MD & CEO | 28 Dec 2011
We are operating at the premium level of the market, while Teacher’s Highland Cream is actually at the top end of the pecking order. We are playing up the inspirational value. We believe in offering the best and not necessarily at the least price, and that has been our effort; we have been very true to our quality. The consistent quality in the spirits, especially the Scotch, is the key to our success. Yes, Teacher’s has had its share of challenges, but has never compromised on its quality.
Harish Moolchandani has been Managing Director & CEO, Beam India & ISC, since August 2005. Prior to this, he was managing the same portfolio at Allied Domecq Spirits and Wine (I) Pvt Ltd since September 2003, before it was acquired by Beam Inc.
Moolchandani had worked with Allied Domecq for over seven years. Prior to his appointment as Managing Director, he was Vice President – Sales at Allied Domecq and had played an important role in maintaining leadership position in the Scotch segment with its flagship brand Teacher’s Scotch Whisky. Apart from heading the sales operations of Allied Domecq, Moolchandani was also Vice President, Finance, for the company.
His previous stints were with MNCs like Becton Dickinson India and Whirlpool India in various finance positions.
In this interaction with exchange4media's Suraj Ramnath, Moolchandani speaks about Brand Teacher’s, its success story, India as a market for Scotch and more...
Q. How has the brand Teacher’s fared in India?
Teacher’s is the No. 1 scotch brand in India right now. That people know Teachers because of its quality since the early 90s speaks for itself.
Q. Which are the target markets for Teacher’s Scotch in India? