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

Episode 21....

IDV----journey continues....

Corrections....Shekar Bharadwaj came to IDV from Brook Bond....and from IDV he went to CPL....(thanks Debasish for correcting me).

As I had mentioned earlier, this narrative wont be on a chronological order as I am going to talk about things which keeps popping up in my memory...

In the last episode it was all about how consumers reacted to a price hike especially a product/brand selling at a cheaper price than a premium brand and suddenly coming on par with that premium brand without any add on either in the liquid or in other offerings....this is a great lesson learnt in a hard way by us at IDV....and this talk of Industry colluding et al never works out as the smarties in the industry understand where their volumes and profits have to come from and react immediately to be the first mover...keep this in your mind....the first mover advantage...HL encashed on the first mover advantage and made Bagpiper, from a non seller in Maharashtra, to N01 in volumes by understanding the price elasticity....Kudos to them....

This doesn't mean that IDV-SWC and BDA were not clued on....but sometimes even the biggies err....it was an error in judgement---on how consumers would react to price increases....

So, Sunil Lulla joins IDV....Sunil was in media and from media to Alcohol....and he is not a typical marketing guy...if I remember right, he is an alumni of SP Jain....but no airs about this tag....as mentioned earlier, liquor marketing is all about experiential marketing, visibility, distribution and execution of activities on time every time....He didnt have any baggages like we had....he didnt know anything about liquor industry except the brand he used to taste once a while....

He had Ajay as BM for Smirnoff (Ajay was not a typical marketing person either) and Nihar Das, BM of Green Label, Ashwin Deo (Ashwin came back after a short stint in Yangoon) and was the GM of Marketing under Sunil....Kamal Arora, Vibuthi Channa, Aparna and couple of others.....Also we had these Trade marketing managers in all the regions....Trade Marketing guys work as the bridge between marketing and sales guys....they are the ones responsible for execution of all the marketing activations at the ground level...so they get jacked often by both sales and marketing guys....if the marketing guys have to be successful, they need to ensure the sales team is completely aligned with the activation plan and motivated to execute the same. This we do at the beginning of the fiscal in our budget meets in every region and any issues raised by either of the team are discussed and sorted....But we found, despite best attempts there were always last minute irritants from both sides...initially the best offer we ran used to be Coke with SMV....the retailers used to go crazy and stock well....but we figured out later that some big retailers in Bombay were quietly selling the Coke to the nearby shops and discounting SMV....so we need to restrict the offers and think of ways and means of reducing the ramping....so keep in mind the 'ramping' part when you offer anything which is not packed inside the box along with the product....it should be 'in pack' and not 'on pack'....for regular whiskies it was either bhujia or glass....even today the same thing.....again ramping....huge ramping....bhujia were easy to sell off....so, bhujia would fly off but stocks would get stuck....one of the biggies came out with 'under the cap' offers....the retailers cant remove the cap and ramp the offers...caps have to be returned to claim the offers...only in the bars, the barmen were benefitted and hence pushed the brands...so in IDV we were trend setters on offers....competition copied many of our ideas and executed better with the learnings of our mistakes at the market place...also on trade we were always one step ahead of competition....

We finally brought the MRP of GL. This was the beginning of the other problem...what would retailers do with the stocks stuck with them at old prices (higher)? We had to compensate some big retailers..and after lots of struggle with the old stocks, finally some tractions started....and as part of our relationship building, we organised a distributors meet at Lonavla and Sunil instantly developed a great relationship with the distributors....

IDV HO Marketing, developed a beautiful way of working for on trade and to introduce the same to the team they conducted a workshop in Bangkok. Self, Abhijit and Sunil were nominated to attend that. This concept was called QDVP....(Quality, Distribution, Visibility and Promotion)....It was IDV Marketing initiative but the execution has to be by the sales team....but despite my best efforts on understanding that, it flew over my head...and I could not decipher that....on the last day after the program got over, our return flight was early morning, me and Sunil decided to discuss the execution part over a drink and went to the bar in the hotel (Abhijit left already)....After a few JD (I was a fan of JD then-though it was not from IDV), we decided that Sunil would travel to all the regions with his marketing guy and run a workshop on this with the sales team, drill this concept in their heads and make them to commit to execute this....After returning to Bombay, Sunil prepared a template on QDVP with easy to understand examples of different kinds of on trade and what should work where.....it was a brilliant piece of work....to be frank, without Sunil's involvement, initiative and his understanding this QDVP would have just got stuck in HO only and not seen the light of the day....why am saying this is that a good marketing guy should have the attitude to dirty their hands and not just sit in HO and just briefing the agencies....especially in spirits and beer industry, as the avenues to advertise are very restricted. Innovation and improvisation plays key and hence 'understanding' is key here....also convincing the sales guys on something that doesn't produce numbers, is hell a lot of task in itself....Sunil's template made things easier for us to execute it well in the market place. Those ex-IDV guys if they are still working either with Diageo/USL or any competition, would immediately recall how it helped them to segment the outlets and implement this QDVP. After a year or so, IDV came out with QDVP3 which means Quality, distribution, Visibility and 1) Promotion 2) pricing 3) presentation...

Sunil also got a great sense of humour....DRs birthday is 25th June....he planned something quite wacky and the plot was something like this....on 25th June, after DR walks in, settles down after receiving everyone with their wishes, 2 guys well dressed would walk in and tell the security at the reception to tell the boss that they had come from IT department and its urgent they have to meet the boss....we knew that DR, on getting the call from the security, would call me/Rodney/ Sridhar/Sunil and we told his secretary Pervin to manage that and we quietly sneaked out and stationed ourselves just outside the office door. These two guys walked in to DRs cabin and told him politely that they have been asked to bring him to the IT office at Churchgate for questioning on the company's last year filing...DR got quite edgy and tensed up....he wanted to use the phone but the guys, drama artists by profession, stood firm and said no phones and no one should be contacted...they took his cell phone and DR was completely distressed and panicked....he called Pervin and they told him politely they dont want anything and he can only call his auditor or an advocate....DR didnt know how to react to this and it almost lasted for around 10 to 20 minutes...these two guys pulled out an envelope telling him that he can open and read the charges...DR opened the envelope dreading things and there he saw 'Happy BD boss' signed by all of us....and at that moment we all walked singing happy BD....DR's expression from desperation changed to first relief and then laughter....and that was a sight to behold....what a BD it was for DR.....

IDV USA had a brand called Christian Brothers.....it was a locally made brandy...IDV India got excited with that, brought the entire bottle and label design and launched Christian Brothers Rum....first in WB but bombed...

Myself and Ashwin went to DR and convinced him to come out with Christian Brothers Brandy as we felt it would help us in Kerala, UT and in AP to gain some volumes and make our presence felt. Blend was developed locally and we launched the brand first in UT of Pondy and there after in Kerala and in AP. In Kerala it was an instantaneous hit...we were so happy and even in Pondy and AP Coastal we started getting some great feedback....but alas, some Christian association objected to the name and filed a complaint with the government in Kerala...Sudeep and Ashwin handled this very well, went and explained to them the origin of this brand, gave lots of proof that the name was international. Same issue cropped up in AP too and Sudeep and Ashwin went on a 'convincing' mission. But it took some time to sort this out but by the time the brand suffered major set back and it became a struggle then...but we still sold decent quantities...later we realised one of the major competitor used their clout in Kerala and were instrumental in lodging this complaint as they felt it would destabilise one of their brands named after an Italian King....

Sunil was instrumental in recruiting Mohita Arora...who came to us from P&G....very intelligent and with great pedigree but from day one, developed some kind of 'antipathy' with the sales team. Gaurav and Ashu were very vocal about Mohita...I have to play it safe...I remember this episode well. I was called to DRs cabin and as I entered, I saw Mohita also inside...DR, when he is angry or upset with something, would look at the person with some kind of indifference....I knew, the moment I walked in, there is something wrong....Mohita had complained about one of our guys 'indifference' to her and DR told me that I should pull up my guys and make them to understand that marketing plays a major role in IDV....I felt bad as there was no proper dialog and hence I asked him whats so special about marketing for which he quipped ' marketing is the brain of the organisation' and I said what about sales...'they are just the bran'....believe me guys...this was what he said....I didnt want to react to this but stored it at the back of my mind.....Mohita never bothered to understand the nuances of the industry and she thought it was like any other FMCG....when we relaunched Gilbey's Old Gold as Gold Club.....the pack was fabulous but the content was the same....Mohita wanted all the retails should be supplied on the same day....which was not just a task but quite impossible too.....impossible as first they have to place the order and the WS has to apply for the permit and supply....when this was told to her, she brushed us aside thinking the team was just not cooperating....again matter went to DR but this time DR knew what she was demanding was something which is not possible but he still defended her.....DRs weakness for the marketing team....

We tried to resurrect our failing numbers in AP with the relaunch of Old Gold and launched the new pack but didnt succeed much....this Gold Club didnt take off at all....

Another brand in the premium segment....'Gilbey's Solitaire.....with lots of fanfare was launched....again failed in the USP area....consumers looked at it as yet another product and with no differentiation....we put in lots of efforts but failed miserably....RC was unshakable....only Blenders Pride was making in roads...Signature and all the other brands....no one could dislodge RC....it took years for this brand to be dislodged and that was by USL after they bought over SWC....today RC is no more premium....in many markets RC is sold either at the same price of Royal Stag or slightly premium. Their major market-Maharashtra, they lost it totally....the undisputed king in this price segment today is Blenders Pride...we will talk about that later.

Sunil, got bored of IDV and left...joined a start up company but the imprint he left behind was something we all still remember....and he is back in media again and based at Mumbai....

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

Episode 20....

IDV----journey continues....

Meanwhile, other markets barring AP started consolidating...there was not much of growth on Green Label but we were getting some volumes. Kerala started off very well for GL with 15000 cases hitting the market and also getting sold from the depots....but somehow the consumers of Kerala were not ready to change their preferences...still going after brandy and rum....but with Men's club brandy and whiskey, Louis XI brandy we were still a small force to reckon with...Sebastian and team were clued on which made our job simpler..We got Sathish in to our Trivandrum office to manage our accounts and coordination with the manufacturing units and promoter....Sathish is an asset....very committed, focused and absolutely brilliant in his job....He was in HL Secunderabad and wanted to get back to his native and thats how we got him in to IDV and moved him to Trivandrum....Our equations with UDPL Calicut was very good but the last minute-11th hour rush for dispatches, literally, was something we had to live with. The team members kept changing in Kerala. I thoroughly enjoyed working there-I covered almost the entire Kerala-and Mahe used to be a regular stop with NFLS-Jayaram being our distributor. This is another market we enjoyed great sales. Ironically, Green Label was consistently delivering volumes with other brands too chipping in. Pondy was also delivering. Our guy in Pondy, Sabapathy, a very creative guy managed the business well....we initially appointed RR as our distributors with Ravi and Rammurthy managing the business but that partnership went in to some spin and our KGR went there to pacify them but since that was not to be, he kind of brokered peace with them splitting the distribution of brands. Ramamurthy got KF beer and our Old Gold and Ravi got the rest of our brands....

Karnataka was still a struggle due to its market dynamics but my team, delivered every month and SMV was growing. We got JKK transferred to Goa, Shankar Iyer  and Uthappa to Bombay. While Shankar enjoyed his new place and job in Bombay but Uthappa due to some personal issues could not continue and resigned. We recruited George, Vipin and Kannan. New team in Blr. One major loss for us in Karnataka was Paramashivappa who was based at Mysore. He came to us from Khodays and such a great guy to work with. He succumbed to some illness....

Raghu was transferred from Kerala to MP to head MP operations. It was a great move for him and he settled down well in MP. It was a tough market for us due to its dynamics but he managed it well. It was undivided MP then.

IDV in its launch spree and also to get a share of the "Premium" whiskey segment, developed 'Heritage' premium whiskey cross line with Royal Challenge. The presentation was good and as always the marketing believed that Gilbey's prefix would pull the consumers to the brand and we launched it in Bombay first. The sales force went after the brand. (the problem is that when a new brand gets launched all the focus gets shifted to the launch and related activities and the existing brands take a hit)...I think I mentioned it earlier too, that Bombay market is different. There are only 500 retail vends right from the inception and the government froze the retail vends (god knows the logic behind) but were issuing licenses for bar and restaurants and pubs. So Bombay had around 500 retail and around 1500+ on trade...that includes, clubs, hotels, bars and eating joints. But getting an entry in the bar and restaurant segment was a big task. Out of the 500 retail vends, around 25 to 30, spread across Bombay were key to supplies to the on trade. The small bars for whatever reasons, didnt want to buy from the WS but were okay to buy from these powerful retailers. The retailers also were happy selling to them by just keeping a thin margin. It was win:win for both. But the problem for the new brands was the initial placement. The bars would go for replenishments with the retails only after the initial placement from the distributor with the excise permit-this is to ensure that as and when the excise authorities check, there would be proof that the stocks were bought from a WS. And bars used to keep only popular brands demanded by their clientele. It's quite tough to change consumers from their favourite to a new brand in spirits especially in established 'pull' based open markets like Bombay/Maharashtra/Karnataka/Hyderabad/ WB et al. And a new brand from a relatively small company is quite difficult. Though many bars in Bombay started keeping Smirnoff and to some extent Green Label, premium whiskey was tough. While our team could place the products in the clubs (give 2+1 free, the clubs would keep any ####) and some premium on trade, the standard bars where the commoners go to have a drink-we call them nip joints, its tough to crack as they only buy when there is traction. The consumption at the clubs and premium on trade for regular segment of whiskies like Green Label was almost a zilch. But we used our relationship with these big retailers and got some placements but on a large scale it was still elusive. I used my past experience of Kamatipura of Bagpiper and made some inroads there too. And Heritage struggled and struggled and struggled.

But the blow for Green Label came from within. 

Disclaimer:

"I am writing this as happened and absolutely no intent to doubt the intent of DR and Ravi Jain..."

Subodh Kumar was the commissioner of excise then and he came with a very innovative way of excise duty calculation by which you start working backwards from the MRP and arrive at your basic price and based on the MRP the excise duties would be applicable. Suppose your MRP is 100, the manufacturer would get 25 out of it, the retailer would get 12% and the WS would get 7%. The rest goes to the government. It was such fool proof system and no one could tweak it and get any benefits. The manufacturers association should have taken it up and stalled it but they failed in this and it became a GO. The retailers who were getting anything between 15 to 20% and WS around 12 to 15% earlier were made to work with lesser margins and the manufacturers were made to break their heads to arrive at their MRPs and the resultant basic price. Absolutely fool proof.

Our bosses all met and worked out the pricing strategy. The consensus was to increase the regular range price to McD No1 level and McD No1 to move up to the next price band. When myself and Sanjit were told about this by our boss, we felt a jolt as taking the MRP up to McD No1, we felt would be suicidal as we strongly felt consumers would downgrade and the segment would be finished. Ravi Jain was heading Shaw Wallace then, the makers of DSP, RC, Haywards, Band Masters Blend et al. DR and Ravi were good friends and it was their idea to move up the price. And based on the dialog and despite our opposition to moving up the price (for a change self and Sanjit were on the same page but DR didnt heed to our arguments and we were just torn in to pieces for not looking at the brand contributions), Shaw Wallace and IDV submitted the revised price for their brands. After a few days, Herbertsons and McD submitted their prices but to our utter dismay and disbelief HL stuck to their old MRP and McD No1 too stuck to the old price. So at the retail level, DSP, OC and Green Label were at the same price point of McD No1 whiskey. Till then Green and DSP were lower than McD No1 Whiskey. Herbertsons smartly kept Bagpiper at the old MRP and registered. I had mentioned in my earlier posts how difficult it was to sell Bagpiper in Bombay/Maharastra except in the Vidharba region. This price strategy paid HL big time and overnight consumers shifted to BP from DSP, OC, McD Diplomat and Green Label. In Bombay BP was struggling to sell 3 to 4k p.m but after this it went up to 30 to 40k per month. In rest of Maharashtra and U'nagar alone BP started doing around 100000 cases p.m. We were all left with red faces. Our sales plummeted as consumers didnt think that Green/DSP/OC were McD No 1 range, and didnt want to pay the new MRP. Shekar Bharadwaj, who joined us from Colgate, (Debasish recommended him) tried his level best to lower the prices but DR was not interested at all. Shekar B was a great guy and great analytical mind but lacked that street smartness required and always in an angry mood. We had, for some time, had our Regional sales office right below the HO in the second floor. Once Shekar wanted to present the market dynamics to DR and I requested DR to come down and hear out Shekar....he came down reluctantly as he felt Shekar was more of an analyst than deliverer....Shekar wanted to convey the importance of reducing the MRP to that of BPW to arrest the fall and also some analysis he did from his market visit....the meeting started off well but at one point DR got irritated and asked Shekar something and Shekar got provoked and completely lost it....'what the fuck you are saying' he pushed his chair saying this looking at DR....every one got stunned....total silence...so awkward....and no one, I repeat, no one, knew how to react....Gaurav and Ashu who were the two ASMs managing Bombay and Nagpur were awestruck....Shekar realised his blunder and just sat down holding his head....I looked at DR and signalled him to leave and would see him in his cabin....DR was quite upset, called Debasish who was the head of HR then and gave a piece of his mind...after a long discussion we felt we should allow things to cool off and not precipitate by asking Shekar to quit....Debasish was asked to counsel Shekar and he made him to speak to Deepak and apologise. Shekar resigned after a few days....Shekar was very intelligent and supported his team and was quite articulate...but the problem was too analytical and probably felt that he was the only intelligent guy in the organisation and knew all and others were just passing time....Green label slide was consistent...and BP was gaining momentum in every single market in Maharashtra including areas where it was zilch earlier...unstoppable...this proved that in that price segment consumers were okay to pay some premium but not so much and downgraded when they saw that the price increase was not in line with the products offerings....a great lesson....Sudhir Chopra who was heading ABD then also got very frustrated as OC lost all their big markets to BP....so I have to exert lots of presser on DR and finally made him to concede it was a blunder and we decided to drop the prices....its not easy to drop the prices as we have to give a revised price and cost card to excise and the moment you submit, it becomes public knowledge resulting in 1) the retailers stop buying and 2) for the stocks with WS and retail you had to compensate as excise wont return the duties they collected earlier....so price drop reduced not only our bottom line but also huge loses against compensations on the stocks stuck with WS and big retailers....this gave some reprieve to Green Label but the brand could not gain back its original consumer base....same thing happened to DSP and OC....Ravi Jain and DR had to take all the brunt of the distributors and their respective team....HL went all the way laughing to their bank....Nagappa was the happiest guy....NRR who was heading SW West then, was also totally against this move by his boss but we were all made to just on lookers.....We replaced Shekar with Nitin Pitale....a veteran in the industry...he was my predecessor at HL Hyderabad and my distributor in Bombay and Pune for IDV representing H Parson....(rumour was that Ravi Jain had a share in HP)....Sanjit quit with in few months and joined Heinz food products....and we got Sunil Lulla in his place as head of marketing. He bought so much of raw energy and fun in the work place. The whole atmosphere got changed. And he handled DR very well. The marketing team also started thinking differently....

Will write in my next blog more on Sunil and his WOW.....till then...enjoy life but stay safe and secured....god bless!!!

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

Episode 19....

IDV----journey continues....

As mentioned in my earlier post, the narrative wont be in a chronological order as I want to capture things as it comes to my memory....need to capture the 14 years of journey and hence....

Managing the CBUs gave me lots of exposure in terms of understanding manufacturing better and also the issues involved in their every day life. Though India is one country but when it comes to alcohol, it's like managing 30 plus countries....with varying rules and regulations from state to state. Every state has their own taxes and duties...its called state excise duty (nothing to do with central manufacturing duty) and if you are manufacturing in one state and exporting to another state, there is added levy of export pass fee (varies from state to state...the lowest being states like Punjab, Goa, Pondy and Daman), there is also import fee when you import the finished goods from one state to another and CST....Its endless. Plus one has to register their labels in the states its being bottled/manufactured and the states you are selling. Suppose one has multiple sources of supplies in a particular state, the labels of all the sources have to be registered in that state. This cost additional money. In Maharashtra, they had introduced Form K, for those who want to import in to the state of Maharashtra from another state. Maharashtra is not an import friendly state and the idea of form K is to dissuade manufacturers to import in to Maharashtra. And this form K is quite expensive and to be renewed every year. To sell in Delhi one has to have their own bond...brand registration costs....based on categories. TN you cant import anything in, except BII scotches and wines and BIO. Kerala you have to pay TOT, even today, if you have a local unit. One has to familiarise this before taking the plunge. When volumes go up, it's important to have local units in all the big states to avoid multiple taxes and also to save time. In some states, getting the export permission itself would take few days even after paying the Export pass fee. Most of them are established and age old practices and mostly the officers(the excise commissioners) will not alter the policies fearing backlashes. But there are exceptions. There are some states, one can represent their predicaments/issues and if there is truth and logic in that, the governments would tweak the policies. Companies have one person dedicated to follow up with excise office in every state. It's a full time job. And raw materials like molasses are confined to few states and the others have to import this in to their states for distilleries to manufacture spirit. For example, Pondicherry do not have a local unit to produce ENA and everyone imports from other states which increases the cost of the final product. Goa, haven of many bottling units, is dependent on ENA from other states as they have just McD Ponda producing their own ENA. The respective governments have gone quiet and not issued licenses to make the job of the manufacturers easier and cost effective. Also getting a new bottling or distillery license is almost impossible in many states. And for example, if one is importing finished goods from Punjab to say, AP.....the process starts with applying for the permit paying the excise duty with the AP excise which would take max of 2 days to get. But the permit comes with a validity of say 15 days. This means, if the permit is dated 1st, the goods have to reach the destination by the 15h without fail. Once the AP permit is received at the unit in Punjab, the unit in Punjab would apply for the export pass, after paying all the applicable fees there and only upon receipt of the EP, they can load the truck and dispatch-provided the stocks are produced and kept. The goods have to reach before the expiry of the permit. Incase the exporting unit is unable to execute the order for whatever reasons, they have to send back the permit with a non execution certificate signed by the distillery excise inspector. This would be submitted to AP excise for revalidation and the whole process would start again. Suppose the goods were dispatched in the last minute and reach the destination in AP after the expiry of the permit, the goods cant be unloaded and the trucks would be stranded till the time the excise in AP revalidates the permit. ahhhh....one more...From Punjab you cross many states and some of them insist on obtaining a transit permit and some insist on escort also....one more day would go in that...if one is caught on a week end, 2 more days would be lost. And escorts are always on demand. Planning and execution hence is the key here....and if people involved are not well versed with the process, god help the units and the company. With forecasting failing us always, it was rush hour last 3 days of the month and the entire sales force and the manufacturing team would be on tenterhooks....nothing has changed till date....the same scene across all the companies...but when am talking about IDV-it was difficult times. While we could somehow manage the open markets like Bombay/Maharashtra/Goa and UTs....the state controlled markets were the toughest....especially Kerala....my BM of Kerala....Harikumar....made of iron stuff but could not do much on the last minute rush....Kerala we had to exit KAPL....this is one story I need to retell....KAPL was managed by Sakthivel Swamy the manufacturing head of both Shiva Distilleries and KAPL. The owner is Balasubramaniam a well respected businessman based at Coimbatore and in to sugar factory, distillery et al and from the illustrious family of Pollachi Mahalingam. A wonderful person. Sakthivel Swamy was crude and would always complain about our materials management-though partly we have to be blamed but due to the erratic volumes, the materials were getting stuck at his unit and also occupying space. It was becoming a bit of an issue for us too and once DR was coming back from Ooty and I wanted him to meet SVB as a courtesy and organised it. The meeting started off well in his office in the presence of Sakthivel Swamy and his finance person Shanmugam....but few minutes in to the meeting Sakthivel Swamy started complaining about our materials management and also erratic volumes and used a bad word in Tamil but from the way he uttered it, DR guessed what he said and in return he shot back at him saying 'what shit are you saying?'...this irked SVB and he looked at DR and his finance guy and said, 'lets terminate the contract'. Though we were not happy with KAPL and especially with Sakthivel Swamy's tantrums, a sudden exit would have resulted in huge write offs in terms of packing materials, change of unit and its approval process et al. This thought struck me like lightning and I immediately intervened and pacified SVB and brought down the tempers. DR was not happy and he told me on our way back we should have taught these guys a lesson but once I explained to him the quantum of write offs, he realised and smiled...We spoke to Jairaj and Neil who had their own bottling unit at Calicut-UDPL-and signed off with them. We served notice on KAPL after exhausting majority of our PM and at the start of the next fiscal we moved our bottling to UDPL. 

I would like to say a few things about Jairaj and Neil here. Jairaj inherited the liquor/distillery business from his father HR Basavaraj ( very well known in the industry then)-Karnataka based- and with his school/college mate Neil Peres, expanded the same...but he was content to be a bottling partner than manufacturing their own brands. Neil, his partner along with Betz Fernandes were managing the relationships and the units. We tied up with them in Kerala, Odisha, Goa and I think Punjab. Wonderful guys to work with. No air and totally committed and always there for friends. Sadly we could not do much in Odisha and Punjab and also struggled in Goa....but kept the Kerala unit going well. Jairaj and Neil helped me when we started our Geoscope....(this story at a later stage). We also tied up with an unit at Diwan cater our requirements of Vidarbha....So contract bottling across regions to cater the local markets which has reduced the pressure on Nira-our mother unit. SMV was still from Nira only. Meanwhile we recruited more executives to strengthen our manufacturing...John George joined as GM at our Nira plant and also Nitin Ghate. From the Polychem side we had Soni as the chief chemist and also hired Vijaykumar to manage the blending. John G a good natured guy with a very pleasing smile. Once I went to meet the excise commissioner in his office along with John and the EC mentioned that John has a very disarming smile...and John still wears that smile....Nitin is another great guy in our manufacturing team...well mannered and non controversial. Dr. Gore was our head of QA.... Another person with great pedigree.... Manufacturing is now fully staffed but our mother unit Nira was always a problem as all the international brands were bottled there and brands like Archer's, Malibu, Kelly's were small volumes but spread across so many states with state specific labels. Every state had their own requirements to be printed on the labels. Some states even specified the font sizes. In Bihar, those days, the brand name has to be printed on the cap....and Punjab followed that. The excise department implemented many things to stop illegal interstate flow of stocks but those who were indulged in that continued managing the channel partners well....but the problem was for the small volume brands....one has to print special labels to serve small quantities and that would increase the costs. And the stocks have to be segregated and kept separately state-wise. Sometimes the load man by oversight would load stocks meant for other states in the truck and if it is caught by the excise, you had it....it would mean lots of running around and penalty-for just 'oversight'. Whereas those who indulge in cross border by design go scot free. We had lots of issues with stocks getting mixed up and many a times we managed locally by just getting the labels removed and relabelling them. It was always nightmarish. When you complain, the reasons would be the same from manufacturing....And excise department across states working overtime to come out with more and more statutory requirements to make life more miserable for manufacturers....Whether the GOI brings Uniform Civil Code or not, they should bring uniform labels across the country for alcohol. If you are a non booze business guy reading this post, you would be wondering what kind of system is this....just imagine Unilever....Ponds talcum powder from their Chennai plant to Srinagar. All they would do is make an invoice, load the truck and 10th day it would reach Srinagar without any hassle....the invoice and the delivery challan is what is required to transport the goods but what is mentioned in the invoice should be in the truck not one extra or one short....any consumer durables or FMCG....hassle free compared to the hassles the liquor guys go thru....and we had this Octroi thing also...in Maharashtra, Gujarat and in some other states....thats another hassle one has to go thru. And the stranded trucks at the octroi toll centres....

