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

Episode 34...

We are a start up now!!

Sudeep was gung-ho....Krithi was quite but didnt say no....I was looking at something to exit Flemingo...so we decided to move forward....first 'how to name it'.....Sudeep had roped in someone, a freelancer, to work on the brands specific to TN and South and also presentation. 

She provided few names for the company and we chose 'Geoscope'....Geo in Latino means global and scope-you know....Geoscope became Geoscope Exim pvt ltd...We registered the company with ROC and we got the approval from ROC on the 7th of Sep 2010....so Geoscope was born on the 7th of Sep 2010....

Darpan Kaur, who was our colleague during our Diageo time (she was handling SMV in India and later got a job in Diageo Singapore in brand management-worked there for few years and came back to India and was trying to figure out what next?

Myself and Sudeep knew her potential well and convinced her to be part of this start up and roped her in....We are a start up and the compensations cant be high which Darpan also knew well....And more than anything, she is a good soul and self and her respect each other and hence she decided to work on our brand strategy along with the one at Blr....Also Darpan started doing the hypno therapy course under Yuvraj Kapadia and was revving about it...Will come back to this later....

So, name done....work on brands in progress.....strategy and money?

Pramod Menon, who was with Diageo India and was with me in Dubai-a wizkid, came back to Bombay during this time and I met up with him and requested him to help us to work out the financials....and guys, hold your breath....the template he used 12 years ago is still being practiced by Geoscope...He did a fabulous job and challenged all of us enough on the numbers, employees, salaries et al.....I left India in 2005 and returned in 2010 and lost touch with the market dynamics (domestic esp south) and hence there was lots of dependence on Sudeep to provide these. Also Sudeep was still working for Kyndal and midst of his travel would contribute to the financials which was getting prepared by Pramod.

Krithi was a duty free guy and never. had any understanding on the domestic front but was very good in following up on initial setting ups et al. Also his job was to get us some export trading...we added the 'Exim' in Geoscope was to emphasise on the 'export-import'....

None of us had any idea on the upfront investment required for this project as we all had another job on hand and have to shuffle between these....

So when Pramod finally presented to us (including Darpan) we were in for a shock...because there was upfront investment required plus the investment on materials, brand registration fees, salaries et al....

Sudeep, on seeing these numbers, over a drink, with Krithi present, suggested that we mortgage our homes and raise the money....I was very clear from the very beginning that there will be no mortgage or any sort like that as none of us were rich enough to take that kind of risk....

So we decided to pitch our business model and the investment required to few known faces....Krithi brought a guy, known to all of us, and after hearing us out, he said when the money would be repaid and what would be the interest? He was under the impression that we were looking for short term loan....but that was not our pitch...

Sudeep and Krithi have to be behind the scene as they didnt want to rub their bosses on the wrong side and lose their regular income...but I have already done the rubbing and hence for me nothing to lose...It was almost a done thing with Flemingo for me...but since I kept the relationship going, I approached Viren but didnt sail through despite the fact that Viren initially agreed to this...these were all hit and runs...

I presented this to Jairaj and Neil in Blr....I had mentioned to you about these two lovely souls in my earlier blogs-during my IDV-Diageo times....Jairaj and Neil were school mates and Jairaj roped in Neil to partner with him in his business...they had few bottling units across India and their main focus was 3rd party manufacturing...I took our business proposal and met up with these two at their Blr office and we discussed in length but they didnt want to get in to branded alcohol business..so we need to start afresh...

One day self and Sudeep were in Bandra and over lunch we started wondering where the money going to come from to start our business. I told Sudeep that we will meet Sridhar Iyer-our ex colleague from Diageo and the CFO of Pfizer then...called him and he asked us to come to his office immediately. We went to his office and told him about our business proposal and our current plight. He asked us whether we approached Vishal Jaiswal....Vishal Jaiswal was our first bottling partner in Diageo, when we sold off the Nira plant along with our Green Label whiskey to Deepak Roy...Vishal set up a new plant as per the standards set by Diageo in Aurangabad in no time....We told Sridhar we didnt and he called Vishal immediately and set up a meeting. That was a major break through for us.

I met Vishal in Bombay and presented to him our business plan and financials....he said YES immediately-the meeting was in Hyatt in Santacruz east and we used the Hyatt office to draft an MOU between us...self and Vishal signed it and next day he transferred the first crore of rupees to Geoscope.

I was still in the Chembur flat of Flemingo and we organised a meeting in our place with Vishal, Vaibhav (his brother) his team consisting of Vinod Puri, Nikhil (his finance guy) and Jeevan Patel. From our side it was me, Sudeep, Krithi and Darpan along with Pramod....we discussed the business plan and financials threadbare along with overheads, our salaries and head count. We decided we would set up an office in Chennai and also all of us would move to Chennai. I was asked to be the CMD of the company with Sudeep and Krithi the directors. The salary for all 3 of us fixed at the same level-though I was more experienced I felt all of us should draw the same....Darpan's payout was also firmed up...

Sudeep used to frequent Chennai often as Kyndal had their tie up with SNJ there and also doing well with their Bols Brandy. Sudeep was under the impression that Bols was 100% imported brandy with the concentrate coming from South Africa....but he realised after a thorough study and research that Kyndal was using a small portion of the South African brandy concentrate only for blending purpose and it was nothing but an ad-mix brandy.....meanwhile Morpheus was gaining traction in TN...On 'Morpheus'....Tamilians have to travel to neighbouring states to experience national and international brands as in TN only those 6 or 7 companies were catering to consumers needs with their own brands till 2010....DMK under Karunanidhi gave away 3 licenses and since none of them (except Kals who was in arrack business in UT of Pondy) they started welcoming tie ups with national players. Radico moved in fast and introduced Morpheus in TN...the presentation was something new to TN consumers and they grabbed it....The liquid is nothing but an ad mix brandy...they added a small portion of extracts of raisins to enhance the flavour of the product....and the consumers were ready to pay a premium for this brand.... 

We also wanted to pitch ourselves for Smirnoff Vodka for TN as Diageo didnt want to get in to that market directly. Sudeep used his charm with the concerned in Diageo India and we got a letter of consent from them authorising Geoscope to manage SMV for TN...this was a major break through for us....with that letter we approached few bottlers and through one of them showed huge interest, the project didnt take off as Roland got shunted out of India suddenly resulting in this one was put on to the back burner....

Our designer in Blr came out with some brilliant stuff but all in Brandy category as our strategy was to take a strong foot hold in TN and South and hence the entire focus was on brandy. 

Meanwhile our dialog with Bardinet, France progressed well and I met up with Patric in Cannes at the annual DF congregation (I was with Flemingo then and it came handy)....we had some misunderstanding with Patric and the meeting in Cannes got this issue sorted. Patric and his boss Etione were very supportive and we signed an agreement with Bardinet for 10 years. We chose the name Hobsons, as for many it meant, 'leaves you with no choice' but actually the meaning is different. 

The next question was whom would we partner with in TN to bottle our brands? What came to my mind immediately was MGM Maran whom I have a great friendship. MGM is the parent company and SAFL is their IMFL bottling unit. MGM Maran bought SAFL from Muthia of SPIC few years ago....During Muthia's time we pitched for SMV bottling with them but it didnt work out. SNJ would have been ideal but Sudeep was sceptical as it would jeopardise his Kyndal job....I also wanted to look at Shiva as they were the most professional those days next to Balaji and went to Coimbatore and met up with Mr. SVB...but he told me that they have stopped bottling for others after their bitter experience with USL....I shot out a mail to Maran about us and the start up and pitching for bottling tie up for 3 of our brands with a volume forecast of around 25k per month. He immediately responded with a YES and asked us to meet Theyagarajan who was the CEO of SAFL bottling unit and distillery. Everything happened in a jiffy. We were all still operating from Bombay and I was the face of the organisation as Sudeep and Krithi were still with Kyndal and David Lee...I told Viren and Atul my road map of starting our own in manufacturing. I requested them that my flat would be given back once I find something in Chennai for which they had agreed, graciously. As mentioned earlier I had approached Viren for investment but it didnt work out.

There was lots of work as we figured out (none of us had any clue on the time lines on TN/Tasmac registration process), SAFL sat on our papers and we came to know of it accidentally. There were lots of process involved. 1) The brand owner has to give a letter to the bottler their intent to bottle with them. 2) This letter, along with the letter from bottler addressed to TASMAC/excise to be submitted with the excise inspector based at the unit with his signature and stamp(find this illogical), 3) this would then go to the desk of 'tapal' at TASMAC 4) it can lye there for ages unless one follows up 5) Tasmac would make a note of it and call the bottler for a price negotiation and once the prices are agreed, Tasmac would send their recommendation to the board, and after the approval of the board, TASMAC would advice the bottler to submit the labels for registration and once the labels are registered and after the clearance from the chairman of TASMAC, the first order would be released....one has to be hands on here as the bottler wont move an inch as its not their own brand....we need to push this in every stage...I reached, on figuring out the letter has not reached TASMAC (we had a good soul in TASMAC-the then FM-Bala -who gave us right kind of advice on how the system works), SAFL office around 5 in the evening. Thyagarajan was there and he realised the letter was just lying with his secretary....it has to be signed by the excise inspector. Sudeep was waiting outside the office as he was still with Kyndal and should not be seen with me.....I made SAFL to prepare the letter, took it with me and drove down to their factory at Villupuram. Reached there around 8. There was a wonderful guy, Ramakrishnan, the factory manager-he was very supportive and cooperative-got the letter signed by the excise guy in the late hours-but the issue was that it has to be carried by the excise assistant to the excise office and not by an outsider....so the work was done only half.....next day the letter reached around 5.....one more day lost...finally after this letter things started moving ahead. We gave letter for 3 brands....Hobsons XR Pure French Grape Brandy, Clovis and Le Roi' all in brandy category with SAFL....Those days SAFL were bottling for USL (erstwhile SW brands) and Maran just started his own brands as being a bottler with a meagre bottling fees, they were not making any money....Also USL had bottling tie ups with Balaji and the new start up Kals....

The day we started talking about Geoscope and brands, one thing was clear in my mind that we should be the first one to launch 'bottled in India' brandy and thats how Hobsons was born. Clovis and Le Roi were to give volumes.

I have to keep travelling to Chennai from Bombay and since Sudeep was based at Chennai and had an office too, was able to track things, though surreptitiously, and keep us posted....

We got all our brands approved by TASMAC board and got the GO....major celebrations to see the name of Geoscope in TN....but we encountered an issue with the excise of TN.

We import the concentrate of matured French Grape spirit and it is bonded in the customs bonded warehouse Chennai. We imported 80 barrels and these have to be sent to SAFL. We could not import directly to SAFL as they never had an import export license. The process is that SAFL has to apply for a permit to take these to their bottling plant. There was a fee of Rs5 per lit to be paid to the excise department and along with that challan one has to apply to the commissioner seeking his permission to transport it to the plant. The file moves from AC to DC to JC and to Commissioner of Prohibition and excise..(irony, isnt it?)...unless you get the permit and transport, you cant bottle. We waited for 2 days but no news from excise and we were told by SAFL there was some objection from the JC....I used Vijaykumar of MBDL's influence to get an appointment with the JC. Met up with the lady and briefed her on our pedigree and the start up and also the bottled in India concept....she didnt want to understand and kept telling me that there is no provision in the book to allow such kind of product in TN....I quoted her the examples of Teacher's, Black & White, Vat 69 et al but she kept telling me that there was no precedence. Also their fear was the impending election results and hence wanted to play safe. This lady is a good officer but didnt want to chance. But without the signature of the JC the commissioner wont sign. And the file cant be sent to the DMK minister as the ministry was only care taker....complications....one of my partners came to me and said we can change the blend and go to the JC and tell her we would use this imported spirit only for ad mix and not completely....I said 'only on my dead body'....we went around in circles.....We were also running against time as we have to get the bulk spirit moved to SAFL before the elections results are announced....so I used a good soul to put in a word to the Commissioner of excise about me and he got an appointment. Its not that one will not get an appointment with the commissioner...anyone can go and meet him but if the appointment is thru a source, it lends some credibility....I explained to the commissioner step by step and like to a student....I spent almost an hour taking him thru this and also I carried a small portion of the Hobsons blend with me and made him to nose....he was maha impressed and felt that there would be no legal hassle and since it is an established practice in other parts of the country no one would object to it in TN. He picked up the phone and spoke to the JC who was in the other building and told her: "this person Rajah is a professor...he explained to me very well and made me to understand...I am sending him to you and pl listen to him and you would be convinced ( I didnt tell him my tryst with the JC, for obvious reasons)....I dont see any legal issues and I think we should approve this file as the government would get the revenue like other brands plus the Rs 5 per lit".....this was something fantastic. The commissioner also told me that he is waiting for the election results and once it is announced he would be removed from this position. So with his blessings, I rushed to the JC, repeated the same nth time and she asked me to come next day....so lived one more night with tension and next day she signed and forwarded the file to the commissioner. We got the permit and immediately transferred the stocks to SAFL after paying huge import duty-huge for us as it is blocking our precious cash-the next day election results were announced and AIADMK came to power and all the officers got transferred.....this is one major victory for us....had it been delayed, god knows how things would have turned around....

Simultaneously the brands presentations were taking final shape....we started the work in Sep 2010 and by, if my memory serves right, we got the approvals by Feb 2011....

The presentation of Hobsons and Clovis were stunning.....We decided to go with green bottle for Hobsons and with bar top closure with sleeve to cover the cap...very expensive packaging as the bar top is not made in India and the sleeves, though made in India, was expensive as there were only a couple of manufacturers of this particular sleeve...only for the 75cl pack. We also decided not to go for 37.5cl considering the investment required. So we created a fabulous design and a great product and the task was to get a supplier to produce what we want. The obvious choice was HnG and AGI in India....HnG didnt even bother to talk to us and AGI, though was ready to do for us, but they had this colour bottles run twice a year only and hence the MGQ was huge....I approached Rajashekar of USL who was my neighbor and a good friend and requested him to get me connected to some bottle supplier and he connected me to Glassex Choudry...We also got a lead and met up with Anil Mehta of Jay glass. He was the agent for many glass manufacturers and one of them is Piramal glass SL....Damitha was their export manager and Sanjay the CEO...excellent guys and very supportive and cooperative....but the problem was the cost and also the advance they demanded...100% advance.....but we requested Anil Bhai to come for our rescue and he did....we got some credit of around 30 days but the minimum guaranteed quantity (MGQ) was a big issue, as huge amount gets blocked with inventories, but we could not do much about this....I flew down to Colombo to see first hand the first bottle of Hobsons coming out of the furnace and it was a sight I still behold....Green color and very cute bottle.....what a feel it was....we also decided to go for transparent label and self adhesive....I spoke to Manohar packaging-Nishikant Shirodkar-using my HL contacts and there I met this great guy, Aditya, Nishi's son in law....Aditya is full of energy and fire in the belly guy.....he was so helpful and was sharing everything about packaging industry with me....He created a great looking label for us and was also very considerate with the credit and also the MGQ.....then to bar tops for quarts bottle and guala closure for nips. There was no producer of bar tops caps in India and through our ex colleague Ashwin (we miss you friend), we got hold of Sidharth, and signed off for the bar tops...but we had huge issues with this person and at one stage, I was about to cancel the order and decided to go for a regular cap...but better sense prevailed as at that point of time, we were nobody and hence played it down....we got the consignment from France through him and also the sleeves. Went and met Romail of Guala closures-they were the first one to introduce tamper proof closures in India and during our IDV time, we introduced this closure for Green Lable whiskey...and hence knew them well. But our requirements were not huge and hence the MGQ here too....

Finally the liquid....for Hobsons it is not a rocket science...the liquid is imported in around 64% strength and all we have to do is to reduce it to 42.4% v/v by adding the demineralised water....

Suresh Babu was our manufacturing guy, based at Villupuram to look after our bottling and quality at SAFL (MGM)....very good in his job....while we thought we were ready to go, he came out with a big investment requirement. SAFL in 2010-11 were not bottling any major premium brands and almost 90% of their production were cheap and regular brands....they were primarily bottling for USL (Shaw Wallace brands and major volumes were from John Ex Shaw brandy and Golconda brandy and almost 80% were nips-hence the bottling lines were made to produce only these kind of packs....where as for Hobsons we needed some extra care in a semi-auto machine. And these things were not off shelf....the self adhesive labels when put on bottles develops air bubbles inside as the bottles are wet (the bottles are washed pre bottling, the liquid is pumped inside, bottles with liquid arrives at the labelling area with wet outside.......as none of us were manufacturing guys all these were realised while doing trials....so we need to remove the wetness and hence have to install something called 'air knives'....also in the bottle washing area, the washers and the holders have to be changed to suit our bottles....labelling machines, guala feeders and bottle holders....all these to suit our bottles and we designed different ones for each brand....and guys none of these were even factored in our capex....and as mentioned these were not off shelf except the air knife....but we moved heaven and earth and got all these in record time but we had some issues with SAFL as they have never ever done any super ultra premium brands in their lives....and once all the above in place, we took a blend of 3300 cases (TASMACs first order is 3300 cases) and somehow managed to bottle these 3300 cases in around 10 days time with around 300 cases per day....this was not liked by SAFL as they do, in their lines, around 800 cases per day and its loss of production for them....so the issue of bottling fee....we learnt a lot by trial and errors only....Since the brand approval was there we thought we would bottle the entire quantity and go to TASMAC for the first order.....

Meanwhile, we also felt that we should launch Hobsons in other markets of south and hence approached my dear friend Jairaj of Gemini and Neil, whom I approached for investment earlier....they immediately agreed to bottle for us and we signed off....the problem with their unit at Goa that time was the IMFL bottling line was lying idle as they were focussing on Bacardi Breezer only.....so the lines were dusted off, the blending tanks and holding tanks were cleaned and kept ready for us....we also need a guy to manage our bottling and hence recruited Kotteeswar Rao.....young boy with lots of ideas....Suresh was overseeing Goa too.....We moved some concentrate to Goa and started at Gemini our bottling for supplies to UT of Pondy, AP and KTK. 

Meanwhile In TN, we started our recruitments....hired Rajeev as our marketing guy, Subrat as our finance head and Vishwanath as our ASM for TN....Office was set up on Chamiers road...a 3 bedroom apartment....one bedroom was kept for Sudeep and Krithi, one for me and one for our office.....we also had a cook to prepare our lunch and dinner as we wanted to minimise the expenses.....Darpan used to visit us from Bombay once a while and things have started moving. We recruited Sridhar to look after UT of Pondy (Sridhar is ex SW and Kyndal)....The total team was in place....

Thyagarajan resigned from SAFL and Samsudeen aka AKMAS came back to SAFL...(he was there earlier after his premature exit from USL but fell off with Maran on something and resigned)....initially I thought Samsudeen was a great guy as I knew him from his SW days in Bombay.....He also ensured we sign the agreement with SAFL and we got it done in Dec 2010....

We bottled the entire 3300 cases of Hobsons in June 2011 and made SAFL to give the letter to TASMAC. AIADMK came to power in May and if my memory serves right, Jayalalitha took charge on the 16th of May 2011. With in a week the entire set of officers got transferred and we got a new commissioner of excise and new MD in Mr Vivekanandan. We thought TASMAC would release the orders immediately after we informed them on our stocks level, but nothing moved...we were desperate to get the first order as each day it is delayed was adding to our cost and interest....I went and met the home secretary, I think it was Santha Sheela Nair, a very nice IAS officer and briefed her the Hobsons brand...she was very impressed with our company profile and the product and she immediately picked up the phone and spoke to the MD of TASMAC....still nothing happened. I went around like a mad man knocking at all possible doors....my ex colleague from HL-Datta introduced me to one Kulothungan and he said he would put in a word to the MD...he was the PR of Maidas another bottling unit in TN....very nice person and sincerely wanted to help us....and he did put in a word to the MD....when I met the MD he said he is at it and we would get our order soon....time was just flying....meanwhile we shipped the first consignment from Gemini to Pondy...We appointed Happy wines, Anand, for our Pondy distribution...he was the numero uno there with almost all the brands except USL...highly focussed and very hard working, approachable, nice and friendly...had a good team and we launched our Hobsons in July 2011 in Pondy...the first in the country....finally we could see our efforts sitting pretty at the retail shelf....and the trade welcomed the brand as they saw the potential of it....Also our strategy that we should hit the market with our most premium and establish Geoscope as the premium brands company, paid off....we ensured the trade was well briefed on Hobsons...1) 100% French grape brandy 2) Made and matured for 3 years in France 3) the first bottled in India (BII) brandy in India....the presentation stood out and the liquid was a kind of 'never before' and people started calling it Cognac...I need to tell you guys here that in TN and in many markets, the consumers were just drinking brands not knowing what it is and how it is made....we ensure the consumers are well educated by conducting 'Brandy appreciation sessions'...mainly for the consumers...my marketing guy Rajeev created the content and yours truly conducted the sessions...I ensured it was interactive and the consumers loved it....and we always ended the session with sampling...this I learnt from Diageo and W&M....and designed it based on what I have learnt from there....we followed Pondy with Karaikal and Mahe...then in AP and in KTK....every where Hobsons received rare reviews....we have also launched it in Goa....The MRP in UT was around 900 per bottle and Goa also similar. 

TN was very still elusive. We kept meeting people and were told it would get released. Meanwhile self, Sudeep and Krithi went on a trip to Pondy and decided we would visit Srirangam to take the blessings of the Lord....we left early hours and on our way we got a call from our Datta that TASMAC has released the new brand order on SAFL....we got so excited and called up our ASM to rush to Tasmac....it was some time first week of August 2011....Vishwanathan also confirmed that order was released....we called up the GM of TASMAC and asked him but were heartbroken when we heard that 'yes order was released but SAFL took it for their brand VSOP Gold'....this was a huge shock for us....we stopped the car midway as we didnt know how to react to this....I called up Bala of TASMAC and asked him why the order was not for Hobsons for which he said Samsudeen said they are ready with VSOP Gold and converted the order....he also said not to worry and in Sep we would get our order. We came to know that TASMAC would release one new brand only per month per unit. We didnt want to abort the trip and hence prayed and returned to Chennai the same night. I went to TASMAC straight next day and met the MD...he was helpless as he also didnt anticipate this googly from SAFL. The fact was SAFL created a brand called VSOP Gold some couple of years ago when Samsudeen was there but it went in to hybernation....when Samsudeen realised TASMAC is releasing new brand order he grabbed it without even a single case of finished goods in his warehouse....a sample of TN for you....So we have to wait for another 3 weeks....in TN there are many twists and turns....on 15th of August I was on an outing with my friends and I get a call around 7 in the evening informing me that the MD of TASMAC got transferred....our dear friend who was very supportive and also assured us 1st Sep.....another set back...I think the Home Secretary also got transferred....those days the HS was the Chairman of Tasmac too....my contact told me not to worry and we would get our orders....Mr Soundayya was appointed as MD of TASMAC....we have to start all over again....briefing him and getting him on the same page...which I did...he was giving us hopes but nothing happened in Sep, Oct and Nov....

Meanwhile, Krithi shifted his base to Chennai and resigned from his earlier job...Sudeep also resigned but kept one room in our office for himself.....our expenses were mounting....we started thinking outside the box....I met one Kausalya Devi the honorary CG of France based at Chennai and thru her got an appointment with the CG of France at Pondy....requested Patric of Bardinet to accompany me....we went and met him briefed him and requested him whether he could put in a word....

I personally sent mails to the CM of TN....knocked at every possible doors...kept meeting our contact....it used to be funny....he would meet me only after 2200 hrs but in some kind of remote places...mostly outside the park at GN Chetty Road....I would go early and wait for him....

Meanwhile, Darpan decided to drop out and told us that she is shifting to Goa to pursue something else....

Our brand developed from Blr also, after completing her job left....

We developed Clovis....the packaging came our very well but we were struggling with the blend...through our Suresh we approached Natarajan who was the blender with SAFL and he developed the current blend....our brief was that he should use our Hobsons spirit in the blend and it was a challenge for him....he is a good person but very quixotic....but after testing many blends we finally zeroed in on the current one....second product was ready....

Hobsons still remained elusive and we decided to pursue Clovis for UT....and from Goa dispatched the first consignment from Gemini Goa to Pondy on the 23rd of Dec 2011 to Happy wines....the consignment reached Pondy on 31st of Dec 2011.....

This day turned out to be a memorable day for us in Geoscope.....

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

Episode 33...

Its Flemingo times @ Amchi Mumbai....(the shortest stint) 

After so much of dilly dallying finally said bye bye Dxb....2005 Sep to 2010 May.....5 years of great life, learning and lovely friends...and of course, prosperity....

Flemingo International was an upcoming organisation...from just a trading house based at Dxb, to travel retail was their business strategy and they had already sowed the seed in smaller airports across India and tied up with WDF to manage their back office in Mumbai airport....The duty free retail in those airports Flemingo started was 300 to 500 sq ft area....the focus was primarily on arrival as shops in departure could not attract any footfall due to its un-appealing looks of the shops.....the company was started by Mahendra Thakkar and Rasik. They got a license to operate a DF stores in Kenya to start off and also set up a trading house in JAFZA, Dxb. Viren Ahuja and Atul Ahuja-brothers, from Mumbai took a stake in Flemingo and started expanding. In fact, Atul asked me to draft my own appointment letter as we had such a great relationship...I was also asked whether I would like to be based at Dxb or shift to Bby...I opted for Bby...Though I have gained lots of experience and did fairly well with the DF business both during Diageo time and W&M, never done any financials for this business and hence didnt have a clue how the bidding was done to acquire the shops and on what logic/basis....

Shifted lock stock and barrel to Mumbai.....Got an excellent and spacious apartment on rental, in Raheja Chembur....self and wife went to see the apartment and while going up to the 7th floor met my great friend Rajashekar's wife Lalitha and the moment I realised they were also residents of the same place, we decided to pitch in for the place but we learnt the owners have already committed to someone else (this has been the case always)....the apartment was owned by Transworld shipping CEO and Sethuraman was the chief of their operations in Mumbai. Went and met Sethuraman and become instantaneous friends...he somehow managed to swing it for us....but the place was barren - just the walls and they used all their might and got it furnished in no time....Such a wonderful apartment...

Started off with Flemingo on 2nd May 2010.....My friend and ex colleague of Diageo was with Flemingo for almost two years. He joined Flemingo after the 'episode' with Asif Adil the then CEO of Diageo India....Diageo India got Asif Adil after Ravi Rajagopal. Asif was ex Mackenzie....Diageo had lots of expectations...the Mackenzie aura he carried....there were lots of issues and rumours on Asif which I dont want to get in to but one thing stood out...Stuart Fletcher was still the head of the emerging markets and Asif was reporting to him. Asif got quite close with the Sr Khaitan of Radico and when Stuart visited his office and later dinner in Sr Khaitan's home in Delhi, he was totally floored and Diageo India formed a JV with Radico and launched Masterstroke a super premium whiskey in line with Blenders Pride...they got Shah Rukh as the brand ambassador and spent a huge amount....but the product bombed the very first day....didnt understand even today the logic behind the JV...Diageo burnt their fingers once again in India...During this period, Nalin Garg, Sridhar Iyer, Sudeep and Krithi have all become Ex Diageo....Nalin joined Coke and went to US....Sridhar joined Pfizer as CFO and later became the CEO of Pfizer....Krithi went to Flemingo and Sudeep joined Kyndal  a company floated by Sid Bannerjee....

Krithi was instrumental in getting certain work culture in Flemingo India....he got a bit edgy and joined David Lee's company to look after India RTM...David Lee was the most trusted distributor of Diageo in this part of the world, based at Singapore.

Flemingo was full of veterans....Ayyaswami, chartered accountant and was on board of Flemingo as an advisor....Viren was totally dependent of him and would not take a step without his clearance. Viren was pumping money and Atul was running the show, of course with Viren's nod on everything....Viren's brother in law Thimmaiyya was the operations manager for India DF shops..the brothers are very down to earth and fond of south Indian cuisine especially the idli, dosa and vada stuff.....Raghavan, another veteran was their chief accountant. The office was in Navi Mumbai and hence home at Chembur was the right choice...they also had a huge canteen where lunch was served for everyone....I was given a small cabin in their office...nothing fancy but a functional place.

The very first day I assumed office I got a call from Rahul Khashyap my ex colleague from Diageo (and like an younger brother to me) who was trying to settle down in Colombo and was eyeing some opportunities. He shared with me the news that the airports authority of SL was considering a second license at the airport and he would like to pitch for it in JV with Flemingo ....Of course Flemingo was interested and we called Rahul for a chat in Mumbai. Rahul also wanted a partnership in his domestic distribution trade....the talks started....meanwhile, we got another lead from Colombo and Flemingo wanted to pursue that.....self and Viren flew to Colombo and met up with the lead who took us to meet the President and pitched for the shop....It was in his home and he was in his jogging attire with a news paper on hand....There was huge security cordon but the meeting was very cordial but he didnt make any commitments...we did our job. Our local man took us to meet the other officials and also served us break fast in his gosala....very pious person....I met Rahul before we left and briefed him as I didnt want to keep him in the dark....

Things started moving fast and guys, hold your breath....Flemingo got the license....My contribution to Flemingo in a big way....and had Rahul not called and spoken to me and shared this, we would have been in dark and this would not have happened.

But Rahul was left high and dry and I have to apologise to him. And I felt bad as it was Rahul who was instrumental in sharing this confidential news but Flemingo didnt do a thing for him. Meanwhile, Rahul was coming to Chennai for a day and as he was still struggling to get some business going, I told him he can stay in the guest house of Flemingo in Chennai. This happened in the afternoon and I have informed Atul and also left a word with the care taker of the GH. I was attending some program in the evening in Chembur and got a call from the caretaker, that Thimmaiyya has told him not to entertain Rahul. I have a short fuse and this infuriated me to hell...I called Atul and vented my anger....I was told, since Thimmaiyya was not comfortable with Rahul and felt he would get privy with things in the GH and hence didnt want him to stay there...I was speechless...its a guest house man....what secretive things would be in a guest house...I had stayed there a couple of times and its a two bed room apartment on top of Flemingo's office and nothing secret was ever kept there....I pushed my way and got Rahul accommodated there...realised that moment that am dealing with a family run business...

Meanwhile, I pushed Flemingo to keep a feet in the domestic business too....the reason being duty free and trading is not permanent...as the airports authority go for new bids every 2/3 years....and a foot in the domestic business would always keep the cash box ringing....

Roland Abella was transferred to India as CEO from Middle East....Asif Adil was asked to go and Roland came in his place. I met up with him and we decided to bury the baggages we were carrying on each other (remember Roland making me redundant)....he also assured me that he would favourably look in to for any worthwhile proposals both in DF and domestic....it was a good meeting.

I also wanted Atul to know about domestic and hence requested my ex Diageo colleague Sandeep who was in Pune and was in between jobs to present a white papers on domestic distribution business in Bombay and Maharashtra. Obviously it requires gathering lots of info and assimilating the same and presenting...I discussed this with Atul and made it clear it wont come free and offered Sandeep a lakh of INR for this work and if things materialise he would also get placed with Flemingo. Mind you guys that no one in Flemingo had any clue about domestic business and I was the one who was pushing this...I also realised am the lone ranger as domestic is long term, involves dedication but on a lower ROI compared to travel retail but its long term and with good brands this vertical can stay on its own. I was not looking at only Mumbai but also other parts of Maharashtra using Flemingo's relationship with major players a la Diageo, PRG, Bacardi and Brown n Forman....

I wanted Atul to get some inputs on this and hence organised a luncheon with Deepak Avtramani of Candy wines, one of the major distributors in Mumbai and well respected and regarded by the trade, and also a great friend of mine, right from my Herbertsons days. This meeting turned out to be disastrous and Deepak's inputs were taken out of context and Atul didnt show any interest after that....and also his accounts department sat on Sandeep's payment. I put pressure but nothing happened. So, I sent the lakh of rupees to Sandeep personally from my account. Another set back for me...I am sharing these just to make you aware that one has to be absolutely clear in terms of getting the buying in of the owners and in writing to avoid these kind of embarassments.

Meanwhile, another development. Rasik of Flemingo Dxb got a contact who claimed that he could get them entry in to the Duty free operations in Indo China....consisting of Cambodia, Laos and Vietnam. The DF operations there is different. Apart from the airports (not very big barring Vietnam) there were huge DF stores in the borders of Cambodia and Laos....You should know the geography of this area to understand this. These countries share borders with Thailand and Vietnam. Vietnam's local taxes were high and hence the border shops did a roaring business. These are the major RTMs. I didnt know much about these but learnt it very fast. The first trip to Phnom Penh, capital city of Cambodia....I have to first fly to Bangkok from Bombay and then to this city....We spent some time with the contact of Rasik there and visited some shops locally and in Cambodia border....Rasik is an expert when it comes to perfumes but not alcohol. And a wonderful person...calm and composed. On the second day, our contact told us that we should visit Ho Chi Min City in Vietnam and meet up with a potential partner...next day we visited the Vietnam embassy in PP and somehow managed to get the visas thanks to our local contact....So over to HMC.....met up with the contacts.....so the next step was that yours friendly has to come back again and visit the border towns, shops and also Laos and come out with the strategy...

This I did religiously....our local contact ( a Russian by name Sergey) organised the vehicle, driver and his secretary to accompany me in the entire journey....Cambodia-Vietnam border and Laos Vietnam border. The journey would start after breakfast and go on till late evening. We used to stay in small places in the night and travel next day. Sergey's secretary, a local used to carry fruits and nuts for me as she was told explicitly clear that I would eat only veg....the problem with Indo China, apart from the capital city, you wont get veg. In one restaurant I asked for a veg soup....when it came I didnt like the flavour...and language was a huge issue. I went to the kitchen and requested them to show me how they make veg soup....very simple....soup in this part of the world is their staple and would always be in a ready to serve form boiling hot with meat inside....for veg they just remove the meat and serve (!)....so soup was out....I started carrying the yogurt with me and mix it with hot rice and manage....but it was fun trip....absolutely fertile land with so much of water.....the Mekong river....it flows through the entire Indo China and wetting the lands and make it so fertile....

Dao Heuang group was operating the border DF shops and owner is a Vietnamese lady but settled in Laos...one should visit these shops to believe....each shop, as big as a wall mart stores....huge....with well trained and well uniformed staff with all the global brands in the son display....for someone visiting these shops it would seem as just duty free but their business model was based on the demand from the domestic Vietnam....as the taxes in Vietnam was very high, these shops catered the bootleggers to smuggle it in to Vietnam. JW Gold Label was quite popular there...remember Gold label 18 to JW Gold Reserva story in the last post of mine...JW Gold Reserva was created for this market to replace the 18YO.....

Coming to business...Dao-Heuang group....Yes, they are big and how do we get our foot inside? What's the irresistible offer Flemingo can bring it to the table? (to be frank there was nothing Flemingo could boast of other than their relationship with the biggies a la Diageo, PRG and et al...And this group was heavily dependent on David Lee, Diageo's most trusted distributor based at Singapore and an RTM expert...I visited almost all their DF shops across the borders and there was no doubt in my mind that Flemingo should somehow get in to this group as a strategic partner and our agent Sergei got us an appointment with the owner...the lady was the most powerful and her daughter was assisting her in procurements....Self, Ayyaswami and Arjun (Atul's son who was getting inducted in to the business) flew down to Vientiane the capital of Laos.....the lady was very superstitious and we came to know during our discussions that she goes with the compatibility factor of the zodiac signs matching as per the Chinese system(!)...She asked for our DOBs and mine matched with her and she gave me a nod and a wide smile which meant that we can look at the opportunities of a JV....we discussed in length and I insisted that the MOU should be signed 'here n now'....Ayyaswami got it done and we signed the MOU....but the moment David Lee came to know of this development he used all his might and stopped the progress of this JV....Sad we wasted so much of time....

Another great contact was David Sim....A Singaporean who established business interests in Indo China....

I introduced my WnM domestic distributor of Turkey to Atul and Flemingo formed a JV with him for Turkey....I think it is still continuing....We also explored many more possibilities including Mauritius... Viren one day asked me to assist a start up distillery in TN and next 2 months I got sucked in to it....cant say more than this...

Sudeep and Krithi were also based at Bombay....One evening over few drinks Sudeep opened up about the opportunities in TN in the alcohol business....After ages, the then DMK government in TN (2009) gave few licenses in TN....Kals, SNJ, Golden Vats and Elite....Radico Khaitan launched Morpheus and Kyndal launched Bols thru 3rd party manufacturing in tie up with SNJ....and these brands started doing well as after decades the consumers of TN got to see some new brands in the shelves....and Sudeep was witnessing the huge margins being retained by these companies....He suggested we should form a company and start in TN....(the seed was shown by Sudeep)...Sudeep had his own axe to grind with Sid and I was not enjoying my time with Flemingo...Krithi was happy with his job and working for David Lee....I felt I was heading nowhere as the atmosphere in Flemingo was different-Atul and Viren was very supportive but they also didnt know how to utilise my skills....so when Sudeep suggested that we should look at starting on our own and get an entry in to TN to start with, made me to get excited....

I joined Flemingo on 1st of May 2010 and in just 5 to 6 months time, got them the Colombo DF, Tie up with the Turkey domestic market with a local partner and also helped their friend in TN on the start up of the local bottling. I discussed our foray in to manufacturing with Atul and Viren and slowly got myself relieved from Flemingo...

My stints....14 years with UB group....14 years with Diageo......3 years with W&M but just 5 months with Flemingo....Any way my destiny was to start something on my own and it started with Sudeep sowing the seed......

Exciting times ahead?????

to be continued.....

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

Episode 33...

Whyte&Mackay...3 years

Visa was an issue...I didnt want to go under UB DxB visa or AnEs visa...Didnt know till I joined, W&M had a guy on their pay based at DxB...this guy, an Australian, earlier was with the Heineken distributor and wasn't, obviously, happy that he is being made redundant....Alok Gupta spoke to him and finally he agreed but after a proper handover to me...his knowledge was confined only to Gulf and nothing beyond that....I was to join on 10th Sep 2007 and was to be inducted by him before that but he disappeared suddenly without a word and came to know from Simon of AnE that he had gone back to Australia....

I was asked to come to Glasgow for an induction and I was so excited to be part of this new beginning and was there to take charge...10th of Sep 2007.....

Reached W&M office at 0930 and I was the first one to be there...A decent sized office in the center of Glasgow, just walking distance from Hilton....

Alok introduced me to the team there...and almost everyone was a Scot there....Their accent is different and I always felt they sing the language and not speak(!)....also dialect...I found it very difficult to understand and actually I felt a translator was required....no jokes.....Met the head of HR....Val aka Valerie, very nice lady and told me that the next day I have to go to the distillery (Dalmore) for an induction with Richard Peterson....Richard was the master blender and distiller of W&M and inherited the skills from his Dad who was also a master blender. Richard is one of its kind...a true Scot and loved his profession....very friendly, open and ready to share everything he knew....Valerie, the HR lady gave me a car key and told me that I have to use the car to go to Dalmore which I think was around 3 hours of drive....I told her that am not comfortable to drive...she was quite taken a back...but got me booked by the morning train..Oh....didnt like one bit of my induction....absolutely clueless and unprofessional...In HO, no one to take me thru the strategy and also on whats expected of me....Alok spent some time with me but I found him involved in many things and was always on phone.....And added to that my trip next day to Dalmore by train.....completely different from the Diageo days....W&M was small and was more of trading....no strategy to build brands though they had huge potential in Dalmore, Jura and even WnM blended scotches....on the very second day, I felt like quitting the job...it was more out of frustration due to lack of proper induction...but Richard made my day with his indomitable style and the time spent with him was invaluable....every second...he also was known for his consumer interactive sessions - a la 'journey of taste'. Will talk about that later....

Induction got over in 2 days flat and came back to DxB.....it was an one man army for WnM....Diageo DxB was putting pressure on my to surrender my visa....I convinced Alok on the importance of our own office and visa and got his approval. Got hold of an advocate who assured me he would get an office space in Jebal Ali Free Zone (JAFZA). JAFZA has already become the most sought after place for business houses....Free zone is the place where you can set up a company without any local partnerships...if you set up a company in the city, you need to have a local (Emirati) as partner whereas in freezone is exempted...but Free zones had their own rules and space constraints...they also had virtual office licenses...this means, you would get a license to operate but without any office space but would enjoy all the facilities of the free zone...but I wanted the office....though Pernod Ricard had a full fledged office and warehouse there and also Flemingo, when we approached the authorities they hesitated to give license to a liquor company but we told them it is only a management office for the entire region and Africa and convinced them. The beauty of UAE was that they listen and they were always for increasing the revenue....JAFZA was known for its customer friendliness...we got the license from JAFZA but to get the visa I have to get out of Dubai (heard they changed this clause now)....So went to South Africa on a market visit - my first trip to SA....what a beautiful country but they instill so much of fear in you before you land about the crime in Jo'berg and Durban....W&M was operating thru a distributor based at Jo'berg...apart from this distributor we were also supplying directly to a super market chain....one exclusive brand called John Barr...a look alike of JW Red but much cheaper....But the volumes are not great....despite huge potential in this market. SA is driven by consumer pull and also the retail chain stores play a huge role as every chain has their own brands to push....but Diageo, PRG and some local companies enjoyed great business.....During my time, circa 2007 to 2010...Jameison was a very fast growing brand....JW Black was well established....but the policy was a bit complex as no whiskey other than-made from grain and  matured ones were allowed to be sold...Only Vodka made from grain was allowed without any restrictions....my trip was primarily to understand the market and also come out with a strategy.....I had to stay at Cape Town for a couple of more days as my Visa got delayed...finally got the visa from JAFZA....and W&M finally to set up office in Gulf....great milestone...

We got a small space....and created a feel good office. Recruited Ramana as office incharge to manage logistics....Got my wife and my home assistants visa also....The driver who was with me from my Diageo time left for Chennai to pursue other opportunities.....W&M got a different policy for vehicles and they got me a Merc (first time in my life) on a long lease basis....So all set and business has to start...I committed to Alok that I would double the business as I felt W&M brands has potential but there was no proper 'pitch' for the brands....also, I felt, I can use my relationship, crack some hard nuts and get entries...this didnt happen as W&M decided to increase the prices....

