Ep #18 | WTF, Alcohol is a $70B Business in India? | Nikhil Kamath explores Gaps & Opportunities

Nikhil Kamath 0:00 the intent is to find young people out there and tell them how they can get a job in owning a bar, starting a liquor company, working in a liquor company, doing advertising for liquor companies, because you guys are experts in this. [upbeat music] Okay, you guys ready? [music] Welcome, each and every one of you. Uh, thank you for coming. The very first thing we do when we begin this off is introduce ourselves. Uh, I know Abhishek very well already, but I haven't spent time with the other three of you. So maybe you start by giving us five minutes about yourself, starting with you.

Minakshi Singh 1:24 Okay. We start?

Nikhil Kamath 1:26 Yeah, go, Meenakshi.

Minakshi Singh 1:27 Amazing. So, um, okay,

Minakshi Singh 1:30 maybe start from the beginning. Um-

Nikhil Kamath 1:31 You're a bar owner-

Minakshi Singh 1:32 Yeah

Nikhil Kamath 1:32 ... so you're already a very cool person.

Minakshi Singh 1:34 Yeah, I know that.

Nikhil Kamath 1:35 Like I said, I will pull your leg. Feel free to-

Minakshi Singh 1:37 No, I'll do the, I'll do the same [chuckles] -

Nikhil Kamath 1:39 Yeah. [chuckles]

Minakshi Singh 1:39 ... trust me. We need some alcohol, and then we'll start. No, so yeah, so I, I started, um, my journey into this industry, uh, right from hotel management days. So I did my hotel management from IH&M Pusa, New Delhi. Um, and from there on, uh, uh, in the second year of college, just like most of us, we needed pocket money for the pizza and beers. [chuckles] And so we-

Nikhil Kamath 2:06 Where did you do college?

Minakshi Singh 2:07 IH&M Pusa, New Delhi. So, uh, and finished my schooling and college from Delhi.

Nikhil Kamath 2:12 Mm.

Minakshi Singh 2:13 And since then, I've been in Delhi.

Nikhil Kamath 2:14 Mm. Okay, so you went to college, then?

Minakshi Singh 2:17 Uh, yeah, so, uh, I started bartending in the second year of college as a, as a, almost like a, you know, there's something called ODCs, which are out- outdoor catering.

Nikhil Kamath 2:25 Do you have pictures from back then?

Minakshi Singh 2:27 Yeah, yeah.

Nikhil Kamath 2:27 Yeah.

Minakshi Singh 2:27 Of course.

Nikhil Kamath 2:27 Meghna, we should put that up. Okay, then? [chuckles]

Minakshi Singh 2:32 Okay, so that was my first experience behind the bar.

Nikhil Kamath 2:35 Mm.

Minakshi Singh 2:35 Um, I, I also think that was also a very big turning point for me. I was really lucky to have experienced really good, uh, s- you know, space of work. For the first time when you go, um, it was, it was not a pa-- it was just a part-time job, uh, and, you know, you were just doing it for fun, mostly for money. And, uh, when I went behind the bar, I started really enjoying it, and I, I felt like... I don't know if there's a word for this. I really felt like this is my calling, and I got-

Nikhil Kamath 3:02 What element of bartending?

Minakshi Singh 3:03 Actual bartending. So I loved making drinks. I loved serving drinks. I loved the part of hosting and talking to new people, getting to know their stories.

Nikhil Kamath 3:10 Was it the social element more-

Minakshi Singh 3:12 Yeah

Nikhil Kamath 3:12 ... or was it the mixing of the drink?

Minakshi Singh 3:13 Absolutely. Absolutely. So bartending is a mix of many things. Of course, the technical art of it, of making drinks is, is, is primary, but after that, it's layer on layer on your personality and how sociable you are and how open you are to knowing new people, talking to strangers, and how, you know, what your personality is. And I think bartending can bring that personality out in you. It's very-- it's a very good, comfortable space because you are also already in a space of enjoyment. You're mostly there to relax, so you also come with your guards down a little bit. So I think from a consumer point of view, it works really well, and I had a great, uh, time in that second and third year of college.

Nikhil Kamath 3:49 Bartenders tend to be particularly good-looking?

Minakshi Singh 3:54 Um, n- no, I don't think so. I, I don't think that... I think that's not... See, good-looking and good grooming are two different things, and I would say that that's because when you're in the hotel background or hotel industry, you're expected to be turned out well. Your hair's in place, your nails are in place. That's part of grooming, and I feel that's also part of hygiene.

Nikhil Kamath 4:12 [chuckles]

Minakshi Singh 4:12 And because you're serving food, you're serving drinks, I don't want a shabby-looking person, you know, preparing my food, for example. It's the same way I don't want a shabby-looking person making drinks for me. So I think grooming is where the center point is, and after that, of course, you can be groomed well. You can wear a beautiful designer shirt and look really good.

Nikhil Kamath 4:28 Okay, so bartending, second year of college.

Minakshi Singh 4:30 Yeah.

Nikhil Kamath 4:31 Then?

Minakshi Singh 4:31 And, um, after that, uh, when I was in third year, um, as expected, uh, most of the hotel management students back then, it's-- I'm also referring to now twenty years ago. Back then, um, it was expected that now you'll become a hotel manager, you'll become-- you'll get into management training program, and then, then you get a suit, and you're sorted, right?

Nikhil Kamath 4:51 Mm.

Minakshi Singh 4:51 So it's, it's the blue-collar, white-collar part of it. And my parents weren't very happy when I told them that I don't want to do hotel ma-- I don't wanna be a manager in a hotel. I'd rather be bartending. And that was a difficult phase for us as a family as well. But somewhere, I took the decision to continue bartending. I did a bartending course, and I think that is when I realized that real-

Nikhil Kamath 5:13 In India?

Minakshi Singh 5:13 Yeah, in India. Uh, my business partner, current business partner, Yangdul Lama, had just started his bartending school. So we-- I was actually one of the first initial batches of kids who came out. This was at that, that, uh, back then was-

Nikhil Kamath 5:25 What year?

Minakshi Singh 5:26 This is two thousand three, four, and it-- four or five, actually. And this time, uh, funnily, it was a six-month course, and you were supposed to, after doing your classes, also bartend. So it was literally like fourteen-hour days, sixteen-hour days, and for some odd reason, I, I still enjoyed it a lot, and I kept doing it. I was at it. Uh, and I think where the biggest, um, turning point-- I mean, there, there was this whole moment where I was like: Okay, I'm gonna be a bartender. I'm gonna work in this, this place and that place. I was dreaming all these big dreams, and then I realized that women are not allowed

Minakshi Singh 6:00 to bartend in Ind- India. Uh, it's actually illegal-

Nikhil Kamath 6:03 Even today?

Minakshi Singh 6:03 ... today, to certain states in India. Uh, women are not legally allowed to serve-... also, like, even waitressing-wise, or so be actually making drinks. So that was quite a stop for me. Um, I didn't have the option to actually move outside of India. I was barely managing it in Delhi. Um, that's when I kind of looked around on what to do, and that time, Youngduff actually introduced me to somebody who had just started off, uh, this website called Tallyho.com. It used to be working for beverage marketing companies, trainings, a lot of spa- the space was the same, uh, just not bartending. And I actually was their first employee, and I started with data entry and a lot of that, but I actually still really wanted to be there [chuckles] , so I continued doing it with, uh, little money. And, uh, yeah, so those, those years were a struggle, but I also think that I actually look back very, very fondly at that time because those were my... I feel I was very lucky to find the space to still continue in the, in the industry without actually have the option to do.

Nikhil Kamath 7:02 And then?

Minakshi Singh 7:03 Uh, while working in Tallyho, I got to travel a lot. I traveled all over India. They were doing projects with Bacardi, with Smirnoff. Uh, I was working extensively with these brands. These were the brands that were actually entering in- These were global brands, uh, multinational, uh, global brands, and they were actually entering India for the first time, and so they needed bartender training programs, customer activation, deep- a lot of, a lot of, lot of below-the-line activation. So I was part of all these multiple projects. So I would actually take a flight every weekend to a different city. So it was Delhi, Bombay, Bangalore, Hyderabad, Calcutta, Punjab, Jaipur, Raipur, multiple cities. Uh, and that was, like, a intense, crazy two years of my time, and I loved every bit of it. Uh, learned a lot, interacted a lot with a lot of people. I learned about what the corporate means, how businesses work, how all the other things work, right? What- how does- how is the spirit made? I took courses to actually learn how gin is made or how vodka is made, things like that. Um, and continued to actually grow in the, in that space. And, and, and then I got

Minakshi Singh 8:08 my break in a company called Diageo, which was actually, which is still actually, uh, globally number one in the world. And, uh, I started working with a brand called Captain Morgan. Uh-

Nikhil Kamath 8:18 Rum.

Minakshi Singh 8:18 very short stint that time. It was a rum that launched, and, uh, so they launched in Bombay, so their office was here, and then, um, head office was in Bombay, and then, uh, in, uh, Delhi, they launched. So we kind of handled Captain Morgan, and then I moved to Pernod Ricard, which is another liquor giant. There, I stayed for about three and a half years. But d- during this whole time, in 2000...

Minakshi Singh 8:40 I can- I have to tell you, in 2006, I made my first Excel sheet of m- having my own bar, you know? [chuckles] And I still have that Excel sheet of all the costs in the world.

Nikhil Kamath 8:50 Right.

Minakshi Singh 8:50 And at that time, I called Amit Burman, uh, you know, the founder of-

Nikhil Kamath 8:54 Like Dabur

Minakshi Singh 8:55 ... Dabur, and at that time, he used to run a bar in, uh, in Delhi called Forum. And I took one hour of his time asking him, "How much does the glass cost? How much does the kitchen cost? How much does- how much do you pay your manager?" I had no idea how to build the sheet, right? So I built it, and very nicely, actually gave all the details, heard me out, and, uh, and then, yeah, the dream was alive. And, uh, Youngduff and I kept talking, where we were- He was a trainer, very well-established, uh, you know, bartender, mixologist, uh, he's an author. He's many, many things. And, uh, so we kept talking about doing something together, s- starting our own bar. And at that time, I think the dream was to have a bar for people like us. That was always the conversation. We were like, "Where are the bars where you go quietly, sit, chat, have a good drink? Why are all, all the bars so loud? Why do they expect us to dance [chuckles] right now or, you know, dress up all the time?" You know, where are the bars which when you go to London, you go to New York, you go to... I mean, West was our, mostly that's our direction, you know, uh, that- that's how you get inspiration globally in this space of spirits-

Nikhil Kamath 9:58 Right

Minakshi Singh 9:58 ... and bars. Um, and we used to always talk about it, uh, between us, that, "Where are the cool bars, man?" Like, where are the... There are pubs, there are beer places. There were, like... Of course, we've always had institutions which are, which are amazing, even at that time, but good cocktail bars with cool bartenders talking to you and serving you and owners being, being there for you does not happen. Here, there are all, you know, owners who are, who will, will walk into, you know, "This saab ka table aa gaya, and saab ke friends aaye hai," and the managers are like... It's, it's a very different culture, right, in India when it comes to bars, and... So, uh, yeah, so we kind of went through it, and we went through looking for investors. We had our conversations, and finally, we realized that nobody's gonna give us money [chuckles] to start our bar. And we really wanted to be in South Delhi. That was our dream. But you know that what they say, that God gives you the opposite of [chuckles] what you want. And then we finally found a place in Gurgaon, in a basement in Gurgaon. It's still, like, kind of in the middle of nowhere, is how a lot of people refer to it, people who know this place. It's called Cocktails & Dreams Speakeasy. That's our first bar. Uh, we started it in the basement. Uh, Youngduff was the bartender, I was the waiter. [chuckles] That's how we like to put it. And we had two more people to help us, and we had about four people in the kitchen.

Nikhil Kamath 11:13 Do you have live music in this bar?

Minakshi Singh 11:15 Yes.

Nikhil Kamath 11:15 Yeah, I think I've been here.

Minakshi Singh 11:17 Amazing.

Shuchir Suri 11:17 And, uh, you are a regular customer who was there at least four times a week.

Minakshi Singh 11:20 Yeah, Shuchir... Like I told you, Shuchir was one of our first, first, uh, guest.

Nikhil Kamath 11:25 How often does he come?

Minakshi Singh 11:27 Uh, now, you know, he's married, and he has a kid, so things have changed. [chuckles]

Shuchir Suri 11:29 I used to be there four times a week with four different people.

Nikhil Kamath 11:31 Is there a correlation being, between being single and going out to a bar?

Shuchir Suri 11:35 I think that time, uh, I think it just happened, uh, naturally-

Minakshi Singh 11:37 Yeah

Shuchir Suri 11:37 ... because that was one of the cooler bars. Uh, I mean, that was the only bar which was close to home.

Nikhil Kamath 11:42 Why did you go there, Shuchir?

Shuchir Suri 11:43 Uh, because, um, I wanted to drink cocktails, and every... There were not too many places in the city at that point in time which would serve co- cocktails.

Minakshi Singh 11:52 Yeah.

Nikhil Kamath 11:52 How

Nikhil Kamath 11:53 many people walk into a bar for the taste of a cocktail, and how many walk into a bar for the people in the bar?

Minakshi Singh 12:01 So majority of the people will come for the entire experience. It's never one thing. Um, yes, cocktails are, of course, cocktails and food, both are very much, you know, your center. That's your point of sale. You have to sell cocktails and food, otherwise you're not selling the lights and the table and the chair, right? So I have to make money from that, so I have to get that right. But other than that, music, lighting, people, servers-... all of it, even the comfort of your chair. Like, the number of times we have, we have made our own furniture ourselves. Even now, today, we are making our own bar, and we're still making [chuckles] the furniture ourselves. So it's like, it's part of who you are, right? It's the craft of it. So I know I-

Shuchir Suri 12:40 And also, you will go to your bar and be like, "Okay,"-

Minakshi Singh 12:42 I need a Suchit, yeah.

Shuchir Suri 12:42 "Talk to the, talk to the bartender and be like, 'Okay, I do not like this. Make me something else.'" Which was, which was amazing, and not too many bars would be doing that back-

Minakshi Singh 12:50 Yeah

Shuchir Suri 12:50 ... back in the day.

Minakshi Singh 12:51 Yeah, Yangdupu was all about that. He used to make drinks as per people, so he-- I still know the drink that Suchit used to have, and-

Nikhil Kamath 12:57 What do you mean?

Minakshi Singh 12:57 ... to date, he used to have this popcorn [chuckles] shot-

Shuchir Suri 12:59 Popcorn shot

Minakshi Singh 12:59 ... like a crazy person. [chuckles] So-

Shuchir Suri 13:01 And after a few, everyone in the bar-

Minakshi Singh 13:03 The caramel

Shuchir Suri 13:03 ... would be having that shot.

Minakshi Singh 13:03 It's amazing, it's amazingly, it's a no-brainer, okay? So yeah, so bar, so bars are a lot about comfort and, you know, knowing people, many, many things. So if I, I can't just put, like, my finger to it-

Shuchir Suri 13:14 Mm.

Minakshi Singh 13:14 ... but yes, of course, food, drinks, music, ambiance. If you just make pillars, there are four, five big pillars. Service, these are like, you have to have them sorted, and then everything else hopefully aligns.

Nikhil Kamath 13:26 So you started, uh, Cocktail & Dreams in 2012?

Minakshi Singh 13:30 Yeah.

Nikhil Kamath 13:30 And then how did SideCar happen? SideCar is Asia's-

Minakshi Singh 13:34 World's, yeah.

Nikhil Kamath 13:35 World's-

Minakshi Singh 13:35 So we were part of World's list, we are part of Asia's list, we are part of-- We are number one in India for the last consecutive three years.

Nikhil Kamath 13:42 Number one bar in India.

Minakshi Singh 13:43 India, which is so much more stressful than the international awards, I'm telling you.

Nikhil Kamath 13:47 Really?

Minakshi Singh 13:47 'Cause it's fear, man. You know what I mean, right?

Nikhil Kamath 13:49 Mm.

Minakshi Singh 13:49 Indians-

Nikhil Kamath 13:50 Mm

Minakshi Singh 13:50 ... voting for Indians-

Nikhil Kamath 13:51 Mm

Minakshi Singh 13:52 ... and being number one-

Shuchir Suri 13:53 It's, it's actually not-

Minakshi Singh 13:53 It's, I think it's-

Shuchir Suri 13:53 ... because every time there's a competition in the country, I know the top three.

Nikhil Kamath 13:57 Who are the top three?

Minakshi Singh 13:58 Stop it.

Shuchir Suri 13:58 It'll always be SideCar, number one, Delhi-

Minakshi Singh 13:59 No, Baba, stop it. That's not-

Shuchir Suri 14:00 Yeah.

Nikhil Kamath 14:01 Who are the-

Shuchir Suri 14:01 But, but you know it.

Nikhil Kamath 14:02 Who are number two and three?

Shuchir Suri 14:02 By the way, the greatest-

Suraj Shenai 14:03 There'll be one by Bose, I think will happen.

Minakshi Singh 14:05 Sorry?

Suraj Shenai 14:05 Arijit's bars, you know?

Minakshi Singh 14:07 Yeah, but yeah, I mean-

Suraj Shenai 14:09 They-

Shuchir Suri 14:09 Yeah, but they had a-

Minakshi Singh 14:09 Spirit forward is just, yeah, it's-

Suraj Shenai 14:10 Yeah, so among the top three-

Minakshi Singh 14:11 You might not be too spirit forward

Suraj Shenai 14:12 ... you would probably, you know?

Minakshi Singh 14:13 Yeah, but that's-

Nikhil Kamath 14:13 Spirit forward is two hundred-

Minakshi Singh 14:14 So, so bar industry is very small. We all know each other from-

Nikhil Kamath 14:17 But how much would be your revenue? Because SideCar is known for the best cocktails, so between cocktails and spirit, what would be the-

Suraj Shenai 14:25 Breakup

Nikhil Kamath 14:25 ... breakup?

Minakshi Singh 14:26 I, I am sitting at a very good eighty-five percent cocktails, and the rest-

Nikhil Kamath 14:28 Eighty-five percent.

Shuchir Suri 14:29 Wow!

Nikhil Kamath 14:29 Fantastic.

Minakshi Singh 14:30 Yeah.

Nikhil Kamath 14:30 So I think, moving

Nikhil Kamath 14:32 on, so you know, when I heard about you first, Riaz called me one day, and he's like: "You have to invest in Goa Brewing Company. I'm connecting you to him."

Suraj Shenai 14:41 That's so sweet of Riaz.

Nikhil Kamath 14:43 [chuckles] What is the story of Goa Brewing Company, and why are so many people vouching for you in a world riddled with many different Indian independent beer brands?

Suraj Shenai 14:58 I think vouching is all their kindness. I'm [chuckles] really grateful to everyone, but I think from a story, um, we-- I grew up in Panjim, small town of Goa. Parents were, uh, worked as government employees. Mother, pa- father both went to work, so we were literally, you know, had the whole town to ourselves. It was very navigable as kids. Great life. Um, you know, w- went to hotel school because couldn't get into any engineering college. I, I could go to some rural college of engineering, but that didn't seem exciting. I took a year off-

Nikhil Kamath 15:33 You went to school in Goa?

Suraj Shenai 15:35 Yes, I went to school, everything in Goa until, uh, I graduated.

Nikhil Kamath 15:39 Your dad was posted there?

Suraj Shenai 15:40 No, no, my dad was working in the... He, he joined as a land surveyor. Parents were m- first generation, moving from village to the city, educated, so their entire focus was to educate us as kids. A younger brother, who also, again, lives in California. And, um, while we were growing up, I think, um, uh, there was varied experiences also. You know, Goa is qui- quite charming that way, in terms of, um, it had its own micro culture.

Nikhil Kamath 16:12 Mm.

Suraj Shenai 16:12 So you saw a lot of people, travelers, tourists, you know, in the-- people visiting, and you were also exposed to a completely different life-

Shuchir Suri 16:20 Right

Suraj Shenai 16:20 ... which was very different from what you were living in your small town. And, uh, then I, uh, joined hotel school. I went to IHM Goa, graduated, but it really didn't feel like working in the hotels, so I was just looking for a job, and, uh, Kingfisher,

Suraj Shenai 16:38 the beer company, was hiring, and I just went for an interview. I had no experience. They just, I don't know, offered me the job because I was extremely like, you know, enthused.

Nikhil Kamath 16:47 What year was this?

Suraj Shenai 16:48 This was in the year two thousand and six, so that was the first understanding of how, you know, the liquor industry works, you know, because beer operates almost like FMCG, and when you are, uh, working for a, for a large beer company, you are... The operational length and breadth of it is unlike any other alcohol category. I think beer has to reach the last. You wouldn't travel, like, for a wine, you may go a little further, but for beer, you will want it very close to your home. It's, it's very different, so it operates very fast. You order, so if in a liquor company, order cycles maybe once in a month, in beer, you get, like, every three, four days. So operationally, very, very exciting. G- got, got a sense of that. Then I got a job to work with Pernod Ricard, which is this French company. Great time to join them because it was, it was entirely actually built by Indian executives, Param Oberoi and these guys.

Nikhil Kamath 17:46 He's also in Goa now.

Minakshi Singh 17:47 Yeah.

Nikhil Kamath 17:48 Right, yeah.

Minakshi Singh 17:48 That was Seagrams then.

Suraj Shenai 17:49 It was Seagrams then.

Minakshi Singh 17:50 Were you in Seagrams or in Pernod?

Suraj Shenai 17:50 No, I was in Pernod by then, but Pernod had acquired... It's very interesting that when, uh, the Seagrams family, which owned, uh, which was the world's biggest liquor company, the f- the founder wanted to just sell out, and there was nobody who would buy it. So it was split between many people, and nobody wanted to take the India business, and Pernod got it, and Pernod turned it around, and today, I think-

Minakshi Singh 18:13 Made it massively profitable.

Suraj Shenai 18:14 Yeah, like twenty-five thousand crore-

Minakshi Singh 18:16 The biggest, yeah

Suraj Shenai 18:16 ... in revenue. It's, I think, the most profitable liquor company, but entire-- so the DNA was very interesting while I was working at Pernod. You had great executives who were very supportive of talent.... so got to work within Pernod. So from Goa to Chandigarh, which is again, like a complete three sixty degrees shock for me, and I looked after marketing for Northwest India. So got a very different sense of how India is. Then moved to the brand team, uh, where I was given one of the biggest brands to manage for a short time. I was looking after Royal Stag, which is, I think, I don't know if it's still the biggest, but it was quite big.

18:53 So when did that campaign come, "No artificial flavors?" Was it by you?

18:56 No, no, this was before me. Yeah, no artificial flavors.

18:59 I think, yeah, that, that really-

19:00 The product campaign-

19:00 That really clicked it.

19:00 This whole grain whiskey story.

19:02 Yeah.

19:02 But-

19:02 When I was there, Royal Stag became the number one in the world.

19:04 Yeah, it was number one.

19:05 Highest, yeah, biggest volume-

19:07 In the IMFL category.

19:08 So-

19:08 Biggest volume in the world.

19:08 It's still number one, right?

19:09 Yeah.

19:10 I mean, it, I, I don't know, today, like, also, that category is very-

19:14 Yeah

19:14 ... it's, it's, it's-

19:15 Number one, is it, is it in revenue or in volume?

19:17 Not revenue, yeah, it's in volume.

19:18 It's in volume, volume, volume, volume.

19:19 So there's a Royal Challenge, and these guys are-

19:21 Yeah

19:22 ... sort of neck and neck mostly.

19:23 No, no, Royal Challenge has come down.

19:24 Yeah.

19:25 So now Royal Stag is there.

19:26 Yeah.

19:26 They say UB has twenty-five percent market share today. Is that approximately right?

19:30 UB with Diageo, or you're talking about the United Breweries-

19:33 No, no, Diageo

19:33 ... the beer company?

19:34 Diageo.

19:34 Yeah.

19:34 With Diageo.

19:35 With Diageo. Yeah, it must be. I think they will-

19:40 Okay

19:40 ... three hundred million case industry.

19:41 So now, like, uh-

19:42 You know

19:42 ... uh, the Diageo has given off the, uh, less expensive-

19:47 Yeah

19:47 ... brands to, uh, Embro. Earlier, their market share would have been about, uh, close to about thirty-five.

19:53 Yeah.

19:53 So now they'll be same, about twenty, twenty-five.

19:56 Right.

19:56 Interesting.

19:57 They didn't want to get very deep into the smaller cities-

19:59 Yeah

19:59 ... and stuff.

Suraj Shenai 20:00 They wanted to focus more on the premium. No, no, no. Those were the economy segments-

20:02 Yeah

20:02 ... which makes no profit.

20:03 Yeah.

20:04 So what was the opportunity you saw in Goa Brewing? What sets you apart from the rest?

20:10 So while I was working, I-- the only thing I used whatever income that I got was to travel. So I initially, with the small salaries, I could travel in Southeast Asia, just backpacked. And when I finally got to go to the US, I think this was somewhere around two thousand and thirteen, fourteen, I was on a flight, uh, from London to New York, and, like, a United Airways, like the cheapest ticket, right at the back, [chuckles] you know? So you know, that's like-

20:38 They just landed.

20:38 That's... And you are happy about it.

20:40 They landed. [chuckles]

20:40 That's luxury. And I'm sitting there, and I'm waiting for the trolley with like, you know, the, the, with the drinks coming, and I'm just very observant of people. So I always, I was just looking, and there were all these kids who looked very hipster. Hipsterism was in and all the, you know, uh, what do you call, the turtle shell, uh, frames.

21:00 Yeah.

21:00 And everybody was picking up this green can, and I was just super curious, and this is taking so long. It's a transatlantic flight, so twenty, thirty minutes down, and I'm just waiting, and then it reached me, and I said: Do you know what that green can is? And she, this woman, just looked, the, and she said, "Oh, that's the last one. It's your lucky day." And that was an IPA. And I'd never had an IPA. I'd worked in liquor for ten years, maybe, not ten years, I must have worked in liquor for seven years.

21:26 IPA is Indian Pale Ale.

21:27 Indian Pale Ale. And I cracked open the bottle, can, and I poured it, had the first sip, the burst of hop aromas, and like what authentic craft beer is, and I was just like, like, shit, you know, I mean,

Suraj Shenai 21:40 what am I... What are we making?

21:41 Can you, can you elaborate a bit, what is Indian Pale Ale?

21:44 So it's a very interesting, uh, story. So Indian Pale Ale, um, was made when the British couldn't ship fresh, old beers to India because they would get spoilt on the journey. It was on the sea.

21:58 By the ship.

21:59 So some brewers in, in, uh, London decided to increase the alcohol percentage and also add a lot of hops. So hops are, uh, you know, they're antibacterial, but the yeast loves it. So from a microbiological standpoint, it-

22:12 What are hops?

22:13 Hops are, um, uh, like it's a bud of a creeper. It's very, um, sim-

22:18 Botanical, uh-

22:19 Yeah, yeah, it's a botanical plant.

22:21 With green in color-

22:21 So it's the bitterness-

22:21 Small buds

22:22 ... and the aroma of beer essentially came from hops.

22:25 It, that is what makes a bitter beer.

22:25 So the-

22:25 Pure bitter

22:26 ... so the main problem was when you didn't have temperature control back in the medieval ages, and you still brewed beer, you often ha-- found the beer turn sour, and then the brewers would just experiment with, like, the French brewers would put something and, and then somehow someone realized that, okay, if you put a lot of hops, it controls the bacterial, uh, growth, because you didn't have the sanitation of today, and you didn't understand microbiology that well. So in fact, beer was given to, you know, farm workers as a ration because it was healthier than water. Because water, beer, beer goes through the whole process of getting heated and cooked and... So, um, so i- the, the, when this beer started coming to India, it was made for India, and when Indian breweries got set up, I think the first ones in Solan and everywhere, this shipping was not needed anymore. So the, the, the style died. For almost hundred and forty, hundred and fifty years, nobody really even heard of India Pale Ale. Until brewers-

23:24 And also, I think the Indian palate, uh, did not, mm-

23:27 It's not in India at all.

23:28 Yeah.

23:28 Even in the West, it died. Until-

23:30 Because al- also, it's, it's way more bitter than, uh, the, the regular beer.

23:33 So was the green can you had on the airline-

23:36 It's a-

23:36 ... an Indian company, or was it-

23:37 No, no, India pale ales were never made in India until maybe two thousand and fifteen, sixteen.

23:41 India pale ale is more of a category, like lager.

23:42 It's a category. Like how you have a stout-

23:45 A stout, lager-

23:45 You have, you have IPA

23:46 ... India pale ale. So if you, yeah, most of the-

23:48 So, so the India pale-

23:48 Beer brands would have an extension of an IPA

23:49 ... generated because it was being shipped to India.

23:51 Shipped to India.

23:52 The British brewers-

23:53 The British brewers called it IPA, and then in the '80s-

23:55 The same way, like, fortified wines happened.

23:57 Yeah.

23:57 Same way, like, they added alcohol to keep it alive. [chuckles]

23:58 It had a proof also. It had a higher amount of alcohol in it.

24:01 Yeah, yeah, little. So-

24:02 But still, if you look at the market, like IPA, like wh- when, when you want to-

24:06 Very small

24:06 ... be a beer drinker, try a new beer, they don't usually end up liking an IPA. They'll still go for a lager-

24:12 Yeah

24:12 ... or a hefeweizen, which is- Because, because it's more bitter.

24:14 It's a acquired taste.

24:15 What would be the difference between Guinness and, uh, this?

24:18 It's like black coffee and milky coffee.

24:18 But a beer nerd-

24:19 Like we start with milky coffee and move to- [chuckles]

24:21 Yeah.

24:21 You know, it's the same. I think the palate grows, right?

24:23 Yeah.

24:24 Or like it's the blue cheese or amateur cheese-

24:25 Yeah, yeah, it's all evolution

24:26 ... situation. [chuckles]

24:27 And, you know, the, the category really took off because there were, like, this very passionate-... you know, ab-absolutely, you know, authentic brewers, home brewers in the West Coast who decided to start, um, you know, challenging the status quo of these big corporations. So the big beer back in the day in America was all mild lagers and everything. So these brewers started making small batches, I think, and then the style that became very popular was IPA, and it was invented by the brewers like Stone Brewing, Lagunitas, the first generation craft brewers. And they also came with a great culture, where they were really trying to-- They were also contemporaries of, like, you know, the tech companies and, you know, very open work culture happening in the West at that time. So this was, like, on the beer direction. So that's how IPA, uh, became popular.

Nikhil Kamath 25:20 Okay. So how did that relate with you starting Goa Brewing Company?

Suraj Shenai 25:24 So I had a plan to go and visit, like, you know, friends and travel in the US and see what not, you know?

Nikhil Kamath 25:32 What were you doing back then, professionally?

Suraj Shenai 25:33 I was working. I was working for at, uh, in that, that-- Those days, I was working in Chandigarh, I think. Yeah.

Nikhil Kamath 25:39 For?

Suraj Shenai 25:39 For Pernod.

Nikhil Kamath 25:39 Okay.

Suraj Shenai 25:39 Yeah.

Nikhil Kamath 25:40 So-

Suraj Shenai 25:40 So whatever money I saved, I just would use it to-

Nikhil Kamath 25:43 So you saw this green can, you were like, "IPA is great!"

Suraj Shenai 25:45 Yeah.

Nikhil Kamath 25:45 Kickass. Then?

Suraj Shenai 25:47 So I read the can, I was like: This is insane. Like, how can we not make product like this? And I was always, like, thinking within the companies, what can you do to create new product? I was very, like, trying to shake the, those, uh, within that organization. I just was, I think, waited. I remember, like, pacing in the flight, wanting for the doors to open. When I landed, I just went to the brewery that made it. Then I just kept traveling with, going from one brewery to other.

Nikhil Kamath 26:18 Mm.

Suraj Shenai 26:18 Then I, I m- must have, on that trip of three weeks, I must have gone to maybe two or three breweries a day.

Nikhil Kamath 26:24 Mm.

Suraj Shenai 26:24 I didn't even meet my cousins. I said ... Like, I was totally obsessed by the idea, and it was like everyone was very open, friendly. The whole culture part of it was very different from how, like, how Indian liquor companies were, very secretive.

Host 26:37 Yeah.

Suraj Shenai 26:37 It was very-

Host 26:38 Secret formulas.

Suraj Shenai 26:38 The movement was called Poppy Left. Like, you have poppy right-

Nikhil Kamath 26:41 Is that such a big thing in alcohol, the recipe?

Suraj Shenai 26:44 Not so much. So, uh, Western brewers just publish their recipes. We also are very ha-happy to, you know, like, tell people what, what style it is. We describe it very in detail.

Host 26:52 I think the legacy brands hold it tight.

Suraj Shenai 26:54 Yeah.

Host 26:55 It's the-

Abhishek Khaitan 26:55 No, like the-

Host 26:56 Johnnie Walker, Chivas

Abhishek Khaitan 26:56 ... like, in, uh, hard alcohol, the-

Host 26:58 They have the secret, and they actually make the whole thing very mystical

Abhishek Khaitan 26:59 ... liquor ingredient is very, very critical. Like, only the chief master blender, they-- It's called as a black book, so, like, we don't share with anyone. Like, only I have it, and my blender would have it.

Host 27:09 Yeah, like you, you are a legacy brand, so like-

Abhishek Khaitan 27:12 Started.

Host 27:12 You know what I mean? [chuckles]

Suraj Shenai 27:14 Yeah.

Nikhil Kamath 27:15 Okay, so if I go to a wine store, why do I pick Goa Brewing Company over another beer which is on the counter?

Suraj Shenai 27:25 The first basic differentiator is quality. You know, it is phenomenally different from any commercial beer.

Nikhil Kamath 27:33 Like, say, for example, I take a Kingfisher Strong-

Suraj Shenai 27:36 Yeah.

Nikhil Kamath 27:36 I take a Goa Brewing beer.

Suraj Shenai 27:38 I mean, you could just taste it. You will, you will immediately realize, and, uh, how the beer affects you.

Nikhil Kamath 27:42 Quality is a factor of what in beer?

Suraj Shenai 27:45 So we are-- Uh, what we do, I can speak, you know, because the word craft is also very broad and liberally used, but we-- I mean, I personally take it with a lot of seriousness and ... So we are absolutely, uh, like, natural or nothing business, where we don't even use any kind of extract or even f-fruit, which has, like, processed by any industrial company. We would rather go straight and use as much as whole produce as possible. So we'll source our grains, we'll work very closely. So every part of your, um, the k- the beer that you are drinking, if you read our label, all the ingredients you will be able to know. They're, they're all which you would find in your kitchen. It's nothing which is industrial or something. So that's because we are not really aiming to produce, you know, one lac cases, or from one ... Like, you know, you're not scaling, you're not-- So the bigger breweries probably would, from one batch, they would produce twenty thousand cases, and we would probably produce maybe six, seven hundred cases from one batch. So we work on slightly trimmed down equipment. We've customized what scale is good enough, where the quality doesn't, uh, get affected, and work to make sure that you are ... So, you know, you're delivering a product that's, that has a very good differentiation. At the same time, it also, m- you know, has that value. We are Indians at the end of the day. If I'm going to pay twenty rupees more, I want to taste it, I want to feel it. You know, if I have five bottles of People's Lager, people say that I, it doesn't bloat them, it, it's clean, the next day it's fresh, because it's clean in terms of what ingredients go in making it. And that's-

Nikhil Kamath 29:20 How much does it cost versus Kingfisher?

Suraj Shenai 29:23 So our beers would be, um ... So Kingfisher, let's say, is about fifty rupees for a three thirty ML, just to give you a, uh, m- a markup. We will be at ninety.

Nikhil Kamath 29:32 Isn't it more than that?

Abhishek Khaitan 29:33 This is the Goa prices.

Suraj Shenai 29:34 Just Goa prices. I'm just giving-

Abhishek Khaitan 29:35 Goa is the cheapest in the-

Suraj Shenai 29:36 Yeah

Abhishek Khaitan 29:36 ... country.

Suraj Shenai 29:37 So we would ... And a Budweiser would be a sixty-five, and, you know, so our-

Abhishek Khaitan 29:41 That's it. [chuckles]

Nikhil Kamath 29:41 Very cheap.

Suraj Shenai 29:42 Yeah, that's for the, for the three thirty ML.

Nikhil Kamath 29:44 [chuckles]

Suraj Shenai 29:44 And we would be at ninety, which would be a twenty, twenty-five percent upgrade over the premium category. And then we have beers in every category.

Nikhil Kamath 29:53 And what margins does a beer company typically work on?

Suraj Shenai 29:56 So, you know, with extremely high levels of efficiency, if you are producing mass macro lagers, you probably get into the range of between fifty-five percent, and because they also recycle, a lot of bottles come back. It's, it's very efficient in terms of cost structure, and it can be stretched all the way to sixty, but not consistently, because you also operate on commodity prices also coming. Um, malt prices go up, glass prices go up year on year.

Host 30:21 The taxes and all don't, uh, I mean-

Suraj Shenai 30:22 Taxes is out of your, uh, cost framework.

Nikhil Kamath 30:25 Your cost margin.

Host 30:25 Yeah.

Suraj Shenai 30:25 You know, beyond-

Host 30:25 Otherwise, when you-

Nikhil Kamath 30:26 If the taxes go up, the prices also go up.

Host 30:28 Yeah.

Suraj Shenai 30:28 Yeah.

Host 30:28 That's what I'm saying.

Nikhil Kamath 30:29 Taxes only affect this entire industry from state to state, which you realize the revenue-

Suraj Shenai 30:33 Yeah

Nikhil Kamath 30:33 ... taxes go to the-

30:35 ... but I think what cleverly you have done is you have differentiated your product by pricing it higher. I think that is the main thing.

Suraj Shenai 30:42 But I think we are also a little bit like carpenters, you know, to be honest. [chuckles] We make it at a certain cost. We have a simple, very clear idea that this is our margin structure, we're not going to touch it. We don't want it to be outpriced. We're not aiming for-- We want to create great quality product. So the ph-philosophy of Goa Brewing is, is simply, you want to create beer, which is in the home refrigerator. We don't look at any other touch point. We don't sponsor-

Nikhil Kamath 31:09 Not bars?

Suraj Shenai 31:11 We-- bars keep our product for the product quality, but we don't pay for entry into any bar.

Host 31:16 They don't have to.

Suraj Shenai 31:16 Like, like Minakshi's bar-

Host 31:18 I, I feel they don't have to.

Suraj Shenai 31:18 Like owner-run bars would a, a great support system for us, who appreciate quality, you know?

Nikhil Kamath 31:24 Right.

Suraj Shenai 31:25 So-

Nikhil Kamath 31:25 How big is Goa Brewing Company now?

Suraj Shenai 31:27 In terms of, uh-

Nikhil Kamath 31:28 Sales?

Suraj Shenai 31:29 ... sales, I think we, last year we finished with twenty-seven lakh bottles in the financial year.

Nikhil Kamath 31:33 And the money number for that?

Suraj Shenai 31:35 So in terms of gross sales, we would have crossed twenty crore-

Nikhil Kamath 31:38 Right

Suraj Shenai 31:38 ... in terms of sale. Yeah.

Nikhil Kamath 31:39 And you've gotten funded also, no?

Suraj Shenai 31:41 Yeah.

Nikhil Kamath 31:41 By DSG Sama.

Suraj Shenai 31:42 So, uh, one of the first investments that, you know... So that was another long journey into figuring it out, so-

Nikhil Kamath 31:49 Right. So competition is Bira mainly?

Suraj Shenai 31:51 Bira is actually a very different, uh, play, because Bira's, um, uh, Bira also gets majority of its volumes from the same category as Haywards 5000 and Kingfisher Strong, where it's, it's, it's the base category, where in certain states, they really get a lot of volume. I think we do not have any kind of a, uh, competition as such, because I think w-we fall in the category of brands which, you know, consumers really, you know, take- make that effort to even go one stop आगे to get that product, and they will buy a case, and they will make sure that, because that's the, uh, the moat.

Host 32:33 Interesting.

Nikhil Kamath 32:33 Enjoy it.

Suraj Shenai 32:34 Huh?

Nikhil Kamath 32:35 Enjoy it.

Suraj Shenai 32:36 Thank you. [chuckles]

Nikhil Kamath 32:37 Do

Nikhil Kamath 32:38 I say Shuchir or Shuchir?

Shuchir Suri 32:40 Shuchir.

Nikhil Kamath 32:40 Shuchir.

Shuchir Suri 32:40 Yeah.

Nikhil Kamath 32:41 Okay. So we already know about Shuchir, that his youth-

Host 32:46 [chuckles]

Nikhil Kamath 32:46 ... was focused around going to cocktails, uh, Minakshi's-

Shuchir Suri 32:52 You told it before, though, but, uh-

Nikhil Kamath 32:53 Yeah.

Host 32:53 I know.

Nikhil Kamath 32:53 Minakshi's bar four times a week with four different people.

Host 32:56 Yes.

Nikhil Kamath 32:57 When did the journey-

Host 32:58 I'm an eyewitness. [laughing]

Shuchir Suri 32:59 [chuckles] To, uh, a, a small part of it.

Host 33:02 [chuckles] Okay.

Nikhil Kamath 33:04 So when did you, like, get your act together and become a family man? The most-

Shuchir Suri 33:08 A family man is a different story.

Nikhil Kamath 33:09 The question in the most traditional sense.

Shuchir Suri 33:11 Family man happened, uh, what, about five years back. I actually met my wife at a, at one of my own events.

Nikhil Kamath 33:16 Mm.

Shuchir Suri 33:17 But I've always done events. So since I was in school, I was, I was not the best student, but I was always involved in organizing stuff for school with friends.

Nikhil Kamath 33:28 Mm, mm.

Shuchir Suri 33:28 So I was-- I've always been an organizer. Uh, so it was a very natural transition for me to be in the industry of entertainment. Um, along the way, I started, post-college, I started getting artists down to the country. Um, I floated my first company when I was about seventeen, eighteen years old, where I would get a company called spottedclub.com, where I would send photographers across bars in Delhi, Bombay, Bangalore. They would take pictures and upload it within twenty-four hours onto this website. And, um, but I would

Shuchir Suri 34:00 always create experiences, and I realized that the only way I could monetize this was via alcohol brands. So when I was eighteen years old, I got this artist into the country called Edward Maya for the first time, and I was an eighteen-year-old, had no idea about sponsorships. I walked into the Bacardi's office. Randomly, I stayed in Gurgaon, I walked into Bada- Bacardi's office. I got a meeting through the-

Nikhil Kamath 34:21 Was he really popular in Delhi?

Host 34:23 Uh, [chuckles] subjective right now. Let's not-

Shuchir Suri 34:26 What do you call popular? [laughing]

Host 34:27 You don't want to put him above this, right? Let's discuss that.

Shuchir Suri 34:31 Uh-

Host 34:31 No, he was. Massively connected, extremely social-

Shuchir Suri 34:34 But like I said-

Host 34:35 Fun guy

Shuchir Suri 34:35 ... that, that, that's my moat. I just knew how to get people together-

Host 34:38 Yeah

Shuchir Suri 34:39 ... and I knew how to have the best parties, and, um, but I did not have experience, right? So I was throwing these amazing parties. I was making money off it, but at a point of time, I had a downfall.

Nikhil Kamath 34:50 Yeah.

Shuchir Suri 34:50 So I remember these events-

Nikhil Kamath 34:52 How old are you now, Shuchir?

Shuchir Suri 34:53 Uh, I'm thirty-five.

Nikhil Kamath 34:54 Yeah.

Shuchir Suri 34:54 I'm thirty-five.

Nikhil Kamath 34:55 There's something about this. I have a couple of friends in Bombay and Bangalore who are really cool, organizing great events at a certain point in their life. They all have a change of heart, where what was once really appealing and validating for them stops being validating at around the age of thirty-five, thirty-five, forty. Why is that?

Shuchir Suri 35:19 Uh, actually, for me, um, I ha-

Nikhil Kamath 35:22 I, I, I take great offense to this because when I watch some of these guys who are making money, having a good time, being very social, in many ways doing what they love, why do they stop it and then try to do something completely different at a later half of their life?

Shuchir Suri 35:40 I don't think I've stopped it at all. At least from personal experience, uh, I realized very early, whatever I do in life, I'll have to build my business around it, and I could not do a nine-to-five job. I was very clear about that. I had to be we- doing s- something in which I have fun. So I had this one party, which did not go very well, uh, which was a very big talk of town, and it called-- it was called, oh, it was a New Year party, where we ran out of alcohol, organization was not the best. In one month's time, I decided, uh, I'm going to-- I was a small partner in a nightclub. I sold that off.

Nikhil Kamath 36:13 What went wrong?

Shuchir Suri 36:15 Um, the partnership that I was in, at that point in time, who I partnered with to have this party, that did not work out for me, and my responsibility was, was perfect. What, what I executed as part of my responsibility was, was on point, but-

Nikhil Kamath 36:29 I'm thinking Delhi, someone shot somebody.

Shuchir Suri 36:31 That's the same party I'm talking about.

Nikhil Kamath 36:32 Oh, my God! [laughing]

Host 36:34 Oh, my God! [laughing] Shuchir, do you-

Shuchir Suri 36:37 ... [laughing] No, but that's fine. That, that did happen at that party.

Nikhil Kamath 36:39 We say, "No, we were all fine."

Shuchir Suri 36:40 Like, there, there's stories-

Nikhil Kamath 36:42 We were all playing a lot at Yoga.

Minakshi Singh 36:42 No!

Shuchir Suri 36:42 No.

Minakshi Singh 36:42 Of course not.

Nikhil Kamath 36:43 Yeah.

Minakshi Singh 36:43 No, no.

Shuchir Suri 36:44 So that's a story.

Minakshi Singh 36:44 We don't have, we don't have people like that. [laughing]

Shuchir Suri 36:45 Uh, within one month's time, uh- [laughing]

Minakshi Singh 36:49 I haven't arrived yet. He's been arriving. [laughing]

Nikhil Kamath 36:50 Wicket. [laughing]

Minakshi Singh 36:50 Oh, God, it's so long time.

Shuchir Suri 36:52 So, so within one month's time, um, I quit whatever I was doing-

Nikhil Kamath 36:56 Mm.

Shuchir Suri 36:56 -and I joined, uh, who's also a mentor to me. Uh, I ro- I joined a company,

Shuchir Suri 37:01 uh, at a very low sa... I was making lots of money, but I realized that if I want to do what I want to do for the rest of my life, around what I want to do, uh, which is entertaining people, I have to understand how companies work. So I joined, uh, Roshan Abbas. He was running a company called Encompass at that point in time. I joined as an assistant manager at a very low salary, but the three years I spent there, all I did was understand invoicing, taxation, purchase orders, um, how to... vendor management.

Nikhil Kamath 37:30 Give me the secret recipe to throw a killer party that everybody wants to show up to. One line.

Shuchir Suri 37:35 So, so what I do now is experience. So what I learned from that and what I do now is the same thing I'm doing for 100,000 people across three cities with one IP that I run called Gin Explorers Club. It's just corporatized, right? That time, financing was, I had to sell tickets to finance, I had to go behind sponsors to finance. Now, financing, thanks to these ticketing partners, has become much easier. Alcohol brands are spending more money on creating experiences. People are getting-- people became more music sensitive. They would come for certain acts. So basically, what I do now, it's exactly what I was doing back then, but I'm more organized and I've built a successful business only focusing on the alcohol industry. So watch brands come to me, luxury brands come to me. I say no to everyone. What I know very well is alcohol. I know how to se- I'm their, I'm their friends, right? So I work with multiple of his brands. I built out one of his gin brands, which is one of-

Minakshi Singh 38:29 He's an important guy. If he comes to the bar and says, "This is a cool bar," then-

Nikhil Kamath 38:32 Yeah

Minakshi Singh 38:33 ... you kind of-

Abhishek Khaitan 38:33 No, his, uh-

Minakshi Singh 38:34 You make it in the list

Abhishek Khaitan 38:34 ... what he created,

Abhishek Khaitan 38:35 this, uh, Gin Explorer Club-

Nikhil Kamath 38:37 Uh.

Abhishek Khaitan 38:37 -is one of the most fantastic properties.

Minakshi Singh 38:40 Yeah.

Abhishek Khaitan 38:40 And, uh, it, it's like a carnival: music, food, the alcohol, and it's like to a different level. Like, for our gin, also, Jaisalmer, which is now the largest luxury gin, we had a launch in his, uh, GEC, and immediately it became popular. So what he has created is amazing.

Shuchir Suri 38:59 So at that time, also, uh, people, uh, were not okay, brands were not okay with partnering an event where other brands were involved, so we were fortunate enough to get all the gin brands together back then.

Minakshi Singh 39:10 The first GEC at Olive.

Shuchir Suri 39:11 At Olive.

Minakshi Singh 39:12 That was so beautiful. One of my favorite events.

Shuchir Suri 39:13 Actually, uh, GEC started when Anand, at Anand's bar. So that's where the idea of GEC started, when there was a, there was a gin boom which was going on because cocktail-- we were actually also in the same-

Minakshi Singh 39:24 Anand is the founder of Greater Than-

Shuchir Suri 39:25 Of Greater Than

Minakshi Singh 39:26 ... Sasha.

Nikhil Kamath 39:26 Ah, I know.

Shuchir Suri 39:27 But that being said, now Gin Explorers Club will not only be Gin Explorers Club, we'll, we'll be dropping gin, and we'll be entering more categories under the same festival. Tequila is something which I'm very passionate about.

Nikhil Kamath 39:37 Tequila, is it really blowing up like we think, or is it only in the affluent circles?

Shuchir Suri 39:42 Globally, it's blowing up. India will always be, uh, in the affluent-

Minakshi Singh 39:46 Yeah

Shuchir Suri 39:46 ... circle because of price point.

Nikhil Kamath 39:47 Much smaller than gin?

Minakshi Singh 39:48 Yeah, but as per-

Shuchir Suri 39:48 Way smaller

Minakshi Singh 39:48 ... the ISWR report now, it's, it's actually growing three times, which is a very s- but on a very small base. So it's like saying one glasses have now multiplied to three. [chuckles]

Nikhil Kamath 39:58 But it's growing faster than everything else, right?

Abhishek Khaitan 40:00 In the US-

Shuchir Suri 40:00 But the volume base is very small, and it's-

Minakshi Singh 40:02 Yeah, volume is super small

Shuchir Suri 40:03 ... only the top-level tequilas which are growing.

Minakshi Singh 40:05 Super tiny.

Shuchir Suri 40:05 Because if you see the lower-level tequilas, they're not selling at all.

Minakshi Singh 40:08 So we're still a whiskey market. Like, we'll, we will be a whiskey market for a really long time, so...

Nikhil Kamath 40:12 So you run Food Talk India, which is the largest food community in India?

Shuchir Suri 40:16 That's how we started off, but right now I'm focused on Anthem, which is a marketing agency, agency which focuses on the alcobev industry. Under that, we have an IP called Gin Explorers Club, and I service Pernod, Diageo, all these brands. I do their marketing strategies, activations, events.

Nikhil Kamath 40:33 Mm-hmm.

Shuchir Suri 40:33 And along the way, I built a beverage brand called Jade Forest because I wanted to be in the, in the space. So I was like, "I, I can't create my own alcohol," so I created a mixer brand.

Nikhil Kamath 40:42 Why can't you create your own alcohol? It's expensive?

Shuchir Suri 40:46 Um, at that point in time, I actually sat with Lama also-

Minakshi Singh 40:49 Yeah

Shuchir Suri 40:49 ... uh, at a point in time to create my own alcohol. I was just scared. Uh, red tape-ism, every state has their own excise duties. Um, and even while I run an alcohol agency, people look at you very differently, uh, when, even when I go and apply for a license for a cocktail festival, "Achha, aap sharaab promote kar rahe ho. Ghar pe piyenge sharaab raat ko." But they, they look at you in a very different-

Minakshi Singh 41:12 Yeah, yeah

Shuchir Suri 41:12 ... different way.

Minakshi Singh 41:13 You're the shadiest of the lot. [chuckles]

Shuchir Suri 41:15 Yeah.

Minakshi Singh 41:16 Always.

Abhishek Khaitan 41:17 But now it's changed.

Minakshi Singh 41:19 [chuckles] Where are you hanging out, Abhishek? [laughing]

Nikhil Kamath 41:23 [laughing]

Minakshi Singh 41:23 Who's changed? We are talking about larger sense of the word, right?

Abhishek Khaitan 41:27 Yeah.

Minakshi Singh 41:27 It's still very, uh, taboo. I mean, India has always been taboo. We've- it's still a dark market. What that means is that you can still not advertise alcohol.

Abhishek Khaitan 41:35 It's all surrogate.

Minakshi Singh 41:36 So we are under surrogate, and-

Shuchir Suri 41:37 That's what I realized, that-

Minakshi Singh 41:38 It's below the line

Shuchir Suri 41:38 ... that's what I want to do-

Minakshi Singh 41:39 So hence, the biggest-

Shuchir Suri 41:39 ... because it's a dark market, right? So that's-

Minakshi Singh 41:41 Yeah

Shuchir Suri 41:41 ... I want the marketing budgets.

Minakshi Singh 41:41 So in fact, one of the biggest-

Nikhil Kamath 41:43 Big money

Minakshi Singh 41:43 ... amazingly genius move on his part-

Shuchir Suri 41:45 They can't spend anywhere else, right?

Minakshi Singh 41:46 Yeah, and amazingly, genius move.

Nikhil Kamath 41:48 We'll come to this as a topic, because, see, at the end of this episode, we want to tell young people how to have a job in alcohol, how to build a business around alcohol, how to create cool alcohol, brands-

Shuchir Suri 42:05 Thank you

Nikhil Kamath 42:05 ... ancillary cocktail mixes, wherever the opportunity is. Last

Nikhil Kamath 42:10 but not the least, Abhishek. I have to preface Abhishek's introduction. Uh, so we are a very small miniature partner to Abhishek in his business as a equity partner. It's a investment that has done very well for us. Uh, we've never spoken about it publicly, but we've spoken, like, privately many times about it. I think it's one point six, one point seven percent.

Abhishek Khaitan 42:35 Yeah.

Nikhil Kamath 42:35 But-

Abhishek Khaitan 42:35 Pre-IPO?

Nikhil Kamath 42:37 I think it's... No, no.

Minakshi Singh 42:37 No, no, no.

Abhishek Khaitan 42:38 Yeah, from the open market, it's I think-

Nikhil Kamath 42:39 Okay

Abhishek Khaitan 42:39 ... close to five hundred crores you're holding.

Nikhil Kamath 42:41 I think four hundred crores. Four hundred-

42:43 ... near four hundred crores of Abhishek's stock, Radico, which is a great investment for me. So, uh-

42:49 Nice

42:49 -don't blame me for being a bit nicer to [laughing] Abhishek.

42:53 Let's tell you, let's tell you-

Host 42:54 How good investment relation-

Nikhil Kamath 42:56 I mean, he got caviar.