I gained lots of knowledge about the intricacies involved in manufacturing and that helped me to make the sales team understand the importance of forecasts and also the timely placement of permits.

As mentioned earlier, IDV was on a launch spree.....we launched Gilbey's Heritage a premium whiskey in RC segment.....and later Solitaire.....and revamped Gilbey's Old Gold....Mens club brandy in Kerala....Christian Brothers Rum and Brandy.....All these in the next episode....till then, if you were in manufacturing/are still in-either in liquor or FMCG, pl mull this over and sure you would wonder why liquor is singled out.....yes, there is plenty of reasons for this differential treatment.....we will talk about this too.....

Till next episode.....

Cheers

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

Episode 18....

IDV----journey continues....

The business was slowly picking up but we had serious issues with our own plant at Nira in terms of  increasing our output as the unit was a very old one and infested with issues. So we started getting in to 3rd party bottling. The first one was KAPL, Kerala and the second one  was Khemani Distilleries at Daman. Ashok Khemani the owner, was a well known bottler in Daman with his Royal distilleries and in the same complex he built Khemani distilleries, a bottling plant, very modern and well constructed. We tied up with him to bottle our brands primarily Green Label for exports out of Daman. If you wonder why bottle in Daman for exports to other markets in India, the rationale was that the export pass fee and the proximity of Daman to markets like Rajasthan and MP and also the modern facilities built by Ashok in that plant weighed well. So Daman started with Green Label. The irony was that there was nothing else available and everything has to be brought from outside....including the molases.

We had issues with Polsons in Kerala as they were not able to invest much on their unit and I approached KAPL owned by Shiva Distilleries in TN. KAPL was in the borders of TN and Kerala and on Kerala side. A new unit and with great capacity and new bottling lines...This is the first tie up for bottling from our side and Khemani was the second one.

We shifted our bottling from Polsons to KAPL and with improved supplies our Men's Club range and Louis XI brandy (both being the acquired brands of IDV from Polychem), started doing better...these brands had some traction in Kerala already. 

IDV also tied up with an unit in Haryana and one in WB to cater to North and East respectively.

As mentioned in my earlier post, I moved the willing ones from AP to different parts of South and west....Srinivas and Raghu were sent to Kerala along with Ravi...Kerala was split in to two....one managed by Hari and other one by Ravi....

When Sudeep got transferred to Pune, we brought Ravi to Bangalore to head KTK. There were lots of uncertainties in South due to AP going dry and TN was closed for players like us.

Lots of efforts put in by us and the team at HO to establish all the brands we launched but barring SMV and Green Label, none of the other brands picked up nationally...Malibu and Archers were okay but with very low volumes and catering to small segment of consumers. Kellys was a disaster with quality issues on the liquid getting cuddled....Lots of time of the FF went in to managing these issues.

SMV picked up damn well and we made sure that we own the key on trade with SMV....Many places we got the pouring contracts with decent payouts....

Ten Downing Street started off in Hyderabad. A theme pub...Vinod and Mohan Reddy were the owners and great guys to partner with. They wanted to expand and opened one in Pune but wanted brand partners..Vinod approached me, due to the relationship we built with them earlier and came down to Bombay for a meet. He made a proposal to me that IDV invest 10 lakhs in his pub upfront and in return would enjoy complete branding rights and pouring status for SMV....Those were initial stages for us too and investing such a large sum in an outlet which was yet to start was a tough call to take. But knowing Vinod and Mohan I felt that investment would help us in the long run and went with the proposal to DR for his approval. I also got Mahesh Madhavan on my side. The proposal was okayed and these guys never let us down....TDS as it is popularly known had been our partners of choice ever since. Sad Vinod is no more...wonderful friend and a great business associate. Their USP was not only the pubs atmosphere but also the food served there. TDS Hyderabad was well known for its 'curd rice' (!) apart from many other mouth watering dishes.

In Bombay too we tied up with some excellent pubs one being Ghetto near Mahalakshmi....That was a happening pub then....Raspberry Rhinoceros in Juhu. In Blr our guys didnt leave a single one for competition, despite pressure tactics from UB beer division. Purple Haze was a hot spot in Blr and we got them in to our fold. The Club on Mysore road was always a supporter of us. Ms. Kusum was the boss and she had a soft corner for our team..Bacardi also became very aggressive and Mahesh Madhavan left IDV and joined Bacardi as their Marketing Manager.  

Bhanu Kaila was our on trade manager for Bombay metro...Bhanu did his hotel management from Oberoi and after serving them for a while came in to IDV...a great chef and with full of ideas..great energy and built a fabulous relationship with key on trade exploiting his 'Oberoi' tag well....after our ASM Bombay left-Deb Mitra, we transferred him to sales but he left us and joined Bacardi based at Blr....so IDV became a hot poaching place for competition and we have to protect our flock....

Bacardi took away Mahesh and Bhanu and that made Bacardi our enemy no1...Guys, Bacardi was more popular amongst Indian consumers than Smirnoff...so wherever they launched the product took off well....While there were lots of locally made vodkas which were quite popular and cheaper in prices available across, in the White Rum Category there were hardly any players...and that made life very easy for Bacardi...also largest selling international white rum and the consumers perception that white rum is better than dark...god knows what? But Bacardi is as good or as bad as any other spirit....IDV has to guard and protect our sales and keep growing SMV....with pressure on Green Label and also with so many brands, the team had to be always on their toes....In Maharashtra we could hold well in Vidarbha region but the rest of Maharashtra was always pressure selling. But we had some great distributors to work with. Pappu in Ulhas Nagar, Meher Irani in Pune, Desh Videsh in Nagpur and Dhanu in Kholapur....U'Nagar was the place where most of the distributors for Thane, Kalyan and Raigad operated from. Pradeep Kalani-a well known personality in the industry-had his bottling plant and also running the distribution of Shaw Wallace spirit and beer based at U'Nagar. Became very good friend. I still remember this episode. During one of my visit, I went to meet Pradeep to pick his brains on something....the moment you enter their office, a big bowl of dry fruits and nuts would arrive. Pradeep started cracking the shells of pistachio and within few minutes a hand full of cracked pistachios were handed over to me....I am mentioning this here as this is hospitality at its best. He was a competitor but the way in which they treat their guests is something one has to learn and practice. Also most of the retailers when you visit them wont leave you till you have something....All the guys in U'nagar known for their excellent hospitality. When you go on a market visit, most of the time the lunch is in the distributors home...Pappu was such a great host and his wife Neelima too....many of the guys I still keep in touch.

Selling was always a pressure....the billing used to happen till the 11th hour...tough on the factory guys but despite our best efforts we could not crack this last minute loading--almost 75% of the months sale used to happen in the last two to three days only. The reason being that our secondaries and tertiaries were not in line with our projections. 

Kerala was another night mare. KSBCL has some formulas for order placing......and our guys somehow could not crack the forecast and it was always the last minute rush and many a times we could not meet the last day of the month dead line....The permits have to be sent to the unit from Trivandrum and many a times we used to send our guy personally to the unit.....And the month ends were always pressure and tension packed. 

I shifted my family to Bombay in 96 April and the apartment where I was staying as a guest - Silva croft- was converted as my residence ....that was a great thing to happen. The apartment was on the main road with everything in close proximity. And we had a great time there...so many get togethers and the private terrace we had, was such a huge one and could accomodate around 50 pax...this was a real luxury... The only issue with that building was sometimes power outages and water. My son got his admission in Learners which was just a few steps away. Kiran Talcherkar, a great friend, helped us to get the admission. This school was run in an apartment but an excellent place for the kids. It was a star studded school....(Zeenat Aman's kid was there and also Nasurudeen shah's) just to name a few...run in to them quite often.

Changes were constant in IDV....IDV India managed to send its people on overseas assignment regularly. Tony George managed to get a job in IDV UK and he moved. That was a good thing to happen to me personally as we got Debasish Roy as our HR head...guy with lots of commitment in developing people...we jelled very well...Debasish and Veena, his wife became our neighbours in Bandra....Ashwin Deo another great guy, was seconded to IDV - Yangoon. 