It all started in 2006....the scotch industry started witnessing shortage of Malt spirits....U need to understand the crux of this....As explained earlier there are different categories in Scotch 1) Blended (blend of matured-minimum ageing of 3 years to be called Scotch-grain and malt spirits 2)  Single malts (from one source...only matured malt spirit 3) Pure malt ( blends of different malts) and 4) Single Grain (single source of matured grain-but no takers for this). Take JW 12 yo...its a blend of few grain spirits and few malts....from different regions of Scotland....and every single spirit be it grain or malt, should have been aged (matured) for 12 years minimum....Forecasting and inventories play a major role. If the demand goes up suddenly, the inventories esp the raw materials would start depleting....and you have to plan 12 years in advance.....a very tough job indeed....Global demands have started growing especially for 12+ and single malts and the manufacturers realised that there would be raw material issue....Diageo known for their proactiveness and being the market leader fired the first solvo......they introduced JW Double Black without any age statement and priced it more than that of JW black 12 YO.....Its nothing but marketing gimmick as the consumers were made to pay more than the 12 YO for a product where there was no age statement but better presentation....Double Black was first launched in the DF sector and consumers fell for it....basically the great presentation and a stronger blend...The pricing was great...in between JW Gold 18 YO and JW Black 12 YO... Diageo also launched JW Gold Reserve slightly lower to JW Gold 18 YO.....Gold label 18YO was an amazing product and was quite popular in Indo China region.....as Diageo could not fulfil the demand due to depleting stocks of raw materials, they quietly replaced the 18 YO with this new variant.....Around early 2000, William Grants-another leading scotch manufacturer known for Glenfiddich,  opposed tooth and nail when Diageo launched Cardu pure malt, in Spain. Cardu was a popular single malt in Spain and one of the major malts in the JW Black blend....as Diageo foresaw issues with malts, they launched this variant but William Grant took the battle to Scotch whiskey manufacturers association and made Diageo to withdraw this variant.....sadly,William Grant didnt practice what they preached...today William Grant sells Monkey Shoulder which is a pure/blended malt whiskey....Also they have in their portfolio 'age not mentioned' malts...Moral responsibility takes a back seat when it comes to filling up the coffers....

So, there was shortage and hence all the manufacturers upped their prices and started focusing on variants....but the price increase by W&M didnt go off well with the customers as they felt that the Indian boss wanted more money as he paid exorbitantly to acquire W&M and hence upped the prices....also we were not a powerful player like Diageo or PRG and hence lost quite a few customers....

As always, I was inundated with all these issues but have to come out with some quick wins....

1) Knowing the demand for 1.13 lit pack of blended scotch, focussed on W&M in Northern Emirates and pushed its way thru with some biggies.....

2) Used all my good relationship with Dubai Duty Free and got almost all the Dalmore range, Jura and W&M blends.....And started heavy push for W&M blended scotch and got some big volumes.

3) AnE was under pressure from Diageo and hence told me clearly they wont be in a position to help with our portfolio....Took a call and changed the distribution to MMI....though it didnt go well with AnE....

4) Got entry in to Beirut Duty Free and our premium malts and W&M 40 YO started doing well there....W&M 40 YO blended scotch is one of the rarest and the best in its segment...I have never ever tasted anything even closer to that in my life yet....if you can get hold of one, pl try it...

5) Got the entry in to Alpha, Colombo duty free.

6) Used my contacts in Gulf and got some break throughs....but the entry level scotches were a big issue due to the price hike....

W&M was a trading company and hence never focussed on anything other than executing the customer orders. We had a good business going with RTM channel based at Jordan....the business was transacted by a Lebanese sitting in London....the customer was based at Amman....and W&M was giving unsecured credit....I realised this channel can compensate for my lost volumes from Kenya and some other parts of Africa and went after this customer. Made a trip to Amman and met up with the customer....wonderful gentleman but absolutely no English....managed to strike a conversation thru his secretary but he was not happy with our price increase. His volumes were primarily W&M 3 YO....I made it on cash in advance with a 2% CD...tough one but cracked and secured the money and incentivised the person who was based at UK....but it was never easy business and the RTM was dependent on lots of factors.....The stocks were shipped to Mersin in Turkey and from there found its way to the traders...the stocks never ever entered Jordan......Middle East is mystic.....one has to go deeper to understand the route to market to be successful.

Initially recruited Chris Pillay a South African as TMM for my region....but it didnt work out well....he stayed for some time and quit. Got Ashish Monga my ex colleague from Diageo India...he was working with some trading house in Nigeria and he grabbed the offer but took some time to understand the nuances......but for me a good support....

We were doing some business in Nigeria but again the customer was operating from UK....Indian origin...good guys but were not upto speed....we were also supplying to Israel thru a trading house based at UK....I found everything strange....but in hindsight, I should have left it the way it was instead of changing it.......

My mind set, I should admit here, was that of Diageo....having come from big volumes and highly respected background, the need to prove myself and with very little interference from HO.....I made few mistakes or miscalculations.....

There were changes in HO too....Ashwin Mallik who was the COO of USL North was posted at Glasgow as CEO of W&M....this upset Alok and he quit....Ashwin also didnt last long and was replaced by a Scot as the CEO and VJM appointed Nick Garland as head of Marketing and sales.....These guys were good but focussed on correcting lots of things in US and in Europe....W&M was also big in own labels business...this means they used to manufacture for super market chains, labels owned by the super stores, but with very thin margins.....and their supply prices of own brands were rock bottom in Europe and Nick's task was to correct them....Somehow I was holding the forte in my region by doing some unthinkable....

The NE customers were of great help to me....at the Barracuda outlet we put up a gondola, first time by W&M....our malts have started dong well across...Dalmore got some great visibility in DDF and was a major source of revenue for my region.

We opened up Lebanon domestic, Syria and Jordan.....All were small markets for us but we started getting some numbers from zero base. Richard came down to Lebanon for a master class and also did a couple of them in Dubai-one exclusively for DDF floor staff and one for the select consumers and customers in DxB...His shows were great hit...my friends in Diageo and PRG started noticing these and started wondering what we were up to....but W&M seriously didnt have any money as their revenues, that time, were from selling own labels and cheap scotch and also bulk to select customers.

One of the great customer for bulk scotch was Balgobain of Mauritius...We stopped supplies of bulk as the retention was nothing great and W&M wanted to focus on brands....but Mukesh Balgobain's daughter, a young and bubbly, Kareena didnt want to take 'no' for an answer....She called me when I was in DxB and initially with her Brit accent I thought some French customer from Mauritius....but it turned out to be Mauritians of Indian origin....they were buying our bulk and bottling their own brands but small timers....this was their bread winner and they needed it desperately. I went and met up with them in Mauritius and such wonderful family and people....but could not entertain their request on the old price and they reluctantly agreed to pay extra....I have to also do lots of convincing at HO....but needed the cash register ringing till we establish our premiums....We also had a local distributor for Mauritius but of no great shake....shifted the domestic portfolio to Mukesh....but they also could not do much...Its a small island but what a great place....Got our Dalmore listing at the Mauritius Duty Free.....

MMI, as our domestic distributor for DxB was not great at all....They had PRG and some great brands and were quite happy with incremental despite a very aggressive CEO....They were clueless and just stocking up without any focus on depletions.....

Used my relationship with ADNH, Abu Dhabi and got direct supplies for them....

We did some great in shop training for their staff....and we started getting some regular business from them.

Meanwhile, my ex contact from Diageo, a local Iraqi who was running the duty free based at Baghdad and supplying to the consulates and to permit holders of foreign nationals...He was claiming big about his business and I felt we should visit his operations at Baghdad and decided to visit Iraq.

Myself and Ashish travelled to Baghdad - Iraq....scary one though...We stuck a deal with him exclusively for his duty free operations only. The flight to Baghdad from Sharjah took around 2 hours and it carried mainly the business community. We were given great welcome by Ahmed and he really took care of us...we visited his warehouse, shop and also he provided us a bullet proof vehicle and we visited a club in Baghdad and a retail outlet....(it was foolish on our part as were told later that we were lucky and normally word spread and people get abducted...We visited the club around noon and left by air to the northern Iraq capital, Erbil by evening flight....This is called Khurdistans....and bordering Iran.....our guy whom I had mentioned in the earlier paragraph was quite strong in Erbil as he used this place for transporting to different parts. Erbil is like any European town completely in contrast to the war torn Baghdad.....really a beautiful city...The first supply to the Iraq duty free operator upset my domestic distributor and he opposed it tooth and nail. Our defence, that he would supply only to DF, failed to convince him....I too got carried away with the tall claims of this person from Baghdad and gave the distribution to him....one of my worst blunders.....we have to undergo lots of ordeal because of this including collecting our dues from him....finally the stocks have to be transferred to our old distributor.....

My gut failed me in this.....

Similar thing happened in South Africa too....We had a distributor for the entire country but he was just happy selling some very small quantity. We were approached thru an agent based at Cape Town to look at Midmar, a super stores chain based at Cape Town and having shops in Cape Town and Durban...belonged to a South African of Indian origin....George Naidoo....he was a practicing Hindu but like many South African Indian Hindus had a christian first name....took him to Glasgow and to Dalmore.....wanted him to get impressed.....but as it turned out, he was not easy to deal with.....I even took him to UB house in Bangalore....but didnt work out well....money was difficult to get and finally he have to exit.....

These were my two major blunders when I was in W&M.....I kicked myself for not thinking enough on the RTM channel of Iraq and also the South African business.....The lesson is that to be patient and give a clear perspective of what the company wants from the distributor and give them time to come on the same page....I was a bit impatient to achieve numbers.....Also hired a local guy for South Africa based at Jo'berg.....half his time went managing Midmar and getting the money....I was not getting excited with what I was doing.

VK Rekhi and Samy Lala met me in DxB during one of their visits, and asked me what I would do if I were made incharge of the USL Indian brands for UAE? This thought had come to me many a times during my stint but having access to the internal intricacies I didnt open my mouth...in fact this would have helped in many markets to get entry and push for W&M brands as the USL brands would have been leveraged for W&M....they asked me to come to Blr with a clear strategy....

I did lot of research, work, detailed discussions with the NE customers and presented a way forward for USL brands-they were suffering from the onslaught of ABD's OC whiskey that time..along with the all powerful Royal Stag, Imperial Blue and Blenders Pride....I strongly felt that we should split the portfolio and offer each one to the 3 main WS there in NE and adopt the same strategy for DxB domestic and Abu Dhabi....I presented my strategy to VKR in Blr but it didnt sail thru due to the intricacies involved....USL selling to UB Global and UB Global in turn selling to the NE customers. But a few years back Diageo India split the portfolio and broke the monopoly enjoyed by CeeCee for ages...(!)...this is not to undermine the efforts put in by CeeCee in the initial years but USL should have changed the strategy and followed the footsteps of PRG....

I was sort of getting bored with Dubai in general and W&M in particular.....Thought I should get back to India......Atul of Flemingo convinced me to join Flemingo as ED....in fact he wanted me to be based at DxB but I decided to shift to Bombay and be part of Flemingo.....The Iraq and South Africa blunders were also played a role in making me to look at leaving W&M and Dxb....more than anything else it was sheer boredom of doing just trading and nothing on brand building except the activations in the DF area.

We did quite well in Lebanon with our premium and also in Syria...but our distributor in Syria got in to some problem with the administration and shut his business....I visited Damascus a couple of times and what a place it is....winding alleys....and lovely night life with great bar and restaurants....it used to be fun in Damascus and so was Beirut....My domestic distributor of Beirut, bought a good quantity of our aged Dalmore and also W&M 40 YO....Guys if you ever see a bottle of W&M 40 YO anywhere pl try it...its real value for money.

