Memoirs.....Musings of a sales guy at heart.....
Episode 33...
Its Flemingo times @ Amchi Mumbai....(the shortest stint)
After so much of dilly dallying finally said bye bye Dxb....2005 Sep to 2010 May.....5 years of great life, learning and lovely friends...and of course, prosperity....
Flemingo International was an upcoming organisation...from just a trading house based at Dxb, to travel retail was their business strategy and they had already sowed the seed in smaller airports across India and tied up with WDF to manage their back office in Mumbai airport....The duty free retail in those airports Flemingo started was 300 to 500 sq ft area....the focus was primarily on arrival as shops in departure could not attract any footfall due to its un-appealing looks of the shops.....the company was started by Mahendra Thakkar and Rasik. They got a license to operate a DF stores in Kenya to start off and also set up a trading house in JAFZA, Dxb. Viren Ahuja and Atul Ahuja-brothers, from Mumbai took a stake in Flemingo and started expanding. In fact, Atul asked me to draft my own appointment letter as we had such a great relationship...I was also asked whether I would like to be based at Dxb or shift to Bby...I opted for Bby...Though I have gained lots of experience and did fairly well with the DF business both during Diageo time and W&M, never done any financials for this business and hence didnt have a clue how the bidding was done to acquire the shops and on what logic/basis....
Shifted lock stock and barrel to Mumbai.....Got an excellent and spacious apartment on rental, in Raheja Chembur....self and wife went to see the apartment and while going up to the 7th floor met my great friend Rajashekar's wife Lalitha and the moment I realised they were also residents of the same place, we decided to pitch in for the place but we learnt the owners have already committed to someone else (this has been the case always)....the apartment was owned by Transworld shipping CEO and Sethuraman was the chief of their operations in Mumbai. Went and met Sethuraman and become instantaneous friends...he somehow managed to swing it for us....but the place was barren - just the walls and they used all their might and got it furnished in no time....Such a wonderful apartment...
Started off with Flemingo on 2nd May 2010.....My friend and ex colleague of Diageo was with Flemingo for almost two years. He joined Flemingo after the 'episode' with Asif Adil the then CEO of Diageo India....Diageo India got Asif Adil after Ravi Rajagopal. Asif was ex Mackenzie....Diageo had lots of expectations...the Mackenzie aura he carried....there were lots of issues and rumours on Asif which I dont want to get in to but one thing stood out...Stuart Fletcher was still the head of the emerging markets and Asif was reporting to him. Asif got quite close with the Sr Khaitan of Radico and when Stuart visited his office and later dinner in Sr Khaitan's home in Delhi, he was totally floored and Diageo India formed a JV with Radico and launched Masterstroke a super premium whiskey in line with Blenders Pride...they got Shah Rukh as the brand ambassador and spent a huge amount....but the product bombed the very first day....didnt understand even today the logic behind the JV...Diageo burnt their fingers once again in India...During this period, Nalin Garg, Sridhar Iyer, Sudeep and Krithi have all become Ex Diageo....Nalin joined Coke and went to US....Sridhar joined Pfizer as CFO and later became the CEO of Pfizer....Krithi went to Flemingo and Sudeep joined Kyndal a company floated by Sid Bannerjee....
Krithi was instrumental in getting certain work culture in Flemingo India....he got a bit edgy and joined David Lee's company to look after India RTM...David Lee was the most trusted distributor of Diageo in this part of the world, based at Singapore.
Flemingo was full of veterans....Ayyaswami, chartered accountant and was on board of Flemingo as an advisor....Viren was totally dependent of him and would not take a step without his clearance. Viren was pumping money and Atul was running the show, of course with Viren's nod on everything....Viren's brother in law Thimmaiyya was the operations manager for India DF shops..the brothers are very down to earth and fond of south Indian cuisine especially the idli, dosa and vada stuff.....Raghavan, another veteran was their chief accountant. The office was in Navi Mumbai and hence home at Chembur was the right choice...they also had a huge canteen where lunch was served for everyone....I was given a small cabin in their office...nothing fancy but a functional place.
The very first day I assumed office I got a call from Rahul Khashyap my ex colleague from Diageo (and like an younger brother to me) who was trying to settle down in Colombo and was eyeing some opportunities. He shared with me the news that the airports authority of SL was considering a second license at the airport and he would like to pitch for it in JV with Flemingo ....Of course Flemingo was interested and we called Rahul for a chat in Mumbai. Rahul also wanted a partnership in his domestic distribution trade....the talks started....meanwhile, we got another lead from Colombo and Flemingo wanted to pursue that.....self and Viren flew to Colombo and met up with the lead who took us to meet the President and pitched for the shop....It was in his home and he was in his jogging attire with a news paper on hand....There was huge security cordon but the meeting was very cordial but he didnt make any commitments...we did our job. Our local man took us to meet the other officials and also served us break fast in his gosala....very pious person....I met Rahul before we left and briefed him as I didnt want to keep him in the dark....
