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

Episode 22...

IDV----journey continues....Memoirs.....Musings of a sales guy at heart.....

MNCs known for their mergers, takeovers, name changes et al. But when it comes to alcohol business in India, name change is a nightmare as 1) you have to get the local excise dept permission to change the name and 2) register all the labels once again with the new name 3) take those approved labels to other markets and re register them and 4) huge write offs....serious nightmare.

So just beware of this if any of you or your bosses or the company you work for, contemplating name change.....

IDV (the one I joined in 94 and the first Liquor MNC to start ops in India) merged with UDV....IDV was the makers of Smirnoff, Bailey's, J&B, Archer's, Malibu, Gilbey's et al. UDV was the biggest player in the industry with Johnnie Walker as their lead brand and with Bells, Dewar's and many more....and Guinness was another brand. After the merger it became Guinness UDV and there after Diageo. United Distillers India ltd (UDIL) had a JV with USL on a 50:50 partnership and launched Black & White n Vat 69. USL wasn't happy with this development of IDV and UDV merging globally as USL felt very threatened that this IDV-UDV combo would make their life difficult. They also used UDVs clout in bringing their own Black Dog in to India as BII. UD India launched Black & White and Vat 69, both were well known in India but didnt make any headway and lost in the race to Teachers and Seagrams 100 Pipers.....Vat 69 was one of the most desired scotch whiskey brand in India pre 70s with majority of the movies this brand getting huge visibility....The UD:USL JV changed the bottle shape to kidney shape instead of the original round one....This was a bad strategy by them....God knows what made them to go for a new bottle in India....Could be one of the reason Vat didnt become the first choice for consumers....100 Pipers and Teachers Highland cream grabbed the opportunity and became highest sellers in the BII scotch category. IDV failed with Spey Royal and UDIL was stuck with the USL sales force for pushing their brands but USL team had their own pressure with volume brands and hence could not take these two brands of UDIL to the top slot. We inherited these two scotches in India and these were bottled in the USL plant in Nasik-Maharashtra....and the bottling of these to be continued in USL plant due to some contractual obligations and that put some extra pressure on us. A bottling arrangement and with USL and managing production in another unit.....and delivering the volume commitments...added to our headache...look at the complexities....nothing came to us with a silver spoon (whiskey glass)....and the beauty was that we also got the entire portfolio of UD scotches....that was a dream come true for the entire team and especially to me as I was a big JW Black fan always.....we also got Gordon's gin and Bombay Sapphire....fantastic portfolio of brands and the work started.....These brands were the aspirational ones for our Indian consumers but due to high taxations and complex RTMs the availability and accessibility were the issues. The highest sellers at the airport DF shops were JW Red and Black. At the diplomat supplies, though small quantity, the huge sellers were UD brands...so in popularity chart these brands were something we can say, 'owners pride and competitors envy'.

We will touch upon this later. 

As things were moving, got promoted to the level of VP. Abhijit also got promoted. New persons in HR in Roy Joseph and in marketing too a completely new team with Anupam Datta replacing Sanjit....Ashwin left and so as Mohita....DR recruited Abhijit Sanyal as COO. Both self and ADG were asked to report to Sanyal...a bit tough but we did....Sanyal-well educated, articulative with great FMCG experience but as seen, liquor was a bit baffling for many of these FMCG guys and many quit the game before even understanding the depth of the water. Anupam Datta as head of marketing...with great pedigree..but was found wanting in peoples management...but he had DR's ears...So we had two Bengali Babus-one managing the sales and marketing and another marketing....Sanyal struggled really to understand the forecasting model and also the complexities in RTM...Anupam thought if you put money behind ATL brands would start selling...but Anupam's downfall started when he invented something called 'claytoon' for SMV.....claytoons are cartoons but the characters made with clay.....this commercial, god knows how he got the approval of the international brand manager of SMV and DR- got bombed on day 1. When we saw that, we mean, self, Sudeep, Gaurav and Ashu, we uniformly felt this would be suicidal for SMV especially when Bacardi was scaling up and went straight to DR and conveyed our concern-- but DR didnt do anything and went ahead....SMV was the most premium Vodka in India and was making good progress and the positioning was also premium....but this claytoon commercial didnt depict any of the premiumness....another stupid experiment which failed before take off....waste of money and time....

