Secret Diary of Ravi Jaipuria, founder, RJ Corp | Biography Part- 1 | Outlook Business | Outlook Business
Home  /  Specials  /  Secret Diary Of An Entrepreneur  / "Walk together or walk out" | AUG 04 , 2016

Vishal Koul

Secret Diary Of An Entrepreneur

"Walk together or walk out"
Secret Diary of Ravi Jaipuria - Part 1

N Mahalakshmi

Ravi Jaipuria, founder, RJ Corp

Personal information of Ravi Jaipuria 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… 

sketch of woodI 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…. 

wedding photo of Ravi JaipuriaI 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 It happened because of me – CK and SK were managing things smoothly, as Bauji had withdrawn from day to day operations of the bottling plants and was managing only the Bank.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. 

beauty lies in the eyes of the beholderThe 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.

pepsi

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…

thumb down

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 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…

This is the first of a two-part series. You can read the second part here.

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