Host 42:56 Investor relation guys. [laughing]

Nikhil Kamath 42:58 That's how this is. It's like you are vegetarian, you have caviar. [laughing]

Abhishek Khaitan 43:03 I can't see the caviar. [laughing]

Nikhil Kamath 43:06 [laughing] But tell us, Abhishek, you have legacy in this industry. I read-- I didn't know, but seventy years, really?

Abhishek Khaitan 43:12 No, actually, um, see, our company was formed by the Goen brothers in 1943, and then, um, uh, 1973, my dad, uh, bought it over from Mr. Sanjay Dalmia. And, uh, so from 1973, our family is into the alcohol business.

Nikhil Kamath 43:31 Mm-hmm.

Abhishek Khaitan 43:32 And, um, I studied in Modern School.

Nikhil Kamath 43:35 Mm-hmm.

Abhishek Khaitan 43:36 And I always say I'm in the business of making people happy.

Nikhil Kamath 43:39 Mm-hmm.

Abhishek Khaitan 43:40 And-

Nikhil Kamath 43:40 In Bangalore, you were in boarding school, right?

Abhishek Khaitan 43:42 No, Modern School was in Delhi.

Nikhil Kamath 43:44 And then college in Bangalore.

Abhishek Khaitan 43:45 Then college in Bangalore.

Nikhil Kamath 43:46 Mm-hmm.

Abhishek Khaitan 43:47 So for, for me, from the beginning of my school days, I always wanted to create a brand. I love alcohol.

Nikhil Kamath 43:56 Mm-hmm.

Abhishek Khaitan 43:56 That's why I'm happy, because I practice what I preach.

Nikhil Kamath 43:59 Mm-hmm.

Abhishek Khaitan 44:00 So I love each kind of alcohol, and, um, by nature, I wanted to become a CA, but as God had it in store for me, is my mom didn't wanted me to do four years of CA and then, uh, two years, uh... three years of college, then four years of CA, then two years of MBA. So I landed up in Bangalore, uh, for my engineering, and, um, I think the kind of homework I did there by visiting all the pubs, everything, paid me very well. I think Bangalore has been my biggest inspiration of what Radico is today, because Bangalore is always known as the pub city, and every street had its own pub. And, uh, the liquor consumption that time was like, that time, liquor consumption was not like an FMCG. It was more like, you know, it was a thekedar system where you push your material. It was not a consumer's choice. But Bangalore was the only city where you could see the liquor as an FMCG. So I did my engineering there, and,

Abhishek Khaitan 45:10 uh, then in 1996, I finished my engineering, and everything which could go wrong happened to me. I was, that time, I think, twenty-two. So we had a separation in our family. My father were four brothers, and, uh, we got Rampur Distillery. That time, I think the turnover of the company would be about seventy crores, and I had a liability of fifty crores, and the profit would be kind of zero. And-

Nikhil Kamath 45:37 What year was this?

Abhishek Khaitan 45:38 This was in '96.

Nikhil Kamath 45:40 Mm-hmm.

Abhishek Khaitan 45:40 That's the time I joined business. Also, we had a bottling contract with one of the, uh, leading players in India, which got over. So my entire revenue system was over. Company was kind of in losses with fifty crores liabilities. So that time, I went to one of the largest bottlers with Dad, and, uh, he made us wait for five, six hours and wanted a stake in the company. So that's the time I went to Dad. I said, "Dad, "" Now, our back is against the wall, and I really want to create a brand, and let me try and do it." So that's the time, as a company, we decided to get into brands. And, um, the-- one of the biggest tasks for me was to change the name of the company. So the company was called Rampur Distillery and Chemical Company. And, uh, this, I was twenty-two. We had eleven, uh, foreign companies in India. That is the time that there was a myth, the amount of scotch consumed in India is more than what is bottled in Scotland. And here, a twenty-two-year-old guy coming, no monies, nothing. Totally, like it was a, it was a, uh, different scene. So first of all, it took me three, four presentations to my, the senior team, and the age was all high. I was twenty-two, they were all forty, f- fifty years old. So I changed the name of the company from Rampur Distillery and Chemical Company to Radico. RA of Rampur, DI of Distillery, and C of Company. So that's how Radico came into, uh, existence, and, uh-

Nikhil Kamath 47:20 But by the way, I love this part of the story wherein I find this in many industries I'm going in to invest. Uh, we have this Western baggage in India, where innately Indians believe that if the product is foreign, it's better. Like I was telling you earlier-

Abhishek Khaitan 47:38 Absolutely.

Nikhil Kamath 47:39 -we still sell Indian clothing, which is probably better quality with foreign models on the face of it. So when I saw this company, which was making alcohol called Rampur and Jaisalmer, in some cases, which was not even aged as much as the Scottish counterpart, selling for more than that. And people would call me and be like, when we spoke about alcohol, they would be, "You will only get it in the duty-free, and only sometimes. Otherwise, Rampur Whiskey will be sold out." So I was enamored from the very beginning in terms of how has an Indian brand been able to pull that off? I feel that way for all industries, not just alcohol-

Abhishek Khaitan 48:20 Absolutely. Absolutely.

Nikhil Kamath 48:21 -apparel, anything.

Host 48:21 Sometimes I'm sure your bigger market in it-- in your earlier years of products like Rampur would be international, right? And not-

Abhishek Khaitan 48:28 No, I will, uh, I'll come to Rampur little later, but, um, so that's the time, like, what we did is because monies were limited, so and you had to be pan-India, else your marketing bucks would go waste. So I hired a team of hundred people. The average age of my team would be twenty-four.... but what I thought, if I get experienced guys, they'll ask me a lot of salaries. Second, they would not agree to what I am saying. So my average age was very less, so my, uh, payout was less. Then literally, I went to ten people begging them that, "Please bottle for me." But I didn't-- I could not put up CapEx, so it's outsourcing, co-packing, what you're saying. So I said, uh, "I'm twenty-two, about twenty-two and a half. I want to create a brand, blah, blah, blah. I'm not going to run away, so please bottle it." So I got ten people to bottle for me, and then in '98, eighth August '98, we launched our first brand, 8 PM Whiskey. And luckily, like, I don't know, the ad was very famous. It was the best, one of the best ad of the century, the India-Pakistan ad, the, this thing, it was nominated as, uh, one of the best ads. What was the ad? Remind me. It was a border ad. Mm. It was two generals, and, uh, then at the clock strike, the cannon goes up, the clock strikes, and then they pass the whiskey. It's called as Time for Friends. It's a very popular ad.

Host 49:52 Nice, mm.

Abhishek Khaitan 49:52 So, so that's how we started. Then, from '98 to 2006, we mapped out that which are the low-lying sectors, the economy segment or the popular segment, the mass market, and we became from zero to ten million cases. What is that in money terms? Ten million cases, ... That would be what? A turnover of about six hundred, seven hundred, eight hundred crores. Mm. Eight hundred. So that is what we did, and, uh, that was fascinating. Then, the most important, which was a turnaround in our, this thing is, uh, I was in Vegas, and for me, all the good ideas either come after eight PM or at bars- Mm. -because I think that is my biggest learning. Mm. So that's my-- that's, that's where I can see the consumers, what they want.

Host 50:47 Yeah.

Abhishek Khaitan 50:47 You, you interact at the, either at the bars or at the shop. Have you guys been to his home in Delhi?

Nikhil Kamath 50:54 Not his home.

Abhishek Khaitan 50:55 He invited us. [chuckles]

Host 50:56 No.

Abhishek Khaitan 50:56 I've got seven bars.

Host 50:57 He has to call us.

Abhishek Khaitan 50:57 I've got seven bars. You'll have to come.

Nikhil Kamath 50:58 He lives like, he lives like Batman.

Host 51:00 What? [chuckles]

Nikhil Kamath 51:01 So I went-- we had an idea of starting a tequila brand with a certain famous person. I took a bunch of friends to his house recently for dinner. Outside of all the alcohol that might have been in his house, so I went in the hotel taxi, right? And we were going back. So when we were leaving, a- Abhishek sent a Rolls-Royce, a Bentley, and one or two other cars like that, and we went in, like, a pos-

Abhishek Khaitan 51:28 Convoys

Nikhil Kamath 51:28 ... posse of cars, and I was like, "What is going on?" [chuckles] And my Innova, which was from the hotel, was following me from the back. [chuckles]

Host 51:35 Bangalore versus Delhi. [laughing]

Abhishek Khaitan 51:37 Yeah. No, no, opposite, one of Delhi. I know, Bangalore also have a lot of people, [laughing] much more than Delhi.

Host 51:46 Starting you off with- [chuckles]

Abhishek Khaitan 51:46 So that is also different. Uh, so that I won't get it. So anyway, so I was in Vegas, so there, what I saw, that people were ordering vodka on the table, Grey Goose, and the whole trend was changing because earlier, you never used to show your bottle off. So, you know, the, the bottle has to be a piece of art, what I realized. And the concept came that, you know, there was a ice bucket, the bottle was there, and people were proud to put the bottle on the table. So I said: We need to create a vodka, and we want to go and premiumize. So that's the time I came back. I wanted a decorated bottle, but we didn't have money to get the machine. So, so I think no one knows this. So I went, I met up with kabadiwalas. So the first bottle of Magic, which was produced, was dipped in acid with a paper label, and it looked like a frosted bottle and everything. So Magic was born in 2006, then it kept on innovating. And, uh, today we are proud because I always believe that twenty-five percent of the global market is vodka. In India, at that time, it was only two percent. Now, it's changed to four. The vodka consumers are basically the younger generation, that is youngsters and women, which if we see our demographics, year on year, every year, like fifteen million people are going to come into the drinking age. So I thought that is the right thing to do. So that's how Magic came, and today we are proud that Magic is the seventh largest vodka in the world. And in India, out o- out of all the vodkas, starting from a regular to a Grey Goose or a Koffmann, sixty percent of any vodka sold is Magic. Wow!

Host 53:37 Fantastic.

Abhishek Khaitan 53:38 So that has been one of the turning points for us. And then what happened is we, uh, we had Morpheus, which is the largest premium brandy. So even if you see the packaging, what I believe, if the packaging, what someone was saying, like, packaging is the first thing which attracts, uh, to a consumer. Second is the most important, the blend has to be good.

Abhishek Khaitan 54:00 And when you actually make a brand, is when people are proud to have that sitting together. They're not shy away. Even if they like the product, they like to display it. Then, in 2014, is, um, UK and India always have this, uh, tussle that, uh, Indian whiskey cannot be called as a whiskey because it's not aged. And that's the time, if you see all the new-age malts, whether Yamazaki, et cetera, were gaining ground. Earlier, like Yamazaki, never used to get sold. Today, if you go, go to buy a fifteen or a eighteen, twenty-one-year-old Yamazaki, you won't get it in the market. Each bottle is more than a lakh of rupees. For a, a twenty-five would be, I think, about two and a half, three lakh rupees. And then they also removed the, like-

Host 54:50 No, no, there is an allocation.

Abhishek Khaitan 54:51 Yeah, it's an allocation.

Host 54:52 They called me and they said: "Please, can I have some bottle? [chuckles] Buy a bottle."

Abhishek Khaitan 54:55 The Yamazaki 18.

Host 54:56 Yeah, buy a bottle, but-

Abhishek Khaitan 54:57 And also the price- In fact, I was in, uh, Hedonism-

Host 55:00 No, but we are checking

Abhishek Khaitan 55:00 ... a bottle of Yamazaki 55, guess how much was it retailing for?

Nikhil Kamath 55:04 No idea.

Abhishek Khaitan 55:05 Any guess?

Nikhil Kamath 55:05 Fifty lakhs.

55:07 ... must be?

Abhishek Khaitan 55:08 Six and a half crores.

Nikhil Kamath 55:10 Wow!

55:11 And people actually buy?

Abhishek Khaitan 55:11 Yeah, absolutely.

Host 55:12 Yeah, collect it.

Abhishek Khaitan 55:13 It's crazy, I'm telling you.

Nikhil Kamath 55:14 I read this-

Host 55:14 It's like art, yeah.

Abhishek Khaitan 55:15 Yeah.

Host 55:15 It's like art.

Nikhil Kamath 55:16 So the Chinese are-

Host 55:17 No price to it.

Nikhil Kamath 55:18 But art you don't drink. [laughing]

Abhishek Khaitan 55:21 [laughing] No, but nowadays, if you see wine and malt-

Host 55:24 It is, it is part of-

Abhishek Khaitan 55:25 It appreciates. It appreciates a lot.

Host 55:26 Yeah, and people are reselling.

Abhishek Khaitan 55:27 Like Nepal, I tell you so-

Host 55:27 There's a reselling, uh, situation.

Nikhil Kamath 55:29 People invest into barrels.

Host 55:30 You actually get invited to these closed rooms, [chuckles] Zoom sessions where-

Abhishek Khaitan 55:33 In our company also, they have invested in barrels-

Host 55:35 They actually sell your bottles

Abhishek Khaitan 55:35 ... like, uh, few of the-

Host 55:36 Trade

Abhishek Khaitan 55:36 ... these, uh, uh, auction houses, I think.

Host 55:38 Yeah.

Abhishek Khaitan 55:39 Yeah, yeah, collectors.

Host 55:39 There are multiple auction houses.

Abhishek Khaitan 55:40 Mm-hmm. So that's the time we created in 2016, our Rampur Single Malt, and, uh, today we have seven expression. The cheapest is $100 a bottle.

Nikhil Kamath 55:49 Mm.

Abhishek Khaitan 55:50 And in fact, lately, uh, uh, we had 400 bottles of Chairman Reserve.

Nikhil Kamath 55:55 Mm.

Abhishek Khaitan 55:55 The first bottle was, uh, in London.

Nikhil Kamath 55:58 Mm.

Abhishek Khaitan 55:58 It was sold for one lakh, which got re-auctioned for two lakhs. So we had saved some bottles, which is now, uh, in Hyderabad duty-free, and retailing at five lakhs a bottle.

Nikhil Kamath 56:08 And it's sold out?

Abhishek Khaitan 56:09 Yeah. There's now, I think, only two left. So-

Nikhil Kamath 56:12 Five... 400 bottles?

Abhishek Khaitan 56:13 Yeah.

Nikhil Kamath 56:13 So that's 20 crores of sales.

Abhishek Khaitan 56:15 No, no, I start, I started with one.

Nikhil Kamath 56:17 Right.

Abhishek Khaitan 56:18 But in the end, there were three, four bottles left-

Nikhil Kamath 56:20 Mm

Abhishek Khaitan 56:20 ... which we sold, which is now retailing at five lakhs.

Nikhil Kamath 56:23 This is a good insight on the market. Like, when we are pricing products across category, we're like, if 400 Indians are willing to pay five lakh rupees a bottle, they can pay 20,000 per, uh, for a shirt-

Abhishek Khaitan 56:36 Absolutely

Nikhil Kamath 56:37 ... shoes.

Abhishek Khaitan 56:37 Absolutely.

Nikhil Kamath 56:38 Indian-made watches.

Abhishek Khaitan 56:39 Yeah.

Nikhil Kamath 56:40 As far as we can push this needle of Indian craftsmanship and the ability of the Indian artisan in every department, I feel like, you know, like, enough of white stuff here. Why not our stuff sell there?

Host 56:56 Exactly.

Nikhil Kamath 56:56 Culturally, we are more creative if anything.

Host 56:58 It's happening. It is happening.

Abhishek Khaitan 56:59 You know what, Nikhil, what I'm saying-

Nikhil Kamath 57:00 Yeah

Abhishek Khaitan 57:00 ... with especially our Prime Minister-

Nikhil Kamath 57:02 Yeah

Abhishek Khaitan 57:03 ... the Indians, the kind of respect, the kind of aura Indians have, you know, earlier they used to doubt the quality of Indian product.

Nikhil Kamath 57:11 Mm.

Abhishek Khaitan 57:11 But today, India commands one of the biggest, uh, premiums. That is why, like, our single malt is on allocation. And, uh, we also launched, like, taking from your gin, it can be always debated whether gin was invented in England or Holland, but gin and tonic was the invention of India.

Nikhil Kamath 57:32 India.

57:32 Really?

Abhishek Khaitan 57:33 In 1910-

Nikhil Kamath 57:34 Mm

Abhishek Khaitan 57:34 ... you'll be surprised, when there was a malaria outbreak, so the Britishers, what they did, they, uh, they had to have, uh, this, uh-

Nikhil Kamath 57:42 Quinine

Abhishek Khaitan 57:42 ... quinine. So they mixed, uh, quinine with, uh, lime water and sugar.

Host 57:47 And then they added gin in the end. [chuckles]

Nikhil Kamath 57:48 And soda.

Abhishek Khaitan 57:48 And then they... Uh, yeah, soda.

Host 57:49 Lime juice.

Abhishek Khaitan 57:49 Then they added gin. So gin and tonic is the creation of India. That's why every tonic water is Indian tonic water.

Nikhil Kamath 57:58 And how big is Radico now?

Abhishek Khaitan 58:00 See, Radico now is, uh, like, our, uh, turnover last year was about f- uh, 4,200 crores, and, uh, market cap is close to about 22, 23,000 crores.

Nikhil Kamath 58:14 I, I read in the news somewhere that Abhishek had become a billionaire on Forbes.

Abhishek Khaitan 58:18 Oh.

Nikhil Kamath 58:18 How did that feel? What changed?

Abhishek Khaitan 58:20 See, being a billionaire, et cetera, is all numbers, it's all market.

Nikhil Kamath 58:23 Mm.

Abhishek Khaitan 58:23 But in the end, what is more important that the Indian products going abroad create that name, like our gin, Jaisalmer, Rampur, because numbers will keep changing, so that does not give me a kick.

Nikhil Kamath 58:36 Mm.

Abhishek Khaitan 58:36 Once the products become global and respected, I think that's the main kick about that.

Host 58:41 Yeah, then the value you that... value changes.

Nikhil Kamath 58:43 Okay, so now that the introductions are over, we'll get into the meat of what we were here to discuss. The

Nikhil Kamath 58:50 intent is to find young people out there, wannabe entrepreneurs, and tell them how they can get a job in owning a bar, starting a liquor company, working in a liquor company, doing advertising for liquor companies. Uh, this seems to be such a large ecosystem with so many opportunities, but nobody-- I looked up online, I searched a lot. No one has articulated the A to Z journey when somebody gets interested and starts working, earning a buck from this industry in a very tangible, comprehendible manner, so we'll try and attempt to do that. So before we talk about opportunities

Nikhil Kamath 59:34 in this industry, maybe a good place to start is by establishing how big the industry is-

Abhishek Khaitan 59:40 Mm

Nikhil Kamath 59:40 ... which part of it is growing faster than other parts, and, uh, then try to narrow in on what somebody looking to begin here should do. Would you say the hard liquor market in India is about $40 billion?

Abhishek Khaitan 59:56 No, no, much more.

Nikhil Kamath 59:57 You think?

Abhishek Khaitan 59:57 Hard liquor?

Nikhil Kamath 59:58 Hard liquor.

Abhishek Khaitan 59:59 40 million?

Nikhil Kamath 1:00:00 Billion.

Abhishek Khaitan 1:00:01 40 billion.

Nikhil Kamath 1:00:01 Yeah.

1:00:01 Yeah.

1:00:01 50 billion is total market, uh, size.

Host 1:00:04 Yeah.

Nikhil Kamath 1:00:04 And beer is about 12 billion?

Abhishek Khaitan 1:00:06 Yeah.

Nikhil Kamath 1:00:06 Maybe about 12, 13.

Host 1:00:07 Yeah.

Nikhil Kamath 1:00:07 Something like that?

1:00:08 So the interesting thing is, in India is the only country in the tropical zone where you do roughly around 350 million cases of hard liquor, considering you also counti- uh, regular spirits also, and about the same quantity of beer. But if you compare it to Vietnam, which is on the same, uh, heat, uh, temperature distance, Vietnam does 300 million cases of beer, but only 30 million cases of hard liquor.

1:00:36 Why do you think that is?

1:00:36 So we are extremely over-indexed on hard liquor.

Abhishek Khaitan 1:00:38 Why?

Nikhil Kamath 1:00:39 I think one of the key reasons is, I think, if you look at the psychology, we have to look at India-- urban India is very unlivable, and one of the big, you know, the, the consumption, uh, you know, categories that these, uh, the IMFL category gets its volumes from is the post-work, going home period, which in the traditional liquor parlance, you call it chaar yaar moment, like four people working in different jobs would come together, sit at a small theka-

Host 1:01:06 With joints theka.

Nikhil Kamath 1:01:07 Enjoy-

Abhishek Khaitan 1:01:07 How was

Nikhil Kamath 1:01:08 ... have that one break and then go home to their... And, and, you know, look at the transit times within cities. So you have really short of time. So this moment of-

Shuchir Suri 1:01:17 ... like maybe taking a little break from your routine is very short, hence the consumption style and pattern has also been developed around this. So what happens is, we are extremely over-indexed on the one eighty ML nip. So-

Nikhil Kamath 1:01:32 What is nip?

Shuchir Suri 1:01:33 So in terms of pack sizes-

Nikhil Kamath 1:01:34 Mm.

Shuchir Suri 1:01:34 -I think eighty percent of the say-

Abhishek Khaitan 1:01:36 It is like, uh-

Shuchir Suri 1:01:37 Or in regular-

Abhishek Khaitan 1:01:37 One is a full bottle, which is seven fifty-

Shuchir Suri 1:01:39 Seven fifty ML, and then there's a smaller one.

Abhishek Khaitan 1:01:40 Then you have pint, three seventy-five, and one eighty ML is a nip. So what-

Shuchir Suri 1:01:43 Which they call it pauwa. Pauwa, yeah.

Abhishek Khaitan 1:01:45 So what happens usually in the, say, up to a level of a semi-premium segment-

Shuchir Suri 1:01:49 Yeah

Abhishek Khaitan 1:01:49 ... that is up till, say, a Royal Stag.

Shuchir Suri 1:01:51 Yeah.

Abhishek Khaitan 1:01:51 So you'll see guys will meet at a place, Aahata, it's called.

Shuchir Suri 1:01:56 Mm.

Abhishek Khaitan 1:01:56 They'll buy a nip.

Nikhil Kamath 1:01:58 Aahata?

Abhishek Khaitan 1:01:58 Aahata.

Shuchir Suri 1:01:59 It's like-

Nikhil Kamath 1:02:00 Oh, that's a-

Abhishek Khaitan 1:02:00 Like, like now-

Shuchir Suri 1:02:01 Permit room.

Nikhil Kamath 1:02:01 The permit room.

Abhishek Khaitan 1:02:02 Permit room.

Nikhil Kamath 1:02:02 Permit room.

Minakshi Singh 1:02:03 Yeah, yeah.

Abhishek Khaitan 1:02:03 So there, they'll take a nip-

Nikhil Kamath 1:02:05 Mm.

Abhishek Khaitan 1:02:05 -and they'll finish it, and then go home for work. But so go home for, uh, meeting their wives or anyone. [chuckles] So that, uh, so that they-

Minakshi Singh 1:02:13 So it's basically summarized-

Abhishek Khaitan 1:02:14 Yeah

Minakshi Singh 1:02:14 ... as bang for your buck. A lot of times this happens, so it's you have one hour, if you drink two beers, the high that you get-

Nikhil Kamath 1:02:21 How to get high the fastest?

Minakshi Singh 1:02:21 The high that you get-

Shuchir Suri 1:02:22 Yeah

Minakshi Singh 1:02:22 ... versus you drink two-

Shuchir Suri 1:02:23 Gone in sixty seconds.

Minakshi Singh 1:02:24 One one eighty ML, one large-

Nikhil Kamath 1:02:25 But for the, for the premium liquor, premium liquor, it is different. But for the, this the-

Shuchir Suri 1:02:28 Strong is the biggest because they like to get high. No other reason.

Abhishek Khaitan 1:02:32 Which is surprising-

Shuchir Suri 1:02:32 Yeah

Abhishek Khaitan 1:02:32 ... which is surprising. Like, it, nowhere in the world, eighty percent would be strong.

Shuchir Suri 1:02:36 Yeah.

Abhishek Khaitan 1:02:36 Nowhere. Nowhere.

Nikhil Kamath 1:02:38 What do people drink for? Is it to escape? Is it to escape the monotony of life? Is it to get a high? Is it cultural in the sense that it's a activity that you like doing along with your friends and family? Why, why does India drink?

Shuchir Suri 1:02:58 It's also divi-- broken up into segments. Uh, the country liquor drinking class, they, th- for them, it's price point, and they want to get high at the lowest cost. Um-

Nikhil Kamath 1:03:08 What do you think the seg-

Abhishek Khaitan 1:03:09 No, I'll change that. Like, I studied in Bangalore, so say the, he's talking about the country liquor or the lowest segment.

Nikhil Kamath 1:03:14 Mm.

Abhishek Khaitan 1:03:15 So you'll be surprised, these guys go to work at 8:00 a.m. You know, they do physical labor. I've seen them because I used to have in my BMS college, the industrial engineering, so I had to take the hammer and everything like that, you know? So six o'clock, you'll see that guy in a liquor shop, and how they drink it is amazing. They'll take a nip, it's called a pauwa in Hindi. So they'll take it, boom, and then they'll go for work. It's so physical. After their work, they'll again come back, have one more, and then go home and sleep.

Shuchir Suri 1:03:50 And no need of a mixer.

Abhishek Khaitan 1:03:51 No need of a mixer, maximum water.

Shuchir Suri 1:03:52 So if they pick it up for fifty rupees now or forty rupees, that, that's a typical price.

Nikhil Kamath 1:03:55 What percentage alcohol is this?

Shuchir Suri 1:03:57 Uh, twenty-eight percent.

Abhishek Khaitan 1:03:58 Yeah.

Shuchir Suri 1:03:58 No, this is forty-two percent.

Minakshi Singh 1:03:59 Forty-two percent.

Abhishek Khaitan 1:04:00 No, it depends.

Shuchir Suri 1:04:02 Tharra, it is-

Abhishek Khaitan 1:04:02 Like, you have twenty-six, thirty-six-

Shuchir Suri 1:04:03 Yeah, and forty-two percent.

Minakshi Singh 1:04:04 I mean, Tharra is-

Shuchir Suri 1:04:04 So recently, I've done a content series on country liquor, and I've-- and which is doing very well for me. So I've actually picked up country liquor from all over the country, and I've been, uh, tasting them, and they don't taste as bad because of the low ABV, although they have synthetic flavors in it.

Nikhil Kamath 1:04:18 What is ABV?

Shuchir Suri 1:04:19 Uh-

Minakshi Singh 1:04:19 Alcohol by volume.

Shuchir Suri 1:04:20 Al- alcohol by volume, uh, which is not strong. So a typical whiskey, which will be a forty percent, uh, a Tharra, which is your country-made liquor, is twenty-eight percent, so you can drink it directly, versus a whiskey, where that you need a mixer.

Abhishek Khaitan 1:04:33 And they have all those local flavors.

Shuchir Suri 1:04:35 Santra.

Abhishek Khaitan 1:04:36 Softe.

Shuchir Suri 1:04:36 Santra.

Abhishek Khaitan 1:04:36 Santra.

Shuchir Suri 1:04:37 Softe.

Abhishek Khaitan 1:04:37 All that, you know-

Shuchir Suri 1:04:38 Garden fruits

Abhishek Khaitan 1:04:38 ... it's very different. It's the local, local flavors of India.

Nikhil Kamath 1:04:40 I've had one which taste just like Sambuca.

Shuchir Suri 1:04:41 And they have funny names, like Jal Pari, whatever, like-

Minakshi Singh 1:04:44 Fun names.

Shuchir Suri 1:04:44 Fun names.

Minakshi Singh 1:04:44 I, I, I think these are fun names.

Shuchir Suri 1:04:46 It's very, um-

Minakshi Singh 1:04:46 That'll be a fun content piece if, uh... Yeah.

Shuchir Suri 1:04:49 And I had one which tasted just like Sambuca. Like, you put it, you put Sambuca-

Minakshi Singh 1:04:53 And-

Shuchir Suri 1:04:53 ... you put this other country-made liquor, you will not be able to tell the difference.

Nikhil Kamath 1:04:57 This doesn't sound necessarily like a good thing, right? Somebody gulping one eighty ML-

Minakshi Singh 1:05:03 No.

Shuchir Suri 1:05:03 It's not.

Abhishek Khaitan 1:05:04 It's not.

Shuchir Suri 1:05:04 It is not.

Nikhil Kamath 1:05:05 It, it is irresponsible drinking, but they don't have-

Shuchir Suri 1:05:08 Absolutely

Nikhil Kamath 1:05:08 ... any other option, right?

Minakshi Singh 1:05:09 Uh, mass-level drinking, it's, it's to get high, to answer your question. It's mostly to get high quickly for the money that you've spent.

Nikhil Kamath 1:05:16 What is the psychology behind wanting to get high? Why is this laborer who is making, let's say, eight hundred rupees a day to go and lift something for eight hours or ten hours or twelve, why does he want to get high at the beginning of his day?

Minakshi Singh 1:05:31 It's the same psychology that a corporate CEO probably comes home and has a whiskey at home before they get, sit down on the dinner table.

Nikhil Kamath 1:05:39 What-

Minakshi Singh 1:05:39 It's the same psychology.

Nikhil Kamath 1:05:40 What is that psychology?

Minakshi Singh 1:05:40 You are tired, you want to get away, you want to spend your day not thinking about maybe work and socializing or talking to your friends or your work friends, whoever you talk to. But from that point of view, it is that break.

Abhishek Khaitan 1:05:52 They, they want to-

Shuchir Suri 1:05:53 Like they want to get-

Abhishek Khaitan 1:05:53 They want to, like-

Shuchir Suri 1:05:54 Sick

Abhishek Khaitan 1:05:54 ... because their life is so tough, they don't want to just-

Minakshi Singh 1:05:56 Yeah.

Shuchir Suri 1:05:56 Yeah.

Minakshi Singh 1:05:56 It's physical labor-

Shuchir Suri 1:05:57 Yeah

Minakshi Singh 1:05:57 ... it's taxing.

Shuchir Suri 1:05:58 Yeah.

Minakshi Singh 1:05:58 I mean, they have enough issues, I feel like-

Shuchir Suri 1:06:00 Yeah

Minakshi Singh 1:06:00 ... I think it's-

Shuchir Suri 1:06:01 Yeah

Minakshi Singh 1:06:01 ... it's a lot of that. I mean, as part of Diageo Pernod, we did a lot of rounds in-

Shuchir Suri 1:06:05 Yeah

Minakshi Singh 1:06:05 ... many, many liquor stores, permit rooms, and, uh, one of the biggest learnings was that why are they sitting here and drinking is because they all need to get home in half an hour and then start that whole day again. This is one break you got in the whole day, where you could get away with your friends or whoever you drink with. I mean, that's irrespective. You can drink alone and still find, you know, that peace. So I think it's that.

Nikhil Kamath 1:06:28 Right. Because we can't go around this question,

Nikhil Kamath 1:06:32 do you think alcohol net-net for society is good or bad? And explain why. Make a case on this side and on the other.

Minakshi Singh 1:06:43 I mean, you are talking. [chuckles]

Shuchir Suri 1:06:44 [chuckles]

Abhishek Khaitan 1:06:44 I think-

Shuchir Suri 1:06:45 I'll give you an analogy why.

Abhishek Khaitan 1:06:46 See, anywhere where alcohol is banned, whether it was US, et cetera-

Minakshi Singh 1:06:52 Yeah

Abhishek Khaitan 1:06:52 ... it has led the economy-

Minakshi Singh 1:06:53 Overconsumption

Abhishek Khaitan 1:06:54 ... into shambles.

Shuchir Suri 1:06:55 Yeah.

Abhishek Khaitan 1:06:56 What she's rightly saying, ac- uh, drinking alcohol in moderation is very good. Like-

Nikhil Kamath 1:07:00 You're talking Kennedy time, bootlegging.

Shuchir Suri 1:07:01 Yes.

Abhishek Khaitan 1:07:02 Yeah, yeah.

Minakshi Singh 1:07:02 Talking about-

Abhishek Khaitan 1:07:02 Even the doctors say-

Minakshi Singh 1:07:04 Prohibition era

Abhishek Khaitan 1:07:04 ... a glass of wine-

Minakshi Singh 1:07:04 1920s

Abhishek Khaitan 1:07:05 ... or sixty ML a day is very good for the heart. So I think anything in moderation is good. Even-

Nikhil Kamath 1:07:10 So what you're saying is, culturally, alcohol has been a part of our life-

Abhishek Khaitan 1:07:15 Absolutely

Nikhil Kamath 1:07:15 ... for centuries, and if you ban it, what happened in US prohibition, the money from alcohol will not go to you guys, but it'll go to the-... dark elements in society.

Minakshi Singh 1:07:25 Not even-

Shuchir Suri 1:07:25 But that being said, if, um, I don't- I'm not very good with the numbers of America, but the younger generation that I tend to engage with once in a while, they're not drinking as much as we were drinking when we were younger. At least they were not drink-

Nikhil Kamath 1:07:39 Mm.

Shuchir Suri 1:07:39 They're not drinking as much as I would drink-

Nikhil Kamath 1:07:40 Yeah

Shuchir Suri 1:07:41 ... when I was about the legal drinking age.

Minakshi Singh 1:07:42 Even the younger generation in India also.

Nikhil Kamath 1:07:43 Maybe they don't have four friends-

Shuchir Suri 1:07:45 They have alternatives

Nikhil Kamath 1:07:45 -to go to four different places.

Shuchir Suri 1:07:46 Right? They are, they're doing other things to get high, but they're still getting high. But they're caring about calories, they, they're caring about hangovers-

Nikhil Kamath 1:07:51 Absolutely right

Shuchir Suri 1:07:52 ... compared to what we would, we didn't have those alternative.

Nikhil Kamath 1:07:55 Interesting point. Do you guys individually believe that you become a different person, a slightly different version of yourself?

Minakshi Singh 1:08:03 Absolutely. Absolutely.

Nikhil Kamath 1:08:04 Yeah.

Minakshi Singh 1:08:04 Absolutely.

Nikhil Kamath 1:08:05 How, how do you change?

Minakshi Singh 1:08:05 It's a chemical reaction in your body. I mean, it, this is finally, it's not just a product in the air, right? I'm not consuming fashion through my eyes. I'm actually consuming it in my body, so it is actually changing– There's a molecular change that you go through when you have alcohol.

Nikhil Kamath 1:08:19 So how does Minakshi change?

Minakshi Singh 1:08:21 I, I mean, I get more... I, I love to dance, and I love great music. I like to put- I mean, some of us have seen us [laughing] drink, but we've had some great nights. And you also, also, at, at any point in time, whenever you are drinking, you are, your guards are down, like I said, right?

Nikhil Kamath 1:08:37 Mm.

Minakshi Singh 1:08:37 So you are more open to knowing people-

Nikhil Kamath 1:08:40 Mm

Minakshi Singh 1:08:40 ... and talking to people when you are, say, having a drink versus not having a drink.

Shuchir Suri 1:08:44 I think I become funnier, uh, I become more social, and I become more chatty.

Nikhil Kamath 1:08:50 Mm. Abhishek, I've seen. Love.

Suraj Shenai 1:08:52 Yeah. [laughing]

Nikhil Kamath 1:08:54 [laughing] See, I always say I'm in the business of making people happy, so I become happy.

Suraj Shenai 1:08:58 Yeah. Same, I think, you know, largely to a, to a great extent, but more of also sometime you also want to consume something on your own personal space as well. Like just, you know, in the unwind moment, that's also something which is very interesting-

Minakshi Singh 1:09:14 Yeah. Yeah

Suraj Shenai 1:09:14 ... but very

Suraj Shenai 1:09:15 specific then, you know?

Nikhil Kamath 1:09:16 Okay, so we established that the hard liquor market is forty billion, beer is twelve billion. So we have some data that says that, correct me when I'm wrong, UB has twenty-five percent market share, followed by-

Suraj Shenai 1:09:33 You mean spirit?

Nikhil Kamath 1:09:34 And beer together. Country liquor has twenty percent?

Abhishek Khaitan 1:09:39 No, actually, if you see four hundred million-

Suraj Shenai 1:09:42 In terms of value terms.

Abhishek Khaitan 1:09:43 No, I'll tell you the thing.

Minakshi Singh 1:09:44 Yeah.

Suraj Shenai 1:09:44 Value terms, yes.

Abhishek Khaitan 1:09:45 No.

Suraj Shenai 1:09:46 Not volume, no.

Abhishek Khaitan 1:09:46 Four hundred million is the hard liquor.

Nikhil Kamath 1:09:49 Mm.

Abhishek Khaitan 1:09:50 So four hundred million cases, country liquor would be again, a three hundred million cases market.

Nikhil Kamath 1:09:56 But maybe not, uh-

Shuchir Suri 1:09:57 In numbers, fifty-one percent is-

Abhishek Khaitan 1:09:59 Revenue

Shuchir Suri 1:10:00 ... is country liquor.

Abhishek Khaitan 1:10:00 So value would be very less.

Shuchir Suri 1:10:01 Yeah.

Minakshi Singh 1:10:01 Revenue?

Shuchir Suri 1:10:02 Revenue would, fifty-one percent, won't it be country liquor?

Suraj Shenai 1:10:05 No, no, much, much less.

Abhishek Khaitan 1:10:06 No, much less.

Suraj Shenai 1:10:06 Twenty percent, your state data is correct.

Abhishek Khaitan 1:10:09 Much less-

Minakshi Singh 1:10:09 Because the-

Abhishek Khaitan 1:10:10 The value is very less.

Minakshi Singh 1:10:11 The value is low.

Suraj Shenai 1:10:11 Yeah.

Nikhil Kamath 1:10:12 Okay, followed-

Shuchir Suri 1:10:13 In volume, maybe

Nikhil Kamath 1:10:13 ... followed by Diageo at seventeen, Anheuser-Busch, Bernard Ries, Radico Khaitan, three percent?

Abhishek Khaitan 1:10:22 No, we, we, of the market size, we're about ten percent.

Nikhil Kamath 1:10:25 Right.

Suraj Shenai 1:10:26 Mm.

Nikhil Kamath 1:10:28 So what did these brands do correctly, which somebody can use to emulate, somebody can build around? If you had to talk about underlying trends in the brewing space, uh, what is changing today that I should focus

Nikhil Kamath 1:10:47 on? Imagine I am a twenty-five-year-old who has managed to raise ten crore rupees, and I want to start a liquor brand. Should I do tequila? Should I try and figure out what UB is doing correctly? I had an interesting conversation with an ex-executive at UB, who said that off late, they've been trying to push Heineken-

Suraj Shenai 1:11:11 Mm

Nikhil Kamath 1:11:11 ... instead of KF.

Suraj Shenai 1:11:12 Absolutely.

Nikhil Kamath 1:11:12 It's a strategy that has not worked-

Suraj Shenai 1:11:14 Yes

Nikhil Kamath 1:11:15 ... and they're falling back on selling KF again.

Suraj Shenai 1:11:17 Exactly.

Nikhil Kamath 1:11:18 Something on those lines.

Suraj Shenai 1:11:19 Yeah.

Nikhil Kamath 1:11:19 Okay-

Suraj Shenai 1:11:19 Silver, Heineken Silver was their, uh, moat.

Nikhil Kamath 1:11:23 Right.

Abhishek Khaitan 1:11:23 Same thing which happened, like if you see the cola wars, which happened with Thums Up and Coke.

Nikhil Kamath 1:11:28 Yeah. So what do I do? I have ten crore rupees that I have raised. A venture capital fund has given me the money. I want to start a liquor, liquor brand. What should I start?

Shuchir Suri 1:11:38 So, um, I deal with these young people on a daily basis who want to start a liquor brand. Uh, when you talk about numbers and market share, most of these kids do not know their numbers, and they don't want to go into building a tequila or building a gin because they want to capture market share. They, they want to create a product. They want-- The first thing that they want to create is they want to create a differentiated product, which is the first thing that they come up with, saying that, "Oh, my gin has, uh, hemp seeds in it, that's why I'm different," or, "My tequila has this certain type of agave that I'm importing in, that's why I'm different." They don't go in with the mentality, saying that, "Oh, I want to capture fifty percent market share of the gin category in the country," number one. Number two, they feel that the Indian brands or the international brands which are there, uh, they can do a better job in packaging, positioning, marketing, compared to these bigger players. Thirdly, they feel it's become much easier compared to, uh, what it was before, that, "Okay, I know a friend who knows a co-packer. All I have to go and do is create a recipe. I don't want to be a manufacturer, I want to be a brand owner, and I want to be a distributor versus going into the entire CapEx model."

Nikhil Kamath 1:12:48 Can you manufacture brew on your own with ten crore rupee capital that I've raised?

Shuchir Suri 1:12:55 You can set up a-

Nikhil Kamath 1:12:56 You have to go to a co-packer, right?

Shuchir Suri 1:12:56 You can set up a distillery with... but most of your money will go into just setting-

Abhishek Khaitan 1:13:01 No, distillery, you cannot set up with ten crore. Nothing.

Minakshi Singh 1:13:02 Distillery is too less.

Abhishek Khaitan 1:13:04 It's less-

Minakshi Singh 1:13:04 Uh, brewery, I think you can answer that up.

Suraj Shenai 1:13:06 I raised, my first round was eight crores, and we spent almost six in CapEx-

Abhishek Khaitan 1:13:10 In CapEx.

Minakshi Singh 1:13:10 Yeah

Suraj Shenai 1:13:10 ... because we really wanted the best equipment to brew. But that was the whole journey that came to the point that, you know, we'd done all, everything that we could, and then you only needed the money.

Nikhil Kamath 1:13:21 So with six crore rupees in equipment, you can start a independent beer company in India?

Suraj Shenai 1:13:26 ... but the, the journey to the six crore is not the-- see, the money is the least important thing in this whole matrix. I think one of the most important things is you, once you, the, what you are trying to do has to fully resonate with you. Like how Meenakshi's been running her bar for day in, day out for years, and you keep getting better at what you do by being at it.

Abhishek Khaitan 1:13:51 What if I-

Suraj Shenai 1:13:51 So-

Abhishek Khaitan 1:13:51 -I don't know what resonates with me? I want to find from the lens of capitalism, the low-

Suraj Shenai 1:13:57 Mm

Abhishek Khaitan 1:13:57 ... hanging fruit of today.

Suraj Shenai 1:13:58 So one of the-

Abhishek Khaitan 1:14:00 I'm okay with going to a co-packer.

Suraj Shenai 1:14:01 Yeah.

Abhishek Khaitan 1:14:01 I don't have to manufacture. I don't have to spend money on that. What brand and what price point, what category?

Minakshi Singh 1:14:09 Category. The question is category-

Suraj Shenai 1:14:11 Yeah, category.

Minakshi Singh 1:14:11 -and I would say the highest category-

Suraj Shenai 1:14:13 Yeah

Minakshi Singh 1:14:13 ... is whiskey, and I would say that-

Suraj Shenai 1:14:14 Whiskey

Minakshi Singh 1:14:14 ... whiskey would be your-

Suraj Shenai 1:14:14 But then you have aging and stuff like that.

Minakshi Singh 1:14:16 Yeah.

Suraj Shenai 1:14:16 So even it would be your-

Minakshi Singh 1:14:17 But whiskey would be your most, uh, profitable category, and by far is the one that actually has test the test of-- test, stood the test of time as well.

Shuchir Suri 1:14:25 Like I've seen-

Minakshi Singh 1:14:26 Over and over

Shuchir Suri 1:14:26 ... people set up with thirty to fifty lakh rupees, uh, how their money is spent, um, maybe ten percent is spent on creating the brand. The balance goes into actually paying-

Minakshi Singh 1:14:36 Yeah

Shuchir Suri 1:14:36 ... uh, listing fees, uh, in every state. So they usually start off-

Minakshi Singh 1:14:40 So law is killing people

Shuchir Suri 1:14:40 ... from Goa. They started from Goa, then they go to either Delhi or Gurgaon. And I'm talking about gin as a category, because that's a space I know. Um, in Delhi, you have to pay per brand, which will be about twelve lakh rupees for vodka and gin. That's where most of the money is going initially. Go-to-market, thirty to fifty lakh rupees, people can start off their brand initially through a co-packer, if you want to start, uh-

Minakshi Singh 1:15:04 See, but the journey is really long. The que-

Shuchir Suri 1:15:05 Yeah.

Minakshi Singh 1:15:06 To answer your question, if six CR is today-

Suraj Shenai 1:15:08 See, if you see the liquor industry, we are in-

Minakshi Singh 1:15:08 You have to have six CR every year. [chuckles] So we are not talking about-

Shuchir Suri 1:15:12 Yeah, you have revenues.

Abhishek Khaitan 1:15:12 No, it's Capex.

Minakshi Singh 1:15:13 Yeah.

Shuchir Suri 1:15:14 Capex.

Abhishek Khaitan 1:15:14 One time.

Shuchir Suri 1:15:14 One time.

Minakshi Singh 1:15:14 No, no, but then af-- I'm just saying you've set up the brand, right?

Shuchir Suri 1:15:16 You can be very frugal also.

Abhishek Khaitan 1:15:17 No, no, what about... Like, I'll tell you, like, in our industry, if you want to go all India, you have to have thirty-five-

Suraj Shenai 1:15:24 Yeah

Abhishek Khaitan 1:15:24 ... bottling units.

Minakshi Singh 1:15:25 Right.

Abhishek Khaitan 1:15:25 Then it's a dark environment.

Minakshi Singh 1:15:27 Mm.

Abhishek Khaitan 1:15:27 So it depends on the category. So with such a small amount-

Minakshi Singh 1:15:30 Mm

Abhishek Khaitan 1:15:30 ... you can only make a mark if you go into a niche category.

Minakshi Singh 1:15:33 Which I'm fine doing.

Suraj Shenai 1:15:34 Yeah.

Abhishek Khaitan 1:15:34 Which only you get into a niche category.

Minakshi Singh 1:15:36 Right.

Abhishek Khaitan 1:15:37 There also, you have to, the most important is you have to have the patience.

Suraj Shenai 1:15:41 Mm.

Minakshi Singh 1:15:42 Which is fine.

Abhishek Khaitan 1:15:42 Because what I feel-

Minakshi Singh 1:15:43 Uh

Abhishek Khaitan 1:15:43 ... to get the first ten thousand consumer is the toughest.

Suraj Shenai 1:15:47 Mm.

Abhishek Khaitan 1:15:48 That is the biggest journey which we, I've seen in all my brands.

Suraj Shenai 1:15:51 Absolutely.

Abhishek Khaitan 1:15:51 Because-

Minakshi Singh 1:15:51 Building the base

Abhishek Khaitan 1:15:51 ... once that ten thousand are loyalist consumers, they will talk to-- they'll make fifty thousand consumer, then millions comes.

Suraj Shenai 1:15:58 Mm.

Abhishek Khaitan 1:15:58 That's happened with each of my brands. It goes slow, but then it just takes off.

Suraj Shenai 1:16:02 Mm.

Abhishek Khaitan 1:16:02 So the minute you push your brand, and the most important in our industry is the payment. The minute you push your primaries and you don't look at your secondaries and tertiaries, the brand is finished.

Minakshi Singh 1:16:14 What is primary, secondary, tertiary?

Abhishek Khaitan 1:16:16 Primary-

Suraj Shenai 1:16:16 Distributor

Abhishek Khaitan 1:16:16 ... suppose if I give to a distributor, then secondary is when it goes to the retail. The most important is the tertiary, is the retail offtake. Any retailer will take your material, but till the time-

Suraj Shenai 1:16:27 Yeah

Abhishek Khaitan 1:16:28 ... it does not go out, he won't give you a payment.

Minakshi Singh 1:16:30 You're not making any money till the end of the day.

Shuchir Suri 1:16:32 And, and the biggest problem is-

Minakshi Singh 1:16:33 So your sales are happening at distillery-

Shuchir Suri 1:16:33 ... the distributors don't pay you

Minakshi Singh 1:16:34 ... right? You are selling it at after fee.

Abhishek Khaitan 1:16:35 So in our industry, what Meenakshi is rightly saying, I echo her, what she's saying, with the six crore, one, you, it's, it's like if you click it, you're a god. But you should have that capital of at least fifty crores, et cetera. [chuckles]

Minakshi Singh 1:16:49 [chuckles]

Abhishek Khaitan 1:16:49 But he did it with ten. [laughing] Fantastic.

Suraj Shenai 1:16:50 Small, like, uh-

Abhishek Khaitan 1:16:52 You can start.

Suraj Shenai 1:16:52 So I have one hack-

Minakshi Singh 1:16:53 But beer, and that's-

Suraj Shenai 1:16:54 which I think you should-

Abhishek Khaitan 1:16:54 See, but no, we're talking about alcohol. Beer is a different category.

Suraj Shenai 1:16:57 Yeah.

Abhishek Khaitan 1:16:57 I'm, I'm open to beer, wine- I'm talking about alcohol

Minakshi Singh 1:16:59 ... tequila, gin, anything.

Shuchir Suri 1:17:01 So I've looked at even Anand's story and these other gin brands. They didn't start off-- they first, they were going to co-packers, and no, no co-packer wanted to bottle their product, right? They were, uh, if you go to co-packer and tell them, "If I come to you and tell you I want to build seven hundred and fifty cases in a year," no, they'll say, "That's too less for me," right? So that's the main thing, that you have to start small.

Abhishek Khaitan 1:17:22 Which co-packer should I go to?

Shuchir Suri 1:17:24 Uh-

Abhishek Khaitan 1:17:24 Any names, recommendations, people who have repute?

Suraj Shenai 1:17:27 So I think co-packers, there are many. You should probably choose a market where the resistance, the friction to get your product to the consumer is the least. So don't go to markets where there is-

Minakshi Singh 1:17:39 I.e., Goa

Suraj Shenai 1:17:40 ... very high regulation. Goa, we were, you know, we built-

Abhishek Khaitan 1:17:42 Goa is the best

Suraj Shenai 1:17:43 ... an entire ecosystem. I think please come to Goa, I think.

Abhishek Khaitan 1:17:46 Goa has great co-packers?

Suraj Shenai 1:17:47 Goa has great co-packers, also extremely, um... S- so there, there are two, three types of markets that happen in India. Goa is considered an open market like Maharashtra, where you have a distributor. It, it, it almost operates very similar to, say, uh, any other business. Like, you have, you have the freedom to do. If you are in Karnataka, you have to sell to the government, so you have much higher control. So as a starting point, Goa-

Abhishek Khaitan 1:18:11 No, I get that. I don't want to get into the complexity-

Suraj Shenai 1:18:12 Yeah

Abhishek Khaitan 1:18:12 ... of different states, 'cause I think-

Suraj Shenai 1:18:14 Yeah, that's-

Abhishek Khaitan 1:18:14 ... there are too many rules. But are you talking about liquor, or you're talking about beer?

Minakshi Singh 1:18:17 Either.

Suraj Shenai 1:18:18 Anything, I think.

Abhishek Khaitan 1:18:19 So-

Shuchir Suri 1:18:19 Both are different, uh- In Goa, getting a co-packer is easier. Getting a line-

Abhishek Khaitan 1:18:24 Na- name a, name a co-packer, somebody, somebody of repute.

Suraj Shenai 1:18:27 Uh, Greater Than, and you know, there are a bunch. Like, there are thirty, thirty-five-

Abhishek Khaitan 1:18:29 Greater Than is a co-packer?

Suraj Shenai 1:18:32 It is being made at one of the factories-

Shuchir Suri 1:18:34 So the also, also model is-

Suraj Shenai 1:18:35 They started from there

Shuchir Suri 1:18:36 ... also model is that you go to co-packer, and if you, if the co-packer doesn't have the still that you want to use in order to make your product, since the co-packer has all the licenses, which is actually the majority of the co- the cost-

Minakshi Singh 1:18:49 Biggest work, yeah.

Suraj Shenai 1:18:49 Yeah

Shuchir Suri 1:18:49 ... the biggest work, the biggest headache, of your fire, your chemical-

Suraj Shenai 1:18:53 Yeah

Shuchir Suri 1:18:53 ... you have multiple licenses. Where initially, if you want to raise money to build your own distillery, that's where your money will go, is when you import a still, put it, give it to your co-packer, and tell him to use this still to make your product.

Minakshi Singh 1:19:03 Yeah, and then get a good distiller.

Shuchir Suri 1:19:05 Yeah.

Abhishek Khaitan 1:19:06 So when you say bottler, do you mean co-packer?

Shuchir Suri 1:19:08 Yeah.

Minakshi Singh 1:19:09 Yeah.

Abhishek Khaitan 1:19:09 Same thing? Can I find a co-packer for whiskey? Yeah, yeah, you can.

Minakshi Singh 1:19:14 So for any, uh, for any spirit.

Abhishek Khaitan 1:19:16 Easy.

Minakshi Singh 1:19:16 Any spirit.

Abhishek Khaitan 1:19:16 Yeah. So then I don't need that much money, right? If I'm using a co-packer in making whiskey.

Minakshi Singh 1:19:22 No.

Abhishek Khaitan 1:19:22 This recipe, how do I go about getting it? What is it? I remember Kiran, Kiran had this license in beer brewing, whatever. She studied microbiology. She spoke about how-

Nikhil Kamath 1:19:34 ... the recipe is such an important ingredient.

Suraj Shenai 1:19:37 Absolutely.

Nikhil Kamath 1:19:38 I don't know anything about liquor. I have raised ten crores from a venture capital fund. I have a broad plan in mind. I go to a co-packer, Blue Ocean, somebody equally relevant. We'll put out names at the end of this podcast-

Minakshi Singh 1:19:51 Yeah

Nikhil Kamath 1:19:51 ... with some research, we'll take it from you-

Suraj Shenai 1:19:53 Yeah

Nikhil Kamath 1:19:53 -who are good co-packers. Second step, recipe. How do I find a recipe?

Suraj Shenai 1:19:58 You will get a consultant. Most people get a consultant on board.

Minakshi Singh 1:20:01 You can either get a distiller, for example-

Suraj Shenai 1:20:03 Yeah, or get them.

Minakshi Singh 1:20:04 I, I'm just giving you an example again, because we know these guys, uh, Greater Than an Apusha was made by a, by somebody who was making gin in, in, uh... They came back from Bombay Sapphire, right? So the legacy is big.

Nikhil Kamath 1:20:16 What's their name?

Minakshi Singh 1:20:17 I don't- I wouldn't know their name, but I, I know the lady. I've met her. [chuckles]

Nikhil Kamath 1:20:21 Uh, so we'll put-

Minakshi Singh 1:20:22 Yeah, we'll put this stuff out.

Suraj Shenai 1:20:23 You go two ways: either you get a consultant on board who will take you through this entire process-

Minakshi Singh 1:20:27 Mm.

Suraj Shenai 1:20:27 -or you get a dis- master distiller.

Nikhil Kamath 1:20:28 How do you find a consultant who will take you through the process?

Minakshi Singh 1:20:31 Difficult to find in India, no?

Suraj Shenai 1:20:32 It's, it's not difficult to find a consultant. Consultants you'll get, but the consultant will also help you get a master distiller from-

Minakshi Singh 1:20:38 Yeah, okay, another example, Terai, they went to Proof and Co. Proof and Co. is a globally international, well-known company that consults brands-

Suraj Shenai 1:20:46 Mm.