Things started moving fast and guys, hold your breath....Flemingo got the license....My contribution to Flemingo in a big way....and had Rahul not called and spoken to me and shared this, we would have been in dark and this would not have happened.
But Rahul was left high and dry and I have to apologise to him. And I felt bad as it was Rahul who was instrumental in sharing this confidential news but Flemingo didnt do a thing for him. Meanwhile, Rahul was coming to Chennai for a day and as he was still struggling to get some business going, I told him he can stay in the guest house of Flemingo in Chennai. This happened in the afternoon and I have informed Atul and also left a word with the care taker of the GH. I was attending some program in the evening in Chembur and got a call from the caretaker, that Thimmaiyya has told him not to entertain Rahul. I have a short fuse and this infuriated me to hell...I called Atul and vented my anger....I was told, since Thimmaiyya was not comfortable with Rahul and felt he would get privy with things in the GH and hence didnt want him to stay there...I was speechless...its a guest house man....what secretive things would be in a guest house...I had stayed there a couple of times and its a two bed room apartment on top of Flemingo's office and nothing secret was ever kept there....I pushed my way and got Rahul accommodated there...realised that moment that am dealing with a family run business...
Meanwhile, I pushed Flemingo to keep a feet in the domestic business too....the reason being duty free and trading is not permanent...as the airports authority go for new bids every 2/3 years....and a foot in the domestic business would always keep the cash box ringing....
Roland Abella was transferred to India as CEO from Middle East....Asif Adil was asked to go and Roland came in his place. I met up with him and we decided to bury the baggages we were carrying on each other (remember Roland making me redundant)....he also assured me that he would favourably look in to for any worthwhile proposals both in DF and domestic....it was a good meeting.
I also wanted Atul to know about domestic and hence requested my ex Diageo colleague Sandeep who was in Pune and was in between jobs to present a white papers on domestic distribution business in Bombay and Maharashtra. Obviously it requires gathering lots of info and assimilating the same and presenting...I discussed this with Atul and made it clear it wont come free and offered Sandeep a lakh of INR for this work and if things materialise he would also get placed with Flemingo. Mind you guys that no one in Flemingo had any clue about domestic business and I was the one who was pushing this...I also realised am the lone ranger as domestic is long term, involves dedication but on a lower ROI compared to travel retail but its long term and with good brands this vertical can stay on its own. I was not looking at only Mumbai but also other parts of Maharashtra using Flemingo's relationship with major players a la Diageo, PRG, Bacardi and Brown n Forman....
I wanted Atul to get some inputs on this and hence organised a luncheon with Deepak Avtramani of Candy wines, one of the major distributors in Mumbai and well respected and regarded by the trade, and also a great friend of mine, right from my Herbertsons days. This meeting turned out to be disastrous and Deepak's inputs were taken out of context and Atul didnt show any interest after that....and also his accounts department sat on Sandeep's payment. I put pressure but nothing happened. So, I sent the lakh of rupees to Sandeep personally from my account. Another set back for me...I am sharing these just to make you aware that one has to be absolutely clear in terms of getting the buying in of the owners and in writing to avoid these kind of embarassments.
Meanwhile, another development. Rasik of Flemingo Dxb got a contact who claimed that he could get them entry in to the Duty free operations in Indo China....consisting of Cambodia, Laos and Vietnam. The DF operations there is different. Apart from the airports (not very big barring Vietnam) there were huge DF stores in the borders of Cambodia and Laos....You should know the geography of this area to understand this. These countries share borders with Thailand and Vietnam. Vietnam's local taxes were high and hence the border shops did a roaring business. These are the major RTMs. I didnt know much about these but learnt it very fast. The first trip to Phnom Penh, capital city of Cambodia....I have to first fly to Bangkok from Bombay and then to this city....We spent some time with the contact of Rasik there and visited some shops locally and in Cambodia border....Rasik is an expert when it comes to perfumes but not alcohol. And a wonderful person...calm and composed. On the second day, our contact told us that we should visit Ho Chi Min City in Vietnam and meet up with a potential partner...next day we visited the Vietnam embassy in PP and somehow managed to get the visas thanks to our local contact....So over to HMC.....met up with the contacts.....so the next step was that yours friendly has to come back again and visit the border towns, shops and also Laos and come out with the strategy...
