Wednesday, February 27, 2008

Khoday India Make New Beginning
India’s oldest liquor producing company Khoday is now rediscovering itself by revamping its image, strategy and marketing abilities to meet the demands of the challenging domestic as well as international market. Satpal Chaudhry, COO, Khoday India Limited in a tête-à-tête with Ambrosia outlines the company’s preparation to reposition itself and how it plans to create its new avatar.
Khoday’s flagship whisky brand, Peter Scot, was the only Indian 100 per cent malt whisky stored in Oakwood which could be truly called a scotch whisky, (not considering the fact that it is bottled in India and not in Scotland), and was a very popular brand in India. Many old timers will recall the heady days of the brand when only spirit companies like Khoday and Mohan Meakins made their presence felt in India. At that time the market place did not include the presence of both UB and Shaw Wallace. Mr.Chaudhry is proud of this heritage. He says, "With a strong base in northern India the whisky drinking belt of India, Khoday’s, Peter Scot brand was a familiar name among all traditional Scotch whisky drinkers in the region. Khoday continues to this day evolving since the time when there were no other breweries or distilleries in the country."
Chaudhry says that producing top class whisky has always been the first criteria of the Khoday family since its early days. The penchant for perfection is seen in the fact that Peter Scot is even matured for minimum five to six years. There are also some Peter Scot batches which are matured for 15-20 years. Most of the time, during blind tasting, Peter Scot has proved itself to be the best in comparison to some world-class premium Scotch whisky brands. “The credit goes to the Executive Director Mr Swami Khoday and Managing Director, Mr Hari Khoday because they never compromise on quality,” he said.
So, what really stops this company from being more visible and regaining its past glory? Mr Chaudhry feels, "Since Khoday's was a family run business they found it difficult to adopt the changes happening in the industry at that part of time. UB or Shaw Wallace gradually started getting their foot prints in the market place by their professionalism and took advantage of the emerging opportunities. They brought in new technologies." Recalling his time, Mr Chaudhry said when I was in Shaw Wallace in 1993 there was no beer business. They entered the market and created the beer business. Within nine to ten years, the company achieved the capacity of 2 million hectolitres to 24 million hectolitres.
That was when Khoday realized the importance of an outsider for a change in the dynamics of the family run business and I joined them as a CEO. After 14 years we have reached a production capacity of around 40,000 cases to 2 lakh cases a year. And Khoday will not have to worry about catering to the increasing demand in the Indian and global market due to the huge amount of its maturing stock. With a lot of optimism, Mr Chaudhry said that he will reach approximately 1 million cases within three-four years time. "We have imported a lot of wood since we have always had distillation capacity but never had storage capacity."
At present Khoday has 3 distilleries in Bangalore and 11 bottling plants based in Nagpur, Jammu, Haryana, Goa etc. Only the plants in Bangalore are Greenfield projects. We make our own malt spirit in Bangalore. Khoday also has 5-6 outsourced bottling arrangements in Nagpur and Hyderabad, while UP is in the pipeline. However, the production of Peter Scot and Red Knight are not and will never be outsourced because of the quality consciousness of the owners, he said.
The brands that are bottled outside include Democrat Whisky, Red Night Select whisky, and Hercules Rum These are positioned in the entry level segment and require mass production hence they are outsourced.
Riding on the growth path, Khoday’s expected sales volume could reach up to 7 million cases this year in comparison to the last year’s figure of 2 million. We are now on a growth path. The production is also being streamlined. From a situation where some of the plants were not operational we are working to bring all of them into operation mode. Almost all the 11 distilleries were not operational but with a renewed interest of the management we are trying to get all the distilleries functioning.
Peter Scot is priced in the same range as Blender’s Pride or Antiquity, but the quality of Peter Scot is much superior, he said. In spite of having its own plant in Nagpur; Peter Scot is outsourced from Bangalore because of the decision of not bottling it anywhere else, as a result the volume has not been increasing as per expectations. Red Night Select is going to be produced in Hyderabad. This will be priced at an equivalent rate of McDowell’s. This will surely help in increasing the volumes and Khoday’s brands would grow in that market too.
Revealing some of his future plans Mr Chaudhry said, “I am going to bring one more brand to be called Peter Scot Scotch which will be of premium category like Teacher’s. We are also trying to negotiate with one of the distilleries in Scotland for import of bulk Scotch. Our aim is to place Peter Scot Scotch in the foreign markets.
Although the liquor business is its flagship business, Khoday has now diversified into different other industries in recent years including Biotech, Real estate and glass making, however, liquor brings in maximum revenue for the company. According to Mr Chaudhry the company plans to touch around Rs 500 crores turnover in 3 years from its current turnover of Rs 200 crores and to touch Rs 1000 crores in 5 years time.
The dynamic man who runs the entire business is Mr Hari Khoday, Managing Director and Vice Chairman and Swami Khoday is the Executive Director for liquor business.
Highlighting the controversial aspect of a whisky being called scotch even if not bottled in Scotland, he said, Peter Scot could also be called a scotch. Scotch is a malt spirit matured in Scotland. If the same malt spirits is matured in India, then it does not really make any difference. Malt is a better grain and after all, Barley is grain.
Meanwhile our plans of totally streamlining our operations are being pursued in real earnest. We are getting more professionalism in our approach and advertising and marketing of our brands are on top of my agenda, he says. Our endeavour is Khoday’s into the limelight now and this will not take more than two years.
Personnel is the core of our strategy to build a team. We are constantly hiring skilled professionals, shaping up the distribution system with right pricing and marketing strategy. On the advertisement front, we have started advertising for Red Night soda and are looking for more dynamic ways to advertise Peter Scot too.
The export market for Khoday too has opened up at a right time. The first container with 100 cases of Red Night and Peter Scot are sent to Italy, though the order has been for around 1 lakh bottles. The company has also signed an agreement with a distributor from the US.
Though we have got a lot of queries from Australia, New Zealand, Middle East, Singapore and Malaysia, we are taking tentative steps. Keeping in mind the current business plan, the company will be investing around Rs 200 crores in marketing, distribution, and exports.
The company’s beer business is also doing quite well. Hercules strong beer is only available in Karnataka and another new strong beer has been recently introduced in Hyderabad called Sovereign. There is also a Sovereign premium lager beer. Though we are just beginners in the beer business, we have plans to make it a full fledged one from our current strength of one brewery with capacity of 2 million cases, within two years.
Mr. Chaudhry also revealed his plans about the contract with the German beer brand, Kalternberg. He confirmed that Kalternberg will be brewed in India in our brewery. This will be on a royalty basis. The brand will be called Kalternberg Pure malt beer which will be brewed in Khoday’s brewery.
The bullish atmosphere prevalent in the stock market seems to have a positive effect on liquor companies. A sleeping giant is now waking up.


PETER SCOT - is a fine Indian Malt Whisky - made by a Company in India and based at Bangalore. The product has been in the market for more than four decades now. The whisky is blended and bottled in the Distillery situated in Bangalore -
One of the finest whiskies available in the Indian Market is PETER SCOT.
Karnataka and BANGALORE in particular, apart from being the SILICON CITY, is also home for several brands of top quality liquor. These liquors are PRIDE OF INDIA and some of them are better than the best known whiskies across the world including Scotch whisky.
Indian Liquor Companies are producing top quality liquor including excellent Beers. No wonder, the consumption of Whisky is growing rapidly in India.