Minakshi Singh 1:20:46 -to create brands.

Suraj Shenai 1:20:47 Also, Stranger Sun-

Minakshi Singh 1:20:48 If you have-

Suraj Shenai 1:20:48 -uses Proof and Co.

Minakshi Singh 1:20:49 Yeah, yeah, so Proof and Co., Terai was, had used it, and then when they came to India, they were already existing as a, as a bottling unit mostly-

Suraj Shenai 1:20:56 Yeah

Minakshi Singh 1:20:56 ... out of Manesar, right? And then they actually created Terai Gin with Proof and Co. proper, um, you know, guidance through, like, the entire recipe, creating the entire story. Everything was out there. So-

Nikhil Kamath 1:21:07 How do I meet these people? How do I have this dialogue? See, we, we want a particular outcome. At the end of this conversation, we want a roadmap wherein so many young people, at least like a couple of them, raise ten crores, build liquor companies, hopefully one day become as successful as Radico, and Indian alcohol finds its place in the global ecosystem because young people coming in will experiment-

Suraj Shenai 1:21:34 Absolutely

Nikhil Kamath 1:21:34 ... do different things. It will improve the alcohol of the, the quality of alcohol.

Suraj Shenai 1:21:40 Best way, like, even when I was building my non-alcoholic beverage brand, you have to pick up the phone, call up people from the industry-

Minakshi Singh 1:21:45 Also, attend shows-

Suraj Shenai 1:21:46 Get references

Minakshi Singh 1:21:46 ... there are many trade shows.

Nikhil Kamath 1:21:47 Like what?

Minakshi Singh 1:21:48 I would say, like, there's London Cocktail Week-

Suraj Shenai 1:21:49 Berlin Bar Convention

Minakshi Singh 1:21:50 ... Berlin Co- Bar Convention. In India, there's Brews and Spirits that happens in, uh, in Bangalore. Multiple places have... Now, this is, this is the thing, right? India has very few trade-only conventions when it comes to liquor. Like, Ahaar is a huge thing, but mostly focused-

Suraj Shenai 1:22:04 FMCG

Minakshi Singh 1:22:04 ... on food and FMCG food, right? But alcohol has very few of these, um, where you actually meet people who are creating stuff, like the, the bottler is standing there trying to sell and say that, "Come to me and make the brand with me, I will give you the best price." So you have to put yourself out there, definitely travel. There are many, many trade shows that happen, and we can give you again names for that.

Suraj Shenai 1:22:25 Yeah.

Minakshi Singh 1:22:26 And of course, the biggest of the shows are the BCBs and the London Cocktail Weeks of the world, which, which bring a lot of people together, and you will have distillers, bottlers, creators, blenders, and investors in one room.

Suraj Shenai 1:22:37 But that, again-

Minakshi Singh 1:22:38 If you have them

Suraj Shenai 1:22:38 ... is not India-centric. I think India-centric is only-

Minakshi Singh 1:22:41 India is very few, I think.

Suraj Shenai 1:22:42 Yeah.

Minakshi Singh 1:22:42 I, I mean, I don't know how many you guys follow.

Abhishek Khaitan 1:22:43 No, I think, I think, see, let's, let's break it into two, three parts. Number one, to create an alcohol brand, what does it take?

Suraj Shenai 1:22:51 Mm.

Abhishek Khaitan 1:22:51 It takes a great blend, which is the most important. It takes packaging, innovation, and thirdly, the space you want to be. So any guy who's starting has to be passionate.

Nikhil Kamath 1:23:03 Okay.

Abhishek Khaitan 1:23:03 Like her thing, if she started SideCar, she was passionate.

Nikhil Kamath 1:23:06 Okay.

Abhishek Khaitan 1:23:07 Tends to win the top Asia Bar.

Suraj Shenai 1:23:09 Yeah.

Minakshi Singh 1:23:09 Yeah.

Abhishek Khaitan 1:23:09 And the World Bar is not a joke.

Nikhil Kamath 1:23:11 We make the-

Abhishek Khaitan 1:23:11 And same thing, Suchet was-

Nikhil Kamath 1:23:12 Assumption that there are passionate people.

Suraj Shenai 1:23:13 Yeah.

Abhishek Khaitan 1:23:13 So then they should know which segment-

Nikhil Kamath 1:23:15 Mm.

Abhishek Khaitan 1:23:15 Where is the global industry?

Nikhil Kamath 1:23:17 Mm.

Abhishek Khaitan 1:23:17 Does it work for the Indian palate or not? So-

Nikhil Kamath 1:23:19 So even if these shows are happening abroad, somebody from here can go there, attend shows-

Minakshi Singh 1:23:24 Absolutely.

Suraj Shenai 1:23:24 Yes.

Minakshi Singh 1:23:24 You can buy tickets.

Abhishek Khaitan 1:23:25 See shows-

Minakshi Singh 1:23:25 These are open tickets

Abhishek Khaitan 1:23:26 ... that they can see the products.

Minakshi Singh 1:23:27 You can travel to many, many shows.

Abhishek Khaitan 1:23:27 But here, with HR, you can get a lot of blenders-

Nikhil Kamath 1:23:31 With?

Abhishek Khaitan 1:23:31 ... who have worked for blenders.

Nikhil Kamath 1:23:33 With HR?

Abhishek Khaitan 1:23:34 Like HR firms-

Nikhil Kamath 1:23:35 Uh-huh

Abhishek Khaitan 1:23:35 ... who have passed Diageo-

Minakshi Singh 1:23:36 Yeah, yeah

Abhishek Khaitan 1:23:36 ... passed Pernod, passed XYZ. There are a lot of-

Minakshi Singh 1:23:39 Consultants

Abhishek Khaitan 1:23:39 ... consultants-

Minakshi Singh 1:23:40 Yeah

Abhishek Khaitan 1:23:40 ... retired people who have created successful brands, so you can get people there. Second is to identify the right product. I think that is where the, where the art of the youngsters will come in.

Suraj Shenai 1:23:51 Yeah.

Abhishek Khaitan 1:23:51 Like seltzers, has been started by younger generation.

Minakshi Singh 1:23:54 Yeah.

Abhishek Khaitan 1:23:54 It's picking up.

Nikhil Kamath 1:23:55 This is my next question. So now that you've figured out a bottler who is also a co-packer, you fig- figure out...

Minakshi Singh 1:24:01 The formula.

Nikhil Kamath 1:24:02 I'll, I'll leave... Yeah, the recipe.

Minakshi Singh 1:24:04 Yeah.

Suraj Shenai 1:24:04 Recipe.

Minakshi Singh 1:24:05 We call it formula.

Suraj Shenai 1:24:06 So I think you simply-

Nikhil Kamath 1:24:07 Formula.

Minakshi Singh 1:24:08 Same thing.

Abhishek Khaitan 1:24:08 The blend.

Suraj Shenai 1:24:08 If you want to start-

Nikhil Kamath 1:24:10 Uh

Suraj Shenai 1:24:10 ... for the, for somebody who's just starting now, I think one of the simplest things one should do is first go to the superm- spend a lot of time in supermarket. Just keep observing the shelf. Do nothing.

Abhishek Khaitan 1:24:22 The trend.

Suraj Shenai 1:24:23 Just let people come shop at the supermarket.

Abhishek Khaitan 1:24:25 Yes.

Suraj Shenai 1:24:25 See what's moving on the counter. Observe, talk to consumers. Just be in that zone.

Minakshi Singh 1:24:30 Very old school, yeah.

Suraj Shenai 1:24:31 Go to-

Minakshi Singh 1:24:31 You have to do that

Suraj Shenai 1:24:31 ... go to the bar.

Minakshi Singh 1:24:32 You have to do that.

Suraj Shenai 1:24:32 Sit at the bar.

Abhishek Khaitan 1:24:33 I, I do that.

Suraj Shenai 1:24:33 Keep seeing what's happening.

Minakshi Singh 1:24:34 I mean, I do it.

Suraj Shenai 1:24:34 Give it time.

Minakshi Singh 1:24:35 We all have to.

Suraj Shenai 1:24:36 Then you will come with an inspiration, which is, you know that it is differentiated. It's not coming from some knowledge of somebody else. Western knowledge never works in India. We, uh, like every pin code in India, I say we have a culture code. It changes. It's, it's phenomenally bizarre. So you have to be very sure about what you are inspired by, and you have understood a sense of the market by being there, looking and feeling it yourself. That's the first step. Then, you are inspired, then all the other things. So if you are a brewer, it's, uh, you know, you simply- it's the most collaborative, open... We have so many home brewers who come to us.

Minakshi Singh 1:25:14 And there are brewing conventions that happen as well.

Suraj Shenai 1:25:15 Yeah, anyone who wants to meet me-

Minakshi Singh 1:25:17 So new people can join these conventions.

Suraj Shenai 1:25:18 We, we have an yeast library.

Minakshi Singh 1:25:19 Yeah.

Suraj Shenai 1:25:19 We always offer yeast strains to people. We give small malt batches to people who want to go and try. You do- don't need more than 5,000 rupees to create a small home brewing kit at home. Experiment, be on the kitchen sink. Give it that time. Once you know the product, whatever you are trying to make, there's so much learning available online also. Then you know which one, which consultant to go to, or then when you go to these fairs-... you are a lot more better prepared. So I think do that homework. This industry requires you to put your head down and work hard. It's a slow-moving industry. It's the nature of the business, where you have to put that time to figure out the product first. Don't keep it for later, because that's something that you will have to-- you'll put all your energy

Suraj Shenai 1:26:00 behind.

Nikhil Kamath 1:26:01 So, because you guys are experts in this, where do you think-- I'll come to each one of you individually, where is the opportunity today? I'll ask you in terms of, Suraj can tell me this kind of beer made with this kind of-

Suraj Shenai 1:26:16 Yeah

Nikhil Kamath 1:26:16 ... ingredient at X price point, with maybe Y story. Maybe you can tell me tequila made from whatever, agave, extra anejo-

Suraj Shenai 1:26:26 Yeah

Nikhil Kamath 1:26:26 ... being sold at five thousand rupees, how to make that happen? You can tell me based on what you're seeing in your bar as something where the demand is growing exponentially, and Abhishek can tell me who can build a competitive product-

Shuchir Suri 1:26:40 Yes

Nikhil Kamath 1:26:40 ... to what is selling best at Radico in the least tumultuous way as possible.

Shuchir Suri 1:26:47 But is the goal of this question to become a billion-dollar business, or is it to build something that you're passionate about?

Nikhil Kamath 1:26:53 Something that's profitable in nature.

Suraj Shenai 1:26:55 Yeah.

Shuchir Suri 1:26:55 Okay.

Nikhil Kamath 1:26:56 It doesn't have to have the scale of a billion dollars. Uh-

Minakshi Singh 1:27:00 Anyways.

Nikhil Kamath 1:27:00 Okay.

Shuchir Suri 1:27:01 Got it.

Nikhil Kamath 1:27:01 So we start with, take a second to think about it. Who would like to go first? Idea, price point, product, category.

Suraj Shenai 1:27:11 So I think one of the best opportunities right now is, if you think about large multinationals, the value which is available in the Indian beer market, I'll only speak about beer right now, lies in the category where the Indian consumer slowly upgraded from the Kingfishers of the world now to a Budweiser or Heineken. They've already come to a twenty, twenty-five percent. This is currently roughly around a fifty-five to sixty million case industry. That's the price point where you actually make money proportionate to the investment and everything, so it's, it's, it delivers better margin. If you now can take these consumers who are already here, so the consumer psychology is that, that, that consumer wants something better. Take it to a destination product. There may be multiple destinations, so you can upgrade a consumer who's seeking quality is always a great starting point. I think look at price elasticity. Don't go to hundred percent markup on a existing large category. Category building is absolutely not possible in beer.

Nikhil Kamath 1:28:09 Okay, so what you're saying is, take the premiumized cus- consumer who has moved from KF to Heineken-

Suraj Shenai 1:28:16 Yes

Nikhil Kamath 1:28:16 ... who is willing to pay a couple of hundred bucks for a beer.

Suraj Shenai 1:28:18 And, and that consumer is going to be far more willing because he's seeking or she's-

Nikhil Kamath 1:28:24 Mm

Suraj Shenai 1:28:24 ... seeking this product quality as a driver, and, and they will be more than willing to come and upgrade. So there is a constant, uh, journey that's, uh, that's accumulated to a large enough pool now.

Nikhil Kamath 1:28:35 Minakshi?

Minakshi Singh 1:28:36 I know what I'm gonna say. It has to be bourbon whiskey. Uh, coming from two, three things, um, that I really believe in. Uh, India, I mean, and again, coming from the fact that we are talking cocktail consuming, cocktail, the way consumption is growing, it is one of the biggest drivers of the way consumption is happening in India. Uh, again, again, urban centers more so than rural, but then again, Tier Two as well. There are many, many cases and great restaurants and bars opening in Tier Two as well. And you can see that the major driver of consumption is through cocktails. Um, what that-

Nikhil Kamath 1:29:07 Why bourbon whiskey specifically for cocktails?

Minakshi Singh 1:29:10 I'm coming to that. Is because cocktails were actually created in America. They were, they're American invention. [chuckles] And then, and hence, because bourbon whiskey is a whiskey that was created in America, um, has not been tapped into as such, as a base spirit in India as much as it can. We have Jim Beam, which is now being made in India, which is completely sweeping through the cocktail market. Every bar that you go to right now is actually pouring Jim Beam in their old fashioned-

Suraj Shenai 1:29:38 Old fashioned

Minakshi Singh 1:29:38 ... whiskey sours, all of the min mint juleps of the world, right? And what it's doing is that it doesn't have an Indian alternative. So even if I want to use the best of Indian whiskeys, most of them actually emulate Scotch, because that is our way of kind of taking the Scotch whiskey production process forward, right? The Japanese-

Nikhil Kamath 1:29:55 What is the difference between bourbon and Scotch?

Minakshi Singh 1:29:57 So Scotch, biggest is-

Nikhil Kamath 1:29:59 Scotchy

Minakshi Singh 1:29:59 ... differences, of course, Scottish and American, but other than that, there's a big production difference.

Nikhil Kamath 1:30:04 Taste?

Minakshi Singh 1:30:04 It's actually-- taste-wise-

Suraj Shenai 1:30:05 Mm

Minakshi Singh 1:30:05 ... also there's difference. So there's, it's sweeter, so bourbon whiskey is much sweeter than Scotch whiskey, primarily because fifty-one percent of-

Nikhil Kamath 1:30:10 [clears throat]

Minakshi Singh 1:30:10 ... corn is, is used to make a bourbon whiskey. So hence it's sweeter in taste-

Suraj Shenai 1:30:15 Mm

Minakshi Singh 1:30:15 ... when you actually do a comparative. Also, the way it's finished, it's actually finished, and there is a little bit of a char of the bourbon ca-- the, the cask in which it's made. It's actually made in new casks. So the cask itself has a little bit of that woody, charny, burny flavor, which works really well for Indian palate. And we feel very, very strongly that so far many have tried, actually, uh, Beam Global has launched a whiskey, which they are saying is very much like a bourbon whiskey. It's not to say that the big guys are already not in it, but I feel an Indian, true Indian person, like Indian brand, has not really ventured there because, A, whiskey is intimidating, A, it's-

Nikhil Kamath 1:30:52 What, what price point should it be?

Minakshi Singh 1:30:53 Given that you don't have money issues, like we-- if we say that we don't have a CapEx issue, and we don't have an aging issue, I mean, I'm, I'm assuming all of these things are in place, the investment is in place.

Nikhil Kamath 1:31:03 Does it have to be aged? Is Jim Beam aged?

Minakshi Singh 1:31:05 Yes, minimum two years. That's what bourbon's claim is. You, in India, given that-

Shuchir Suri 1:31:09 It'll be minimum three years.

Minakshi Singh 1:31:10 No, but, but also-

Suraj Shenai 1:31:11 But being a hotter climate, aging will become more faster in India.

Minakshi Singh 1:31:13 But India is again hot. It is as hot as, as, as the bourbon.

Suraj Shenai 1:31:15 Yeah.

Nikhil Kamath 1:31:15 But bourbon, does it have the GI tag, like Scotch has a GI tag?

Minakshi Singh 1:31:18 We don't have to call it bourbon whiskey. We have to call it an Indian... It's-- we don't wanna call an Indian whiskey bourbon whiskey, that defeats the purpose of it.

Nikhil Kamath 1:31:26 So you're talking that-

Minakshi Singh 1:31:27 We will do a style of-

Nikhil Kamath 1:31:27 ... it will be a change in the blend.

Suraj Shenai 1:31:29 It's a flavor like a bourbon.

Minakshi Singh 1:31:31 So that, yeah.

Nikhil Kamath 1:31:31 Yeah, I know, like, like in Rampur, we are using bourbon cask.

Minakshi Singh 1:31:33 Yeah.

Nikhil Kamath 1:31:33 We are using three casks.

Minakshi Singh 1:31:34 So if you do... Yeah, so ex-bourbon cask will be much more refined-

Nikhil Kamath 1:31:37 Yeah, yeah

Minakshi Singh 1:31:37 ... version of making the same thing.

Suraj Shenai 1:31:39 It gives a sweeter taste.

Nikhil Kamath 1:31:39 And the char filter relation.

Minakshi Singh 1:31:39 But we are talking about sweeter, corn-

Suraj Shenai 1:31:41 Yeah, yeah.

Minakshi Singh 1:31:41 We are talking about getting into the-

Suraj Shenai 1:31:43 Or rye. You are looking at-

Minakshi Singh 1:31:43 We are getting into the entire production of it.

Suraj Shenai 1:31:45 Yeah.

Minakshi Singh 1:31:45 We are not just finishing the whiskey with it. So and I feel, of course, pricing has to be pouring, which basically means it has to be valuable to me as a bar owner to-

Nikhil Kamath 1:31:53 What is the number?

Minakshi Singh 1:31:54 So anything between twelve hundred to fourteen hundred, not above that, and approachable to young, interesting people who are getting into the category, y- you know, fresh. So what is happening to the younger ones are that-... back in the day, I think we all got into alcohol with Old Monk. [chuckles] I hate saying the back in the day word, actually, but most of us have actually started with Old Monk-

Nikhil Kamath 1:32:13 Oh, Minakshi.

Minakshi Singh 1:32:14 Or tea. So, but what happens-

Nikhil Kamath 1:32:16 You don't look it.

Minakshi Singh 1:32:17 Oh, thank you. My skin, Delhi skin. [laughing] So-

Suraj Shenai 1:32:20 Delhi skin. [laughing]

Minakshi Singh 1:32:22 I can, I should do Delhi, Bangalore-

Nikhil Kamath 1:32:23 You both are glowing as well. What's going on, Delhi?

Suraj Shenai 1:32:25 That's the lights. We will tell you later. [laughing]

Nikhil Kamath 1:32:27 [laughing]

Minakshi Singh 1:32:28 Going back to the price point, yeah, so be- anything between-

Suraj Shenai 1:32:31 Important question

Minakshi Singh 1:32:31 ... twelve and fourteen hundred and entry level.

Nikhil Kamath 1:32:33 Yeah.

Minakshi Singh 1:32:33 So I would fully say there, there has to be entry level. Um, a lot of the younger, immediate after LDA, legal drinking age, actually gets into this category. So they are either drinking gin, which is at a greater than price, slash Bacardi price. I mean, in that, I'm trying to think about a rum [chuckles] which is in that category. So, you know, Makazai, I mean, I-

Suraj Shenai 1:32:56 Yeah

Minakshi Singh 1:32:56 ... the, the coring category that we are talking about. So whiskey in that category still is owned and run by the, the MNCs.

Suraj Shenai 1:33:03 Right.

Minakshi Singh 1:33:03 That space is-- because also it's very intimidating, it's hugely expensive. You know the whole deal, it's damn expensive.

Nikhil Kamath 1:33:09 And we've just launched our Kohinoor Reserve Rum at that price point.

Suraj Shenai 1:33:12 And you know what's going to end up happening-

Nikhil Kamath 1:33:13 And matured in same cognac barrel and, um-

Minakshi Singh 1:33:16 Yeah. So we need to use the whiskey to make cocktails to get... We are not talking to a whiskey consumer. I'm not going to sell it to a Rampur consumer.

Nikhil Kamath 1:33:22 So if I, if I start a brand called Bangalore, Bengaluru, and I make a bourbon-tasting whiskey at thirteen, fourteen hundred bucks, and come to Minakshi and say, "Try this, try Jim Beam"-

Minakshi Singh 1:33:32 Yeah

Nikhil Kamath 1:33:33 ... if mine tastes okay or better, you'll take it?

Minakshi Singh 1:33:36 Of course I will. I'll be-

Suraj Shenai 1:33:37 And it will be very-

Minakshi Singh 1:33:38 There's a-- if you get the packaging, see, it's a great-- You have to find the sweet spot-

Nikhil Kamath 1:33:42 Right

Minakshi Singh 1:33:43 ... in that mix.

Suraj Shenai 1:33:44 Yeah.

Minakshi Singh 1:33:44 So it's good story, good blend. You cannot, absolutely not, um, [lips smack] you know, uh, just discount the recipe, the process, the whole art of it as well, because you cannot say, "I'll just make-

Nikhil Kamath 1:33:56 Packaging is such a big part today.

Minakshi Singh 1:33:58 It is.

Suraj Shenai 1:33:58 Yes, it is.

Minakshi Singh 1:33:58 It is huge. It's huge.

Nikhil Kamath 1:34:00 It's huge.

Minakshi Singh 1:34:00 Like, how you sell it, like, what are you going to say about it? If you say it's a bourbon-like whiskey, I, I'll be like, "Okay, like, so basically, you emulated a whiskey which is made in US." But you have to have your own original story somewhere.

Nikhil Kamath 1:34:11 But Bengaluru sounds like a nice name.

Minakshi Singh 1:34:13 Bring it out of the hat.

Suraj Shenai 1:34:14 That's a lot-

Minakshi Singh 1:34:14 I mean, that's what-

Shuchir Suri 1:34:15 But also, what's going to happen is that-

Minakshi Singh 1:34:15 I mean, you get a good advertising [laughing]

Shuchir Suri 1:34:16 ... because, because Minakshi is from that space, right? For a product like this, you will need the advocacy coming from the bartender-

Minakshi Singh 1:34:22 It has

Shuchir Suri 1:34:23 ... to replace it in an old fashion, right?

Minakshi Singh 1:34:26 I need to be, like, fully-

Shuchir Suri 1:34:27 It has to be very advocacy driven.

Minakshi Singh 1:34:28 And also, hugely, a lot of us, which is a lot of us, fully back Indian, good Indian brands.

Suraj Shenai 1:34:34 Yes.

Minakshi Singh 1:34:35 Right? So if you are making a good Indian brand, which is maybe selling or not selling, I will fully list it-

Suraj Shenai 1:34:39 Yeah

Minakshi Singh 1:34:40 ... give it that chance. After that, if it sells or does not sell, or people, that is like the secondary, tertiary sale conversation, which can happen later. But at least the entry point, you will, you will have it better if you are an entry-- Also, again, as a founder, right, as a co-founder, founder, you, if you're going out to them and talking to people, you have to sound like hundred percent convinced and behind the brand. Like, that's important, right? That's the, that's the meat of it. So if you are not like, you're like: "Oh, I just need to make money," I'll be like, "Okay," like...

Nikhil Kamath 1:35:08 No, no, I, I will fiend passion very quickly when my Bengaluru whiskey is out.

Minakshi Singh 1:35:13 Okay. If you call it Bengaluru, I don't know [laughing] how it-

Shuchir Suri 1:35:16 It's a great name.

Minakshi Singh 1:35:17 Right?

Shuchir Suri 1:35:17 Eureka versus-

Suraj Shenai 1:35:18 Hyperlocal-

Minakshi Singh 1:35:19 Yeah

Suraj Shenai 1:35:20 ... is essentially what you can say that you, we, we, so-

Nikhil Kamath 1:35:24 Or how about we call it like a area instead of even-

Minakshi Singh 1:35:27 No, why not?

Nikhil Kamath 1:35:28 Even more local.

Minakshi Singh 1:35:28 I mean, we have done-- I'll tell you what, we did-

Nikhil Kamath 1:35:29 Like Bandra.

Minakshi Singh 1:35:30 I, I-

Shuchir Suri 1:35:30 If you call it Jaisalmer-

Minakshi Singh 1:35:31 Yeah. [laughing]

Nikhil Kamath 1:35:32 Like we've done it.

Minakshi Singh 1:35:33 Jaisalmer is a great name.

Suraj Shenai 1:35:33 If you see, if you see Rampur-

Nikhil Kamath 1:35:35 Uh.

Suraj Shenai 1:35:36 -we've taken all the Indian names to the world and India, like Rampur.

Minakshi Singh 1:35:39 Fantastic.

Suraj Shenai 1:35:40 Your Jaisalmer. Now, we launched the first time, any Indian company, at a Scotch price, Royal Ranthambore. The brand has really taken off. It's one of the largest, going to be one of the largest selling brands.

Minakshi Singh 1:35:50 You take, you take-

Suraj Shenai 1:35:50 It's all Indian names

Minakshi Singh 1:35:51 ... you take names. I mean, we have a menu called Dear Delhi, which was actually made and which actually got us to this-

Shuchir Suri 1:35:56 Yeah

Minakshi Singh 1:35:56 ... massive, I think, global recognition, is because of that menu. Because the menu was made out of all the places and local place spots that us, as Delhi people, know. And it's not-

Shuchir Suri 1:36:06 Yeah

Minakshi Singh 1:36:06 ... to say everything was named after the tombs and the-

Shuchir Suri 1:36:09 Yeah

Minakshi Singh 1:36:09 ... historical places. There was a drink called DU Special. So people who actually know DU Special are the only people who know, like, who know DU, right? Because that's the bus that actually goes around, and it's called DU Special.

Nikhil Kamath 1:36:19 And what's a good way to get word of mouth out? I start a whiskey called Bengaluru, fourteen hundred bucks.

Minakshi Singh 1:36:24 Meet your-

Nikhil Kamath 1:36:24 Bourbon tasting.

Minakshi Singh 1:36:25 Yeah. Meet your stakeholders, so retailers, your bar owners, your-

Suraj Shenai 1:36:29 Right

Minakshi Singh 1:36:29 ... partners. You have to get your partners on board.

Shuchir Suri 1:36:31 Yeah, the, the, the bar community for this product is a very big push.

Suraj Shenai 1:36:35 So there's a very interesting story. Uh, the founder of Pernod Ricard, his name was Paul Ricard, and he used to say... He started in the southern town of Marseille, where he made a product-

Nikhil Kamath 1:36:48 Ricard

Suraj Shenai 1:36:48 ... which was called Ricard, in his name. So he had a philosophy, it said, "Make a friend a day." So he would take his case of Ricard, go to one bar in Marseille every day, and offer a little sampler to every person who was sitting there, and they would sip. By the end of the year, he was in three sixty bars, and every person was drinking pastis or the, was saying, "Paul is my friend. He makes this product. I'm drinking it," and he took over. That business started as simply as that.

Nikhil Kamath 1:37:14 This is possible.

Suraj Shenai 1:37:15 Yeah.

Minakshi Singh 1:37:15 So Indian equivalent-

Suraj Shenai 1:37:16 Absolutely

Minakshi Singh 1:37:16 ... Indian equivalent to that spirit-

Suraj Shenai 1:37:17 We've gone and done something similar.

