In an interaction with Anil Mascarenhas of IIFL, Lisa Srao says, “The steady rise in disposable incomes has led to an increased acceptability of alcohol consumption. In the last 10 years, the number of drinkers has increased from 1 in 300 to 1 in 20. The women’s market in India is expected to grow 25% over the next five years.”
You were obsessed with sharks and wanted to become a marine biologist. What made you shift paths?
I wasn’t inclined towards Biology as a subject, even though I was obsessed with sharks. So I chose a different route altogether. I pursued my B.Sc. (Hons.) Degree in Managerial & Administrative Studies from the prestigious Aston University in Birmingham, with a specialization in International Marketing and Consumer Behaviour and moved into the media industry, working in marketing with the top media companies before moving to India.
One would have thought there is a bottle available at every price point for every taste. What gaps did you identify which helped you launch this venture?
Back in 2008, products in the price sensitive bracket were sub standard while all quality products commanded hefty premiums. By virtue of my exposure to my father’s business of liquor distribution and my industry stints in the UK, I noticed a specific gap in the Indian market. The premium liquor segment in the ‘mass market’ category was completely under-utilized, both in terms of accessibility and variety, and there were only very few players in the market. Capitalizing on this gap, I incepted I Brands to raise the bar for the industry in the chosen space.
What are the trends driving the liquor industry today?
We see more and more people migrating to bigger cities, where they are exposed to a wider variety of alcoholic products including IMFL. The steady rise in disposable incomes has led to an increased acceptability of alcohol consumption. In the last 10 years, the number of drinkers has increased from 1 in 300 to 1 in 20. The women’s market in India is expected to grow 25% over the next five years.
You moved to India in 2003. Tell us a little about the inception of your venture.
When I moved to India, I was dismayed to find all quality products – from bread to biscuit - to be extremely expensive. Studying the dynamics of the liquor industry, I realized that very few players were catering to premium end of the mass market. Since I always wanted to start a venture of my own, this seemed to me like the right opportunity. I Brand vision was incepted with a vision to provide superior products at affordable prices to the Indian consumer. Quality and price needn’t be related. Me and my team invested in extensive R & D over 2 years and I realized that I could not bring in products from abroad like I envisaged before, as to be truly price competitive, I must manufacture in India itself. The tastes in India greatly vary from state to state, so it was important to create an Asia-specific brand at the given price segment. We researched the blend, packaging and segment very carefully and finally commenced India operations in August 2010 with the launch of Granton Whisky, our flagship product.
What are the different brands under the I Brands umbrella and what’s the revenue mix? Tell us about your manufacturing facilities and expansion plans.
We have in our portfolio, an all-encompassing range of brown spirits. Appropriately positioned in the mass market premium segment, the current portfolio includes:
Granton Whisky (flagship product) - semi-premium whisky (MRP: INR 285 – 565 for 750 ml)
Three Royals Whisky - a premium whisky (MRP: INR 350 – 735 for 750 ml)
Rum 99 - Jamaican flavored dark rum (MRP: INR 210 – 330 for 750 ml)
Granton XO Brandy - a rare French brandy (MRP: INR 280 for 750 ml)
We are an award winning and a rapidly growing company. Our products are available in 15 states at over 6000 retail outlets, across 120 cities. Delhi, Karnataka (Civil), Maharashtra and Telangana are to be launched by end of this fiscal year. We are now looking at the 2nd phase of exports to the ASEAN markets, i.e. Vietnam, Laos and Thailand. Our endeavor is for our turnover to reach 500 crore in the next 5 years. We have two bottling units in Punjab and our products are manufactured there. Granton Whisky is the star product and contributes to 60% of the company revenue. Since we’ve just begun exports last year, it is too early to comment on the export figures.
Being a capital intensive industry, how did you manage the required funding?
The liquor industry in India is incredibly challenging for marking an entry, as it is dominated by few big players with deep pockets. We faced a lot of issues as I didn’t have the kind of funds to play with that is the norm of the industry. Also, being an unknown company, we had a hard time getting distributors to work with us. Additionally regulations in each state were also very different from the other in terms of excise duties, licenses required etc.. We strategically planned to take a slow and steady approach following a semi urban – village route in distribution, developing a solid base foundation in the states that we are present in, before opening up other states. We also perfected the blend of the products along the way as per the need of the consumer. All of I Brands products today are hence receiving a phenomenal response in the market. The same distributors who were reluctant to stock our products are now repeat purchasers.
With GST likely to see light of the day now, how do you view this development?
I don’t think GST will be a major influencer, as liquor industry goes by growth in consumption demand which is robust. With India being the 3rd largest global spirits market by volume in the world, just behind China and Russia, this demand will only grow more. High growth and numbers for liquor companies will be visible in the coming years as this sector in India is getting more organized and demand for branded products are growing.
What is your advice for budding lady entrepreneurs?
More and more women are venturing into this sector, and we see more women in leadership positions, at the helms of companies leading by example, inspiring many more in the country to come forward and be the change. I have three pieces of advice for budding lady entrepreneurs: Don’t look at it as a woman in a male dominated field. Look at it as a business. You will succeed if you have a sound business plan, a strategy, and a unique product and if you do your R&D properly so you are abreast of the industry. Always remember that the consumer is the king. Pay attention to the feedback and don’t be afraid to tweak your product as per the need of the consumer. And, lastly, believe in your dream, and be determined to make it come true! I am truly inspired by Steve Jobs and I would like to share one of his quotes, a motto for me - “The people who are crazy enough to think they can change the world are the ones who do”. Yes, absolutely.
Do you have any other plans to start a new business in the future? Or would you consider expanding products and services under the I Brand initiative.
We don’t have any plans of starting another venture as of now. But we are definitely looking at introducing new products. In fact, a new whisky brand is being developed right now to be launched later this year.
Comment on your distribution network. Why is it more concentrated in the north?
We are present in 15 states in India - - Punjab, Haryana, Jammu & Kashmir (Paramilitary), Uttarakhand, Chandigarh, Assam, Arunachal Pradesh, Tripura, Daman, Goa, Andhra Pradesh, Pondicherry, Mizoram, Orissa and Karnataka (Para military). Our first market was Uttarakhand, and we organically grew in the north. Now with our products being launched in Andhra Pradesh, which is a very important market for us, we are looking at expanding in the Southern Indian states as well. Karnataka and Telangana as mentioned before are slated to launch later this year. Apart from this we are now also exporting to ASEAN countries – Cambodia in the first phase, that started last year, and Vietnam, Laos, Thailand and China in the 2nd phase.
With more women enjoying alcohol, do you think it can turn into a cause for worry as far as family life is concerned?
We’ve always maintained that alcohol should be consumed in a responsible manner. This applies to both genders. We offer a variety of choices from our fantastic product portfolio but we also stress on the need to be responsible about the intake. If the pleasure comes at the cost of disturbing family life, it becomes a pain and defeats the purpose.