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

Episode 38...

SNJ and our tryst with them.

SN Jayamurugan is the owner of SNJ distilleries...he was in to lottery business and was quite successful too. He produced two movies where Karunanidhi the then CM wrote the story and dialog and he became close to him. He got the bottling plant license and also the brewery license along with Elite and Kals...

Jayamurugan is not the typical corporate guy....though he is from lottery back ground his grasping is fantastic and he learns the nuances fast. Always smiling and open. But inside a shrewd businessman. He recruited the right kind of people and many of them are still working for him. He is a hands on person and hence learning happens super fast.

In the 36th episode I spoke about tie-ing up with SNJ for our Le Roi' brandy.....it took off well with SNJ team also managing the distribution. This was our understanding with SNJ while singing the deal with them but within around 3 months we realised this was not going to work out.....so we transferred the distribution to our own team but the volumes were not as per our expectations due to the initial goof ups by SNJ sales team and also the negativity created on the honey comb design on the neck....we ended up changing it ultimately....we still were doing some decent numbers but wasn't consistent....As we experienced with others managing production and getting what we want is not easy in TN.....We really struggled and due to the initial issues, the brand also didnt take off as we expected. Probably doing the distribution ourselves would have given the expected numbers to us. Brand came down to 2500 to 3000 but with constant push for production with SNJ. Since the bottom line was nothing great we also could not invest much on the brand. Our team had Hobsons from SAFL, Clovis from MBDL and Le Roi' from SNJ but due to inconsistent supplies protecting our consumer base and growing from there was the task faced by us....

Le Roi' presentation and product was great in its price segment. We launched this cross line Mansion House-slightly expensive....but in TN due to the issues we faced with 1) distribution which was managed by SNJ, 2) dust forming on the neck due to honeycomb design-but we felt it was more of an issue created by SNJ and 3) inconsistent supplies....even after taking it away from SNJ we continued with the issues....went on for sometime and we changed the presentation...the label and mono carton and bottle all got changed....this gave us the required impetus with our team fully driving the sale but our projected volumes were always elusive.

SNJ has also launched many new brands of their own and started driving them hard...suppressed the sale of Morpheus and Bols and started promoting British Empire which they launched in 2012....though this brand was not the choice of consumers, by cutting down on Morpheus and with the strength of their huge volumes, they somehow managed to get volumes of British Empire. This also proves how important to have own bottling plant in TN. When you are a player in the cheap segment, you can manage to sneak in some volume for your premiums.

Also suppliers play a game by supplying good volumes of their premiums and when it gets stuck at the retail more than 90 days, while TASMAC debits you for demurrage, they also curtail the outlets buying any premiums and thus making the retail push the ones which are stuck with them. This means even if there is demand for my brand, the retailer wont buy till he clears the stocks stuck with them. This is a major dampener for small players like us. SNJ managed to get Morpheus from Radico on Royalty basis like what they had done with Bacardi.....so SNJ business model is simple....use the Indian and International brands to get the image and use it to push own brands....this has clicked for them well.

Around end 2019 SNJ started really squeezing our volumes and after things opened up in June 2021, I met up with him and pleaded with him to allow us to get around 3000 cases per month till March 22 and after that we would shift to another bottler. He told me we should shift it to MBDL and said he would give us the NOC to shift. But before the NOC our accounts have to be settled and it took some time and after hard bargains, we got our accounts reconciled and got the NOC. We signed with MBDL under the new management and along with the NOC gave the required letter to TASMAC. Ashok Kumar was the ASM then and he was chasing it but somehow it was getting delayed.....we wanted to get the approval and the required GO before the assembly elections in 2021 but despite efforts didnt happen. Its still pending....what should take just 15 days or a maximum of 30 days has taken more than 2 plus years and it is still WIP.  A brand which has the potential to do around 20 to 25000 cases is stuck due to procedural delays (this is as on 8th June 2023 (!) 3 years and still counting.

Someone called me the other day and asked me why am sharing these info in public domain. Am doing this because if you are still in this industry and looking at entering TN with a bottling tie up you would come with a clear understanding....ie the idea and also to make everyone due to the protectionist mechanism the bottlers in TN have an upper hand...

The local bottlers have a field day and its all about managing the environment and the logistics. If you visit any TASMAC depot you would find number of trucks waiting there for their turn to download the stocks....The sales rep of the company's main job is to release their trucks asap and also ensure their stocks are liquidated....Since most of the times and especially for Hobsons, our stocks are sent in a combined truck and that adds to our woes.....

2012 we launched Hobsons in TN and since then we have launched Clovis, Geo's Clovis, Wassup and Le Roi' in this market. Our brands are world class in presentation and consumers choice....

We started with SAFL team to distribute our brands....later when we launched Clovis we created our own team....again to another promoter in Happy Wines Anand of Pondy....after this it was through our team till Dec 2019 when we appointed Parthasarathy as our promoter...this coincided with the bottling of Geo's Clovis and Wassup in MBDL, and this arrangement is still continuing.

Our first ASM for TN was Viswanath then it was Jai Mohan....he stayed with us for few years and after that it was Ashok....today we have KGR managing the entire business with just one RSE....

TN is our highest volume generator but with thinner margins compared to other markets.

My hope is that TN also would open up like other markets and allow national and international brands to sell here..and also remove all the long processes for a product to be launched. It should just be registration with Excise and approval of TASMAC. 

We can only hope....

We will look at the UT of Pondy in the next blog....