Minakshi Singh 1:37:19 Indian equivalent to that sort of Indian spirit made by an-

Suraj Shenai 1:37:22 Yeah

Minakshi Singh 1:37:22 ... Indian founder-

Suraj Shenai 1:37:23 Absolutely

Minakshi Singh 1:37:23 ... and went bar to bar, definitely is greater than Abusa.

Suraj Shenai 1:37:26 Yeah.

Minakshi Singh 1:37:26 You guys, like, you have done the... See, you cannot discount-

Suraj Shenai 1:37:30 You go to every bar-

Shuchir Suri 1:37:31 You can't just put it into retailers-

Suraj Shenai 1:37:32 ... talk to the servers

Shuchir Suri 1:37:32 ... and expect it to fly.

Minakshi Singh 1:37:34 Right.

Nikhil Kamath 1:37:35 Interesting. Shuchir, would you like to go next? Price-

Shuchir Suri 1:37:41 Usually, usually-

Nikhil Kamath 1:37:42 category

Shuchir Suri 1:37:42 ... usually what ends up happening is that, um, brands come to me and they're like: "Okay, we have this product. We don't know what to do with it. Please help us out," is what I end up usually writing strategies for a lot of brands. Uh, but personally, um, I think two, one is rum. I, I believe strongly rum is a category. I think India has, has grown up on Old Monk, and post-Old Monk, there's not been too much disruption, uh, in the rum market. Globally, uh, you have Zacapa and such brands which are doing extremely well.

Suraj Shenai 1:38:14 ... and all bartenders globally are working with rum. What was gin a few years back is now rum and tequila. So I believe, um, a great flavored rum at a premium pri-- at a semi-pe-premium price point will be-

Nikhil Kamath 1:38:29 What is semi-premium?

Suraj Shenai 1:38:31 thousand, twelve hundred-

Minakshi Singh 1:38:32 Same price, same as-

Suraj Shenai 1:38:33 onwards.

Minakshi Singh 1:38:33 I don't really agree-

Suraj Shenai 1:38:34 Not an Old Monk, which is cheaper.

Minakshi Singh 1:38:35 I don't really agree with you [chuckles]

Suraj Shenai 1:38:36 Twelve hundred onwards, uh, I believe in that as a category.

Nikhil Kamath 1:38:39 Flavored rum?

Suraj Shenai 1:38:40 Flavored, as in, you can have different expressions of it. You can have a spice rum. I'm a actually, I-

Minakshi Singh 1:38:45 White rum.

Suraj Shenai 1:38:45 I love-

Nikhil Kamath 1:38:46 I've done that.

Suraj Shenai 1:38:46 I love Captain Morgan-

Minakshi Singh 1:38:47 Gold rum

Suraj Shenai 1:38:47 ... spice rum.

Minakshi Singh 1:38:48 It was so good, yeah.

Suraj Shenai 1:38:49 Zacapa is one of my favorite, uh, rums, but-

Nikhil Kamath 1:38:51 But that's higher

Suraj Shenai 1:38:52 ... there are not, there are not too many options here. Recently, there have been some brands coming out of-

1:38:56 Makaza is-

1:38:56 Makaza is there, Sitara is there, and now you're launching rum.

Minakshi Singh 1:39:00 And there is Kamikara. Kamikara.

Suraj Shenai 1:39:03 I've not tried Kamikara, but I'm seeing rum as a-

1:39:07 So there's interesting thing on rum-

1:39:09 And RTDs.

Nikhil Kamath 1:39:09 Yeah.

Suraj Shenai 1:39:09 You know, rum as a category-

Minakshi Singh 1:39:11 Forgetting rum

Suraj Shenai 1:39:11 ... the consumer, so there is two things: whiskey has laddering in terms of price. So whiskey consumer starts at, say, the Imperial Blue level and then goes to Royal Stag, Blender's Pride, Hundred Pipers, Chivas, as the person grows in life. So whole storytelling is about, like, you see all the campaigns are all, "It's your life, make it large." ""I don't know what all, [chuckles] but it's all about-

Minakshi Singh 1:39:35 Thank God, you're not a copywriter! [laughing]

Suraj Shenai 1:39:36 Image will be image.

1:39:37 It's all, it's all about-

Minakshi Singh 1:39:38 Thank God, you didn't take up advertising. [laughing]

Suraj Shenai 1:39:40 [laughing] I, I... Of course. So but in rum, rum sells a lot in the east, West Bengal, um, you know, Orissa. The s- so rum has a, is, is, is a product where the consumer doesn't even relate to this image, so the-- it's not for status seekers. So it's a very different psychological-

Minakshi Singh 1:40:00 Yeah, yeah

Suraj Shenai 1:40:01 ... product category.

Minakshi Singh 1:40:01 Rum has no category.

Suraj Shenai 1:40:02 Uh, you know, you would find a great musician drink rum in Goa, in India. He, uh, but it's almost equivalent to how Jack Daniels has a subcultural kind of a vibe throughout America.

Nikhil Kamath 1:40:12 A strong personality.

Suraj Shenai 1:40:12 Rum does that in India.

1:40:13 Community. It's very community driven.

Nikhil Kamath 1:40:14 Strong personality-

Suraj Shenai 1:40:15 Yeah

Nikhil Kamath 1:40:16 ... not too social, but the beliefs and-

Suraj Shenai 1:40:18 So you can upgrade rum, but you need to do it with a great product story.

1:40:21 Absolutely.

1:40:22 I think you need to upgrade the consumer, who's very different from a whiskey consumer. The whiskey guys would-

Nikhil Kamath 1:40:26 What is Old Monk? Is-- it's rum.

Suraj Shenai 1:40:27 It's rum.

1:40:27 Yeah.

Nikhil Kamath 1:40:28 I read some research around whoever attempted rum in India could not beat Old Monk. Is that true?

Suraj Shenai 1:40:35 I think Celebration rum, which is of Diageo, sa-- now outsells Old Monk quite a bit.

Nikhil Kamath 1:40:40 Bacardi dropped their price so much to compete-

Suraj Shenai 1:40:43 Yeah

Nikhil Kamath 1:40:43 ... with Old Monk?

Suraj Shenai 1:40:43 No, but Bacardi is-

1:40:44 Bacardi is a gold

1:40:45 ... white

1:40:45 and white.

Nikhil Kamath 1:40:46 You see, what happened-

Suraj Shenai 1:40:46 And that's the focus on the white rum

Nikhil Kamath 1:40:47 ... what's happening is, like, you have to get up the price ladder.

Minakshi Singh 1:40:49 Hmm.

Nikhil Kamath 1:40:50 Like, say, we had launched our 1965 rum. So, like, army, defense is one of the largest market. We are the highest priced rum. We are selling higher than Old Monk, the numbers. We're the largest selling rum. So it depends on the pricing.

Suraj Shenai 1:41:04 And product-

Nikhil Kamath 1:41:05 And-

Suraj Shenai 1:41:05 and premiumisation, because there is a huge-

Nikhil Kamath 1:41:07 Premiumisation is the most important thing

Suraj Shenai 1:41:07 ... there's a huge population of, in the country that drinks rum, whose disposable income is going to keep increasing.

Minakshi Singh 1:41:14 I also feel that that's not a category play. Like rum, I don't think anybody's drinking rum for it being rum.

Suraj Shenai 1:41:19 Yeah.

Minakshi Singh 1:41:20 I just think they're just drinking it because it's a spirit, which is super easily available, and it's, it's like there is no-

Suraj Shenai 1:41:25 It tastes good

Minakshi Singh 1:41:26 ... it's never had, it's never had, like a gin has had a-

Suraj Shenai 1:41:29 Moment.

Minakshi Singh 1:41:30 Yeah.

Suraj Shenai 1:41:30 Like, like I'll tell you, listen-

Minakshi Singh 1:41:31 And whiskey has had-

Suraj Shenai 1:41:31 But I strongly believe that-

Nikhil Kamath 1:41:33 You know, brandy-

Minakshi Singh 1:41:34 Yeah

Nikhil Kamath 1:41:34 ... is eighteen to nineteen percent-

Minakshi Singh 1:41:36 Yeah, I know that

Nikhil Kamath 1:41:36 ... of the market. It's-

Suraj Shenai 1:41:36 In Kerala.

Nikhil Kamath 1:41:37 Rum is only eleven percent.

Minakshi Singh 1:41:38 Yeah.

Nikhil Kamath 1:41:38 Brandy is nineteen percent. Yeah. Why is that?

Suraj Shenai 1:41:41 See, I think brandy, ninety-

1:41:44 South is very big

1:41:44 ... eight percent of the brandy sells in south.

Minakshi Singh 1:41:47 Hmm.

Suraj Shenai 1:41:47 So I tried to-

Minakshi Singh 1:41:48 Why? You have to give us why. [chuckles]

Suraj Shenai 1:41:49 Yeah. You know, I had researched it because we have a Mafias, so that is the super premium brandy, and we have fifty-eight percent market share there. Is, uh, brandy, what I realized is south, in south, people are very religious. So if you see Pondy and Kerala are two states, plus Tamil Nadu. So one is Pondy had the French, uh, connection, and French are into brandy. Second, if you, uh, see all the shops, liquor shops in the south, earlier, like Kerala, was called doctors, uh, this, um... Each shop, like the brandy, was called doctor's brandy.

Minakshi Singh 1:42:28 Right.

Suraj Shenai 1:42:29 So people used to think, think that they'll drink because of health purpose, religious purpose, like doctor guy. Like in North India, if you see, when, when we were kids, when it was very cold, our mothers used to like, you know, rub brandy on our hand. So I think it's just some kind of that. Else, South India, it's like hot, et cetera, but the brandy market there is huge.

Nikhil Kamath 1:42:54 Okay, interesting.

Suraj Shenai 1:42:54 Tamil Nadu, eighty-five percent of the market is brandy.

Nikhil Kamath 1:42:57 Yeah, so the numbers we-

Suraj Shenai 1:42:57 Also, Tamil Nadu, you have to, you have to distill in the state in order to sell.

1:43:01 Yeah, yeah, that's, that's-

1:43:01 And you can't have-

Minakshi Singh 1:43:02 Tamil Nadu has a lot of issues of-

Suraj Shenai 1:43:02 Either you have imported stuff, or you have to, you have to distill in the state to sell it-

Minakshi Singh 1:43:06 A lot of issues

Suraj Shenai 1:43:07 ... over there. It's hard market.

Nikhil Kamath 1:43:08 The numbers we had was the market is sixty-three percent whiskey, twenty-two percent-

Suraj Shenai 1:43:14 Yes, brandy

Nikhil Kamath 1:43:15 ... brandy, twelve percent-

Suraj Shenai 1:43:16 Rum

Nikhil Kamath 1:43:17 ... rum, eight percent vodka?

Suraj Shenai 1:43:19 No, four, four percent is white spirit.

1:43:21 Four percent.

1:43:21 Four to five percent-

1:43:22 Four percent, which has vodka, gin.

1:43:23 Vodka, gin.

Minakshi Singh 1:43:24 Maybe all of-

Suraj Shenai 1:43:25 Yeah, yeah

Minakshi Singh 1:43:25 ... all come together.

Suraj Shenai 1:43:26 Ninety-six percent brown.

Minakshi Singh 1:43:28 Yeah. Oh, my God!

Nikhil Kamath 1:43:28 Is there a switch happening between brown spirit to white in India?

Suraj Shenai 1:43:32 Yes. Vodka has been the largest growing category in the last five years, about twenty-two percent-

Nikhil Kamath 1:43:37 But it's still two percent or whatever.

Suraj Shenai 1:43:37 Hmm.

1:43:38 Vodka, vodka-

1:43:39 Portion is true

1:43:39 ... and gin would be about four percent. So vodka now would be about three, three and a half.

1:43:44 Still, it's a, it's, it's smaller compared to-

Nikhil Kamath 1:43:46 It's a far cry from whiskey.

Minakshi Singh 1:43:47 Right.

Suraj Shenai 1:43:47 Yeah, but imagine globally, twenty-five percent is vodka.

1:43:50 Hmm, yeah.

1:43:51 But vodka and the white spirits are cl- uh, gaining a lot of space.

Minakshi Singh 1:43:54 Yeah, it's, it's coming. It-- I, I feel it's a matter of... It, it'll, it'll grow. It'll-

Suraj Shenai 1:43:58 It has to grow

Minakshi Singh 1:43:59 ... it'll lead into the whiskey market.

Suraj Shenai 1:44:00 Hundred percent.

Minakshi Singh 1:44:00 Like Smirnoff, Smirnoff-

Suraj Shenai 1:44:01 I'm, I'm, I'm banking on that.

Minakshi Singh 1:44:03 Smirnoff, hundred years ago, was marketed as white whiskey, and, uh, that's how they got the-

Suraj Shenai 1:44:07 Yeah, the campaign was it leaves you breathless.

Minakshi Singh 1:44:09 That's... They were called, they called it-

Suraj Shenai 1:44:10 You can drink and drive with it-

Minakshi Singh 1:44:11 They called it-

Suraj Shenai 1:44:11 ... because it leaves you breathless.

Minakshi Singh 1:44:12 Yeah, so they were trying to get into the whiskey market.

Suraj Shenai 1:44:13 In America.

1:44:13 In vodka, eighty percent of the market now has become flavored vodka.

1:44:17 Yeah.... and that's, I think-

Abhishek Khaitan 1:44:19 So where we've got like-

Suraj Shenai 1:44:20 No, make sense.

Abhishek Khaitan 1:44:20 I've launched about nine flavors.

Shuchir Suri 1:44:21 I've had a green apple vodka, and it's very tasty by the way.

Abhishek Khaitan 1:44:22 Cranberry has taken off like, uh, crazy.

Nikhil Kamath 1:44:25 It's-- When we did research, everybody kept reiterating flavor, flavor, flavor.

Suraj Shenai 1:44:30 Yeah.

Guest 1:44:30 Yeah.

Nikhil Kamath 1:44:30 In beer, in vodka, in gin, in rum, and brandy-

Abhishek Khaitan 1:44:33 Everything, you're right

Nikhil Kamath 1:44:34 ... in whiskey, in everything. Why is that switch to flavor happening? Would you want to have, like, a flavored whiskey tomorrow?

Abhishek Khaitan 1:44:41 I'll tell you.

Nikhil Kamath 1:44:42 Mm.

Abhishek Khaitan 1:44:42 Say, let's take the white spirits.

Nikhil Kamath 1:44:44 Mm.

Abhishek Khaitan 1:44:44 Mostly, it's prevalent in white spirits, not in the whiskey.

Nikhil Kamath 1:44:47 Mm.

Abhishek Khaitan 1:44:47 Whiskey, you only have fire and honey and all those, but that is too small. In vodka, if you see, who are your consumers? It's the younger generation and women. Now, when you see when a youngster is getting into the drinking age bracket, alcohol by choice is bitter. A Pepsi or a Coke would taste much, uh, better. So they need a sweetest flavor, so they, they tend to get for the flavored, uh, this thing, and then it's easier to drink. Like, the flavor, just add water.

Guest 1:45:20 Yeah.

Suraj Shenai 1:45:21 I think there's-

Guest 1:45:21 Our biggest thing-

Suraj Shenai 1:45:21 There's also another nuance to this-

Abhishek Khaitan 1:45:22 And, and secondly, it does not smell. It does not smell.

Suraj Shenai 1:45:25 Which is-- Yeah, so what happens if you see-

Abhishek Khaitan 1:45:26 It's like a daytime drinking

Suraj Shenai 1:45:27 ... the, exactly, the Indian vodka-

Abhishek Khaitan 1:45:29 Office hours

Suraj Shenai 1:45:29 ... consumer, one of the craziest you would assume that Smirnoff, when they came to India in 2007, and they were just doing parties, and they realized it's not taking off. But vodka in, in terms of percentage of, you know, market share to other spirits, probably highest in the most conservative state, like Kashmir, Rajasthan. And then you look at it, you realize the nuance where it's being drunk a lot by shopkeepers and people who are working-

Shuchir Suri 1:45:53 Exactly

Suraj Shenai 1:45:53 ... during the day, who have a taboo-

Shuchir Suri 1:45:55 To mask their smell.

Suraj Shenai 1:45:57 To mask their smell. So, you know, you would find that, uh, it's, it's like some Fanta bottle lying in that sari shop, and somebody is sipping on it through the day-

Shuchir Suri 1:46:04 Actually, probably [chuckles]

Suraj Shenai 1:46:05 ... and is only drinking some, [chuckles] uh-

Guest 1:46:06 It's like, yeah-

Suraj Shenai 1:46:07 ... flavored, flavored product.

Shuchir Suri 1:46:09 So, so the cool kids moved to gin-

Suraj Shenai 1:46:12 Yeah

Shuchir Suri 1:46:12 ... because there was a botanical play in it.

Guest 1:46:14 Yeah, and global move, yeah.

Shuchir Suri 1:46:15 And the masses moved to flavors.

Nikhil Kamath 1:46:16 What is the botanical play? What does that mean?

Abhishek Khaitan 1:46:18 See, that is the herbs.

Suraj Shenai 1:46:19 Yeah.

Abhishek Khaitan 1:46:19 Like, you know, you-

Shuchir Suri 1:46:20 The infusions, like how-

Guest 1:46:22 Yeah

Shuchir Suri 1:46:22 ... like I said, gin is nothing but a vodka with flavor, but the flavors were stuff like, you have to have juniper, then you'd have cinnamon, cardamom, nutmeg.

Abhishek Khaitan 1:46:30 Juniper is the prime herb for any gin.

Guest 1:46:33 To call it gin, you have to have juniper.

Abhishek Khaitan 1:46:34 But then you have add-ons, like you can have a gin of eleven botanicals, eighteen botanicals-

Guest 1:46:39 Forty-seven botanicals

Abhishek Khaitan 1:46:39 ... which are mixed in the cocktail.

Shuchir Suri 1:46:41 Green apple gin, right? You won't have a green apple gin.

Abhishek Khaitan 1:46:43 You won't-- Yeah.

Shuchir Suri 1:46:43 We'll have a green apple vodka, which has a bigger market size.

Nikhil Kamath 1:46:47 Why fruit vodka, flower gin?

Shuchir Suri 1:46:50 Why?

Nikhil Kamath 1:46:50 Why, why is the flavor that you choose to add to vodka a fruit, whereas-

Abhishek Khaitan 1:46:56 No, it can be... Yeah.

Guest 1:46:56 No, it can be anything.

Nikhil Kamath 1:46:57 Yeah?

Shuchir Suri 1:46:58 Cinnamon.

Abhishek Khaitan 1:46:58 It can be coffee also, but the most popular-- Like, we started the flavor, uh, uh, trend in India.

Nikhil Kamath 1:47:05 Mm.

Abhishek Khaitan 1:47:05 So green apple-

Suraj Shenai 1:47:06 Yeah

Abhishek Khaitan 1:47:06 ... is the most famous, then it's orange, and then it's cranberry.

Shuchir Suri 1:47:09 But it has to be a massier flavor.

Suraj Shenai 1:47:11 Yeah.

Abhishek Khaitan 1:47:11 Green apple is the-

Shuchir Suri 1:47:12 You can't, you can't have a nutmeg-

Suraj Shenai 1:47:14 Yeah

Shuchir Suri 1:47:15 ... um, you can't have a nutmeg vodka, but you'll have a nutmeg infused g-gin.

Nikhil Kamath 1:47:20 Like he's talking about matcha beer.

Guest 1:47:22 Yeah.

Nikhil Kamath 1:47:23 That's as nuanced as nuance gets, right?

Suraj Shenai 1:47:26 But i-it-

Shuchir Suri 1:47:26 But that'll be part of his twenty-five percent share.

Suraj Shenai 1:47:29 It's a-- So it's, it's, it's a part of like a portfolio where you also have a small consumer. So there's this whole consumer who also relates to almost like everything that's very high quality, and that consumer is seek-- is on a completely different journey.

Abhishek Khaitan 1:47:43 If you like rum, you can have a café rum-

Suraj Shenai 1:47:44 Yeah

Abhishek Khaitan 1:47:45 ... which will be very this thing.

Shuchir Suri 1:47:46 But for me, for his brand, these drops, uh, build loyalty to the brand.

Suraj Shenai 1:47:51 Yeah, to the core consumer first.

Shuchir Suri 1:47:51 So now I'm like: Oh, this guy's actually played around with matcha. I must drink his other products.

Suraj Shenai 1:47:56 Yeah.

Shuchir Suri 1:47:56 I might not be a regular consumer of-

Suraj Shenai 1:47:58 Exactly

Shuchir Suri 1:47:58 ... the matcha product, but now in my head, his positioning-

Abhishek Khaitan 1:48:01 Premium

Shuchir Suri 1:48:01 ... my positioning has become-

Suraj Shenai 1:48:03 So we have zero marketing cost because we keep doing products.

Nikhil Kamath 1:48:06 Right.

Suraj Shenai 1:48:06 And every product creates a little bit of its own buzz and market, and then-

Guest 1:48:10 It's like your product mix.

Suraj Shenai 1:48:11 Yes, you keep-

Guest 1:48:11 So you want to have-

Suraj Shenai 1:48:13 Yeah

Guest 1:48:13 ... like your base playing, you're playing at that level-

Suraj Shenai 1:48:15 Yeah

Guest 1:48:15 ... and then you put one Koh-i-Noor diamond in the middle, and the Koh-i-Noor diamond gets you the eyeballs. And that-

Suraj Shenai 1:48:20 Yeah

Guest 1:48:21 ... it, that, and your actual base level brand will actually benefit from it because the main brand might or might not sell.

Shuchir Suri 1:48:26 Same with did that.

Guest 1:48:27 That might not actually sell.

Shuchir Suri 1:48:27 These options every year-

Suraj Shenai 1:48:28 The attention spans are becoming smaller.

Guest 1:48:30 Yeah, yeah.

Shuchir Suri 1:48:30 Juniper bombs, cricket bats.

Guest 1:48:31 It's expensive, too.

Shuchir Suri 1:48:31 They, they aged-

Guest 1:48:32 True

Shuchir Suri 1:48:32 ... uh, a gin with, uh, used cricket bats, which they sourced from all over the country.

Guest 1:48:36 Yeah, yeah.

Nikhil Kamath 1:48:38 Okay, so you said, "Go after the premiumized audience, which has upgraded from KF to a Heineken and hit them at that price point." You said, "Build something which is India's bourbon at-

Guest 1:48:53 Answer to bourbon, yeah

Nikhil Kamath 1:48:55 ... at twelve hundred to fourteen hundred rupees a bottle." I said, "Bangalore." You said, "The story, the design, the packaging will have a big part to play, and a good go-to-market strategy is physically stepping out, meeting bar owners, consumers, converting them one-on-one and hoping for word of mouth." You said, "Brandy."

Shuchir Suri 1:49:16 I said rum.

Nikhil Kamath 1:49:16 Rum, and-

Shuchir Suri 1:49:17 Rum and tonics and RTDs, ready-to-drink beverages. At-- That's about five to seven years from now, but I, I see that picking up.

Nikhil Kamath 1:49:25 Why, though?

Shuchir Suri 1:49:26 Uh, I think space is going to be a constraint. People will not have too many bars. Pe- uh, they will, they won't have space in their houses, and they won't have space to build a bar. They will not have the energy to buy a mixer, have ice, order. They would want the way they have a beer.

Suraj Shenai 1:49:40 Yeah.

Shuchir Suri 1:49:40 There'll be ready-to-drink beverages, which will be there in their fridge. They just come back from work. They'll either have an option of a great beer or something which is pre-mixed, open it, drink it, and go-

Nikhil Kamath 1:49:50 In future, you also said price point same as hers? And-

Shuchir Suri 1:49:53 That, the premium to an Old Monk.

Nikhil Kamath 1:49:55 In rum.

Shuchir Suri 1:49:55 The first stepping stone from an Old Monk, at that price point.

Nikhil Kamath 1:49:58 Your turn. They all suggested what should be built, which category, price point, what kind of alcohol for somebody new starting to build.

Abhishek Khaitan 1:50:07 So if it is a matter of selling, you should create something innovative.

Nikhil Kamath 1:50:10 Mm-hmm.

Abhishek Khaitan 1:50:11 There are a lot of opportunities which I'll just-- I won't go on specific, because we are going to get into that.

Nikhil Kamath 1:50:17 What are you getting into next? Answer that.

Abhishek Khaitan 1:50:18 I'll, I'll tell you, but, uh-

Nikhil Kamath 1:50:19 Same question in a different way. [chuckles]

Guest 1:50:20 He's not telling us. [chuckles]

Abhishek Khaitan 1:50:21 Right now, our friend told about Ricard.

Nikhil Kamath 1:50:23 Mm.

Abhishek Khaitan 1:50:24 What is it? It is French origin.

Suraj Shenai 1:50:25 Yeah.

Abhishek Khaitan 1:50:26 ... there is a lot of heritage-

Suraj Shenai 1:50:28 Yeah, exactly.

Abhishek Khaitan 1:50:28 There is a lot of strength-

Nikhil Kamath 1:50:30 Yeah

Abhishek Khaitan 1:50:30 -on the Indianness. We have to see what India hundred years back offered. We have to get into the roots of India.

Suraj Shenai 1:50:38 Yeah.

Abhishek Khaitan 1:50:39 We have to see-

Nikhil Kamath 1:50:39 You told me this already at your house.

Abhishek Khaitan 1:50:41 We-- So I've been working for four years on that. We have to get something-

Nikhil Kamath 1:50:46 Indian

Abhishek Khaitan 1:50:46 ... which no one has seen.

Suraj Shenai 1:50:47 Absolutely.

Abhishek Khaitan 1:50:47 Like, if you see all my brand history, starting from Rampur, Royal Ranthambore, Jaisalmer, everything is Indian.

Nikhil Kamath 1:50:53 Yeah.

Abhishek Khaitan 1:50:54 So here also, the Indian ethnic things, there is so much of scope, even for India, and that you can price it higher. So the minute you price it higher, your margins are there. For any newcomer, uh, you have to, your, uh, gross profit has to be high.

Suraj Shenai 1:51:12 Yeah.

Abhishek Khaitan 1:51:12 It has to be seventy to eighty percent, else you'll fail. If you try to compete with the masses-

Suraj Shenai 1:51:18 True

Abhishek Khaitan 1:51:18 ... big boys will take you.

Nikhil Kamath 1:51:20 Yeah.

Suraj Shenai 1:51:20 So the category creation margin-

Abhishek Khaitan 1:51:21 Because you cannot compete, you cannot compete with them on their muscle power. I've competed, I competed, but that was a different story. But for a young, uh, entrepreneur, your innovation and price point and the margins has to be attractive. Second would be don't, don't dump. Just look at the tertiaries. So one is, I will say, ethnic flavors. Rum, I agree with her, which we are also venturing. We are venturing into a fifty dollar rum Kohinoor Reserve. First time, it is a small dis- small batch distillation. The, it's made out of cane juice from North India, only in the winter season, then matured in American bourbon casks, then, uh, cognac XO casks, then Vermouth. So it took us four years to create that. So it's a different innovation. So I think rum, there is scope, plus, I think, uh, the ethnic, the Indian story, there are too many liqueurs which was here, which can take the-

Nikhil Kamath 1:52:20 Right

Abhishek Khaitan 1:52:20 ... take the world and India, but the price point should be high-

Nikhil Kamath 1:52:24 Makes sense.

Abhishek Khaitan 1:52:24 -so the margins are there.

Nikhil Kamath 1:52:26 Makes sense.

Suraj Shenai 1:52:26 So the heritage, uh, liqueur part has another nuance to it, which if you can even look at, say, um, mahua being done by certain tribal communities. You travel to the Northeast-

Abhishek Khaitan 1:52:39 Oh, mahua.

Suraj Shenai 1:52:39 -you have a lot of wild rice ferment-

Abhishek Khaitan 1:52:41 Yeah.

