- Only man whose advice I sought Bauji
- Love of my life Devyani, my little girl
- Love the line Yeh dil maange more!
- Worst period of my life Mala’s demise
- My way Pursue what i want. Rely on gut feel
- Favourite poison Scotch, but nowadays, only wine!
- Absolutely love Friends, food, Thailand! La Petite Maison in London... awesome food, perfect presentation. Hindi movies where you know the end in the beginning!
- My religion Gain some, give some
- Stupidest thing I have ever done Ignored health. Trying to rectify now
- Scariest moment In Angola, when I went with an associate who had a well-entrenched business there, and he was shot dead in his room the next day. Never went back.
- Most embarassing moment Caught snoring in a swimming pool!
- Best days of my life Now!
My life came crumbling down that day. Mala was visiting India to bring back Devyani. She was what, four months old then? I can’t define what I went through when I got to know Mala’s plane had crashed. I was shattered…Life looked all set and then someone pulled the rug from under my feet. I was so blank, broken. I was drowning in grief – married for just two years, now left with a little baby girl. Bauji, and everyone else in the family thought it was best I married Dhara. Who could have related to my grief and been the best mother to Devyani than Mala’s own sister? I went with the decision.
But Dhara didn’t want to live in Canada. I had been away from home, from India for more than 15 years. I was just 20 when I went to Canada from New York…Soon enough; I knew I wanted to live there. There were so many adventures and misadventures. Brick by brick, I had built a decent business in Montreal – expanding the family textiles business there, adding some retail assets, and real estate…
I sold off everything, all I had created, except our home. We moved back lock, stock, and barrel to India. Those were the days when my life moved the fastest but every moment felt slow.
Canada to India itself was a big change. And Montreal to Agra? I had no clue the turn life was going to take. Agra depressed me – there were no friends, no family, those were not the days of mobile phones… not even landlines. You had to send a telex or a fax…It was just me and the factory. We had a two-bedroom house on the terrace of the factory – that’s where I lived. Morning, evening, day or night, it didn’t matter – I spent all my time at the factory. Agra those days used to have incessant power cuts; at least in the factory, there was 24-hour power and water supply. Most days, I used to be in the shipping department till two in the morning….
I was still grateful to Bauji for being thoughtful enough to have split the business between the three of us. It happened because of me – CK and SK were managing things smoothly, as Bauji had withdrawn from day to day operations of the bottling plants and was managing only the Bank. I was the one who came in suddenly and wanted a piece of the pie, but they were graceful. Bauji was clear – CK and SK would have the first right to choose, I will have to accept whatever remained. It was fair. I had nothing to complain.
It was natural for SK to choose the Nagpur plant, he was managing it anyway as his in-laws were from there. CK’s choice was understandable too – who would want to leave Delhi? It’s the city we grew up in, we had a mansion to ourselves and it was the best place for the children to grow up.
The unloved one was Agra, despite being the city that epitomises love! You couldn’t be visiting the Taj everyday anyway! When you are battling questions about life and death, the last thing on your mind is love and romance. Every weekend, I would head back to Delhi to get a glimpse of Devyani and spend time with Dhara. Bauji was always a pillar of support – he stood there for me like the Rock of Gibraltar… always.
Who could have thought CK’s move would alter our trajectory the way it did. It was timely, far-sighted and a profound call. It was he who chose to give up Thums Up and shift camp to PepsiCo, asking me to consider it as well. The writing seemed to be on the wall. A huge multinational was coming…if PepsiCo was, so would Coca-Cola some day. The duo dominated the carbonated beverage market the world over; they couldn’t be taking India lightly. Thums Up, on the contrary, was well-entrenched in the country. But among their 60 bottlers, our tie-up was just for three territories. The runway for growth seemed limited. I was stuck in that 100 kilometre territory for so long – I was raring to go.
Those meetings with Ramesh…He was upset, any entrepreneur passionate about his business would have been. He had built a formidable local brand. It’s not easy for a local player to take on a multinational with deep pockets. For him, the challenge was not limited to the marketplace but the entire supply chain – the bottlers, distributors, everyone in the chain. He said Thums Up’s story was still very strong. I replied Pepsi was the choice of the new generation...It was a business decision – there was no role for emotions.
Probably, the only thing Ramesh could have told us, that could have held us back, was that he would eventually sell out to Coca-Cola. Maybe, he didn’t think of it at that time, we certainly weren’t anticipating it either. We had, anyway, made our choice – there was no going back. You could only be part of one camp – we chose PepsiCo.
It was a tough move. Until then, we were telling distributors what a fine cola Thums Up was, what a great company Parle was, with its 80-90% market share. Suddenly, we had to switch, and say, “this 10% market share product is the best, it is the future. Now, try and sell it”…that’s what we were saying, only in a more dignified way.
