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