Suraj Shenai 1:52:41 -still being done in Manipur-

Abhishek Khaitan 1:52:43 I know

Suraj Shenai 1:52:43 ... with indigenous varieties. Very similar to what-

Nikhil Kamath 1:52:46 I know

Suraj Shenai 1:52:46 -the Koreans do with makgeolli-

Nikhil Kamath 1:52:47 I've tasted

Suraj Shenai 1:52:47 ... and with the sim- some, like, similar to the nigori sake.

Abhishek Khaitan 1:52:51 There's too many.

Suraj Shenai 1:52:51 So there's so much-

Abhishek Khaitan 1:52:52 Too many such things

Suraj Shenai 1:52:52 ... to do, but you have to be little bit of like, you know, research-

Abhishek Khaitan 1:52:56 Mm.

Suraj Shenai 1:52:56 -and find a lot of-- There is also lot of ingredients which are very unique to India.

Abhishek Khaitan 1:53:01 Mm.

Suraj Shenai 1:53:01 And that's your s- very strong moat. If you can find the indigenous varieties-

Abhishek Khaitan 1:53:05 Yes

Suraj Shenai 1:53:05 ... and then do a product.

Nikhil Kamath 1:53:05 So you're saying you never go local.

Suraj Shenai 1:53:07 Extremely, yeah.

Nikhil Kamath 1:53:07 Local, local, local.

Suraj Shenai 1:53:08 Yeah.

Abhishek Khaitan 1:53:08 Think global, act local.

Nikhil Kamath 1:53:10 Mm.

Abhishek Khaitan 1:53:10 Like what he earlier said, like, for me, twenty-eight states are twenty-eight different countries.

Suraj Shenai 1:53:15 Yeah.

Nikhil Kamath 1:53:16 Right.

Abhishek Khaitan 1:53:16 If you go to a Kerala, your marketing strategy has to be different. Karnataka, it has to be different. Punjab, it has to be different. You have to go on the-

Suraj Shenai 1:53:23 Yeah

Abhishek Khaitan 1:53:23 ... regional festivals. You have to-

Nikhil Kamath 1:53:24 And don't make a plan for thirty countries, conquer one at a time.

Suraj Shenai 1:53:27 Just one.

Guest 1:53:27 Work, and work with smaller, like even if you're working with the bar community, work with lesser amount of bars. Work with the best bars, but work with them very closely, versus just going and distributing to all the bars in the country, uh, in the city.

Nikhil Kamath 1:53:38 No, it depends on which-

Abhishek Khaitan 1:53:40 And I think the another point would be-

Nikhil Kamath 1:53:41 -which category you play and what product

Abhishek Khaitan 1:53:42 ... that the manpower has to be very, very-

Nikhil Kamath 1:53:44 He's talking about much higher end.

Suraj Shenai 1:53:44 When we talk about, we talk about-

Abhishek Khaitan 1:53:45 You have to have the people who know liquor, because money is-

Nikhil Kamath 1:53:48 I, we are thinking and he's thinking [chuckles]

Guest 1:53:50 Yeah, are different.

Nikhil Kamath 1:53:50 We are, like, poles apart the way we think on-

Abhishek Khaitan 1:53:52 But I think in her industry-

Nikhil Kamath 1:53:54 On building

Abhishek Khaitan 1:53:54 ... bar, I think, is one of the most virgin opportunities in India, and we have not started.

Suraj Shenai 1:53:59 Yeah.

Abhishek Khaitan 1:53:59 If someone can cricket, uh, click it, like if you see Namo's, what their revenue and et cetera is-

Nikhil Kamath 1:54:06 Yeah, yeah

Abhishek Khaitan 1:54:06 ... it's up, it's unreal. They would make it two hundred and fifty crores.

Nikhil Kamath 1:54:11 Four hundred crores. They sold to Abu Dhabi government.

Abhishek Khaitan 1:54:13 Two fifty crores profit only in Mumbai.

Suraj Shenai 1:54:13 Wow!

Nikhil Kamath 1:54:13 Fifty percent. Wow.

Abhishek Khaitan 1:54:15 Namo's, the Zuma's. I think India has just started.

Nikhil Kamath 1:54:19 Yeah.

Abhishek Khaitan 1:54:19 If someone can create a name-

Nikhil Kamath 1:54:21 Mm

Abhishek Khaitan 1:54:21 ... where you can go, I think there's a huge opportunity, and people are ready to pay money.

Abhishek Khaitan 1:54:27 [upbeat music]

Nikhil Kamath 1:55:08 One thing, after we have decided what to build, the next logical question is distribution. Uh, she spoke about going to bars and selling by giving them taster, talking to them individually. What are the ideas for a young person starting off in distribution? How does one get it?

Abhishek Khaitan 1:55:31 Should I go?

Nikhil Kamath 1:55:33 Yeah.

Abhishek Khaitan 1:55:35 See, like, I'll, I'll talk from the global context, and then I'll come to the Indian context. Like, globally, I wanted to make, like, what we have done in Rampur, Jaisalmer, so we export to hundred countries. Now, it's always better to see and never reinvent the wheel. So we've been country partners with E&J Gallo. They have been the largest, uh, wineries in California and the world. Them, uh, and, um, what I re- saw about their distribution model, that they are the best distributors around the globe.

Nikhil Kamath 1:56:06 Mm-hmm.

Abhishek Khaitan 1:56:07 Even if they have to pay extra, but they have the distribution guys who are passionate. So globally, we also followed the same philosophy, where we had distributors, so we didn't have to invest in manpower in a country and get to the nuances. Maybe you pay extra, but you have the right guy who can sell for you.... so that was a good and a easier model. Here-

Nikhil Kamath 1:56:30 But can you do that only at scale, or even if you're really small, starting up?

Suraj Shenai 1:56:33 But for like a new business-

Abhishek Khaitan 1:56:34 No, when you're small-

Suraj Shenai 1:56:35 -it's very hard to get a distributor

Abhishek Khaitan 1:56:35 ... I started with zero, like in Rampur. But like the guy, suppose my US distributor, he left a job with one of the largest, um, uh, companies in America, distribution company, and wanted to take India to the world. So started with negligible volume. Now he's, like, minting money.

Nikhil Kamath 1:56:54 Mm.

Abhishek Khaitan 1:56:55 And, uh, in last seven years, what he's done is fantastic. Same thing in Ghana, same thing in Nigeria. So a lot of places we have done that, Singapore, a lot of places. So India, I feel distribution is the most expensive. So depending on the state, if you get the right distribution partner, you g- get the right social, and you address the, in a, in a state, suppose if you are there, you address the ten trendiest bar. So the minute you are there, other bars will copy you. They'll say that if you give-- like, if you have an entry to one on-premise, like say, SideCar in Delhi. If anyone knows that, okay, if in SideCar, your brand is there, it is accepted automatically. So I think you have to catch the overall there.

Nikhil Kamath 1:57:42 Do liquor brands give you freebies to display their alcohol?

Minakshi Singh 1:57:45 Yeah, absolutely. I mean, they give you not just for display, they give you for activation, they give you for, for... They, they are actually-

Suraj Shenai 1:57:53 Sampling

Minakshi Singh 1:57:53 ... very, very important partners for you.

Nikhil Kamath 1:57:54 Right.

Minakshi Singh 1:57:55 So, like, we are part of the same ecosystem, right? If I don't buy their brand and sell it further, then we are-- nobody's benefiting from it. So I have to work together, like, almost like a partnership. Uh, they do end up taking, [lips smack] uh, shelf space, share of throat, which basically means that how much are you pouring, which are the, uh, which are... Say, for example, I have a menu of twenty cocktails, out of which if I'm getting a majority of, say, a tie-up money, it's called a tie-up money, which basically means if I'm working with a Diageo or a Pernod or a Bacardi or a, even a Radico, I will be then prioritizing their brand over other brands to actually make cocktails with, which basically immediately turns into volumes for them, but it also gives them visibility, it also gives them activation points, touch points, consumer feedback. A lot of things happen, so it's a tool.

Nikhil Kamath 1:58:41 So if I-

Minakshi Singh 1:58:41 So menu is a tool for you.

Nikhil Kamath 1:58:42 So if I start my Bengaluru, uh, bourbon company and sell it for fourteen hundred bucks and come to you, would you put me on your shelf because you already have a deal with your partners?

Minakshi Singh 1:58:53 I will put you on the shelf. I will not immediately start pouring your sh- your brand. Pouring and sh- and putting it on shelf are two different things. I have almost to the tune of three hundred and fifty listed, uh, available, visible brands in the menu. Out of which-

Nikhil Kamath 1:59:09 So let's say, for example, you're selling a Diageo brand. What do they give you exactly?

Minakshi Singh 1:59:13 So they give me multiple... See, they, they support me for New Year's and, say, Christmas activation. They support me for... So next month, we are supporting an entire month of Pride Month at the bar, so we celebrate it every year. Uh, for that, I need to make a special menu. With that menu, I need to make special drinks, which are, you know, uh, which are actually talking to the audience that I want-

Nikhil Kamath 1:59:33 Right

Minakshi Singh 1:59:33 ... at the bar. I'm also doing like some, an event, which is a talking conversation, sort of sit down, which we do every year. Then we, uh, we end it with a big party, with a big band.

Nikhil Kamath 1:59:43 Mm.

Minakshi Singh 1:59:43 I need money for all of these things. If I bring, like, a band, band takes money. If I give-- bring a photographer, photographer will take money. So I'm taking money for this A brand-

Nikhil Kamath 1:59:52 Mm

Minakshi Singh 1:59:52 ... I'm not mentioning whichever brand it is. Then I take money from them, and then for full month, I'm actually giving them the menu exclusivity for that special month. So you kind of, it works really well for your beverage cost point of view. So you actually can make money by selling the brands, and then the brands are also happy because they're getting multiple visibility points.

Nikhil Kamath 2:00:12 Are you demographically seeing any changes in liquor consumption? Traditionally, men have been the one to buy and consume liquor. I don't know about consumption, 'cause buying number is there. Are you seeing more women consume alcohol? Is the age at which somebody first consumes changing? Uh, there is research to show that Gen Z in America is consuming lesser alcohol than millennials. Uh, this problem is so stark in countries like Japan, where young people are not drinking, that the Japanese government is starting sake festivals-

Abhishek Khaitan 2:00:50 Yes, yeah

Nikhil Kamath 2:00:51 ... different ways to encourage young people to drink. Same problem in India?

Abhishek Khaitan 2:00:56 Not at all, I think. We have a-

Minakshi Singh 2:00:57 No, the women are definitely drinking more. There is no doubt about that. Like, that is a big plus for us, for the growth also. So because, uh, the fact that there are m- many, many women joining into the drinking occasions, multiple times-

Suraj Shenai 2:01:11 But the market is growing because of the women also.

Minakshi Singh 2:01:12 Yeah, also. So women and also LDA plus. So we are talking always, whenever we talk about legal drinking age and plus, they are also drinking [lips smack] better places, uh, better quality, premiumisation, all of those things, right? So that is definitely happening, uh, and they are actually adding a huge, huge value to, to the entire, uh, nightlife space.

Suraj Shenai 2:01:31 And also, I think the, the, the shopping experience-

Abhishek Khaitan 2:01:33 Yeah

Suraj Shenai 2:01:33 ... overall, especially in Delhi-

Minakshi Singh 2:01:35 Retail, yeah

Suraj Shenai 2:01:36 ... Bombay, retail, Gurgaon, I think-

Abhishek Khaitan 2:01:37 I think that is one of the, what he said, is one of the most important we've been advocating-

Minakshi Singh 2:01:41 Yeah

Abhishek Khaitan 2:01:42 ... as Radico and as the liquor industry, that earlier, if you would have gone into any shop in, uh, Haryana, Mumbai, women can't go and shop. They'll be looked down, like, you know, they'll not feel safe. But today, if you see the shopping experience, whether it's Bangalore, whether it is-

Suraj Shenai 2:01:58 Gurgaon

Abhishek Khaitan 2:01:59 ... Gurgaon, you have twenty thousand square feet.

Minakshi Singh 2:02:00 And Gucci, yeah.

Abhishek Khaitan 2:02:00 It's become very nice, so women are comfortable to go and pick up their bottle. Second, even when you go for a party, earlier, like, you know, they used to hide their glass, but today it's like normal for the new generation. In fact, a women not drinking, मतलब, it will feel that, "Why is she not having?"

Nikhil Kamath 2:02:19 Premiumisation, before we get into that subject properly, because it seems to be working across the category, any other distribution hacks?

Suraj Shenai 2:02:28 I think one I wanted to mention, which, um-

2:02:31 ... I think if you are an absolute zero to one person starting out, I would say once you identified what product you are doing, just take a few bottles, and in- there are three layers to distribution. What you manufacture is called as the primary.

Shuchir Suri 2:02:45 Mm.

Suraj Shenai 2:02:46 Then you, what your distributor supplies to the market to, say, Minakshi's bar is called secondary, and what Minakshi sells from her bar is called tertiary. I would suggest, first thing that you do once you have the product, go ulta. Don't go the route that the big companies do, where you go do primary, you have established distributor. You go to hundred bars, go to twenty-five, thirty wine shops, take your product sample, talk to the owner. You already built enough awareness on your brand, on, and people know that you are doing, so that when you go to a distributor, you know that if you sell hundred, two hundred cases, it's going to go to those many bars. The distributor's going to be far more comfortable taking on your product if you already done that little legwork. So I think that's one of the simplest things that I think anyone-

Shuchir Suri 2:03:32 Well, like you said, going from zero to one, the hardest thing for a newbie is to find a distributor. It's not as easy as you think it is. A lot of people don't want to take your brand. Yeah, you have to show the volume.

Suraj Shenai 2:03:43 Absolutely. So you do-

Shuchir Suri 2:03:43 You have to show them a base volume. They will be like, "Achha-" They'll say, "

Minakshi Singh 2:08:33 ... experiencing the brand versus just seeing it on TV.

Suraj Shenai 2:08:36 Yeah.

Minakshi Singh 2:08:36 For example, you were to see an ad on TV-

Suraj Shenai 2:08:39 Mm

Minakshi Singh 2:08:39 ... of XYZ whiskey and gin, you'll see it. You know, Shah Rukh Khan is selling it as the best, amazing brand. That's it. That's the end of it, right?

Shuchir Suri 2:08:47 Which brand?

Suraj Shenai 2:08:47 But you can sample it, too.

Minakshi Singh 2:08:48 I mean, like with the surrogate-

Suraj Shenai 2:08:48 I think sampling alcohol is very important. [laughing]

Minakshi Singh 2:08:50 I mean, with the surrogate, you see it, but at the end of it, now, today, it's the way- that is where I feel the quality of conversation has shifted, where you'll be like, if I see Gruha Brewing Company's-

Shuchir Suri 2:09:01 Yeah, yeah

Minakshi Singh 2:09:01 ... say it, you know, I- whatever, whichever people's beer I see an ad, versus if I actually get an experience of a, I go to a, a music festival, I get to try the beer, I get to speak to the, maybe the founder-

Shuchir Suri 2:09:14 The brewer

Minakshi Singh 2:09:14 ... not the founder, whoever.

Shuchir Suri 2:09:15 That, that's a connection that you make.

Minakshi Singh 2:09:16 The whole, the whole experience is the product, right? So I feel it's such a sensorial experience. It's just like food.

Suraj Shenai 2:09:22 Yeah.

Minakshi Singh 2:09:22 No, no matter how many advertisements you can put on TV or newspapers and magazines-

Shuchir Suri 2:09:27 It's when you try it yourself.

Abhishek Khaitan 2:09:27 In this, I would like to say, like, what, uh, Shuchir did, he's created a niche.

Minakshi Singh 2:09:32 Mm.

Abhishek Khaitan 2:09:32 Like, the GEC created was gin. Gin was exploding in India.

Suraj Shenai 2:09:37 Mm.

Abhishek Khaitan 2:09:37 So what happened, like, say, my Jaisalmer, we start, we did it there, the launch. We were waiting for a GEC.

Shuchir Suri 2:09:43 Actually delayed the launch to participate in that-

Abhishek Khaitan 2:09:45 Yeah, so, so what happened-

Shuchir Suri 2:09:46 ... GEC

Abhishek Khaitan 2:09:46 ... all the gin lovers were, as I said, to make the first 10,000 consumer is the toughest, loyalist.

Minakshi Singh 2:09:53 Mm.

Abhishek Khaitan 2:09:53 Then you become 50, then you become millions.

Minakshi Singh 2:09:55 Mm.

Abhishek Khaitan 2:09:56 So in GEC, it was just an evolution, but all the gin lovers, because he had only gin, were coming there, which he coupled like a carnival.

Suraj Shenai 2:10:05 Mm.

Abhishek Khaitan 2:10:05 That is your music and everything.

Minakshi Singh 2:10:07 It's so good entertainment.

Abhishek Khaitan 2:10:08 One is a function, it is that the alcohol is there. Mm. He branded that. So for that, a brand to come there, and actually the gin lovers coming there, it makes a lot of difference.

Shuchir Suri 2:10:18 And also splits the cost of multiple brands.

Abhishek Khaitan 2:10:20 Yeah.

Shuchir Suri 2:10:21 Like, if my total cost is to do, uh, to do this event is four crores, it's getting split between 15 brands versus then co- them getting their IP of their own.

Suraj Shenai 2:10:29 But I think there is a, there's a d- so a brand is like a person, and you have to be really, uh, understand what's the brand personality before you think about events. I think when you... One of the easiest things is what you are not going to do. If you are clear about your brand, then venturing into events is a great space. So like, we were very clear that we are not going to do any collectivist activity, we are not going to do football screenings or anything that's general trope in beer.

Minakshi Singh 2:10:56 Mm.

Suraj Shenai 2:10:56 Because we, as a brand, are focused on, you know, sustainability, you know, making sure that, you know, we are probably, like, focused on great... So we only focus on sponsoring events which are like marathons, which are like cycling events, which are outdoors. So, you know, what happens is you also then, when you own one category and you're focusing entirely on it, you become far more... Your, your entire, you know, digital spread is only going to be messaging that is very at sublinear level, which is going to come. They're saying that, "Okay, this beer is only drunk or seen around these kind of people." Identify that. You know, you, it- there are thousands of events. You don't have that much dry powder. You have to choose where you're going to go.

Abhishek Khaitan 2:11:40 So you're saying don't go too broad, pick a sub-subcategory.

Minakshi Singh 2:11:42 No, yeah.

Suraj Shenai 2:11:42 What is your brand's value system?

Minakshi Singh 2:11:44 You have to have a strategy, you have to have a plan.

Abhishek Khaitan 2:11:44 Yeah.

Suraj Shenai 2:11:44 Yeah.

Minakshi Singh 2:11:44 I mean, you-

Suraj Shenai 2:11:45 So only pick those

Minakshi Singh 2:11:45 ... first year, second year, third year, you build on it.

Suraj Shenai 2:11:47 And if you can pick one category and go to it till the end-

Shuchir Suri 2:11:50 Absolutely

Suraj Shenai 2:11:50 ... and become like someone which has becomes a brand for cyclists or a brand for-

Minakshi Singh 2:11:54 Yeah

Suraj Shenai 2:11:54 ... marathon runners.

Minakshi Singh 2:11:55 I think identification, IP creation.

Suraj Shenai 2:11:56 Hydration-

Abhishek Khaitan 2:11:56 Very important

Suraj Shenai 2:11:57 ... whatever it is, then you are-

Abhishek Khaitan 2:11:58 Like, like to give you an example-

Suraj Shenai 2:11:59 Then it's easier

Abhishek Khaitan 2:11:59 ... if you go to IPL, you won't be visible.

Suraj Shenai 2:12:02 Yeah.

Minakshi Singh 2:12:02 Right.

Abhishek Khaitan 2:12:03 Like you spend-

Suraj Shenai 2:12:04 Absolutely not.

Minakshi Singh 2:12:04 Mm

Abhishek Khaitan 2:12:05 ... because we don't have VC funders and the startup fund, like, not startup, but like, you know, the big boys.

Minakshi Singh 2:12:11 Mm.

Abhishek Khaitan 2:12:12 So you'll be lost. It's all the dotcoms, et cetera, who are sponsoring there. So IPL, if you sponsor, you have to have a budget of 100 crores.

Shuchir Suri 2:12:18 So in our language, when someone

Shuchir Suri 2:12:20 comes to me and tells me, "We want to launch a brand, or we want to activate the brand," we create something called a one-nine-ninety, right? One is your big launch, where you'll spend maybe 50% or maybe 25% of your budget, which will be a Delhi or a Bombay. Then in the nine, where 50% of your budget will go, would be in your major metros, which will be Delhi, Bombay, Bangalore, where you'll target about 50 bars each, where rest of your budget will go. Then you'll get a ninety. Ninety will be a small activation, which could be a s- drink serve or a glassware or a, a tower, which will go across majority outlets across every city in m- in wh- whichever cities that you want to activate. So that's how you have to split your marketing budget. You cannot only, uh, do one launch and, uh, extinguish-

Minakshi Singh 2:13:06 Oof

Shuchir Suri 2:13:06 ... your marketing budget.

Minakshi Singh 2:13:07 That happens. We see in many, many brands.

Shuchir Suri 2:13:09 Right? You have to go consistent, you have to go-

Suraj Shenai 2:13:10 And your marketing budget is like the artillery.

Abhishek Khaitan 2:13:11 And secret of the recipe is Mumbai.

Suraj Shenai 2:13:13 Like the dry powder.

Abhishek Khaitan 2:13:13 It's the most costliest. Mumbai-

Minakshi Singh 2:13:15 Yeah

Abhishek Khaitan 2:13:15 ... is the costliest-

Minakshi Singh 2:13:16 To?

Suraj Shenai 2:13:16 Yeah.

Minakshi Singh 2:13:17 Convert.

Abhishek Khaitan 2:13:18 Any city.

Minakshi Singh 2:13:19 Mm.

Abhishek Khaitan 2:13:19 Like, if you wants to launch his beer from Mumbai-

Minakshi Singh 2:13:22 Mm.

Suraj Shenai 2:13:22 Yeah

Abhishek Khaitan 2:13:23 ... as a startup, it's very tough.

Minakshi Singh 2:13:25 Yeah.

Abhishek Khaitan 2:13:25 The kind of money-

Suraj Shenai 2:13:26 Because it's-

Abhishek Khaitan 2:13:26 ... it burns, like, you know, it, like, I, I, I address Mumbai the last.

Suraj Shenai 2:13:30 You always do.

Abhishek Khaitan 2:13:31 It's the, it's the most, uh, expensive market. Am I right?

Suraj Shenai 2:13:34 Yeah, absolutely.

Abhishek Khaitan 2:13:35 So if I'm starting-

Suraj Shenai 2:13:35 Because the high entry barrier-

Abhishek Khaitan 2:13:37 Yeah

Suraj Shenai 2:13:37 ... cost of KForm, which is the government taxes, you almost-

Abhishek Khaitan 2:13:40 Taxes. Even cost of entering into the retail.

Suraj Shenai 2:13:42 Or cost of entry, the retail, uh, you know, eh, you need to discount and sponsor a certain set percentage when you wanted to sign up.

Shuchir Suri 2:13:48 Also, space is limited, so the retail stores-

Suraj Shenai 2:13:50 Yeah

Shuchir Suri 2:13:50 ... are smaller.

Abhishek Khaitan 2:13:52 So where would I start my liquor brand?

Suraj Shenai 2:13:55 Goa.

Minakshi Singh 2:13:55 Okay, [laughing]

Shuchir Suri 2:13:55 Goa.

Abhishek Khaitan 2:13:55 Which brand?

Shuchir Suri 2:13:56 You will first list in Goa-

Abhishek Khaitan 2:13:57 Uh, bourbon

Shuchir Suri 2:13:57 ... by paying 50,000 rupees.

Abhishek Khaitan 2:13:59 Bourbon?

Shuchir Suri 2:13:59 You'll pay 50,000 rupees as your listing fees to legally sell your alcohol-

Minakshi Singh 2:14:03 You'll make it in Goa?

Shuchir Suri 2:14:04 ... in Goa.

Abhishek Khaitan 2:14:04 See, bourbon, as it is, suppose if you start-

Minakshi Singh 2:14:06 I mean, it's not a bourbon [laughing]

Abhishek Khaitan 2:14:07 ... you have to take three years' time [laughing] to make sure.

Shuchir Suri 2:14:09 Then you come to Gurgaon, and then you create your brand.

Abhishek Khaitan 2:14:11 So basically, it's a five-year process from now. What if I buy old aged-

Minakshi Singh 2:14:15 No, you can do, you can do the other model. We don't, we are not distilling, so we are also talking about changing the model a little bit, right? So we, we can buy spirit and blend it and age it, and-

Abhishek Khaitan 2:14:25 So age it, we'll have to age it.

Minakshi Singh 2:14:27 Yeah, age. Of course-

Abhishek Khaitan 2:14:27 I need to buy a-

Minakshi Singh 2:14:28 ... like, we have to find. Yeah, we have to find a... I feel Goa will be easier than any other market.

Suraj Shenai 2:14:31 Goa would be the easiest.

Minakshi Singh 2:14:32 Is it not? Yeah.

Abhishek Khaitan 2:14:33 Mm.

Minakshi Singh 2:14:33 So Goa would be the easiest.

Shuchir Suri 2:14:34 Age it there itself?

Minakshi Singh 2:14:35 Mm.

Shuchir Suri 2:14:36 ... um, pay fifty thousand rupees to the government, get listed there, uh, for one product?

Suraj Shenai 2:14:40 Mm-hmm, very cheap.

Abhishek Khaitan 2:14:41 And sell it like a beer for fifty rupees.

Suraj Shenai 2:14:42 We have to struggle to get the licenses first-

Abhishek Khaitan 2:14:44 In Delhi, it will be what? One twenty, one, one eighty.

Host 2:14:46 Yeah.

Shuchir Suri 2:14:46 It would be twelve lakh rupees. Uh, a whiskey is twenty-five lakh rupees per SKU in Delhi, uh, to get your product listed.

Host 2:14:52 That's just-- Yeah, that's just listing.

Shuchir Suri 2:14:54 Delhi is-

Host 2:14:54 Baki toh who knows?

Shuchir Suri 2:14:56 But listing is for a, for a one to, from a zero to one, that's a big cost.

Abhishek Khaitan 2:14:58 Mumbai is the most expensive in retail. Like, say, Rampur here is twelve and a half thousand. In Haryana, it is, uh, seven thousand. Delhi-

Host 2:15:06 Copy

Abhishek Khaitan 2:15:06 ... it is eight thousand.

Host 2:15:07 Eight thousand.

Abhishek Khaitan 2:15:07 Mumbai is the highest-

Suraj Shenai 2:15:09 That's the taxation

Abhishek Khaitan 2:15:09 ... taxation.

Shuchir Suri 2:15:09 So forty-four would be Gurgaon, forty-nine would be Goa.

Host 2:15:12 Also, this is after reduction for the last two years. [chuckles]

Suraj Shenai 2:15:14 So you save your-

Host 2:15:14 This is after reduction.

Abhishek Khaitan 2:15:15 Mumbai is the highest.

Host 2:15:16 But this is after reduction rates.

Nikhil Kamath 2:15:18 So we got this interesting stat:

Nikhil Kamath 2:15:22 what percentage of a state's revenue comes from alcohol? The highest-

Abhishek Khaitan 2:15:28 Eighteen percent

Nikhil Kamath 2:15:28 ... happens to be Uttar Pradesh, twenty-two percent.

Shuchir Suri 2:15:31 Mm.

Suraj Shenai 2:15:31 Yeah.