Mahesh Iyer our first CFO quit and in his place we got Ravi Rajagopal from ITC. Completely different from Mahesh. Mahesh was just outstanding...he had a very pleasing personality and a very hard working guy. 

Before the prohibition was implemented in AP, we tied up with an unit in Vijayawada-Continental distilleries. It was a very small unit and we started bottling our Mens Club range there. I remember Mahesh Iyer preparing the 10 pages contract overnight in the hotel room of his where we were staying as the agreement had to be executed next day. The owner of Continental, Subba Raju, a fantastic person. Very rich but very humble and great soul.

We also roped in some great management trainees in Vivek Aggarwal-logistics-Ashu Kaul and Gaurav Sabharwal in Sales-Kamal Arora and Nihar Das in Mktg, Atul Chapparwal in Finance....All these guys are doing so great in their lives....Atul is still with Diageo managing Taiwan...Hoshang Mehta, Aparna Bhosle, Amit Mathur, Ritu Choudhry and Vibhuti Channa....a full fledged mktg team....

So life was hectic chasing volumes and office used to be some kind of hot oven....DR was always on a blow hot mode....month ends used to be very crazy.....but other days it used to be fun....

1996 was all about establishing our brands in Kerala, UT, Bombay/Maharashtra, MP and Goa....the second distributor in Goa was Mac Vaz....he was given only the international brands of ours viz Smirnoff, Archers, Malibu and Kelly's and the rest were with Rajan Lavande....Mac is a great guy to work with....full of josh and energy....we jelled very well. His wife Marusha another excellent person. We are family friends.

After Harminder left to start his own WS in Goa, transferred J Krishnakumar from Blr to Goa....every potential guy got an opportunity to prove themselves outside their comfort zone....

1997 turned the tables in both ways....Naidu came to power overthrowing NTR and there was buzz that AP would open up for liquor. I was in Kerala on some market visit and got a call from Ravi Rajagopal that I should go to Hyderabad pronto and meet the FM, who is his friends friend and get some first hand info. So I reach Hyderabad....first time stayed at ITC Kakatiya....and fell in love with that hotel...and the entire team...Gautham Anand was the GM and his entire team in the hotel were such wonderful people...I went and met the FM and he didnt give me a very assertive answer but kind of got the hint it prohibition would be lifted sooner.

We had a meeting in Bombay office and I was very buoyant...my pitch was that when it opens up, APBCL would have serious issues of providing stocks to the vendors as the local distilleries/bottling plants would not be ready to start the bottling at-least for a couple of months and added to that was the tender and price negotiation process of APBCL. So we decided to activate Khemani for supplies to AP.

AP announced the lifting of prohibition and things started moving very fast. Satyanarayan Rao was the MD and a great and clean guy. Submitted our prices and the tender, and was called for a price negotiation meeting. Went with Pavan Dave and I somehow didnt want to lose time running between Bombay and Hyderabad and hence compromised a bit and signed the price deal. I told the MD that I want 100k as the first order....he was stunned. He thought I was joking...I told him that none of his local guys would be able to meet the demand together and we can supply him from our Daman unit....he was very confused. And as expected, APBCL got in to deep problem as they could not feed the market. I got a call next week itself from APBCL MD's office and he asked me whether I was confident of supplying and when I said yes, he asked me to give a letter and released the order for 50000 cases but with a commitment, to release the next 50k upon reports on the performance of the brand at the retail level.

It was a hard task for us to organise this quantity as lots of things had to be managed. I rushed to Daman, met up with Ashok K and he was very happy to extend all the possible help. Dr. Puri head of manufacturing and Rajneesh Sharma the incharge of Khemani from IDV side were all on their toes and we started the production. We realised after starting the production that the brand registration for AP from Daman was not submitted and we did it post facto....And supplies started....

The same time, we also participated in the Kerala tender process and took the first order of 15000 cases all Green Label. Competition thought we had gone bonkers and the sales of whiskey in Kerala was very meagre and somehow I felt we can sell of these 15000 cases. Yogesh Gupta was the MD with Sashikant as the secretary and Prakash as the FM....tough guys but built a great rapport with them. They were only used to the local companies and dealing with an MNC and someone very aggressive was a welcome change for them. Sashikanth the secretary was good to talk to and he was quite keen to know how one can change the drinking pattern of the Keralites as they were drinking only brandy and rum....Challenging but we decided to bite the bullet.

So Khemani was under pressure to produce so much from nothing...

And we have to get the team in AP....KGR got relocated to Hyderabad and we immediately built a team....And appointed Sarathy of Anupama as our promoter. Such a gem of a person. He was also the promoter of Tilak Nagar but based at Vijayawada....this is where, in hindsight, our first mistake rather misstep.....

AP is something like this....The Telangana part, Royalaeema, South and north coastal. 

Sarathy was strong in Vijayawada and nothing in Telangana....also not very good in Rayalaseema....he appointed his own guys from coastal in Hyderabad....the dealers of Telangana are of different breed. A mix of Sindhis, Punjabis and locals....and the way they do business is different from the coastal and RS guys.....Sarathy didnt know how it ticks in Hyderabad and we had few members and were so dependent on Sarathy and his team.

Green Label started off very well...Prohibition was lifted in April and in August we did a redistribution of around 88000 cases in one month. When we started AP, DR threw a challenge at me that if I cross 100k in a month, he would send me along with family to US.....and there was world class selling competition by IDV and I was chosen as the winner and of course, DR kept his word and I went to US via London and Brussels on a 15 day trip all paid by IDV India....The launch of SMV in AP was another milestone....the launch party was at Grand Kakatiya with Sivamani's solo on drums....it was one of the best Hyderabad had seen....we were on a song but after doing 88k in August the volumes of GL started sliding....so many stories started on the quality of the product suddenly....as consumers were kept dry for almost 2 years and when the flood gates were opened they went crazy. A news item appeared in the local news paper, showing a dead man and alcohol causing the death...and beside the dead man was an empty bottle of GL....And competition fully exploited it especially McD....I would not say that was the only reason....we supplied AP from 3 different sources....and the Telengana trade didnt patronise our brands much as the market started getting flooded with all the popular brands in 3 to 4 months time of opening up and the initial craze on GL started waning out....and in North coastal and Rayalaseema we could not meet the syndicates demand and Sarathy and team somehow didnt put up a show/fight and in January 18, GL came down to 5000 cases!!!!

And Sarathy had Tilak Nagar and BDA and his business was good with OC and MH....and he started losing interest...(I repeat, he was gem of a guy but there are things which one cant do much...and GL was much beyond his capabilities....sad he is no more now). There was so much of negativity with in IDV due to this AP fiasco. In hindsight, I feel IDV should have reacted better but somewhere we lost it...After that it was just struggle one fiasco leading to another....we tied up with Adi Keshavalu's unit ( AK was a VJM's man-though he is from AP his main business was in KTK and he was exclusively bottling for UB and USL in his units in KTK) in Thirupathy and with a minimum volume commitment. Our volumes started plummeting and we could not fulfil the MGQ. We have to pay him despite not producing and that created a huge hole in our pockets....We closed continental after signing with Adi Keshavalu....our old gold also didnt take off in AP. The only saving grace was SMV...we were battered and bruised....the most difficult times of my career....team was down sized...meanwhile, one of our best ASE in AP was Satyapal Reddy....just a day before our sales meeting conducted in Hyderabad, I came to know Satyapal was involved in some business deal with the retail trade in Vijayawada....so called Satya for an enquiry and when asked he broke down and accepted and told me he had some money of his own and funded some retail guys. Then it stuck to me that this guy would do better as an entrepreneur and I was looking for someone smaller and better to take over our promotership from Sarathy....I asked him whether he would be interested to don the role of promoter leaving the job.....this happened in 1998....today Satyapal is one of the leading promoter operating out of Hyderabad.....

So AP was a disaster for IDV but Seagram (PRG) started gaining grounds and  so Tilak Nagar and BDA....I also made a mistake of recruiting a novice to head AP for us but didnt work out.....

Meanwhile, the other markets doing well and also IDV due to capacity constraints at our Nira plant, tied up with few more bottling plants and both self and Abhijit Dasgupta got promoted as VP Sales and CBU...I was given South and West and East and North with AD....not much of change in the job profile but work load increased. This additional responsibility of managing the 3rd party units helped as the buck stopped with us...and lot more learning on logistics and production planning.

Sanjit Padhi decided to leave IDV and joined Heinz...And we got the amazingly talented Sunil Lulla in his place. A man with so much of energy and sense of humour. He changed the entire mood of the office with his camaraderie across functions....he also brought lots of changes the way the marketing was functioning....and more than anything else managed Deepak well....

More next episode......                                                                                                                                                                                                                                                                                                                                                          

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

Episode 16....

Its Bombay-Mumbai folks....my second stint.

My IDV-UDV-Diageo India Stint....from 1994 to 2005 in Bombay....It wont be in chronological order as I want to touch upon episodes which are major learning for me and for the readers too...

I moved to Bombay and was given a room in IDVs guest house on Turner road. Silva Croft apartment 12th floor with a beautiful view of Bandra...this place is situated diagonally opposite to the Bandra Club and a few minutes walk from the very popular Joggers park.

