talwar and requested him to get me an appointment with the CM of Delhi late Mrs Sheila Dixit....I got her appointment and met her at her home one morning. Such a wonderful person and pleasing personality. She heard me out and asked me what kind of solution I was looking for....I told her that she doesnt have the power to sign the revoke order and the only person who can do is the chief of the redressal court but it is vacant as the position has not been filled. She understood, called her secretary and briefed her. Believe me guys our issue got sorted in a weeks time and SMV hit the shelves. Our distributor for Delhi Brindco, such a powerful person, could not do anything on this....we lost a couple of months but just approaching the CM directly and representing our conditions, helped us to resolve this in no time.

If you are going thru this, pl make a mental note that most of the bureaucrats and the politicians, if represented well and if the issue is genuine, would give the solution and resolve. Its the mind set of us that doesnt allow to approach them and use different modes to fast track things.

In my tenure, YSR, Krishna and Mrs. Dixit have helped us to resolve the issues with out expecting anything in return. Many bureaucrats  have also helped us....we will discuss one such issue at a later post....

The 'international brands' division was set and things have started moving well and my team also started delivering. I got some great exposure in DF business and also the SAARC markets....

Diageo and Pernod Ricard, globally joined hands and successfully bid for Seagrams and got the company and its brands. The brands were split with Chivas going to PRG and brands coming to Diageo. That time there was a toss up between a brand which was of Seagram in Korea called Windsor and the entire Seagram portfolio in India. We wanted Diageo to take over Seagram India but one of our own guy, who was part of us in India in finance, played the role of spoil sport and let go off Seagram India to PRG for Windsor in Korea....we could not digest it at all and were left seething in anger and disgust....and the irony was that person came back to India to heal Diageo India....

And around 2002 Diageo announced their intent to sell of the domestic brands with the plant in Nira.....

This and more in the next episode.....

Till then stay safe and healthy!!!  

Delhi I had Alok and Amit Jaiswal to manage the international brands...Rahul Khashyap to manage the bonders and CSD....it was a small team but great guys to work with....

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

Episode 22...

IDV----journey continues....Memoirs.....Musings of a sales guy at heart.....

MNCs known for their mergers, takeovers, name changes et al. But when it comes to alcohol business in India, name change is a nightmare as 1) you have to get the local excise dept permission to change the name and 2) register all the labels once again with the new name 3) take those approved labels to other markets and re register them and 4) huge write offs....serious nightmare.

So just beware of this if any of you or your bosses or the company you work for, contemplating name change.....

IDV (the one I joined in 94 and the first Liquor MNC to start ops in India) merged with UDV....IDV was the makers of Smirnoff, Bailey's, J&B, Archer's, Malibu, Gilbey's et al. UDV was the biggest player in the industry with Johnnie Walker as their lead brand and with Bells, Dewar's and many more....and Guinness was another brand. After the merger it became Guinness UDV and there after Diageo. United Distillers India ltd (UDIL) had a JV with USL on a 50:50 partnership and launched Black & White n Vat 69. USL wasn't happy with this development of IDV and UDV merging globally as USL felt very threatened that this IDV-UDV combo would make their life difficult. They also used UDVs clout in bringing their own Black Dog in to India as BII. UD India launched Black & White and Vat 69, both were well known in India but didnt make any headway and lost in the race to Teachers and Seagrams 100 Pipers.....Vat 69 was one of the most desired scotch whiskey brand in India pre 70s with majority of the movies this brand getting huge visibility....The UD:USL JV changed the bottle shape to kidney shape instead of the original round one....This was a bad strategy by them....God knows what made them to go for a new bottle in India....Could be one of the reason Vat didnt become the first choice for consumers....100 Pipers and Teachers Highland cream grabbed the opportunity and became highest sellers in the BII scotch category. IDV failed with Spey Royal and UDIL was stuck with the USL sales force for pushing their brands but USL team had their own pressure with volume brands and hence could not take these two brands of UDIL to the top slot. We inherited these two scotches in India and these were bottled in the USL plant in Nasik-Maharashtra....and the bottling of these to be continued in USL plant due to some contractual obligations and that put some extra pressure on us. A bottling arrangement and with USL and managing production in another unit.....and delivering the volume commitments...added to our headache...look at the complexities....nothing came to us with a silver spoon (whiskey glass)....and the beauty was that we also got the entire portfolio of UD scotches....that was a dream come true for the entire team and especially to me as I was a big JW Black fan always.....we also got Gordon's gin and Bombay Sapphire....fantastic portfolio of brands and the work started.....These brands were the aspirational ones for our Indian consumers but due to high taxations and complex RTMs the availability and accessibility were the issues. The highest sellers at the airport DF shops were JW Red and Black. At the diplomat supplies, though small quantity, the huge sellers were UD brands...so in popularity chart these brands were something we can say, 'owners pride and competitors envy'.