So finally I took a call after accepting the job with Flemingo....Nick wasnt happy and he asked me to stay back but I was convinced that DxB life was enough....Also interestingly my wife didnt say a thing....probably she was missing our son so much and Bombay is closer to Goa than Dubai.....we had a great get together with all our friends before we left Dxb...in our villa...that was one 'halluva' party...I have lots of fond memories of DxB....some great friends....also from my trade...Mohandas from Truebell, Mani from ADNH, Ron from Gulf brands, Bahrain...Colm, Ramesh and Sharon of DDF......Ashish Monga and Ramana......

Dubai....a great place.....makes all those who come there, go back with better savings....that land has the touch of goddess of wealth......

I also applied for a trading license with Fujairah Free Zone and got a license....the idea that time was to keep my visa alive and that was one way I figured out.....

will catch you in the next episode.....

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

Episode 32...

It took some time for the 'redundancy' factor to sink in.....my guys at the HO and Roland were all taken by surprise as they expected major rebellion from me, considering my 14 years of 'top notch' performance and also the results in Gulf....but as mentioned earlier, divine power showered me with all the 'redundancy' package and I felt relieved....I was asked to work till June 30th, the year end of Diageo and continue with all my visa and home till Sep end....So that gave me the breather and I started mulling over the options.

There was one on my hand though which was to be part of Flemingo international, a trading house in DxB with DF operations across India....but completely run by a family....and there were some other options but I didnt want to disclose to anyone on my 'status'......One day while on a casual chat my wife told me to speak to Dugar who was my boss during my HL time and later on as CEO of Balaji Distilleries....I nodded my head but VJM during that period put a ban on recruiting back those who had left UB with Deepak Roy.....Anyway, I spoke to Mr Dugar and he asked me to send my CV which he told me he would forward it to Samy Lala the CEO of Herbertsons....for your info a little bit of what was happening with UB those days....VJM acquired Shaw Wallace and merged it with McD. (Herbertsons and Carew Phipsons were already merged with McD). The problem with McD as a company was their premium brands never performed to the expectations of the management ...somewhere McD has failed to create a huge premium brand like Royal Challenge or Blenders Pride....So the acquisition of SW has helped them in creating a portfolio, envy of competition. The new entity was named United Spirts Ltd (USL)...Also they have created Regional Profit Centres....

Diageo India formed a JV with Radico Khaitan-Stuart Fletcher was instrumental and he was overawed by the wealth displayed by Sr Khaitan and with Asif Adil pushing hard this JV, it happened. They launched Masterstroke a premium whiskey on par with Blenders Pride and roped in Shah Ruck Khan as their brand ambassador....huge money was spent....But the product failed on day one.....and after some bitter fights the JV was closed down....

My HR person, I understood, spoke to Asif Adil CEO of Diageo India exploring possibilities of my return to India....And Asif made this public (what a professional)....And people in India came to know of my redundancy before I announced it to the world....This happened on a day I was on my way to Bangkok to attend a conference organised by my region-I came to know of this when I boarded the flight in DxB...I sent a mail to Ron, HR and Roland expressing my utter displeasure and also anguish....The moment I landed in Bangkok there were around 20 calls from Ron n others.....They were very apologetic of what had happened and assured me that they would not let this happen again.....Anyway damage has been done....I met Mahesh at Bangkok (he was looking after Thailand then-Bacardi) and hinted him but he didnt do any....

Came back to DxB and started the hunt...As mentioned earlier, Flemingo offer was there but I wanted to explore more...

I had mentioned about Gaurav Sabharwal who was my colleague in Diageo.....He was not happy with Diageo and was considering joining PRG India (joined)....He told me during our conversation that his wife, Gopi, having mentioned about an opening in World Diamond council....Spoke to Gopi to find out how to go about it.......she struggled a lot, took some time and finally got the e mail id of the CEO of the company. ( talking about 2007 and google search was either not there or in the nascent stage)..I shot him a mail with my CV.....Got the response the very next day saying that the CV has been forwarded to the HR but in the same breath he also mentioned probably I missed the bus.....nevertheless, got a call from the HR for an interview in their HO if London....I think I did fairly well in the interview...didnt know anything about the industry and they also didnt ask me much about the industry but the person who interviewed me said they had offered this to someone else and if he doesn't accept the offer within the specified time, the job would be mine....I didnt get it thought but the moral of the story here is that one should not give up till it reaches the logical conclusion....but was happy that I attended an interview outside my industry and thanked Gopi profusely for the trouble she had taken in getting me the lead.....

Meanwhile Samy Lalla called me and told me that he shared my CV with VJM but was not certain on the possibilities. 

The hunt was on and along with my son's IIT and BITS entrances.....Travelled with him to different places in India....Once I went to Blr to attend a wedding and upon reaching DxB (was still with Diageo and purpose of the trip was official)...there were few missed calls and one of them from Bangalore. Missed call from my wife too....She told me there was a call from VJMs office asking for me....to cut the long story short, got a call from VJMs secretary and she connected me to VJM....after the 1994 exit, spoke to VJM....the moment he came on the line I told him 'that I flew KF airlines and heard his welcome address on flight'...he was so happy hearing that and told me that he bought Whyte n Mackay and wanted me to come down to Glasgow the very next day and his office in DxB would organise the tickets and the rest....I could not travel the very next day as I had visitors from Diageo UK but travelled the day after and landed in Glasgow....I was booked at the Hilton and as I entered the hotel, VJM was standing outside and having a smoke along with someone...went and introduced myself to him and he asked me to speak to his secretary.....the press conference got just over where he announced his take over of W&M how he fulfilled his fathers dream....the press in Glasgow liked him and for the first time an Indian buying a Scottish (scotch) company!!!! Bravo....

Met Rekhi, Samy Lala, Ravi Nedungadi and all VJMs leadership team. Many of them were not even aware of my coming....Alok Gupta a very young and energetic guy who was looking after marketing in USL was transferred to W&M and he kind of spoke to me....that night was some dinner with the top guys and next day I was told that VJM would meet me....My flight from Glasgow to DxB was around 4pm and I had to be in DxB next day as I had to accompany my son for some entrance in India....I told Alok that I cant extend my stay due to the prior commitments and hence requested him to push my meeting hard with VJM....Waited till 1400hrs....nothing happened....was getting restless....Alok called me and asked me to come to W&M office and wait....Finally around 245 I was called in and met VJM for a few minutes....he told me that I have to focus on their premium range and make it big....the job was a regional one....Middle East, Africa and South Asia....Regional Director....big designation...he told me I fit the profile and Alok would contact me to take it forward....so job pakka.....

Rushed to the airport and got in to the flight satisfied with the turn of events. 

Reached DxB with some nice feelings....VJM also told me that he was breaking the rule for me (not taking anyone who left)....I was obligated....I also know that they needed someone whom they could trust and also knew the way of working of UB.....

But the wait was long as the HR lady was on leave....W&M has never done any overseas appointment and it took some time for them to figure out the terms and conditions...Alok was also busy and very difficult to get hold of....

Finally sometime last week of June 2005 when I was in Blr to attend friends daughters wedding the appointment letter was received. I asked my son in DxB to open the attachment and read it out....every thing was fine except that instead of mentioning the total remuneration p.m it was mentioned per annum....again a bit of wait and finally the package was delivered.....I told them I would join only on 10th Sep as I want to take a break for around 2 months.

Meanwhile Flemingo was preparing to welcome me on board but I told them that I could not say no to my ex boss....

Also I got couple of more offers but decided to continue in the same industry (alcohol wanted to stick with me)....

Whole lots of things to do in DxB...change of home...fortunately got one across the road....this is another story....we saw one day someone vacating the opposite villa and I approached them and took the number of the owner...when I approached the owner, I was told that was promised to some one else...didnt give up...impressed upon them and got the villa....I had to also take care of my care taken and drivers visa and also get my visa changed.

Since W&M didnt have an office in DxB...I have to either be part of their UB office visa or AnE, their distributors or get an office.....

Didnt want to be part of UB and also AnE....so started working on the own office in one of the free zones....

Rest and more later......

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

Episode 31...

Diageo n Gulf.....

Things were going smooth....the domestic, Duty Free and RTM were all cleansed, healed and started giving us fabulous returns. 

One of the major issues, I faced, was the poor quality of our give aways as offers in the Duty Free channels on JW Black. The travelling consumers liked the trolley bags as gifts as they could, in turn, give it to their friends in their native land as a memoir...PRG-Chivas Regal- managed to get better quality Trolleys than us.....though we did well with our trolleys during promos, there were huge complaints on the quality of our gifts...we have to also stay with in our budgets and hence to catch hold of a good supplier was important. I met up with a good soul and when I asked him whether he could help me to figure out a source, he offered to do it himself and at a very affordable cost...slightly higher but the product turned out to be much better than that of Chivas Gift....and he became our regular supplier of many things...(so do not just look at conventional things...tried and tested....look around and you will always find something or someone who can provide you what you are looking for).

Also introduced the 20ml JW Blue as an offer on JW Gold....this has helped us to improve our sale of Gold and Blue....the 20ml was a trial pack and the sale of trial pack also went up....the added cost is the creation of gift carton to 'in-pack' the 20 ml....this has to be done at AnE and the additional cost but it was worth...The logic was to up-trade the consumers....

As a marketeer one need to understand the duty free consumer much better before designing the promotions. When I took charge of Gulf it was all about bags and bags and bags....nothing else....I used to spend lots of time on the shop floor be it Dubai Duty Free/Abu Dhabi/Sharjah/Doha/Bahrain et al.....Sharjah is different as during my tenure, this airport was mainly for low cost airlines and the fliers also were looking at value for money. The duty free operator at Sharjah, Du Fry, a Swiss based organisation, was very receptive to ideas to improve their business as, most of the manufacturers spent all their monies in DDF as it was huge...this irked Du Fry and the moment i proposed to up the activations in their departures and arrival, they took an instant liking towards me.....there was a problem too as the head of procurement was based at Basel, Swiss and it was always an issue to put our ideas and logics to them to improve their ordering pattern due to the promos....so, decided to visit the head of procurements in Basel along with Pramod, my finance guy and Syama who was managing logistics at our DxB office-This helped us to a great deal as they could put a face to the names they were dealing with and they really appreciated our coming all the way to meet up with them. This trip went a long way to improve our relationship with Sharjah Duty free and we were given 'the best supplier' status by them. We got some great visibility in SDF and also doubled our numbers. Considering the consumer profile, we introduced on JW Red 3 for 2 offers and it was a run away success....And we always reimbursed, the cost of  promos, as goods only hence our cost was just the cost of goods plus transporting....

