Business - Diageo India MD's Interview

Diageo India MD's obsession with Return on Time Invested keeps him at work beyond midnight - but when it's at a bar, who's complaining?

Asif Adil makes sure he spends every night at the bar after his 12-hour day in office. And these days he is spending a lot of time over Mumbai's latest craze — single-malt dinners, the male equivalent of kitty parties where rich and famous men get together to discuss expensive liquor, sports, cars, and of course, women.
The India boss of Diageo, the world's largest liquor company, somewhat grandiosely says he is only doing what Mughal Emperor Akbar did hundreds of years ago — observing how well his administration is running by interacting with people directly, write Shyamal Majumdar and Ruchita Saxena.
"Liquor is a nocturnal business," says Adil, " and it makes little sense to pack up and go home after 8 pm." His sales people, who are used to getting SMSs from him at midnight, would vouch for that. Adil, however, doesn't expect his sales team to keep as punishing a schedule as his and allows them to come to office after 2 pm.
We are at Shiro, the Japanese restobar in the Bombay Dyeing mill compound in Lower Parel. The rather narrow entrance can be deceptive as Shiro, which means castle in Japanese, lives up to its name.
Adil has, however, chosen the venue for a more mundane reason — it's just a two-minute drive from his office. In fact, this is the first time in many months that he is stepping out for lunch. The other reason for could be the display of Diageo brands in the restaurant's rather well-stocked bar.
It's important, Adil says, to be as close to the market as possible. He observes young people at bars, listens to their small talk, observes their drinking habits and makes constant mental notes.
The practice has given him great ideas. For example, he has started serving Diageo's liqueur brand Baileys in chocolate cups on silver trays in the countless parties held in metros. And they are selling like hot cakes. The inspiration for this idea came from his observation that a growing number of women drink at parties but mostly opt for sweet-tasting wines. Baileys is slowly becoming a hot favourite among women, says Adil, looking approvingly at the waiter serving Nilaya, the company's latest wine specifically aimed at the Indian market.
"I hope it tastes fine, and don't worry, it has very low alcoholic content," he says. The salesman has obviously chosen his wine carefully for his ‘target consumers' who, like him, have a long day ahead at work. Adil chooses the starters and his experience is evident. The lamb sticks and soft prawn helpings go wonderfully with Nilaya.
Diageo follows a top-down strategy, with a greater marketing focus on premium brands. "People's desire to upgrade to premium liquor has put the tide in our favour," he says. No wonder, the company's sales grew 40 per cent last year, two-and-a-half times higher than its growth in previous years. Adil wants Diageo to become a $1-billion company in India in the next three years.
The tide, says Adil, is also shifting to smaller towns. Last week, Diageo sold two cases of King George V, its most expensive offering in India at Rs 45,000 a bottle, in Pune. Single malts, priced between Rs 5,000 and Rs 7,000 a bottle, sold four cases in Nagpur. Guniness beer, that costs Rs 450 a can (a nitrogen ball in the can helps the beer to pour out with a perfect, creamy head) is also selling "by carloads".
"Tier-II cities are where the real action is. People are eager to try out aspirational brands," he says. "Like wine and cheese, champagne and caviar, I see Single Malts and Kashmiri food catching on in India fast."
Since it's in Diageo's interest to sustain this culture, the marketing budget runs into hundreds of crores; the company even runs a Johnnie Walker Bar Tending Academy. That explains the company's Armani-clad bartenders who speak and dress the same way as their customers.
Even though there are a lot of starters still on the plate — more because of the quantity rather than the quality — Adil looks pleased as we empty the Nilaya bottle. As the main course — garlic rice and Thai chicken in green curry — is served, Adil resumes the growth story of Diageo.
Ever since he became Diageo India's managing director in 2006, Adil has introduced nearly eight brands a year, mostly in the top-end slot as that's where the real margin is, and the market the company understands well.
Adil says his only obsession in life is ROTI — Return On Time Invested — and asks his sales team to give a detailed account of how they spend their eight hours at work. The pressure-cooker existence notwithstanding, he doesn't think attracting talent is an issue for Diageo as is evident from the fact that almost 70 per cent of the people have come through internal references. He wants his sales team to work with an entrepreneurial spirit, a streak which he himself has.
For example, after his rather successful stints in Shaw Wallace and as a Partner with McKinsey, Adil co-founded the hugely-successful Kaya Skin Clinic with close friend Harish Mariwala of Marico. "Kaya was my baby and I spent every moment seeing it grow," he says, with a tinge of sadness. He, however, sold his 26 per cent stake in the company in 2004 as the business needed more money that he had.
Kaya and Nilaya are the names he had thought of if he had daughters. "But God gave me two sons. So the names went to my other children — Kaya for the skin clinic and Nilaya for the company's latest wine," he says.
The Kaya experience made him realise the pain his close friend Ramesh Chauhan must have felt when he sold the Thums Up brand to Coca-Cola — a process in which Adil had a major role to play during his days at McKinsey, as Chauhan's advisor. He remembers the long walks with Chauhan around Mumbai's Wankhede stadium, trying to convince him to sell Thums Up. saying that the brand needed a lot of money to survive in the face of stiff competition.
That's why he felt pained when Coke took a lot of time in realising Thums Up's potential in India. In retrospect, he feels he would have advised Chauhan differently if he had known that the Indian economy would take off like this. "Selling a brand is difficult. It's like giving away your baby," he says.
For the moment, Diageo India is his baby and he spends all his time helping it grow and prosper. His punishing schedule (it starts with a 7.30-am conference call with his colleagues in Singapore) doesn't hurt his family much as his two sons are studying in the US. His wife is usually busy when he returns home well past midnight — she is an investor in the US market and her peak working hours coincide well with Adil's working hours at bars.
As a political science student, Adil wanted to be the prime minister but realised soon enough that it would remain a dream as he isn't diplomatic enough for a successful career in politics.
As we wait for his car to arrive, Adil says he enjoys nursing a King George V drink in late-evening parties with Mumbai's glitterati, but it's still only a professional compulsion. The Diageo boss longs for his all-time favourite from college days — Old Monk with Coke