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

Episode 39...

UT of Pondicherry......

I have a special liking towards Pondy....my first visit to Pondy was when I was working for Selco Marketing Pvt Ltd based at Trichy selling a concept called Jackpot Bonus stamps....After successfully launching it in Trichy and adjoining areas was sent to Pondy to study the market and launch it there....I reached Pondy by bus from Trichy and after visiting customers and getting some positive response, some one told me that I should not leave Pondy without having alcohol....mind you guys those days TN was dry....So went to a small bar on JN Street end almost near the sea....and my first drink in Pondy was a bottle of beer called Burtons Export Lager from Khodays.....I still remember paying INR 2.50 for a bottle of beer.....those were the days my friend....

During my Herbertsons days I was given UT of Pondy and KKL too....but those days the market was very small. IDV/Diageo days launched all the brands in the UT....I always enjoyed my market visits in Pondy, Mahe and KKL....private retailers, warm and friendly and consumer driven. In Herbertsons Mahe was handled by Kerala due to its proximity...My first visit to Mahe was as RM of HL....this is another market which is very interesting and exciting to work. Yenam, I got familiarised during Geoscope days only but Yenam is totally different from rest of UT....

Coming to Geoscope, as mentioned in my earlier post, we launched Geoscope with our Hobsons in Pondy as TN was getting delayed. We tied up with Gemini Goa and stocks were exported from Goa to Pondy, Mahe and Karaikal. Launch of Hobsons was sometime in June/July 2011.....we were quite thrilled with the response we got from Pondy....Pondy and KKL can be classified as 1) local consumption (predominantly cheap and up to the medium range of brands in terms of price points and not so much of premiums), 2) Smuggled outside (based on demand but primarily from the border areas of KKL and Pondy) and 3) the visitors (visitors from other states go for premium brands and if they are from TN they would opt for brands which are not available in TN) The visitors business is a floating one and confined to few outlets only, both in KKL and Pondy. Also the smuggling is seasonal and mostly cheap. UT of Pondy had an USP of low prices in the region, across categories - be it alcohol, consumer goods, electronics, vehicles et al....but with the introduction of GST that USP is almost gone except 4 wheelers where the road tax you pay in Pondy is still comparatively low and to some extent alcoholic beverages. Mahe is also similar but apart from local consumption, there is lots of influx from the border towns adjoining Mahe. There is also some smuggling which goes out of Mahe and also people carry by train and buses....but the Kerala government tortures the bus passengers and even if they are carrying a couple of bottles for their personal consumption it gets confiscated and sometime a penalty too....I am surprised why no PIL is filed against this unfair practices of TN/Kerala and AP excise departments. While smugglers should be penalised heavily and even put behind bars, the regular travellers and consumers who carry a couple of bottles for their own consumption should not get ill treated and tortured. Pondy/Mahe/Yenam/Karaikkal are all part of India only. Air travellers used to carry 5 bottles from Delhi domestic departure lounge when the prices and offers were so attractive....the Chennai or Calicut or Vijayawada airports didnt stop them nor the respective excise departments. This is nothing but humiliation of a genuine consumer.....its time the GOI or the judiciary come out openly and allow the travellers to carry bottles for personal consumption. I can carry even a couple of boxes when I come from Bangalore and no one stops or cares but only from UT....and currently the UT prices are not attractive also except cheap liquor.

Anyway coming to the Geoscope journey....Hobsons and Clovis got fabulous response and based on the feedback we also launched Le Roi'. Le Roi' was launched in 2012 just before Diwali and normally after Diwali the alcohol business becomes a bit slow in Pondy and KKL and LR took the brunt of it....also Anand of Happy Liquors our distributor was unable to do justice for our brands as he was inundated with plethora of brands and was confined to selling what was demanded....we appointed his brother Selvam in KKL and it was nightmare dealing with him. Getting the payments were quite a task....so we decided to do away with both of them and after ensuring our OS are collected we changed the distribution to Mani of Standard wines and in KKL we appointed Ding Dong ---Babu and Senthil partners in Ding Dong were just beginners in this distribution business but I felt they had fire in the belly and transferred the agency to them. Also they had few retails of their own under their belt and a good team. The business in KKL started picking up for our brands. We also had our TSE based in KKL. In Mahe we were dealing with Sastha, managed by Sujith and Venu....they had around 8 outlets of their own. What it used to be in HL time and Diageo time in these markets changed rapidly with individuals taking over outlets either on lease or outright purchase and started forming groups. In Pondy there are around 5 group shops each having between 4 to 10 outlets....and if any of them also have a WS for example, Clinton and Happy, they push their own brands in these outlets and if your brands compete with theirs, you wont get an entry...even if you place your brands using your personal relationship or the brands is powerful, they would ensure the competing brands are suppressed. Also they demand huge and unimaginable discounts. Karaikkal also had around 3 groups of which the Rasi group was more powerful and very whimsical. Selvam of ANS kept taking up outlets on lease and those outlets the entry was becoming tougher.....