Travellers across globe can be divided in to the following categories...1) Business/Frequent Travellers-these are the ones who travel across globe and use the lounge and know what they want...as they are regular travellers they try and spend little time browsing thru the items and with a very clear understanding of what to buy....They just go to the shop, buy things and leave...whether departure or arrival...since they travel frequently, anything missed in one visit can be bought in the next one....also in UAE the arrival allowance is 4 bottles of spirits and even if someone travels four times a month, its 16 bottles...unless this person is throwing huge parties every week....why should anyone buy alcohol every time? And the other items in DF are primarily chocolates and tobacco.....so in arrivals you dont find queues..2) Tourists....they spend lots of time in the departure shops browsing thru and also looking at the offers and competitive prices....so displays, offers and attractive prices are most important for them. 3) Labour force....they visit their native land once a year and for them there is plenty to take home....alcohol, chocolates, cosmetics et al....offers are so important for them and price....Dubai boasts of world travellers and every nationality is different.....Tourists from Russia and China buy very expensive stuff....Chinese expensive Cognacs and Russians everything....Kuwaitis and Saudis....expensive perfumes and jewellery as they cant carry alcohol when they land. You have to profile the consumers and run offers which would attract the TA and get you results. Also DDF has all the data and they would be too glad to share with you if the purpose is to increase the foot fall and revenue for DDF. Dubai Duty Free celebrates their anniversary in the second fortnight of December and offer huge discounts....I think they capped it at 25% now......not on alcohol but almost on all the other items....you can pre book what you want to buy and collect it at the counter...so much for consumer friendly......

Dubai Duty free has a general stores serving all kind of general items....I used to wonder why items like yogurt and water bottles at the DF shops? But believe me guys they have demand for these too...

In Europe and US there is no Duty Free.....they are tax free shops.....So the prices are high compared to Middle East and Asia...For internal travellers from one country to another within Europe this is attractive as they save on local taxes....and they are not mad shoppers....they buy mostly alcohol and tobacco. If you travel thru Heathrow terminal you will see exclusive shop for Single malts. And it really sells well as almost all the brands are available and even the prices are quite competitive.

In India the face of Duty Free changed only after the new terminals inaugurated in Delhi, Hyderabad, Bangalore and Bombay....Today these shops are world class...Chennai has to go a long way.....you need big time players in Duty Free and its an experience....

In many airports there is last minute shops...small but keeps mainly alcohol for those who are in a rush....every single inch of space in the airport has to generate revenue.....

When things were going so well, they created a new division and merged it with Global Duty Free of Diageo...our region was re named Middle East North Africa (MENA) and came under Ron Anderson....A great guy and grew from the ranks of IDV...And our divisional president was a Stuart Fletcher.....

And these guys introduced something called Break Through (BT) thinking thru an agency and went hammer and tongs after this. Though it was introduced when I was in India it went berserk under Stuart F.....maximum time and money were spent on inculcating this BT way of working but down the line many didnt understand this concept at all.....How this BT has to work....Breakthrough is something you come out without any logic or rationale.....Its a thought, if given shape and inputs, can take the business to a different level....wonderful concept but somehow fallen on the wayside.....lots of money was spent on this by our division....

As mentioned business started hitting high with all the activities and aggression in place. I have also expanded the team by bringing in a manager to manage domestic business (Sahar Maniar), a Customer Activation manager in Roy Diab from Diageo Lebanon and they appointed a HR head to manage our region...another Lebanese lady from Diageo Lebanon based at Dubai...So lot more in our office and lots of action.....

And around the beginning of 2007 the Beirut airport bombing happened and Lebanon was back to its chaotic past.....things became so bad Diageo told their employees to sit at home or those who were keen to leave the country and come to DxB.....Diageo was very concerned and was there to help the needy....

And around April or May 2007, Ron announced that the Middle East-North America region's HQ would be Dubai and a Regional Director would be appointed. This was announced during our review meeting in Dubai and I was told Roland Abella has applied for the position....without battling an eyelid, I also informed the team I am throwing in my hat...I didnt realise that Ron had already zeroed in on Roland....and I somehow felt there was something going wrong for me....and somehow I also didnt like too many Lebanese getting in to our DxB office as I felt they were parochial.....(sorry, this is how I felt that time)...they were friendly fun loving and party animals but they stuck to their own clan....we had a guy who was incharge of marketing-Tony Amin-another great guy but their marketing was woven around the Lebanese consumers and they failed miserably understanding the Gulf DF and also the domestic markets...this irked me a lot and am sure it was vice versa...

Sometime in June 2007, I think, we had a review meeting in DxB with Ron and the dinner was fixed at the Budha Bar....I was getting choked with this new environment and was getting troubled....Ron was a non interfering boss but I felt he was getting carried away by the Lebanese folks....and also they, probably thought, that I dont comply with certain fundamentals-like-no interactions with the traders in NE...also there were whispers that a new scotch strategy was getting developed and Roland was in the leadership team....And also their interference in DF promos irked me majorly....Ron once wanted to visit DDF and meet up with the biggies....I fixed up an appointment with Colm, George Horan and Sharon....but Ron, to my utter disbelief, behaved like a big boss....totally different from how Ivan used to...and Sharon was not happy and she told me in so many words....Also with AnE there was no inputs or anything....I personally had great admiration for Ron from my IDV days when he was heading the world class selling and later as head of the Miami region...So I decided to call it quits...no job on hand but I was emotionally drained.....I wrote my resignation letter (didnt discuss with no one....not even with Nalin), kept it with me and went for the dinner. At the end of the dinner I told Ron I wanted few minutes with him alone and he asked me to meet up with him outside...in another bar....when I went in, I was shocked to see Roland there and I could not believe myself....but I kept quiet....I looked at Ron quizzically and he asked me to sit down and he started the conversation....it was something like 'Rajah, Roland is going to shift to DxB as head of MENA and at this moment we feel that you will have no role in this division....we will try to fit you somewhere else but if we dont, you would be made redundant and whatever is Diageo's policy in terms of severance would be given to you...He was nice, polite and very compassionate....but very matter of factly.....I didnt know how to react....Roland butted in and told me that we would discuss it in the office the next day....and he also told me that the head of HR of DF region would speak to me....no discussions-nothing....I didnt know how to react and hence I just nodded my head and told them bye and left....

Guys, when am writing this, I realise that it was divine intervention that day that I didnt submit my resignation and instead Ron volunteered to tell me about the redundancy.....Oops....what a welcome relief it was....the next day, in our DxB office, Roland was all apologetic and told me that they expected me to react aggressively and were quite surprised my cool composure....The HR lady called me and explained what I would get as severance....I was told that I can continue till June end and I would be compensated....my visa would continue till I want and I can continue my travel attend all the meetings et al....and no one would be told about this till I decide to inform...very considerate Diageo...and the severance money was hefty and good......but I lost my job.....second time in 3 years....both the times, someone has taken away, what was mine.....

Rest and more.....next episode.... 

 

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

Episode 30...

I wrote about the issues and also the tasks ahead....in my last episode.

I looked at DxB airport to start with. 

Folks, DDF is the best run duty free, as per me, in the world....I say this because they are not the typical DF operators like some of the global players and do not squeeze the suppliers. They are friendly and always there to help. 

I looked at the numbers of DDF. The perception in HO was that JW Black was the leader there but it was not so.....DDF had a policy (though I was totally against that) which allows either Johnny Walker or Chivas on promo...the promo in departures were a trolley for every two bottles of Black and Chivas also operated similar stuff. But the difference was in quality....ours was a poor second to what was given on Chivas. We had promoters-they are DDF employees but seconded to us) and their major complaint was the poor quality of ours vis a vis given by competition especially Chivas. This I changed immediately by changing the supplier and brining in new ones. Also I requested DDF to allow both of us on promo at the same time to figure out whats the consumers choice which was turned down by them citing the difficulties in managing both. But I convinced them to allow us to operate during Xmas time at least and I succeeded. I built a good rapport with the DF staff and also the floor managers....Went on a full offensive as due to the issues with the domestic and RTM, I felt I have to make up the volumes from DF. 

Also in the Gulf the arrival allowance of spirit was 4 lits and no one bothered to promote there as it was taken for granted consumers would lift the 4 lits. Yes consumers lifted but they bought assorted stuff...Unlike the departures where the consumers spend some time to browse thru in arrivals they are in a hurry as they have to exit asap to reach their destinations....so one has to do something which attracts their eyes the moment they step inside. Also the arrival shops are not all that spacious compared to the departures. Always cramped....And DDF was dead against any free bottles in arrival as it would affect their revenues....and there was no 'one month for you and one month for Chivas' conditions...so we came out with stunning promos at arrivals and one of them being JW 4 lits packed in one without any discounts. This was an instant success and our depletions started going northwards....

Due to space constraints DDF was very clear that the supplies have to come from our local distributor only (for all the volume brands-companies) and hence the local distributor has to manage the inventories well and keep meeting the demand 24x7. They were given a service charge for this but there were always stocks outs.... and I made it a point to reach the airport with an extra grace time of an hour to spend time with the staff and also address issues and most of the times it was stock outs and shelf space....this was also addressed by getting one exclusive person to look after the logistics of DDF from AnE....

Dubai Duty Free was the major contributor followed by Abu Dhabi (ADDF), Sharjah, Qatar, Bahrain and Muscat. Abu Dhabi was in tie up with DFS and Qatar, Bahrain and Muscat with Aer Rienta....But DFS role in managing the ADDF was limited to only procurements. Diageo stand was that Gulf/Middle East to be left alone and didnt give in to any pressure from the global DF operators on pricing. This has helped us in terms of profitability.

The allowance across UAE was the same (4 lits of alcohol or wines or 4 boxes of Beer). In Qatar both the DF and domestic were managed by the Qatar airways and hence the allowance was just a lit. Same in Bahrain and in Muscat it was 2 lit. All these allowances were in arrival only but in departures you can take as much as you want provided the airlines didnt have any objections. In Muscat and Bahrain during the month of Eid, the alcohol section in arrival were covered for religious reasons. 

One has to first take a note of the local and religious sensitivities before getting in to any strategic thinking. 

So the priority for me was to build relationship with the key stake holders across the DF and also domestic. Domestic business across Gulf was different.

UAE....

DxB..circa 2005. The off trade was managed by African and Eastern and MMI....they were the only two given license to run retail of their own and also supply to local bars and restaurants (the permitted ones)...total monopoly. There was also some local tax and coupled with restrictions of who can buy and how much...hence the retail business was not a very attractive one in DxB local. The on trade were doing great business - across categories....The bar in Emirates towers....I think it was on the 24th floor....what a place it was and Black Label was just 24 AED those days for a peg....Budha Bar another happening place.....the bar on the 32nd floor of Grovenor's house... and every five star hotel....plus the dance bars where the max business was coming from. And these outlets were divided between AnE and MMI....this means that if the outlet had tied up with MMI, it would be Chivas all the way and if it was of AnE it would be JW Black....and Chivas was growing silently as the travellers from other gulf countries were going for Chivas....and the team of both AnE and MMI were focussing on discounts for pouring and major promo was some snacks free....nothing major.....I went around, figured out that the volumes were nothing great and left it to the AnE team to manage the activities well and just focus on the market share.....

Abu Dhabi....better than DxB....we had ADMMI as our distributor and the difference in this market was that there were more retail outlets than DxB....there was also no local tax....there were primarily ADMMI, Spinney's, Abu Dhabi National Hotels, AnE and one more....these distributors also had their own outlets.....but there was restrictions on locals buying from these outlets....but the off trade business was much better than that of DxB....