It was a 3 bedroom, hall, kitchen ( a balcony in the kitchen too) and a huge Terrace apartment. I took one room and the other two were kept for guests. DR was always, and rightfully so, as were just a start up  and the GH was his idea and also putting me up there. I moved in leaving the family in Blr as we wanted our son's academic year to be completed and then move to Bombay. Twice a month Bby-Blr-Bby trips and also covering the rest of the markets from Blr....Lots of travel but it was quite enjoyable to represent an international company. And IDV was the first International company to launch in India....

I took over west from Sanjit.

I also relocated the AP team-due to prohibition, those willing to move, to different parts of West and South.

Now about Bombay registered cum HO....Phoenix complex, earlier a mill, was the first one to come out of the shackles and create an office cum shopping complex out of the defunct mills-thanks to Datta Sawant.

IDV was one of the first movers there and we had a great looking office. Deepak Roy had a nice cabin with a secretary space outside his office...and cabins for finance head, HR head, marketing head et al. I was also given a cabin, closer to the sales MIS and sales accounting. When I moved to Bombay, Mahesh Iyer was the CFO, Tony George was HR, Mark Cohen marketing, Rodney Legal and accounts, Pawan and Rajesh Gaind - Logistics, Rakesh Chopra Exports, Sridhar Iyer accounts and Subra IT....Sanjit went on a stint to UK with IDV on marketing...It was a compact and a beautifully done up office with a nice conference room and a pantry. The HO team jelled very well. Mahesh Iyer was a great guy to work with, so as his team mates. Tony G was Deepak's favourite. We had 4 brand managers assisting Mark C. Mahesh Madhavan (currently Global CEO of Bacardi) was the brand manager of SMV, Navneet Dave was for the Gilbey's brands and we had Vivek, Hoshang, Aparna Bhosle and Vibhuthi Channa....Abhijit Dasgupta was the GM for North and East based at Calcutta.

As always, I landed myself in a big soup in Bombay. Green label was a big hit when it was launched and sadly instead of just confining to fewer markets, IDV expanded but without increasing the production capacity/capability of manufacturing team and also understanding the finer nuances of blending....this has created a major problem with the vendors in Bombay. And Bombay retail trade is well knit and they together decided to teach us a lesson by converting the consumers as they didnt want the consumers to go empty handed and to the next shop. As I had a good equation with most of the retailers, first thing what we did was to correct the supplies and direct most of them to Bombay local and secondly, issued a personal apology to every single retailer on our failure to meet their demand. This helped us to a great extent but we lost some base as consumers shifted to their original brands. Had a good team in Bombay to manage the business. Transferred Sudeep as ZM for Maharashtra (rest of Maharashtra-excluding greater Bombay) based at Pune. This has helped us a lot as Sudeep learnt the ropes faster and built a great relationship with all our distributors. Vidarbha, Thane and Kholapur, we started doing well with improved supplies but competition was quite tough. The problem with Bombay was the number of distributors. Somehow the HO, before my arrival, thought we should have more distributors....They already had some 3 to 4 and when I joined I was asked to induct two more....I could not do anything but to go with what I was told....this too many distributors created major tension for us as one of them, the most powerful amongst, started undercutting to garner more volumes...

We had Rajan Lavande in Goa as our distributor...he was a good man but didnt have the wherewithal or understanding of distribution. It was Sanjit's decision as obviously the negotiations failed with Agencia Commercial, the best distributor in Goa even today. 

And thats the time Seagram (currently Pernod Ricard Group) launched their Royal Stag with a fantastic marketing gimmick. They openly claimed Royal Stag is made 1) from grain spirit as whisky has to be from grain and 2) No added flavours or colors and very aggressively marketed this across channels despite the ban on advertisements...their end card was - 'can your whiskey say this?". Very nice presentation and a decent blend at that price. Normally in the industry manufacturers price their new brand cross-line with the competition but Seagram priced RS slightly above McD No 1 and lower than RCW....this clicked for them very well as many consumers from RCW downgraded to RS and upgraded from McD. Yogesh Mathur told me personally he changed to RS as he found it on par with RC....perception....and Seagram did a great job with regard to distribution too...they gave the entire distribution of Bombay city to Deepak of Candy....though the retailers were not happy about it as their bargaining power would weaken, the company didnt bother as they were very clear that their marketing would pull the consumers to its brands....and the product clicked in Bombay and in Goa....Goa with in no time RS became the household name....and distribution by Agencia.... In hindsight, the difference between IDV and Seagram were---IDV was paranoid to launch as many as possible....Gilbey's Green and White, Old Gold, Smirnoff, Malibu, Archers, Kelly's, Spey Royal---8 brands in less than a year....and one after the other...and the team lost focus, as their time got consumed in launching the products then nourishing it. Also we had issues with our manufacturing capabilities....and we went pan India despite these issues...whereas Seagram was very clear in their head on what they need to do....they started off with a JV unit but with in two years established their own unit in Maharashtra and also franchised an unit in undivided AP. Unlike others they started with East--they launched first in Calcutta and then moved to other markets...from Calcutta to AP to Bombay....and followed RS with another winner in Blender's Pride and later with Imperial Blue....all these three brands are chart busters even today. They spent quite a lot of consumer pull....they also failed in their attempts in brandy, rum, vodka and gin but these 3 brands are big hits...Also in Scotch they launched 100 Pipers and this brand had some traction in the olden days and hence they could swing consumers. Where as, IDV launched Spey Royal, a brand which was sold in Thailand and nowhere else. Blunder....IDV should have launched J&B with the BII route...that would have given IDV a major headway....

Also IDV deputed Chris Arms to develop local blends for India...All the initial launches were his creation only....While in 94, that was the order of the day by everyone, IDV, instead of creating something different, followed the path and hence consumers could not differentiate....our presentation was good but product was similar...Seagram differentiated and tom tomd it......and succeeded. 

Meanwhile, United Distillers, the makers of Jonnie Walker at that time, entered in to a JV with UB group and launched their Black & White and Vat 69. While UD just looked after production, the distribution was given to USL but USL didnt do anything great...Black & White and Vat 69 were so popular in India but the local distribution could not encash on it....Teachers, in 94 was with Hiram Walker....and they did a JV with an Indian company, launched Teacher's....This brand was known but nothing compared to Vat 69 but Teacher's clicked and started doing well with very skeleton FF but a very clear distribution and marketing strategy.

Selling Premium and Luxury brands need a different kind of skills. If you put these Premium and Luxury in the same basket alongside of popular brands, it will remain small only as the team always get excited with volumes and not with Value...creating value has to be driven hard in the minds of the team but IDV, in hindsight, failed in that aspect......USL launched Black Dog-which was owned by VJM and it clicked.....

So the market was hotting up and competition was quite severe....but our team got so much bogged down with Gilbey's range fighting not only with USL and Seagram but also with the regional players....the regional players didnt have to bother about advertisements and were quite happy with thinner margins....and they were very fierce when it came to competition....But we somehow managed....

The episodes between 1994 to 2005-my IDV-UDV Guinness-Diageo stint in India-I would be only covering things which were exciting and knowledge worthy and hence I would be shuttling between time loops.....So pl do not get confused.....

Till the next post.....

Cheers and stay safe.....

 

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

Episode 16....

Bangalore....setting up IDV and the team.....a new journey....

14 lovely years with HL...what a journey it has been...there are guys who continued with HL till they retired. HL got merged with USL and when VJM bought SWL the company became huge and VJM made changes too by creating Regional Profit Centres, a concept new to the industry and made it quite rewarding for those who contributed well. To name a few who retired starting from HL to USL to Diageo.....KSR, KGR ( he left HL to join IDV and then after a few years went back to SWC and USL-Diageo), Dwarak, Kandan, Hari, Datta, Sheigar, Nagappa, BSR, Kalyan and many more. All these guys were from very humble beginning and grew up to BM, RSM, DGM, GM et al. VKR retired as President, Ashok Capoor, VK Arora, VK Luthra and many more. Am talking here only those from HL...I might have missed few and my apologies....

HL was a great company to work for because of its mix of FMCG and alcohol....tough terrain and tough bosses....and that has sharpened the skill of many of us.....So a big salute to HL....

In April 1994, I packed off to Blr with Jeyanthi and Babloo 5 YO then....I was the controller South but the task was huge...to start from the scratch...the first challenge was to get the customers familiarise with the companies name-International Vintners and Distillers-but the beauty was all about the narrative of Vintners...the wine developers...IDV was part of the Grand Metropolitan Group UK, which also had under its arms, consumer brands such as Pillsbury, Burger King and some hotels....In spirits, the most famous brands were Smirnoff, Bailey's, J&B to name a few but sadly none of these brands were that popular in India. In the early 90s GOI opened up the trade and Liquor MNCs were allowed entry...but with a caveat that they should have a local partner with a license to bottle or distill...so IDV tied up with Polychem of Khilachands--the Khilachands are great guys as partners and the Sr. Khilachand was a well respected person in the industry. Polychem had brands such as Alcazar, Mens club and Louis XI but were a small player. Their unit was in Nira, near Baramati, Maharashtra....they had both distillery and bottling plant...but not a very modern unit....in Kerala they had a bottling tie up with Polsons....otherwise their presence in South was nothing...They also had Yogesh Mathur as their head of sales and marketing another wonderful person to work with.

