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The bourbon seller

Source : BUSINESS_STANDARD
Last Updated: Fri, Apr 20, 2012 19:30 hrs

Amrit Kiran Singh has challenged the rule of Scotch whiskey in the Indian market. Bhupesh Bhandari meets Jack Daniels’ man in India

For a long time, the ultimate gift an Indian received from abroad was a bottle of Scotch. More Scotch is sold in Delhi, so the old joke went, than is bottled in the whole of Scotland. Scotland’s rule over India was supreme so far as imported liquor is concerned. Now, for the first time, there is a challenger. Jack Daniel’s, a Bourbon or American whiskey brewed by Brown-Forman in Tennessee, has become the third-largest imported whiskey in the country after Johnny Walker and Chivas Regal. It is ahead of Ballantine’s and Glenfiddich, and its annual sales of 54,000 cases (of 12 bottles each) are more than all the single malts (Scotch, of course) put together.

“Jack Daniel’s is an acquired taste — you like what it does to you,” says Brown-Forman Area Director Amrit Kiran Singh with evident pride. He is dressed in a pinstriped suit with an open collar. Singh says that he has been busy with annual reviews. The air of satisfaction around him says the reviews went off well. Singh informs, over the next hour or so, that Jack Daniel’s has been growing at over 30 per cent per annum for the last five years, and all his brands in India (Jack Daniel’s, Finlandia vodka, Pepe Lopez tequila, Korbel champagne and Southern Comfort liqueur) are profitable. “We are one of the few companies that are not making a loss,” says he. We are in the coffee shop of a five-star hotel in south Delhi. The bar next to us stocks Jack Daniel’s.

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Singh is a Lucknow boy, having passed out of La Marteniere School in 1974. His father, Wing Commander (retired) H K Singh, had set up the Lucknow unit of state-owned Hindustan Aeronautics in 1970. (Singh Sr. lives in Lucknow and raises pheasants for the World Wildlife Fund.) The Singhs belong to a land-owning family in the Sitapur district of Uttar Pradesh. Their village of Dharfari is close to Nimsar (or Naimisharanya), a place holy to Hindus. The bungalow Singh has built for himself in Gurgaon is called Dharfari House. A Business Standard journalist who visited the house soon after it was constructed in 2009 noticed high ceilings and doors and furniture (beds, lamps, dressing armoire, writing bureau et cetera) transported from the ancestral home in Dharfari, lithographs of Lucknow and artworks by M F Hussain, Shuvaprasanna and Thota Vaikuntam. Singh even bought a painting from Eqbal Mehndi, the renowned Pakistani artist, in Karachi.

Singh came to the limelight in the early 1990s when he was hired by Rita Singh (of Mesco fame; she operated out of a five-star suite in Delhi at that time, and moved around in a silver Rolls-Royce) from BPL to run her footwear business. She had a thriving exports business and felt that her footwear could be sold in the country as well. Singh says that in the 18 months he worked for her, he turned it into a Rs 96-crore business. He got advertising agencies Lintas and Contract on board, launched a series of brands, and did a national rollout. But things took a turn for the worse when Rita Singh’s other investments (steel, aviation et cetera) began to bleed. Footwear soon began to subsidise the other arms. “The money we were making was going elsewhere,” says Singh. So, in 1996, he left to head Brown-Forman in India. The Louisville-headquartered company had formed an equal venture with Jagatjit Industries and had launched Southern Comfort. But the partnership was dissolved and Brown-Forman set up shop in India on its own. The only problem was nobody in India knew bourbon.

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At the outset, Singh says, he decided not to bother about older people who had already developed a taste for Scotch whiskey and Scotch-like Indian whiskey. “We decided to look at young adult consumers. We decided to use Jack (Daniel’s) to hijack beer drinkers before they move to Scotch.” One could start with Jack Daniel’s with cola and ice, and gradually reduce the cola and finally drink the bourbon on the rocks till one is “damn near dead”. To target this community, Singh decided to associate Jack Daniel’s with rock music, and thus started the Jack Daniel’s annual rock awards. There is a four-month buildup to the awards in various cities with bands performing in bars and pubs. The finale is held in Mumbai. “Rock music was confined to the college campuses when we started,” says Singh. “It has now become mainstream, and has been adopted by Bollywood.”

Singh also got Jack Daniel’s to associate with Harley Davidson, the iconic American motorcycle. Contests were held across bars, and winners were sent for Harley rides in the US. Three years back, after Harley came to India, Brown-Forman started giving Harley motorcycles to the four winners every year. Jack Daniel’s, claims Singh, sells 60 per cent through liquor vends and 40 per cent through bars. It is present in 30 per cent of the top vends and bars in category A and B cities.

In spite of the success, Singh has his share of critics. Some say that in India Brown-Forman is a one-brand wonder; none of the other brands has been able to come near Jack Daniel’s success. Singh admits that Jack Daniel’s accounts for 60 per cent of his volumes, but says that the other brands aren’t doing too badly. Finlandia, for instance, is the second-largest imported vodka in the country after Absolut. Still others say that he operates in the imported liquor category, which is just 1 per cent of the Indian market. His real test will be if he played in the mass market dominated by Indian players and multinationals like Pernod Ricard.

Singh says that he has discussed with the Brown-Forman brass the possibility of entering the mass market with inexpensive products (a bottle of Jack Daniel’s costs around Rs 3,000 in Delhi and Rs 4,000 in Mumbai) as “it is tempting to look at Indian-made foreign liquor”, but “we are not experts in large volumes and thin margins”. However, he says that if Jack Daniel’s could retail at Rs 1,200 a bottle, volumes could quadruple to 200,000 per annum. Perhaps Brown-Forman doesn’t want to dilute the equity of its brands in India. Annually, it sells over 10 million cases of Jack Daniel’s in a year. That makes India (50,000 cases) less than a blip on its radar at the moment.

But cutting prices won’t be easy. The Indian government has already cut the import duty to 150 per cent (from 750 per cent), in line with its commitment to the World Trade Organisation. Pressure from local manufacturers will make sure it isn’t cut any further. Meanwhile, the proposed free-trade agreement between India and the European Union could result in a windfall for Singh’s rivals, the Scotch whiskies — their prices are bound to tumble once it comes into effect. “That’s okay,” says Singh. “That will make Jack Daniel’s a premium product.” Singh sure knows how to look for the silver lining.




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