My first visit to ADNH was a miserable one....they were very upset with Diageo as just before my arrival they had removed the distribution of Guinness beer from them and handed over the same to ADMMI to consolidate the distribution. This didnt go well with ADNH and I was given a complete dressing down by their boss...Mr. Khoory....and Mr.Mani a fellow Indian who was heading their purchase, was very kind to me. They stopped promoting Diageo totally including the spirits. I spoke to the bosses at ADMMI and transferred back Guinness to ADNH....that paved the way for a fantastic relationship with them and that helped me later....I still enjoy a great relationship with this outlet.

Northern Emirates....

Sharjah is a dry state....RAK, Fujairah, Um-al-Quain and Ajman were open.....and the business was majorly by the Indian community....Diageo used to supply directly to these customers but just a year before I got shifted they stopped it citing some vague and stupid reasons....and they directed AnE to supply to them. This upset them much more and they vented their frustration and anger by buying Diageo spirits from the parallel traders. Diageo, sadly that time, kept changing things-the one which were going right and without any complications-very often. This is one such major change. The reason by the legal team of Diageo was these customers were not authorised customers and were in bootlegging. It took some time for me to understand the nuances of this trade in Northern Emirates. And am summarising my understanding here...1) Most of the traders are Indian businessmen. 2) They are licensed by the local governments (I took the copy of the license of one of the customers which was in Arabic and got it vetted by a recognised and senior lawyer in Dubai and sent to my HO and legal team but they didnt bother to respond to me)....3) They all have huge retail stores and also do trading in majorly African and middle eastern customers. Customers from Africa were dependant on this NE channel as the prices were attractive and the genueinity of the goods. Also the customs in UAE were customer friendly, professional and quick. Alcohol, food, spices, dry fruits and nuts et al. Alcohol used to go to places where it was banned but the UAE dealers were only providing goods and service. Where it goes and how it is transported was not their concern. 4) And they were servicing to license holders only. 5) And payments were never an issue as Diageo, when they were servicing them directly were getting the money either in advance or against LCs. 6) By denying direct supplies and telling them to buy only from AnE at an increased price, they completely alienated the trade. Since there was demand for Diageo brands the customers started buying from parallel traders but the loss was of Dubai hub of Diageo where I was the boss and tasked to deliver the numbers. The RTM channels numbers were almost like 30% of the volumes and highly profitable...This became a major challenge for me. Also despite representing the genueinity of the customers, the legal department of Diageo, not only refused to entertain direct supplies but told me very clearly to stay away from NE customers. I got a directive that I should not visit their shops and the customers as it would be construed as facilitating illegal trading. I felt it was illogical as Diageo was okay for AnE, the authorised distributor to supply them where as the GM of the market should refrain from transacting business with them. They should have ideally taken off the targets set for this channel but the targets were kept as same....look at the irony. So I have to think differently and get the business....and with AnE's poor understanding of the channel (they looked at NE customers as their competitors and also they were new as Diageo distributor)...it made things worse. Meanwhile Pernod Ricard, the makers of Chivas, exploited this situation and started pumping in....to every single customer in NE directly....I sat down with AnE, made them to realise how important this channel for us and cut down their margins and announced some incentives - thru their GM - for the dealers in NE and with my continuous follow ups and interactions with AnE team,  the channel started contributing. But we lost some business in the process. And this channel is known for cut throat competition. While DxB Duty Free was selling JW Black at around 130 AED, some customers in Northern Emirates were selling at 110 AED and this irked DDF.....and it came as a blessing for me and I pressed the accelerator and made DDF to agree for aggressive promos in arrivals (this price issue was affecting their arrival only)...this is a bit complex situation and hence so much of detailing. 

I need to also put a disclaimer here....The legal department of Diageo went with their own understanding of this channel and I felt my predecessor failed in his job in convincing them on the genueinity of the customers in NE....some of them specialised in consumer friendly retail stores....the retail space in some of the shops was just mind blowing. Consumers from DxB on weekends visit these shops and pick up their requirements as 1) it served them as a good get away trip and b) the savings compared to buying from DxB retails of AnE and MMI. (As am writing this I heard the DxB government has removed the local tax on alcohol paving way for lower prices in these shops in DxB). I convinced AnE to go for major branding activations in NE as some of the pubs and bars there were doing phenomenal business during week ends. Lots of work went in to this channel which was never done before I arrived. I am not stating this to tom tom what I had done but to make you to realise how sometimes the biggies goof up on big bucks and waste time on brand building in insignificant channels....and both MMI and AnE were masters in painting the NE as 'untouchables'.....

Sharjah Duty Free:

Though Sharjah was a dry state, this never hindered the DF operations - except during the month of Ramadan.....they used to cover the arrival DF with some kind of 

Qatar...

Smaller in terms of size. Qatar Duty Free, run by Qatar Airways-procurement by Aer Rienta - Qatar Distribution Company (QDC) run by Aer Rienta....There was a lady of Indian origin was the GM of the Duty Free....a real terror and she never bothered about Aer Rienta and ran the DF on her own terms.....we jelled well from day 1. Aer Rienta tried to control the promos and slots but she just sidelined them which made my live easier. Her team was great - Jude was the incharge of procurements and the shop floor).  Qatar Airways in flight service and DF was also brought under control.

The domestic sale..just one retail stores but a huge one....QDC...all the companies wish to sell in Qatar need to go thru only QDC....there was also on trade but limited-attached to the 5 stars-almost 90% of the business was from retail only. The retail business was on some kind of quota based on the income of the consumers...for the local Qatari's no entry in to the shop....established great rapport with the GM of the operations-Colin Boother - a Brit....

Customary visit once a quarter to review the stocks-promos and displays.....

QDF was new compared to DDF and learning the tricks...the big boss of QDF and QDC - ambitious a Qatari -who was also heading the Qatar Airways - knew well how to run the business.....never met though....Also carrying alcohol in to Qatar was prohibited and hence no booze in the arrivals.

Bahrain:

Compared to Qatar and Oman this was bigger in terms of volumes and also was very pragmatic with their alcohol policy. There were stand alone bars serving alcohol apart from retail stores-the stores were few only as only the importers-around 5 or 6-were allowed to set up retail and run. So these importers, in their retail stores gave preference to the brands which they were distributing but the over all business of domestic was good. But things changed a bit after the 2005 Ramadan....

BMMI was our distributor and like any other gulf distributor were just managing the distribution. Thursday evening to Saturday the bars would be abuzz with lots of cross border traffic. The retail stores were huge and churning out good volumes....

The Bahrain Duty Free was run by the BDF, a government arm but the procurements and promotions were managed by Aer Rienta...Initially all the gulf operators wanted some big foreign operators to get best deals from the suppliers but later developed understanding and skills but still continued with their logistics partners.

The allowance in Bahrain was just 2 lits of alcohol or 12 cans of beer....so the arrival was not a great attraction. Gulf Air was their national carrier and it was not doing great then. The departure shop was contributing almost 80% of the overall business.

Oman-Muscat...

This is the smallest of all the Gulf markets. Duty free and Domestic. DF was known as Muscat Duty Free and run by the local businessman with great guys taking care of the shop floor. The procurement and logistics were managed by Aer Rienta....Allowance for arrival were two lits and hence around 25% of the volumes were from the arrival shop. The departure was catering to overseas and transit passengers.

The domestic business was small due to the local taxes and small populace. We had AnE managing our business and also the licensees were importing from UAE due to its proximity and also cheaper prices....

Saudi and Kuwait also had their duty free shops in the international airports but sans alcohol.

The format across Gulf was the same. Also how the business is transacted. The distributors and the DF played major role and one has to take care of 1) great rapport with the operators 2) Attractive offers and perfect executions 3) Managing logistics....The DF shops are so important to get the volumes and hence great understanding with the shop floor staff.

Once the above is understood easier to manage business and deliver the KRAs....

But Diageo is different right.......

We will talk about this and more in the next episode.....

 My experience with Southern Railway.

Folks, I have taken a place on rent in Srivatsam, Kalyanapuram near Kumbakonam. This apartment belongs to my lovely friend GMS.

I want to spend lot more time there as I love the place, the people, the staff and the temples around. It's run very efficiently by the promoter, Shri Seetharaman. 

Earlier I used to go by road but in the last few times changed to Cholan express which, if runs on time, takes exactly 5 hours to reach my destination-the only problem is it leaves at 715hrs, Chennai Egmore.

I had some issues with this train - first being the freezing chillness inside, the perpetual delays and also the menace of vendors. (the AC has issue has been addressed though)

I used to tweet to the Rly minister but didnt bother to respond to the reverts.

This time (3rd of this month) I boarded the train at a place called Papanasam. It is a single platform station and fully dug up. If it rains one would get completely drenched as the shades are not continuous. Also its very difficult to lug your baggages. For elderly people and physically challenged, I would not recommend this station. Whoever is the incharge, should work on some time lines and get the platform and station passenger friendly or else the SR should skip this station and start services only after the civil work is completed.

The train was supposed to arrive at 11.16 and I reached the station on time though I knew, thru the app I had installed, the train was running a bit late. From the entrance to my compartment it was a good 10 minutes walk with very little manoeuvring possible. Fortunately it didnt rain the sun was kind....by the time the train arrived it was a good 40 minutes delay. 

I boarded and settled and in 10 minutes time the train reached Kumbakonam. There I started hearing the vendors noise inside the compartments....

I tweeted the railway minister on the perpetual delay of this train (onward too my train was delayed and also on earlier occasions) and  also on the vendors movements. Within 10 minutes the concerned TTE came in to my cabin as he was asked to address the grievance. He was quite concerned and told me the delay was due to track work (doesnt made any sense to me - it must have been with the knowledge of the railways and they should have considered this delay and advanced the train or adviced the passengers on the expected delay)...and also he told me that he would do something about the vendors.

Within few minutes I got a call from Trichy control room asking me whether my grievance on the vendors was addressed. That person (Bagiyaraj) was very apologetic and assured me action would be taken.

At Cuddalore/Villupuram station 3 RPF police came to me and told me the vendors were evicted. 

1) Am not against vendors but there is always a possibility of some bad elements slipping in and creating issues. I told this to the TTE too.

2) The version of the TTE was that many travellers need food which was provided by these vendors...fair enough but isnt it the job of the railways. A train journey which lasts for 7 hours-day time-with so many stops-should have a pantry....this is missing. Also they should have chair cars instead of standard coaches....(Rockfort and Pandiyan are run as Cholan up and down every day hence standard sleepers in all classes)...And travellers should bring their own food as allowing unknown and unregistered vendors is a major risk factor...

But this blog is to appreciate the quick response by the railway authorities in addressing the issue and taking action.

My sincere appreciations to the Railway ministers twitter handle, the southern railway incharge (whom I had ccd) and the very efficient TTE, Bhagyaraj and the RPF.

Well done Indian Railways....way to go.....