Alok Chandra joined us to look after the Cinzano portfolio...Cinzano was an aperitif.....Martini was the leader in that category and Cinzano was tiny compared to Martini (remember James Bond's famous lines....stirred not shaken...the cocktail made from Vodka and Martini...but both were Italian....The presentation was same as International but contents...no comments....the market didnt respond well to this brand as India was not ready yet and Alok didnt have any heavy marketing budgets to support this brand...so another brand in our basket with hardly any support....confined to metros only but with unjustifiable volumes....

Our Indian arm bought over the shares from Polychem Khilachands and became 100% owned by Guinness UDV....

Rodney n Sridhar got promoted in finance.....Sudeep became head of West and South....Ashu was in charge of Maharashtra....Gaurav got transferred to Delhi....Recruited Ashish Monga as ASM for Bombay city....( his interview was a joy....Ashish a typical sales guy-aggressive and go getter....in the interview I asked him about his hobbies and he said he sings....I asked him to sing and he did so without any inhibitions and some medley of Kishore....got the job)...Team was well set and but it was always a struggle for volumes...

DR recruited Sunil Sethi to manage the international brand portfolio as MM....But though the portfolio was big the numbers were too small...Sunil S is another great guy but he was not given enough meat...

Rakesh Chopra was managing overseas business that included the DF and domestic in Gulf....senior guy and good in his work. 

SMV was doing well but due to pressure from the Green Label the team was unable to do justice for the brand...not only SMV but also the BII scotches....

Changes in UK too....Ivan took charge as the chief of developing markets and India came under him. Such a great guy to work with...very soft spoken but with very clear vision and assertion. 

The talks on selling of the Gilbey's portfolio started but as rumours. Meanwhile he suggested in one of his visits to create separate team for International brands to manage the RTM better. DR called me and told me about the proposal and I pounced up on it and informed him that I would like to handle the international portfolio....including the Duty free....sometimes in life, you wonder what makes you to say or act in a way which you have no answer....this division of FF was a major stepping stone for me...I was given a very small team...for example, some 3 guys in Bombay, 2 in Delhi 1 in Cal and for DF one person in Delhi.....and I was given the task of managing the rest of the country with the domestic brands team-the domestic brands team was headed by Abhijit Dasgupta....all the RMs reported to Abhijit....that was a high pressure area as selling green label and other brands was quite tough....so getting their time was perpetually an issue and managing ADG....

An interesting story here....Bacardi launched the Bacardi breezer in India and started off in Goa....the initial response was stunning as the whole trade started talking about this RTD...the first one in India and bottled in India....though Diageo had Smirnoff Ice an RTD which was gaining global visibility in US and in some European markets but never seriously looked at it for India....there was so much of buzz in our office and everyone wanted SMV ice to be launched in India. But what about production facility and capabilities....you need to invest huge amount....so someone suggested that we would look at the BIO (bottled in origin-import) route and test market it....with the import duty and taxes the MRP for a 300 ml was coming to around 230 vis a vis Breezers less than 100.....I was completely against it as it wont give us any kind of understanding and clarity on how to go about it....So I told them that I want to spend some time in Goa market to understand this better and revert with my proposal. Spent few days in Goa and my take was that since Breezer was some kind of novelty everyone was going for it but the male drinkers were adding a shot of Bacardi Rum in to the breezer and drinking it as Breezer per se was sweet and not giving them any high....it was just a fad....

Globally SMV launched SMV Green Apple flavoured vodka and it was decently received. I put up my proposal after speaking to Sudeep, Gaurav and Ashu that we should go for the flavours instead of RTD for two reasons....1) the cost factor and 2) brand contribution and 3) Fast turn around.....

Also just a few months earlier we came to know that Seagram was planning to launch an international vodka brand called Fling....we realised Fling was nothing international and not selling anywhere...but knowing Seagrams and their success ratio, we didnt want to take it easy....we felt that they would go to the market with 'the first vodka in India with grain spirit'....but SMV was with molasses spirit...though technically there wont be any major difference, it could make a difference in terms of consumers perception....we wanted to move fast and change the spirit for SMV from molasses to Grain...mind you guys it is not an easy task and 20 years back grain spirit was produced in India by just a handful....we picked Kedia in Indore, signed an agreement with them for grain spirit, moved really at a hectic space and launched SMV with grain spirit and created so much of buzz before Fling hit the market....We also sent a message to the trade in Bombay and Bangalore that Fling was not at all an international brands providing all the factual data....Fling bombed and we slowly moved SMV across India as grain based....we launched SMV in 94 and around 2001-2 we moved to grain.....