So, as I said, from scratch, I have to start...first is to find a home....the first 15 days we were put up in Taj Residency on MG Road and started running around...after seeing many, finally got a ground floor apartment in Royal Residency and also lucky enough to find a small independent building on Primrose Road for our office. Home to office was just 5 minutes of walk....the office was just a two bedroom hall and kitchen place but with a garage....we converted the garage in to a meeting room. I was all alone and first person I recruited was an office assistant (Gowda) to do the running around. Phone was top priority and there was only BSNL. And getting a new connection was not that easy then. Had to run around make representation to the head of BSNL in our area and finally got it. I presented a watch to the person who helped me to get the connection but got my trip taken by DR as it was against the policy of IDV as it was construed as bribe....

Now to recruit the team. I presented the structure to DR and got it approved. I had to get an ASM for KTK, AP and Kerala and a TSE/RSE for Pondy. TN was closed for us....Sudeep was the ASM for McD for KTK...one day I just dashed off to his office and met him and offered the job....Sudeep is a nice guy, non controversial and knew the KTK market well....now on KTK market....KTK the official sale per month was around 2 lakh cases then. MSIL was the official procurement agency but the business was transacted completely different. McD Whisky was the leader and with an MRP of around 150 or so but used to sell at around 100 at the retail....how could it be possible....dont want to get in to the details here as it would create a storm....so IDV has to be different as it cant follow the same path as the locals...Sudeep wanted time and he also wanted to have a meal together with families to understand things better....so after dilly dallying for around a month-I almost started looking for alternatives-he accepted the offer. And simultaneously I started recruitments of the team. Pulled Krishna Kumar from HL and Sudeep got Uthappa and Shankar from McD. These three for Bangalore n Paramasivappa for Mysore and Ratnakar Kundar for Mangalore. Recruited Ramesh as office accountant and Felicity as reception cum secretary. Office is set....But business??? Will come to that...

I pinched KGR from HL...he was the RSE in HL. Made him the ASM for AP and also pinched Srinivas CH and Satyapal Reddy....Another Srinivas was also taken. Suresh from Polychem was also absorbed in to the team. We were no player in AP despite Polychem's little presence....Set up an office and took KS Rajagopal to manage our office. The added attraction for me for AP was my stay at Grand Kakatiya at Hyderabad. Anand was the GM there with Sibu and Sharmila in the front office. Kakatiya was new then and it became one of my favourite places....

Pondicherry, appointed Sabapathy as our RSE....

Kerala appointed Harikumar as ASM-he was with McD....we had to absorb a few from Polychem as they had some presence in Kerala...Rakesh Ramachandran at Trichur and also few more. Set up the office in Trivandrum. Brought Satheesh who was in HL in Hyderabad to Trivandrum to manage our office. Such a professional guy.

initially I was doing everything from sending fax to Bombay to collecting appointment letters by fax and handing over to the recruits...but I thoroughly enjoyed it as it was a great learning....the only help I had was Gowda my office assistant.

Let the narrative be state by state...

As we made Blr as our regional office, let me start with KTK....the team was set...Sudeep the ASM, Uthappa, Krishna and Shankar in Blr, Paramasivappa in Mysore and Ratnakar in Mangalore....Ramesh to take care of the office and Felicity as our secretary....and an office boy to run around....

Smirnoff was launched with lots of fanfare in Mumbai sometimes in June 1994....and what an event it was...the first international brand to be bottled in India and to be launched in India...the launch part was in Taj President and it went off so well....it was attended by the creme de la creme of Bombay and very few trade partners....the event went on till 4 in the morning...Smirnoff and IDV arrived in India with a big noise....the first case of SMV was auctioned and Parthiv Khilachand bought the first case....the launch was well covered by the media...our MM Mark Cohen did a great job with Chris Meotti the Global brand manager of Smirnoff personally being there....It was all smiles till the next day morning when we went to the market to launch the brand.

DR asked me to stay back and assist Sanjit who was incharge of west..we have taken some sample bottles with us to the room for our trade visit. Next day morning, I just took few bottles to carry with us and to my utter shock and disbelief, I found the first bottle I lifted from the carton, with white particles floating....called Sanjit who was also in the same hotel and showed him that...we checked the whole case of 12 bottles and found almost half of the stocks having issues....called DR immediately and as expected he lost his head and put Dr.Puri who was incharge of mfg and to cut the long story short, DR said the launch has to happen and we need to segregate the stocks and take with us the one which are in good condition....like true soldiers we followed his order and the brand got a very thunderous response from the trade....Smirnoff's retail price was par with RCW....I think it was around 300 for a 75cl....I went with my team to Crawford market and my favourite shops.....Bombay always welcome new brands as they get their launch offers....but the floating particles was still on back of our heads....later I understood, it was 'spangling'....a kind of chemical reaction when the alcohol is bottled in bottles which are not acid washed....

Sanjit and self went to the distributors office and checked all the stocks and kept aside the stocks which had this issue....left the head ache with Sanjit and returned to Blr....my task was to make the Blr launch a far better one...

As mentioned Karnataka business was different...what you see is not what actually it was(1994)....so one has to learn the ropes but our business model was different so the RTM like others, was supply to MSIL wholesale and from there to WS and to retail. The WS were the cog in the wheel...without their support one cant go anywhere....

We appointed Ananda Rao-Anupama Traders as our promoter for KTK...I have to mention here about Ananda Rao....he is such a gem of a person with fabulous contacts across the government bodies and always on the move...his sons Ratan and Raja were also in business but Ratan was managing the WS.....Anupama also had WS but was restricting their business only to select brands and retails....(am not getting in to the nuances of the KTK model in vogue then as it is highly political)...

We worked out the cost card and arrived at the MRP...fixed it at 350 per bottle on par with RCW and also the same as Mumbai...but hardly any money for activations....DR thru Mark taken care of that...

I was fortunate to have a fantastic team in Blr....you task them something and it is done....and against all odds....we had to swim against the tide....what we did was just focus on biggies....Dewars and Spencers kind of outlets.....Spencer was our great support...Srinivas was the head of procurement there and was very supportive....no nonsense guy but he had a soft corner for us....we have to highlight to the customers and consumers our USP....Three times distilled, Charcoal filtered and worlds largest selling Vodka.....the pubs played a major role and it was difficult to crack them initially as they were all very under the clutches of UB and they didnt want to upset the apple cart....but the team managed it well and cracked...not only we cracked the pubs but also made SMV as the pouring brands in some....We focussed a lot on the visibility part...the tag line of SMV then was 'Pure Thrill'. In Spencers at the entry point we erected a 10x10 wall clock with SMV branding and we improvised the tag line from Pure Thrill to 'Pure Time'. One more innovation was that we created a fabulous branding at Vallara Junction a gift shop and had nothing to do with alcohol....they are at a very vantage point and no one can miss the outlet...we spoke to the outlet owner, a very nice guy, convinced him and erected a signage there....SMV was all over BLR in no time in terms of visibility....this has irked our dear VJM and he went to the press accusing that IDV India compromised on the quality of SMV by producing it from molases instead of the established practice of producing it from grain spirit...he was right though....Koshi's restaurant frequented by the local journalists....primarily print media...and Koshi's owner was my neighbor. I requested him to call the journalists one evening for a blind tasting of SMV....we got few bottles of SMV from the DF (imported from other country) and did a blind with India made SMV....and it was a chance taken by us but the press guys realised that there was no difference and that controversy died down....We were very proactive and we wanted to ensure that we are noticed and respected....And we kept getting visitors from UK and after Bombay it was always BLR for them to visit....and they were so thrilled to see our zeal and commitment. We painted the whole city with our brands....there is one bar in Majestic...we call them the nip joint and quicky..Srinidhi bar...people come there for a quick round before boarding their bus or train....We did a promo for SMV there as this outlet was selling decent quantities of SMV and we felt we need those conversions too....the SMV BM would not have approved, construing it as blasphemy, but we went ahead and that outlet started selling 5 cases a month....and Tony Froggot the head of Asia Pacific during his trip visited the outlet and had a drink there with us.... Another outlet-Status bar-in the same majestic which was on the top floor and had a huge area for branding seen from across all directions...the owner was dead against branding but we convinced him and got our branding there...That became talk of the industry as it attracted millions of eyes. There was another outlet Sarovar pub on the Residency Road junction....we erected a huge signage there. 94-95 there was no LEDs....it was conventional tube lights and once in every 15 days someone has to go and change those lights...also the sheet they were using used to get dirty....we appointed an agency to keep the signages clean....Blr created so much of buzz and the floating population noticed it and SMV was getting popular in Chennai (though was not available) and other places....the rub off effect was felt even at Bombay....