Mahe is no exemption....as mentioned, Sastha had around 8, Krishnan had around 7, Jairam of NFLS had around 8 and Kakat group around 10....getting entry and push from these outlets were quite a task. Out of 65 outlets in Mahe around 33 were group shops....

Yenam every WS had their own shops plus individual shops. The problem with Yenam was the monthly quota. The WS cant not lift more than their quota. This quota was fixed few years ago by AP as the AP excise felt the stocks meant for Yenam was getting either dumped in AP en route or sold primarily to AP consumers from the shops in Yenam. The WS of Yenam had to agree to this unfair trade practice imposed by AP excise and this is still continuing.

We changed distribution but it didnt work out. We could have probably given more time to him to settle down and get used to our way of working and understanding the strength of our brands but we made a mistake by removing him in a very short time.....in one of my visits my ASM Bala told me about Ramdoss who was running Kalathil WS (Kalathil WS Pondy belongs to Krishnan of Mahe) along with Meenakshi an ex HL and ex TI guy....It was May, I think 2015....I met Ramdoss and Meenakshi along with Sridhar our ex employee who was also a partner in that business and decided to handover the business to them. In fact before we changed our distribution from Happy, we presented to Ramdoss the financials of Pondy distribution but he didnt bother to revert....anyway, Kalathil Pondy was appointed as our distributor for Pondy and they are still continuing....

In liquor industry one has to micro manage as there are so many avenues one can get ramped....there is some thing called local AMP for local spends viz retail schemes, CSM incentives and local promos....this is huge amount and mostly left at the discretion of the local ASM n team and also with the distributors - but nothing can be spent with out the line managers approval. 

The UT market is totally spoiled/abused....we have to give schemes/discounts to the owners which are quantity based..this quantity based has become a joke now as if you announce say, buy 100 cases and get 100 per case..the retailers deduct 100 per case even when they buy just 10 cases...so schemes are no more written on papers or printed and customised group wise depending up on the potential....plus window displays...plus retail salesmen incentives....the myth is that the CSM incentive is a must as otherwise they would keep it under the shelf and wont sell....so every company falls for it.....Pondy it could range from INR 10 to 100 per case and in KKL the max would be around 50....in Mahe it is worse....it is from 120 to 240 per case....and some premium brands even 360 per case. I always visit a minimum of 10 outlets during my trade visit and found no salesmen have time to push especially during peak hours which are the evenings...the business transacted during the evening hours/peak hours in outlets which are 'bar' attached is around 70%. And outlets which are just 'off' the evening rush hour business would be around 50%. In shops like Murugan Enterprises, one of the premium off trade in Pondy, the consumers have to bill what they want, pay cash and take delivery....When we are in the outlet personally some time the salesmen recommend our product out of sheer respect....I always challenged this nonsense of CSM incentives but ended up giving up as both the distributor and our own team will not budge....and the beauty is Happy wines just gives a token amount of 10 to 15 a case for Mansion House and the sale is only moving northwards....even on fast selling McD brandy the CSM is zilch....Mahe is the worst.....the reason for this CSM dominance is that majority of the shops the owners do not sit and manage and leave it with the cashier....he is the big boss....the cashier....in some cases apart from the CSM, you have to also take care of the cashier and the guy who is incharge of procurement.....open markets like Maharashtra, Goa and Telangana just to name a few, the CSM is very selective and unlike this UT business....so small players are left with thinner bottom line....and the credit period taken.....biggies are able to collect their dues but small players really struggle....some retailers take more than 120 days....there is one big retail shop near the bus stand in Pondy and this person pays, if he wants to, after 6 months. The beauty is he sells 20% more than the MRP and liquidates whatever comes to his shop but refuses to pay....and if any bottle breaks due to their own mistakes, the burden the distributor and the distributor ends up paying for the broken bottle for no fault of his....this markets were never like that, till the locals were managing the distribution....the moment outsiders came and set up shops, things changed....to get an entry and make a mark, they started these unfair trade practices...and everyone has to follow suit....we have to, in 2017 remove the entire team and appoint a new one and we introduced certain strict measures across these markets at the cost of some sales loss....