Lalaji was most unhappy – he had been with us for so many years, looking at the distribution in Firozabad. All distributors were. They were so sentimental – they were probably right, it was their bread and butter, to them it would have seemed like we were taking a huge chance. Thums Up had appointed a bottler for the territory already and every distributor was being wooed. Still 75% stayed back, they still trusted us…
That was 1991. It was an inflexion point. That’s when the journey got legs…
Pepsi grew, we grew. We grew, Pepsi grew. That’s how the initial years were…galloping on a horse. I was aggressive, wanted to grow fast…we got our second territory - western UP, then we got Meerut. We put up the second plant in 1994. Then came Rajasthan and a third plant in 1995. By 1997, we were catering to half of UP and Haryana, part of Delhi and all of Rajasthan. Then came the big moment…
I was in Hawaii with my entire family – 16 of us. Pepsi had invited me for a global meet. There were about 5,000 people in a grand hall. I was asked to sit in the front row…it was so overwhelming. I knew something was up, just didn’t know what. The moment my name was announced as the international bottler of the year, I had to pause and compose myself before walking up the stage. What a feeling that was, getting the award from a former American President. Along with George Bush senior, there was Margaret Thatcher and legendary CEO Donald Kendall – the stage was oozing power. That day I felt like I achieved something. Bauji was proud, everyone was happy.
But then the dilemma…all of us, me, CK and SK, were confused. Should we? Should we not? Suman, Hugh and the global chairman were all there at our Agra factory…When they started talking about growth, it sounded great. It was daunting though…where would we get the resources from? I needed about Rs 150 crore for my territories alone. CK and SK needed probably as much.
Pepsi had a grand design – to put in the required funds and then convert to equity later…they obviously wanted some assurance that we would not switch to the rival camp. Obviously, they had much at stake. We were a significant partner. Funding was required, but who wants to let go of equity? Would we not lose our independence, control? Day after day, the same discussion would ensue at home. Finally, Suman met Bauji and sealed the matter. Bauji said categorically, “If you want to grow you have to get this partnership going and learn to deal with them.” If we had not taken Bauji’s advice to give away equity to Pepsi, we wouldn’t have grown as rapidly. So much so that four years later we were in a position to buyback that equity.
More importantly, had I not conditioned myself to working in partnerships, it might not have been a long and smooth ride. The first few years in any partnership are always great – it’s the honeymoon period – but when you live together for a longer period, avoiding friction becomes much more difficult. You can only learn to deal with your partner better. Bauji’s advice was so bang on – you can never severe ties with a company because you are having a tough time dealing with one employee – in the end employees are employees, they may be in the position today, may not be there tomorrow, but as an entrepreneur, I had to be there for good.
Did I know back then the opportunity Pepsi would open up for us? No…I didn’t have it all charted out. Not that I ever fancied elaborate numbers, projections or presentations. When opportunities cropped up, if it felt right, I would go ahead and bet on it. Some of those worked, some didn’t…
I always knew the restaurant business will do well in India, but we were more than lucky Yum! Brands ended up in our lap. It was thoughtful of Sandeep to have offered me the franchise. He was handling Pepsi Restaurants then. They had just opened a couple of restaurants and were looking for people… I remember Sandeep said it casually, “Why don’t you give it a shot?” I jumped at the chance, but the debates at home, my goodness! Bauji was dead-against getting into a business that served non-veg.
Defying Bauji was tough – he was always my sounding board. There was no need for a mentor, friend or guide, Bauji was there for everything. Whether I felt troubled or needed advice, he was the one I turned to. But the arguments we had over the restaurant business! I couldn’t understand why he was thinking the way he was – business is different from personal choice. We were all vegetarians…I still don’t eat meat. But we can’t stop others from eating it! So many restaurants serve non-veg food…if we did not take up the opportunity, somebody else would. But his argument was: is this the only way to make money? I just could not see his logic. He could not see mine. I was in no mood to relent or let go of a business opportunity that came on a platter. He was disgusted…
I knew there was no way he would visit any of the restaurants but I was hoping he would at least greet the Yum! chairman when he came home for dinner. He simply refused to come out of his room. In fact, whenever he came across anyone at Pepsi, Bauji would tell them, “Please sell this business for Ravi and give away the money to charity.”
That was the one thing I did that Bauji didn’t want – he was never happy about it. Should I have backed off? I still don’t know…but it will always be a chip on my shoulder.
He lived his life by his principles. He had the conviction to refuse an offer from Hilton to buy out our house and turn it into a hotel. Hilton would have paid any price – Prithviraj Road was some location. But Bauji said, “I am ok with it, provided it is a vegetarian hotel.” Hilton wasn’t amused, obviously.
Living a life based on principles is tough, but it makes you more disciplined…
It’s amazing, even though he was not in agreement with what I did, he didn’t stop supporting me. Except in the restaurant business, he was there for everything, his sheer presence was comforting. But for him, I wouldn’t be where I am…
I wasn’t disciplined, I was in a hurry. Everything has its time, I realise that now…We were ahead of time with so many businesses – there were, of course, businesses whose complexity I grossly underestimated.