This I did religiously....our local contact ( a Russian by name Sergey) organised the vehicle, driver and his secretary to accompany me in the entire journey....Cambodia-Vietnam border and Laos Vietnam border. The journey would start after breakfast and go on till late evening. We used to stay in small places in the night and travel next day. Sergey's secretary, a local used to carry fruits and nuts for me as she was told explicitly clear that I would eat only veg....the problem with Indo China, apart from the capital city, you wont get veg. In one restaurant I asked for a veg soup....when it came I didnt like the flavour...and language was a huge issue. I went to the kitchen and requested them to show me how they make veg soup....very simple....soup in this part of the world is their staple and would always be in a ready to serve form boiling hot with meat inside....for veg they just remove the meat and serve (!)....so soup was out....I started carrying the yogurt with me and mix it with hot rice and manage....but it was fun trip....absolutely fertile land with so much of water.....the Mekong river....it flows through the entire Indo China and wetting the lands and make it so fertile....
Dao Heuang group was operating the border DF shops and owner is a Vietnamese lady but settled in Laos...one should visit these shops to believe....each shop, as big as a wall mart stores....huge....with well trained and well uniformed staff with all the global brands in the son display....for someone visiting these shops it would seem as just duty free but their business model was based on the demand from the domestic Vietnam....as the taxes in Vietnam was very high, these shops catered the bootleggers to smuggle it in to Vietnam. JW Gold Label was quite popular there...remember Gold label 18 to JW Gold Reserva story in the last post of mine...JW Gold Reserva was created for this market to replace the 18YO.....
Coming to business...Dao-Heuang group....Yes, they are big and how do we get our foot inside? What's the irresistible offer Flemingo can bring it to the table? (to be frank there was nothing Flemingo could boast of other than their relationship with the biggies a la Diageo, PRG and et al...And this group was heavily dependent on David Lee, Diageo's most trusted distributor based at Singapore and an RTM expert...I visited almost all their DF shops across the borders and there was no doubt in my mind that Flemingo should somehow get in to this group as a strategic partner and our agent Sergei got us an appointment with the owner...the lady was the most powerful and her daughter was assisting her in procurements....Self, Ayyaswami and Arjun (Atul's son who was getting inducted in to the business) flew down to Vientiane the capital of Laos.....the lady was very superstitious and we came to know during our discussions that she goes with the compatibility factor of the zodiac signs matching as per the Chinese system(!)...She asked for our DOBs and mine matched with her and she gave me a nod and a wide smile which meant that we can look at the opportunities of a JV....we discussed in length and I insisted that the MOU should be signed 'here n now'....Ayyaswami got it done and we signed the MOU....but the moment David Lee came to know of this development he used all his might and stopped the progress of this JV....Sad we wasted so much of time....
Another great contact was David Sim....A Singaporean who established business interests in Indo China....
I introduced my WnM domestic distributor of Turkey to Atul and Flemingo formed a JV with him for Turkey....I think it is still continuing....We also explored many more possibilities including Mauritius... Viren one day asked me to assist a start up distillery in TN and next 2 months I got sucked in to it....cant say more than this...
Sudeep and Krithi were also based at Bombay....One evening over few drinks Sudeep opened up about the opportunities in TN in the alcohol business....After ages, the then DMK government in TN (2009) gave few licenses in TN....Kals, SNJ, Golden Vats and Elite....Radico Khaitan launched Morpheus and Kyndal launched Bols thru 3rd party manufacturing in tie up with SNJ....and these brands started doing well as after decades the consumers of TN got to see some new brands in the shelves....and Sudeep was witnessing the huge margins being retained by these companies....He suggested we should form a company and start in TN....(the seed was shown by Sudeep)...Sudeep had his own axe to grind with Sid and I was not enjoying my time with Flemingo...Krithi was happy with his job and working for David Lee....I felt I was heading nowhere as the atmosphere in Flemingo was different-Atul and Viren was very supportive but they also didnt know how to utilise my skills....so when Sudeep suggested that we should look at starting on our own and get an entry in to TN to start with, made me to get excited....
I joined Flemingo on 1st of May 2010 and in just 5 to 6 months time, got them the Colombo DF, Tie up with the Turkey domestic market with a local partner and also helped their friend in TN on the start up of the local bottling. I discussed our foray in to manufacturing with Atul and Viren and slowly got myself relieved from Flemingo...
My stints....14 years with UB group....14 years with Diageo......3 years with W&M but just 5 months with Flemingo....Any way my destiny was to start something on my own and it started with Sudeep sowing the seed......
Exciting times ahead?????
to be continued.....