Also one of the thing we pioneered is opening up the market. When we launched GPL VSOP brandy, we looked at options of giving it to another distributor in Pondy as we faced issues which we could not resolve with our existing distributors....so we appointed Clinton in Pondy and GNS in KKL....Sudeep took these initiatives....but soon we realised that Clinton could not penetrate much apart from his own outlets and GNS also had similar issues....appointing GNS also upset our existing distributors in these markets and especially Ding Dong....and did we gain? And GPL VSOP, despite fabulous presentation and liquid, didnt sustain the excitement it created on launch....we tried different tricks but nothing paid off as core of the issue was with the distribution...in Pondy we could still do something with Clinton's own outlets but in KKL it was becoming tougher...we even looked at giving the brand to Ding Dong but could not....in Mahe too we had similar issues....when we launched VSOP in Mahe, our distributor who was having around 8 shops under his belt. But Anand, the major partner in the set up, decided to sell off 4 outlets to Velu of Bangalore who was eying this market to launch his own brands. And in those 4 outlets we were not even given entry as he ensured they sell only his brands....

I need to also share with you something which I did to a friend of mine and that turned out to be our nemesis....Ding Dong who was a small time player when he started...once during my conversation with Ravichandran of DeeKay he told me about his struggle in KKL...he was mainly in to cheap segments....I told him about Ding Dong and organised a meeting...and they got the agency....from nothing they took his brands to 5000 cases per month and in the bargain, lost their focus in building our brands....I will write more about DeeKay in the later part....

From GPL VSOP we learnt many a lessons....so decided to develop another brand with the same Geo's Premier League umbrella name....The idea is to use the same bottle but create something more premium both in looks and content....and hence started looking for a 'master blender'....we moved to NJ Menon from Natarajan and he recreated the Le Roi' blend and also Wassup flavours (will talk about this later), GPL VSOP and Le Roi' whiskey.....but for our new brand we wanted something special and I got hold of, thru a contact, Prabhat Barik with fantastic pedigree.....he gave us few blends as we briefed and we did a very extensive research on the blends across the UT markets and zeroed in on the current one which is in circulation. We named it Geo's Premier League XO......GPL XO in short...with an olive green label.....

As mentioned earlier, we were bottling all our brands at Gemini Goa for export to all the other markets barring TN.....including overseas export but we started getting in to problem with Gemini primarily due to one single person. Our efforts to manage the relationship or to get him removed didnt work out with Neil and we started looking at options....when we looked at bottling in Pondy we received lots of resistance from our distributors and our own team as they felt the consumers wont touch anything bottled in Pondy especially the premium brands....Balaji was bottling for Mcd including their McD VSOP and they were doing well. Also bottling locally had its own advantages in terms of saving on transport....we explored the options available to us and it was my call to start with DeeKay, despite my teams reservations....as i felt, considering my long relationship with Ravichandran of DeeKay, the owner....we started small with our 60ml SKU of Le Roi' and it started doing well and there was no negative feed backs....when Gemini problem became worse for us to handle, we shifted lock stock and barrel all our brands to DeeKay except supplies to Chattisgarh from Gemini.....

We started bottling Hobsons, Clovis, Le Roi brandy and whiskey and GPL VSOP.....guys I have to write a full episode on DeeKay which i would do....but shifting to Pondy local was a major step and as I envisaged there was no negative feedback from the consumers and we started doing better.....but it was a struggle to manage DeeKay....there was his manager, Sivanandam and Ravi....our guys were getting shuttled between these two and every time i have to intervene....anyway we decided to move our XO to Balaji....Balaji has never bottled outside USL/Diageo and for the first time, thanks to my dear friend Shivkumar Reddy, they signed with us.....we launched XO in September 2019 first in Pondy followed by Mahe and KKL....we also changed the RTM in these markets....In Pondy we made it explicitly clear to Clinton that they would be our direct/preferred dealer for XO and Kalathil will be our distributor.....we also convinced Singam wines to be our direct dealer (3 shops) and Anandu Brandy Shop ( 7 shops) . We have been following up with ABS for quite sometime but finally with XO we could break through. Kalathil was against but we convinced him with some additional incentives. In Mahe too we opened up the market and appointed my old friend Jairam of NFLS as our distributor and direct supplies to Sastha, Krishnan and Thirumal....this helped us enormously. In KKL we went back to Ding Dong for XO...

We were desperate for a volume brand and XO received instantaneous positive response from the trade in all the markets. When I met Karthik of Clinton after the launch, he said 'U made a success of XO'....thats a top compliment coming from Karthik.....finally we got a winner on hand.....not a single bad review......

Meanwhile we worked on a premium whiskey and developed Maker's Delight....this and more in the next episode......