We approached Starbucks more than 10 years ago. They said they were not ready for India, but perhaps, they thought India was not ready for them. So, we signed up Costa Coffee, we wanted to pursue the coffee business...we were too early. The café business is gathering momentum in India only now. Starbucks has finally made its entry. Still, the market isn’t ripe. Few stores are making money. It beats me – how can you charge the same price for coffee as anywhere else in the world when your real estate cost is way high? How can you pay the rent for someone who wants to sit in your store and sip a cup of coffee for an hour? I had been to one of my stores – it was packed. When I got back to the office and saw the P&L, it was still negative! How do you make money then? Maybe it will change if more people pick up coffee and leave, drink coffee as you walk, rather than sit in the store… or if they paid more for the coffee…it’ll happen, albeit slowly.
It was good fortune we did not go berserk with Costa – to drag on loss-making stores. Even better, we shut the stores that didn’t work. I was cautious with Yum! too, initially. Thankfully, there were no disagreements – we had put up just eight restaurants in the first seven years. Why would we not expand if the business was great and throwing cash? Things looked great in 2014, it wasn’t the same in 2004. We already had more than 100 stores two years ago, buying 30 stores of Pizza Hut from Yum!, we had the runway to add at least a 100 more. The count is up to 280 within a couple of years…it simply made sense…
Disney could have been equally big – but what a disaster it turned out to be. Phew! everyone was selling stuff cheaper…. it’s such a great brand, we were so bullish when we signed up, but how could we have competed in a market where there was no exclusivity and cheap imports were the order? Roshini was understanding, she assured us but I guess there was no way to fix it…
Partnerships don’t always work well – and it may just be no one’s fault. When CK and I decided to bring in Creambell back in 2003, it made perfect sense. It probably did not make sense to remain as mere supplier to Levers but we did that for five years because the deal was lucrative. There is a difference between being a franchise and a mere supplier. But we had no option when the Lamba and Ghai family sold off Kwality to Levers.
Perhaps, I could have taken charge of Creambell earlier. Maybe, we could have turned around the business much earlier. There’s no point thinking of all that now. Ice cream is not an easy business – it is a highly competitive market. It requires great focus and a tight leash – CK didn’t want to continue, glad I could buy him out.
It’s a lesson I am not going to forget. It’s one thing to have a long-term vision but you need to have a pulse of the market to know what to do when. Daily MIS really works… especially, since I can’t be there supervising every single business on a daily basis. But before that, you’ve to be sure where to place your bets.
People ask why I sold my stake in the AB InBev joint venture. I was talking to them for nearly a year, I didn’t feel that it was a great idea to continue. I don’t know how I was able to emotionally detach myself and take that call. Budweiser was great…we built it from scratch here, made it the largest selling premium brand. But I couldn’t grow all the businesses, could I? I have limited cash flow.
I can’t forget the trip to the soccer World Cup in Rio – Carlos Brito was clear they wanted to grow aggressively. I can’t blame them for wanting to grow fast. But we couldn’t have coped since our ambitions didn’t quite match. I didn’t want to commit the capital required nor did I want to dilute the stake below 51%. I could have tightened all our businesses, matched up or stayed on and fought them. Neither was a great option. There was no point being wedded if we were not going to walk hand in hand.
There was a better opportunity knocking at the door anyway. Buying out other Pepsi bottlers was certainly a better proposition… it allowed us to consolidate our main business. It ended as a win-win for all. I got the money and bought the six bottlers, and they were happy to break free.
Would I have made a choice like this some 20 years ago? Most certainly not. My energy levels were far higher, I wanted to do different things. I may not have let go of one business to consolidate another business. But now I don’t want to run around building new things, it is time to consolidate. Already, most businesses are growing at a pace that I can’t handle. Its best Varun decides where he wants to go…
I would like it if Varun takes chances because this is the time he can afford to…He has a great platform, even if he commits a few mistakes, it wouldn’t hurt that much…
The best part of being an entrepreneur is to be able to pursue what you want to. You need to have the conviction though to take the call. The ability to decide fast, put your conviction on the line...that’s what the entrepreneurial edge really is – that’s what differentiates you from multinational companies or conglomerates. I always gave myself that chance, took on new challenges. The trick is to test businesses with small doses of capital…that’s what has always held us in good stead. It didn’t matter if we lost a couple of crore here and there, as long as it did not upset the applecart.
I am glad about Varun – he is running the Nike and Apple stores by himself and is excited to scale up. If he picks up our core business quickly over the next couple of years, I can probably take a backseat and let him run the business.
What will I do then? I simply don’t know…I’ve grown up in a business family, have business in my blood, I can’t ever relax the conventional way. I am relaxed only when I am at work – when I am faced with new challenges. I would grow much older, much faster, if I don’t have something to challenge me!