We will touch upon this later. 

As things were moving, got promoted to the level of VP. Abhijit also got promoted. New persons in HR in Roy Joseph and in marketing too a completely new team with Anupam Datta replacing Sanjit....Ashwin left and so as Mohita....DR recruited Abhijit Sanyal as COO. Both self and ADG were asked to report to Sanyal...a bit tough but we did....Sanyal-well educated, articulative with great FMCG experience but as seen, liquor was a bit baffling for many of these FMCG guys and many quit the game before even understanding the depth of the water. Anupam Datta as head of marketing...with great pedigree..but was found wanting in peoples management...but he had DR's ears...So we had two Bengali Babus-one managing the sales and marketing and another marketing....Sanyal struggled really to understand the forecasting model and also the complexities in RTM...Anupam thought if you put money behind ATL brands would start selling...but Anupam's downfall started when he invented something called 'claytoon' for SMV.....claytoons are cartoons but the characters made with clay.....this commercial, god knows how he got the approval of the international brand manager of SMV and DR- got bombed on day 1. When we saw that, we mean, self, Sudeep, Gaurav and Ashu, we uniformly felt this would be suicidal for SMV especially when Bacardi was scaling up and went straight to DR and conveyed our concern-- but DR didnt do anything and went ahead....SMV was the most premium Vodka in India and was making good progress and the positioning was also premium....but this claytoon commercial didnt depict any of the premiumness....another stupid experiment which failed before take off....waste of money and time....

Alok Chandra joined us to look after the Cinzano portfolio...Cinzano was an aperitif.....Martini was the leader in that category and Cinzano was tiny compared to Martini (remember James Bond's famous lines....stirred not shaken...the cocktail made from Vodka and Martini...but both were Italian....The presentation was same as International but contents...no comments....the market didnt respond well to this brand as India was not ready yet and Alok didnt have any heavy marketing budgets to support this brand...so another brand in our basket with hardly any support....confined to metros only but with unjustifiable volumes....

Our Indian arm bought over the shares from Polychem Khilachands and became 100% owned by Guinness UDV....

Rodney n Sridhar got promoted in finance.....Sudeep became head of West and South....Ashu was in charge of Maharashtra....Gaurav got transferred to Delhi....Recruited Ashish Monga as ASM for Bombay city....( his interview was a joy....Ashish a typical sales guy-aggressive and go getter....in the interview I asked him about his hobbies and he said he sings....I asked him to sing and he did so without any inhibitions and some medley of Kishore....got the job)...Team was well set and but it was always a struggle for volumes...

DR recruited Sunil Sethi to manage the international brand portfolio as MM....But though the portfolio was big the numbers were too small...Sunil S is another great guy but he was not given enough meat...

Rakesh Chopra was managing overseas business that included the DF and domestic in Gulf....senior guy and good in his work. 

SMV was doing well but due to pressure from the Green Label the team was unable to do justice for the brand...not only SMV but also the BII scotches....

Changes in UK too....Ivan took charge as the chief of developing markets and India came under him. Such a great guy to work with...very soft spoken but with very clear vision and assertion. 