Abhishek Khaitan 2:15:31 And I-- we contribute twenty-six percent of the state's revenue.

Suraj Shenai 2:15:34 Wow!

Host 2:15:35 That's crazy.

Nikhil Kamath 2:15:36 Karnataka, twenty percent.

Abhishek Khaitan 2:15:37 Twelve thousand crores.

Suraj Shenai 2:15:38 Mm.

Shuchir Suri 2:15:39 Because Karnataka's taxation is mad.

Suraj Shenai 2:15:41 It's, yeah, very high.

Shuchir Suri 2:15:42 It's like eighty percent tax is what you pay in, uh, in between-

Host 2:15:45 Karnataka is probably the worst-

Abhishek Khaitan 2:15:46 Second is-

Suraj Shenai 2:15:46 The worst

Abhishek Khaitan 2:15:47 Tamil Nadu?

Nikhil Kamath 2:15:48 Second is Karnataka.

Host 2:15:49 Yeah.

Abhishek Khaitan 2:15:49 Achha, third Tamil Nadu.

Nikhil Kamath 2:15:50 Bengal.

Abhishek Khaitan 2:15:51 Bengal nahi hoga hai.

Nikhil Kamath 2:15:52 Twenty point two percent.

Suraj Shenai 2:15:54 Percentage-wise.

Nikhil Kamath 2:15:54 Percentage-wise.

Abhishek Khaitan 2:15:54 Achha, percentage-wise, yeah.

Nikhil Kamath 2:15:55 Actually, sorry, Pondicherry is forty percent.

Shuchir Suri 2:15:58 And that's also a distribution hub. It's not actually a place where people-

Nikhil Kamath 2:16:02 Then comes Punjab, Uttarakhand, Himachal, uh, MP, Andhra-

Host 2:16:08 Chhattisgarh is huge.

Abhishek Khaitan 2:16:09 Haryana.

Host 2:16:09 Chhattisgarh is huge.

Shuchir Suri 2:16:10 Only Gurgaon. Haryana-

Nikhil Kamath 2:16:11 They're all, they're all seventeen to twenty percent.

Abhishek Khaitan 2:16:13 UP is the largest.

Nikhil Kamath 2:16:15 But this is crazy. A state is-

Abhishek Khaitan 2:16:17 Yeah

Nikhil Kamath 2:16:17 ... earning twenty percent of its revenue, not one, but so many-

Shuchir Suri 2:16:20 Yeah, and they make everyone's life so difficult.

Abhishek Khaitan 2:16:22 You know why? Because, because excise-

Nikhil Kamath 2:16:23 Mm

Abhishek Khaitan 2:16:23 ... is the only thing under state subject.

Shuchir Suri 2:16:25 Yeah.

Abhishek Khaitan 2:16:25 Like, we've been lobbying that why don't we come under GST?

Host 2:16:28 GST, yeah.

Abhishek Khaitan 2:16:29 So for me-

Suraj Shenai 2:16:30 And also on that

Abhishek Khaitan 2:16:30 ... I don't get any input credit.

Suraj Shenai 2:16:32 Yeah, we don't.

Abhishek Khaitan 2:16:33 We are the privileged ones.

Host 2:16:34 We don't get input credit there.

Abhishek Khaitan 2:16:34 Because the minute if I come under GST, my whole game is changed.

Suraj Shenai 2:16:37 Our balance sheet would look so beautiful.

Abhishek Khaitan 2:16:39 Yeah.

Nikhil Kamath 2:16:40 Can you make the case, like articulate? Because we'll make this a reel and put it out for whoever is listening. Why should you move from state to GST?

Abhishek Khaitan 2:16:49 See, first of all, any-- like, suppose if I'm transporting my material from Delhi, uh, UP to any other state, I have interstate duties, then I do not have any input credit on my raw material. Excise duties are different. So if GST comes, I'll be like normal. There'll be a level playing field.

Nikhil Kamath 2:17:08 Why are you manufacturing in UP? Are the duties lower than Goa?

Abhishek Khaitan 2:17:11 No, no, I have to manufacture every... That's why I have forty-one units. That's the biggest entry to barrier. It's a big cost, uh, uh-

Suraj Shenai 2:17:18 Of logistics

Abhishek Khaitan 2:17:19 ... cost, uh, not logistics, duty.

Suraj Shenai 2:17:21 Yeah, also.

Abhishek Khaitan 2:17:23 So it's, it's, it's, it's absolutely like, I'm telling you, it's like to getting into liquor is so complicated because

Abhishek Khaitan 2:17:30 of that.

Nikhil Kamath 2:17:30 So-

Suraj Shenai 2:17:31 I have a question for you-

Abhishek Khaitan 2:17:31 It takes a long time

Suraj Shenai 2:17:32 ... now. I, this is-

Abhishek Khaitan 2:17:33 Yeah

Suraj Shenai 2:17:33 ... then I, I, I-- so let's, uh, you know, think about it that, you know, you Alco..., Alcobev is slower because let's say if you were-- India is the biggest whiskey market-

Nikhil Kamath 2:17:46 Mm.

Suraj Shenai 2:17:46 -but we have, apart from, like, the biggest guys, like Radico Khaitan or, you know, Pernod or Diageo of the world, nobody's making malt spirit here.

Abhishek Khaitan 2:17:55 Right.

Suraj Shenai 2:17:55 One of the reasons is, if you start malt, you have to mature it for eight years, twelve years. Now, I went the whole route of with zero money, starting, going to investors in two thousand and seventeen, eighteen, just with an ice box. Even the laptop was owned by Pernod Ricard. So literally, most of the investors back in the day were all tech investors, and they had-- they were very new to consumer.

Nikhil Kamath 2:18:17 Mm.

Suraj Shenai 2:18:17 And any kind of open market money that's available in India looks at that same eleven-year return-

Nikhil Kamath 2:18:23 Mm

Suraj Shenai 2:18:23 ... that everyone has to give to their LPs.

Abhishek Khaitan 2:18:25 Seven years.

Suraj Shenai 2:18:25 Seven year, yeah, or even shorter.

Abhishek Khaitan 2:18:27 Mm.

Suraj Shenai 2:18:27 The term sheets are five years, plus-

Abhishek Khaitan 2:18:28 Yeah

Suraj Shenai 2:18:28 ... five plus two, but you probably give the money-

Abhishek Khaitan 2:18:31 Typically, typically five plus five.

Nikhil Kamath 2:18:32 Yeah, seven would be-

Suraj Shenai 2:18:32 So how would you now create this kind of-- if you were to... You, you see, this is a three hundred million dollar, uh, three hundred million cases industry, largely run by whiskey, with zero upgrade happening on product, essentially because there is no capital that can finance a business that can have those many legs or the length of it. As a person who is from finance, what would be the product that you would probably create for this, this category in terms of terms of funding? If somebody would come to you and say: "I would want to build a malt distillery, and, you know, the returns would come after twelve years," how would you look at it? What would be that view?

Abhishek Khaitan 2:19:10 Good question. As a startup?

Suraj Shenai 2:19:12 Yeah, as a startup. Phenomenal-

Nikhil Kamath 2:19:15 I think-

Suraj Shenai 2:19:15 ... product made in a small lab.

Nikhil Kamath 2:19:16 Mm. I think we are a little bit of an exception to that rule because we are a perpetual fund of sorts. Because we don't allocate third-party money, and it's mostly prop money, we have really long tenures. The current thesis I have, uh, thesis, passion, fascination is to watch Indian brands kill it abroad.

Suraj Shenai 2:19:41 Mm.

Nikhil Kamath 2:19:41 Uh, so be it with Radico, be it with Sabco-

Suraj Shenai 2:19:45 Yeah

Nikhil Kamath 2:19:46 ... be it with Bluestone, be it Ather Motorcycles, these are all, uh... or Eleven Eleven, the shirt company, uh, these are all investments which are far from maturity. Uh, the question if they will ever mature and turn profitable is also unknown.

Suraj Shenai 2:20:06 Mm.

Nikhil Kamath 2:20:06 But my thesis today is to find the hero product, find places where the product is solved for.

Suraj Shenai 2:20:13 Mm.

Nikhil Kamath 2:20:14 The rest of it we'll fi- figure out along the way. I'm there right now, and I'm happy to take these bets. Uh, passionately take these bets, and I have a lot of fun with them.

Suraj Shenai 2:20:24 Nice.

Nikhil Kamath 2:20:24 Yeah. If I like a product in a certain category, the marketing, the sales, the narrative, the financials, all of that comes second. If I can find a product that can compete internationally, I'll do it.

Suraj Shenai 2:20:38 Absolutely.

Abhishek Khaitan 2:20:39 But what if a product is born after five years?

Shuchir Suri 2:20:41 ... Yeah, his question is that-

2:20:42 Yeah, so y- y- you invest now-

2:20:44 See, one is like, suppose-

2:20:44 Mm

2:20:45 - already a person is there.

2:20:46 Yeah.

Nikhil Kamath 2:20:46 Mm.

Shuchir Suri 2:20:46 But one is that a person comes-

2:20:48 The first-

Nikhil Kamath 2:20:48 I can taste the product in five years, you mean?

Shuchir Suri 2:20:51 You can get the product.

2:20:52 You will get a glimpse of it, maybe, of the product.

2:20:53 No, no, you'll only get the glimpse-

2:20:54 But yeah

2:20:54 ... of the packaging or whatever, but-

2:20:56 Yeah, or directionally.

2:20:57 To malt and everything, it'll take five, six years before the product comes in.

2:21:00 Your first-

Nikhil Kamath 2:21:00 With the, uh, the, the seed

Shuchir Suri 2:21:02 ... money, your revenue-

2:21:03 Am I right? I must-

2:21:04 Exactly.

Nikhil Kamath 2:21:04 You are right, yes.

Shuchir Suri 2:21:05 Your revenue after funding is seven years, let's say, six years.

Nikhil Kamath 2:21:07 I'll, I'll tell you my biggest worry, and I'm being really honest here. With liquor, I have to put it in a different box as many of these other investments-

Shuchir Suri 2:21:18 Yeah, got it

Nikhil Kamath 2:21:18 ... which might be an energy transition-

Shuchir Suri 2:21:19 Yeah.

2:21:19 Mm.

Nikhil Kamath 2:21:19 -or whatever, 'cause there I'm betting sector thesis.

Shuchir Suri 2:21:23 Mm.

Nikhil Kamath 2:21:24 If I'm betting on a electric vehicle, which I will see in five years, broadly, I'm sold to the idea that we'll switch from fossil to renewable, [clears throat] and we will need the end point to be electric to have efficiency in the value chain.

Shuchir Suri 2:21:37 Right.

Nikhil Kamath 2:21:38 So if I find a good guy there, it's enough. With liquor, it's a little bit more convoluted because I- the data I'm accessing today is we, we typically tend to mimic the West in terms of consumption patterns in India, and the fact that the Gen Z are drinking lesser than millennials is something which is of a worry to me. So I would need to buy into the sector truly.

Shuchir Suri 2:22:07 Mm.

Nikhil Kamath 2:22:07 Radico is an exception to me because they have a differentiated Indian-first product, which is almost patriotic in nature.

Shuchir Suri 2:22:16 Mm.

Nikhil Kamath 2:22:16 And I love the fact that people are fighting over Radico bottles in a duty-free-

Shuchir Suri 2:22:21 Mm

Nikhil Kamath 2:22:21 ... versus a Glenfiddich or another brand like that. I love the idea of that. I like the names, I like the taste. Uh, these are elements that appeal to me today, but otherwise, liquor as a category, I would have to be sold, and somebody probably will come along the way and sell it.

Shuchir Suri 2:22:39 Mm.

Nikhil Kamath 2:22:39 I'm, I'm not taking the moralistic debate here. Uh, something is legal, it's legal. People should do it in moderation. I'm a capitalistic investor, and I will not fiend morality and altruism in a manner that I don't have to, and I don't believe in doing it either. Uh, if somebody smart comes to me and says, "Here is this new alcohol," it was... It's not a IMFL.

Shuchir Suri 2:23:05 Mm.

Nikhil Kamath 2:23:05 It's more like made from, I don't know, like from some lemongrass or some-

Shuchir Suri 2:23:09 Right

Nikhil Kamath 2:23:09 ... plant in India, and this has history and culture, five hundred years. We will package it this way, sell it that way. We will take it to market this way. In five years from now, I would probably buy it if he is convincing enough.

Shuchir Suri 2:23:25 But also zero to one, what I see in the market is very few investors want to back people in the alcohol space.

2:23:33 I had to pitch to 80 people-

2:23:35 I tell you-

2:23:35 When I was starting

2:23:35 ... and they will say, "Hum, alcohol, alcohol or meat, nahi touch karte."

2:23:38 70, 80 people.

2:23:38 Like, that's the first answer.

Nikhil Kamath 2:23:40 I'll tell you, we're starting this new fund. It's not actually a fund, it is a grant. It is three times as big as Shark Tank.

Shuchir Suri 2:23:48 Nice.

Nikhil Kamath 2:23:48 We don't, in terms of the amount we give out, we don't take any equity in the businesses that we give these grants to. We are just looking at young people-

Shuchir Suri 2:23:58 Nice

Nikhil Kamath 2:23:58 ... under the age of twenty-five, great ideas, no money to execute, and we are giving them money through a segregation process. Not large checks, twenty lakhs, forty lakhs.

Shuchir Suri 2:24:09 Absolutely.

Nikhil Kamath 2:24:09 But to a lot of people, the end result is, if it inculcates entrepreneurship in the country, it's something that we're all very passionate about, and we're all-

Shuchir Suri 2:24:18 Absolutely. That's amazing.

Nikhil Kamath 2:24:19 We're all in this ecosystem where we've been so lucky by virtue of circumstance-

Shuchir Suri 2:24:23 Absolutely

Nikhil Kamath 2:24:23 ... over the last, I don't know, fifteen, twenty years. Uh, it has more appeal to me than giving that money to a charity. What about

Nikhil Kamath 2:24:32 celebrity-led brands? Do you think it works? I know in fashion, I'll give you ex- an example. Uh, when I've looked at fashion, cosmetic, uh, brands led by celebrities, in India have not worked, globally have worked. There's some dichotomy there. I don't know why it is not working in India. What do you think will be the use case for alcohol?

Shuchir Suri 2:25:02 So globally-

Nikhil Kamath 2:25:03 Who's taking it?

Shuchir Suri 2:25:03 ... uh, the people who are building, uh, the people who are building, um, alcohol brands, um, in America were celebrities, and the following was of a certain, uh, strata and of a certain disposable income that would follow them, right? So tomorrow, if Ranveer Singh starts an alcohol brand of a premium segment, the people will see through that, right? So I'm not going to start drinking a certain type of product because a Ranveer Singh drinks it.

Nikhil Kamath 2:25:33 Who should start what? Which actor should start what?

Shuchir Suri 2:25:37 I think, um, Aryan Khan, what he's doing, I think he's doing a good job.

Nikhil Kamath 2:25:42 The Diavol.

Shuchir Suri 2:25:42 Diavol.

Nikhil Kamath 2:25:43 Diavol Vodka, yeah.

Shuchir Suri 2:25:43 He's got a, he's got a vodka. He's got a malt now-

Nikhil Kamath 2:25:46 Yeah

Shuchir Suri 2:25:46 ... and he's got a fashion brand.

2:25:48 I think Zeenat Aman should do a wine, [chuckles] if at all.

Nikhil Kamath 2:25:51 Wow!

Shuchir Suri 2:25:51 You know, I think it's very interesting.

Nikhil Kamath 2:25:53 Very interesting.

Shuchir Suri 2:25:53 Yeah. You know, because p- see, you know-

Nikhil Kamath 2:25:55 I feel it's the brand fit that they were talking about

Shuchir Suri 2:25:55 ... Ryan Reynolds built Aviation, because he was also-

2:25:58 No, but Zeenat Aman, how many of the people would know her now?

2:26:01 No, no, regardless, I'm saying, like, you know, if you see-

Nikhil Kamath 2:26:03 She's the coolest

Shuchir Suri 2:26:04 ... how Ryan Reynolds-

Nikhil Kamath 2:26:04 She's the coolest person on the planet. [chuckles]

Shuchir Suri 2:26:05 No, you're talking about a celebrity endorsement or celebrity doing a brand?

2:26:09 No, no, own brand.

Nikhil Kamath 2:26:10 Own.

Shuchir Suri 2:26:10 Own brand. Like if-

Nikhil Kamath 2:26:10 Does endorsement work? Because I know many-

Shuchir Suri 2:26:12 Own brand hi hota hai. It's basically putting-

Nikhil Kamath 2:26:13 Okay, you're talking about a celebrity doing a brand.

Shuchir Suri 2:26:16 Get a VR.

2:26:16 Definitely, yes.

Nikhil Kamath 2:26:17 How about celebrity-marketed brand? I'm sure you use celebrities.

Abhishek Khaitan 2:26:20 See, I've got a lot of experience with lot of... We have had a lot of brand ambassadors.

Nikhil Kamath 2:26:25 Mm. Did it work?

Abhishek Khaitan 2:26:27 See, what happens, now, as a startup, because I started with kind of zero money-

Nikhil Kamath 2:26:32 Mm.

Abhishek Khaitan 2:26:33 When I got engaged, I didn't have money to open a bottle of champagne that time for my wife. I was in Calcutta. So that kind, we were, like, stretched, totally stretched. So what I realized, you take a celebrity-... you buy a Mercedes, you buy a Rolls-Royce, but you don't have petrol to put in it. So one is the celebrity, the film cost, but the main thing is airing and doing justice. So one is you do justice with it, so you have-- if you take a celebrity, you have to do proper justice. You have to spend enough money. Nowadays, celebrity also, if you see a movie, today, especially, now I'm talking today's context, a celebrity cost is huge, filmmaking is huge. Then to air it, so you have to have a substantial budget.

Nikhil Kamath 2:27:19 But it works with the budget?

Abhishek Khaitan 2:27:21 What it does, it gets you immediate recall, depending on how you use the celebrity.

Nikhil Kamath 2:27:27 But not sales?

Abhishek Khaitan 2:27:29 No, it'll help you for, like, um-

Minakshi Singh 2:27:31 It will give you the eyeballs.

Abhishek Khaitan 2:27:32 The eyeballs.

Minakshi Singh 2:27:33 It's like getting a cricketer and getting a-

Abhishek Khaitan 2:27:34 So like what he said, with that, the salesman has to be motivated, the bar guys have to be motivated, the PR should write about it. It has to be, events should be there, so it has to be a three sixty degree turn. So if you have a X budget-

Minakshi Singh 2:27:47 Oh, yeah

Abhishek Khaitan 2:27:47 ... then you see where you have to spend it, because in alcohol, it's a dark environment.

Nikhil Kamath 2:27:52 If celebrity-marketed brand, we have all agreed, does not lead to sales, but maybe gives you visibility and brand recall, does product placement work? How does the advertising work?

Abhishek Khaitan 2:28:04 The bigger question I have, which I want to ask you, like, we've seen in all the e-com sites where they have become like, you know, unicorns and everything. Say, in alcohol, suppose monies for the private equity is no problem.

Nikhil Kamath 2:28:20 Mm.

Abhishek Khaitan 2:28:20 There's enough capital which is available. Now, suppose if you have a budget of three hundred crores, and you say, "I want to start a brand," and in two years I go, boom, boom, boom, boom, on the TV, media, whatever-

Nikhil Kamath 2:28:32 Mm

Abhishek Khaitan 2:28:32 ... dark environment I have, do you think will it succeed? In a e-com, it might succeed because you buy customers.

Suraj Shenai 2:28:40 You have a call to action.

Abhishek Khaitan 2:28:41 But alcohol, I think it's very tough.

Suraj Shenai 2:28:44 Yeah.

Shuchir Suri 2:28:44 As you build through taste.

Abhishek Khaitan 2:28:46 It has to build through generations.

Shuchir Suri 2:28:47 Yeah.

Abhishek Khaitan 2:28:48 It has to build slowly-

Suraj Shenai 2:28:49 Slowly

Abhishek Khaitan 2:28:49 ... because what I believe, in alcohol, you cannot push sales.

Nikhil Kamath 2:28:53 Right.

Abhishek Khaitan 2:28:54 You have to win sales.

Suraj Shenai 2:28:56 Yeah, yeah.

Abhishek Khaitan 2:28:57 Like, as I said, first ten thousand is important. So even sometimes I brew with that idea, whether is it the right strategy, but in my last twenty to two decades of my experience, I feel it's, it's not worked. It's not-

Shuchir Suri 2:29:10 But what ends up happening is-

Abhishek Khaitan 2:29:11 Am I right?

Shuchir Suri 2:29:11 zero to hundred happens when you go into someone else's distribution chain, right?

Abhishek Khaitan 2:29:15 But the minute you put in three hundred crores, you want that your sales should happen, then you'll dump the material.

Shuchir Suri 2:29:21 So-

Abhishek Khaitan 2:29:21 But the consumer won't come so fast

Shuchir Suri 2:29:22 ... whether you get a Radico or a b- or a-

Suraj Shenai 2:29:24 And India is a vast country

Shuchir Suri 2:29:25 ... Diageo or a Pernod, to get into their distribution, what ends up happening is, okay, you want to take, uh, one, uh, case of Johnnie Walker, you have to take six bottles of this new brand-

Abhishek Khaitan 2:29:35 Right

Shuchir Suri 2:29:35 ... which I've launched. So it's actually literally pushed onto, um, [clears throat] onto an outlet.

Minakshi Singh 2:29:41 Good for you. So you say you buy this, but I have this brand which is not selling-

Shuchir Suri 2:29:44 But no-

Minakshi Singh 2:29:44 But you still like, "Han, do bottle ye le lo." So then you'll be like, "Theek hai, I mean, this is, this is fine."

Abhishek Khaitan 2:29:48 So, like, let's take an example.

Shuchir Suri 2:29:50 That's true distribution.

Abhishek Khaitan 2:29:50 Suppose if a guy comes, a new guy, "I want to take your bar shelf. I want visibility. I'll pay you X lakhs. Okay, you keep this much bottle." She'll keep it once, but if it does not go, and it's a new brand, first of all, why will anyone come and take a new brand? It has to be built gradually. Am I right?

Minakshi Singh 2:30:08 Yeah, yeah, yeah.

Abhishek Khaitan 2:30:08 It's very difficult. In alcohol, it's very difficult where you can just pump in monies-

Suraj Shenai 2:30:13 Yeah

Abhishek Khaitan 2:30:13 ... and consumers will come. It's a very slow process.

Suraj Shenai 2:30:16 And also, another very interesting thing about India is, before you realize how your product's doing, you can-- So what happens a lot of times when you are-- You can grow-

Abhishek Khaitan 2:30:26 Mm

Suraj Shenai 2:30:26 ... by, you start off with, say, South Bombay and South Delhi and Bangalore, and in one year, there is always, in India, there is always a rush to try a new product. We are a large country, people want to try new things because new things don't happen that often.

Minakshi Singh 2:30:39 Mm.

Suraj Shenai 2:30:39 So the consumer is drinking your product in, say, the early cities, so you see traction coming in. But then you say, "Okay, you know, I'm going to get money, raise a large amount of money, and I'm going to go into newer markets." So by the time you go to Thane, and you're going to the suburbs and everything, you're still growing because you're doing primary sales, but your original core consumers doesn't come back to you, repeat. This, you start going from Thane now to Nasik, from Nasik to Ratlam, it takes you five years-

Shuchir Suri 2:31:05 A major market, which is-

Suraj Shenai 2:31:06 You will still grow year on year-

Minakshi Singh 2:31:08 Mm

Suraj Shenai 2:31:08 ... but you are, if you don't measure your vol- sales-

Shuchir Suri 2:31:11 Sales

Suraj Shenai 2:31:11 ... at outlet level, where you started, your core consumer stickiness and repeat, then you may show a growth story on the numbers, on the balance sheet-

Abhishek Khaitan 2:31:19 Yeah

Suraj Shenai 2:31:19 ... but on, in reality, you are actually just recruiting new consumers through novelty and losing them as fast as you are doing it, and paying a huge amount of money to do it, and that's very, very wasteful.

Nikhil Kamath 2:31:29 So you're saying there's no moat. People switch. There's no brand loyalty.

Abhishek Khaitan 2:31:32 No, no, no, no, no.

Suraj Shenai 2:31:33 The product-

Abhishek Khaitan 2:31:33 What he's saying-

Suraj Shenai 2:31:34 What I'm saying is-

Abhishek Khaitan 2:31:34 What he's saying-

Suraj Shenai 2:31:35 ... you will go from one geography to another, and India is a vast country

Abhishek Khaitan 2:31:38 He's saying India is a vast country.

Suraj Shenai 2:31:38 You can still grow.

Abhishek Khaitan 2:31:39 Suppose you can show growth to anyone, any investor.

Suraj Shenai 2:31:42 Yeah.

Abhishek Khaitan 2:31:42 But eventually, it is the repeat which counts.

Suraj Shenai 2:31:45 Yeah.

Nikhil Kamath 2:31:45 Fair.

Nikhil Kamath 2:31:46 So if actors don't necessarily work for India, what about social media influencers? Are they a good medium to sell alcohol?

Abhishek Khaitan 2:31:54 Yes.

Nikhil Kamath 2:31:55 Yeah?

Abhishek Khaitan 2:31:56 But sell alcohol means for a brand or what?

Nikhil Kamath 2:31:58 For a brand.

Abhishek Khaitan 2:31:59 Like, for advertisement, hundred percent.

Minakshi Singh 2:32:01 They do. Uh, you have to be careful on who you're investing on and, uh, do your research. I feel there are now apps, and there are ways to actually find out if that influencer is bought or of who that person is talking to-

Suraj Shenai 2:32:13 Yeah

Minakshi Singh 2:32:13 ... what the male to female ratio is-

Shuchir Suri 2:32:15 And the niche of, niche of the influencer

Nikhil Kamath 2:32:16 Depends, depends on the product

Minakshi Singh 2:32:17 Which city, which city they are operating in. So now, good thing is that-

Nikhil Kamath 2:32:20 So you would go through an agency?

Minakshi Singh 2:32:21 It's a far cheaper way to acquire consumers-

Nikhil Kamath 2:32:24 Than actors

Minakshi Singh 2:32:25 ... than, than actors.

Suraj Shenai 2:32:25 Reachability.

Minakshi Singh 2:32:26 Than actors. But also, having said that, uh, what influencers also do for you is that they are also physically present-

Abhishek Khaitan 2:32:33 Right

Minakshi Singh 2:32:33 ... which actually changes the game a little bit. It is kind of like the digital way of experiencing the brand, you know, in the sense that they will taste, say, a whiskey, and be like, "Mm, I find it, like, smoky."

Abhishek Khaitan 2:32:44 No, a-

Minakshi Singh 2:32:44 You know, that kind of trust-

Abhishek Khaitan 2:32:44 Also, it depends on the category. If the higher you go, suppose you go eight, ten thousand, you don't need any marketing.

Nikhil Kamath 2:32:51 Mm.

Abhishek Khaitan 2:32:52 If you market, you won't be able to sell.... the only thing should be word of mouth and PR, press, and the competitions. If you go highest up-

Minakshi Singh 2:33:04 Yeah, there, there are spirits competitions.

Nikhil Kamath 2:33:05 Is that what worked for your five lakh rupee bottle? Because I saw it in the press.

Abhishek Khaitan 2:33:08 Five lakh, Rampur, Jaisalmer, everything.

Minakshi Singh 2:33:10 Even Rampur and Jaisalmer-

Abhishek Khaitan 2:33:11 Yeah

Minakshi Singh 2:33:11 have done that.

Abhishek Khaitan 2:33:11 So that, that's worked for me.