As mentioned our initial days were focussed on placements in outlets that mattered...viz the pubs, clubs, premium off and fine dinings, visibility across the city and at the retail outlets. In 1994 the windows at the outlets were not all the expensive but we didnt have that kind of budget and hence we decided to go berserk on shop signages and things like Vallara Junction.....

And my team never looked at their watches.....we were on a prowl and would return home every day almost by midnight....and we thoroughly enjoyed....the problem was the volumes didnt substantiate our hard work due to the market dynamics. It was very difficult to make the WS to buy SMV as they had to invest upfront and hence we had to depend heavily on Anupama for placements but Anupama had their own limitations but as the consumers started asking for the product the volumes started trickling in....

The Taj group was of great support. At the Taj West End, Vivek Pradhan was the head of F&B and he was so supportive. And our guys cracked the Bangalore Club, Indra Nagar Club, Koramangala club, Karnataka Golf Club, Bowring institute and Century club in Cubbon park....these were volume givers and were lifting the stocks from MSIL directly. Their demands always were 2+1 free but we completely desisted from succumbing to it....and still managed volumes.

So it was a waiting game for us for the volumes to improve. The other markets apart from Blr city were Mysore, Coorg and Mangalore....also Manipal...but too small in volumes...

So Blr was always on the radar of the HO because of the quality of work it was churning out....Our SMV launch party was a huge success. We picked up an event management agency which was relatively in experienced but they did a fabulous job. Surendra Nath (Nath in short with a lovely pony tail)...The launch was held at Taj Residency, MG Road and what an event it turned out to be. The first of its kind for the Bangaloreans. The event was well covered by the media. I was very raw then in terms of my interactions with the press and just learning the ropes.... and also organising events....HO was maha impressed and so was Chris Meotti the brand manager of our region. Diana Hayden, who became Miss World in 1996 was part of the event management company of Nath that time....and our marketing guy Mark Cohen(Irish) and Diana became partners in real life too.....So IDV Blr also helped people to build personal relationships...

Every single launch of ours was different....SMV was followed by Spey Royal.....Spey Royal was the first bottled in India Scotch....this means, the bulk used to come in barrels with higher strength and all we need to do at the bottling plant is to reduce the strength of the alcohol to 42.8 by diluting it with DM water...the quality remains the same as bottled in origin and BII....the product and presentation were different but attractive. Spey Royal is the scotch from Spey side....the Spey river of Scotland....its very mellow and easy on the palette....Ann Ho was the brand manager and she was based at HK and such a wonderful person. She was so passionate and was full of drive....being the first BII scotch we went after it big time....for every product launch the team used to dress up in typical product specific attires....We tied up with West End hotel and gave a coupon to the retailers on purchase of 3 cases to dine with their spouse at West End with 2 shots of Spey....this was something no one had done before....Spey Royal was all Royal with the purple colour label and packaging....but our Indian consumers always drink the brand and not the product....so the response was very lukewarm.....

Kerala was different....in 94 the excise duty on alcohol was very meagre---around 150 per case with marginal ST and a 25% margin of the corporation. The retail was with private and many of them very powerful too. In Trichur the biggest was Perunchery wines......probably Kerala's biggest...during the Onam time the queue would be around 2 kms long....the beauty with Kerala consumers are they are very disciplined and also you would not find much of alcohol related fights or quarrels...and brand loyalty was huge....the market was all Brandy and rum....McD, HBB, Bejoice and in Rum it was OCR et al....Vodka category was small....and one has to wait for the tender period to open to launch a product...it used to be always Feb/March  for the fresh tender to open and April one could launch their new brands....we could launch SMV sometime in 95...also they had some very specific conditions in terms of comparative and competitive prices....you quote the prices, they would call you for a negotiation and then you enter....but the officers were good especially the company secretary and the MD-an IPS officer, at that time....they were quite helpful but all by books and rules....so in 94 we could not do much but to get our act together with our Polychem brands viz Mens club brandy and whiskey and Louis XI brandy....these were locally bottled at Polsons, a very small unit at Chalakudy, owned by Peruncheris.....and in Kerala the corporation release the orders based on some 3 months average...if you dont supply or short supply you would tend to lose the average.....one has to be very well versed with the system to manage the numbers in Kerala....We had a mix of new and old members in the team....Harikumar had a great relationship with the Corporation. Ashraf of HL who was in Trivandrum initially helped by taking me to KSBC and introducing me to the MD with a good word but ran in to problem with Santhosh and Tomy-God knows whats their problem with someone introducing me....When IDV took charge, Francis Allappat was our promoter....a very nice guy but he was also the promoter for CDL of UB group and also Amrut....Obviously, UB put pressure on him to leave IDV and he recommended his brother Jose Allappat to be appointed in his place. That was one big mistake I did as I didnt have that much of knowledge about Kerala market that time.....we went with Jose but it turned out to be a bad call.....We continued with him despite serious issues as we didnt have much to lose....In 95, after we got our SMV and Green Label registered with KSBC, self and KGR decided to bring in someone small. Polychem had an auditor in Mathew Joseph....very calm and composed guy....I approached him and asked him whether he would be inclined to take up the promotership... he brought his brother Sebastian in to the picture....Sebastian was very raw and had some small brands under his belt but he was keen and wanted to get in to this industry....in fact I suggested them to name their company J&B....(Joseph and Brother) but they decided to call it Joseph Brothers.....We started off small but today am happy Sebastian is one of the leading promoters in Kerala.....Sebastian was always available and open to try out new ideas.....our teams really jelled well....

AP was a different story. We had Polychem brands as mentioned earlier but too small. In 95 we got our SMV and Gilbey's brands registered with APBCL and in fact just launched the brands when NTR swarmed in to power and the very first day of his assuming office, declared prohibition....I had a huge team....and it was a major turbulence in AP and also personally for me and many who believed in IDV and joined in AP. We had to immediately act. And as a company, IDV didnt want to send anyone home for two reasons...(1) IDV was the first MNC to enter India and (2) Chris Bulmar, the HR head of Asia Pacific was a great HR person and she was clear in her head that no one would be sent home....We gave the options to the team and many of them opted to resign as they didnt want to move out of AP. Ch Srinivas and T Raghuram (a great guy) opted to move out....We transferred KGR to Kerala and split Kerala in to North and South. Hari was given Trivandrum and KGR was based at Cochin and was asked to look after Mahe too....The business was small in terms of numbers but we accommodated them. ChS was given Cochin as HQ and TR was accommodated in Trichur.  AP office was closed and whatever stocks were left with APBCL were sold at the cooperative stores which started servicing the permit holders. So I was just left with Kerala, Bangalore and UT of Pondicherry.

Pondy was a different story. An open market with a limited volumes for brands like SMV. We appointed RR wines as our distributor there. Ravichandran and Ramamurthy--college mates who ventured in to alcohol business....they were also new in this business and they had UB beer distribution but nothing in spirits. SMV was an instant hit in Pondy and also at Mahe. We appointed Jayaram as our distributor in Mahe. Karaikkal was too small then and supplies to some select retails used to go from Pondy. We launched all our brands in a very short span of time in Pondy and also Green Label....dealers in Pondy still remember our launch parties....Saba was very creative and you give him the concept and he would churn out some box office....Green Lable received thunderous response there....but small volumes.

On IDV and its first year launch....IDV was in a kind of hurry....in hindsight, it was a wrong strategy as the team got completely lost with launches of so many brands one after another....SMV was followed by Spey Royal, Archers peach schnapps, Malibu Coconut white Rum, Kelly's cream liqueur and Gilbey's Green Label, White Label and Old Gold.....One after another....kept coming....Kelly's started cuddling at the retail outlet with in few days and it gave us huge head aches...unlike Bailey's, Kelly's was made from veg fat....Bailey's was original cream blended with Irish Whiskey....but Kelly's was made for India with very inferior quality. But Archer's and Malibu passed the test despite a different compositions due to its very strong flavour contents. But volumes were very very low....these drinks were too early for Indian consumers as these were just liqueur and mostly taken post dinner and our consumers wanted immediate high...Chris Arms was the blender assigned for India by IDV but somehow he felt Indians deserved only this much.

Green Label was an instant hit with consumers across the country with its unique presentation. First time in India Guala cap-tamper proof-was used for a regular price segment whiskey....but the problem was we kept expanding the launch as we need to give enough work to the team without strengthening our supplies....more on this later.

The first tie up by IDV was signed off with KAPL at Meenakshipuram-Kerala...an unit owned by the Shiva distilleries of Coimbatore. They were languishing with this unit in Kerala as their brands were not providing volumes and we had huge problems with Polsons....so we exited Polsons and entered KAPL....I was so happy that we could tie up with KAPL the first by IDV in India. Mr SV Balasubraminam, a fine gentleman, was the Chairman and Sakthivel Samy was their manufacturing head....We had lots of issues initially as we just kept dumping materials there but managed in due course. The unit was very good and quality conscious...

So with just three markets to manage and smaller volumes, I requested DR to do something asap....April 1995, I was made the GM and transferred to Bombay to manage South and West.....Sanjit was transferred to marketing...

Another transfer and moving lock stock and barrel......

More to come.....