The talks on selling of the Gilbey's portfolio started but as rumours. Meanwhile he suggested in one of his visits to create separate team for International brands to manage the RTM better. DR called me and told me about the proposal and I pounced up on it and informed him that I would like to handle the international portfolio....including the Duty free....sometimes in life, you wonder what makes you to say or act in a way which you have no answer....this division of FF was a major stepping stone for me...I was given a very small team...for example, some 3 guys in Bombay, 2 in Delhi 1 in Cal and for DF one person in Delhi.....and I was given the task of managing the rest of the country with the domestic brands team-the domestic brands team was headed by Abhijit Dasgupta....all the RMs reported to Abhijit....that was a high pressure area as selling green label and other brands was quite tough....so getting their time was perpetually an issue and managing ADG....

An interesting story here....Bacardi launched the Bacardi breezer in India and started off in Goa....the initial response was stunning as the whole trade started talking about this RTD...the first one in India and bottled in India....though Diageo had Smirnoff Ice an RTD which was gaining global visibility in US and in some European markets but never seriously looked at it for India....there was so much of buzz in our office and everyone wanted SMV ice to be launched in India. But what about production facility and capabilities....you need to invest huge amount....so someone suggested that we would look at the BIO (bottled in origin-import) route and test market it....with the import duty and taxes the MRP for a 300 ml was coming to around 230 vis a vis Breezers less than 100.....I was completely against it as it wont give us any kind of understanding and clarity on how to go about it....So I told them that I want to spend some time in Goa market to understand this better and revert with my proposal. Spent few days in Goa and my take was that since Breezer was some kind of novelty everyone was going for it but the male drinkers were adding a shot of Bacardi Rum in to the breezer and drinking it as Breezer per se was sweet and not giving them any high....it was just a fad....

Globally SMV launched SMV Green Apple flavoured vodka and it was decently received. I put up my proposal after speaking to Sudeep, Gaurav and Ashu that we should go for the flavours instead of RTD for two reasons....1) the cost factor and 2) brand contribution and 3) Fast turn around.....

Also just a few months earlier we came to know that Seagram was planning to launch an international vodka brand called Fling....we realised Fling was nothing international and not selling anywhere...but knowing Seagrams and their success ratio, we didnt want to take it easy....we felt that they would go to the market with 'the first vodka in India with grain spirit'....but SMV was with molasses spirit...though technically there wont be any major difference, it could make a difference in terms of consumers perception....we wanted to move fast and change the spirit for SMV from molasses to Grain...mind you guys it is not an easy task and 20 years back grain spirit was produced in India by just a handful....we picked Kedia in Indore, signed an agreement with them for grain spirit, moved really at a hectic space and launched SMV with grain spirit and created so much of buzz before Fling hit the market....We also sent a message to the trade in Bombay and Bangalore that Fling was not at all an international brands providing all the factual data....Fling bombed and we slowly moved SMV across India as grain based....we launched SMV in 94 and around 2001-2 we moved to grain.....

Coming back to the Breezer fight, somehow I could sell the idea of flavours to the management and we launched SMV Green Apple and I think Lemon with in 6 months....this became a big hit as our USP was that no additives required....just soda or water or ice cubes.....today almost 75% of the Indian Vodka market is dominated by Flavoured Vodka only......the seed was sowed by us and our brand development team with the manufacturing did a great job....

The learning from the above two episodes...do not go after competition....go after your strengths....and understand your weakness.....the SMV flavours is a great lesson and also preempting competition with Grain SMV.....

The international brands team...I organised an ice breaker meeting at Goa with key distributors and our team....under DR and Sunil Sethi.....that was more to get to know the portfolio and RTM....the distributors were quite thrilled as they would be dealing with the dream brands....

We also appointed the Khilachands as our exclusive bonder to import and sell the international brands for better management of RTM.....

This and more in my next post...

Till then happy reading and be safe....

Cheers