Coming back to the Breezer fight, somehow I could sell the idea of flavours to the management and we launched SMV Green Apple and I think Lemon with in 6 months....this became a big hit as our USP was that no additives required....just soda or water or ice cubes.....today almost 75% of the Indian Vodka market is dominated by Flavoured Vodka only......the seed was sowed by us and our brand development team with the manufacturing did a great job....

The learning from the above two episodes...do not go after competition....go after your strengths....and understand your weakness.....the SMV flavours is a great lesson and also preempting competition with Grain SMV.....

The international brands team...I organised an ice breaker meeting at Goa with key distributors and our team....under DR and Sunil Sethi.....that was more to get to know the portfolio and RTM....the distributors were quite thrilled as they would be dealing with the dream brands....

We also appointed the Khilachands as our exclusive bonder to import and sell the international brands for better management of RTM.....

This and more in my next post...

Till then happy reading and be safe....

Cheers 

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

Episode 21....

IDV----journey continues....Memoirs.....Musings of a sales guy at heart.....

CSD...

Canteen Stores Department ie CSD is the only source to supply to the defence force....they have canteens (stores) across the country in almost all the states including the border areas....and getting in to CSD is not only difficult but a long haul also. But once you get in there and with proper foot work and if your brands are good, you are sure to get some consistent volumes as the consumers are captive. GOI has given special concessions to the armed forces by cutting down the taxes and hence the price of all the brands across categories are cheaper in CSD compared to the domestic markets. In big cities they have huge walk in stores also. Big companies enjoy a sizable share of their business coming from CSD.

Having said that due to their tough procedures and the process involved getting listed takes longer than one can imagine. First there is something called PSC committee and once it passes through this committee (many get rejected here itself if your brands dont qualify the norms-every category of alcohol has a different norm-CSD made a major exemption to Bottled in India Scotches and allowed almost all the BII Scotches to get listed with lesser procedural hassles) and after PSC they do a distillery check if you are new and the unit is not listed, they also insist on your brand being sold in atleast a minimum of 5 states and once these things are done, there is a price negotiation committee and then you get qualified. The companies have to pay some kind of Bank Guarantee too.....

The states always have issues with CSD as some stocks tend to leak in to the domestic market, not in a big way-but in trickles-due to its price advantage. And the states keep hiking their duties for CSD supplies.

CSD was given to me. We pushed thru SMV as it was an international brand like BII Scotch but when it came to other brands it was struggle. But we quoted for both Gilbey's old gold and Green Label and after lots of running around came to the final stage of price negotiation. CSD chairman, categorically said it would be only one brand and asked me to choose....Didnt have much time and without consulting DR, I took a call and stuck to Green Label.

I think that was one of the wisest decision, in retrospect as that brand started giving us some volumes from CSD...we also got Christian Brothers listed.

But I think I was unfair to one person in the whole deal. KN Sharma who helped me with all the paper works and introductions with CSD and very well net worked....Some misunderstanding with him and after the listing I got the agency changed to Sankalp...Sankalp was the major agent to CSD and also had their own brands. Kamdar, Ashar and Gowlikar......these three were a great team to work with...and they did a good job for our brands.

Smirnoff and Green got in to CSD and also CB brandy....I have written about CSD for those who do not know about this one huge channel. Their reach is something really phenomenal and unimaginable....The opportunity for FMCG is really huge in this channel but it has to be managed with utmost professionalism and commitment as this channel services our beloved armed forces. But the process are still archaic and dont think much has changed in terms of process.....getting in is long drawn but once you are in and you have a good brand, CSD is life long....

We made Rajkumar in charge of CSD with regions supporting him. Rajkumar learnt the nuances quite rapidly and mastered it....my job was more in to relationship management and also strategic inputs. Biggies had very seniors managing this channel with a full team to support them as the numbers justified such huge deployment. CSD was managed as a separate RPC by USL....you can imagine the contribution!!!

Apart from CSD there are CRPF, BSF and others who float tenders on an annual basis and based on certain criteria award the tenders...but this is small business as they all float the tenders individually.

So just a brief on the most important channel in India. 

Till next....

Enjoy life and be safe.....

 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.....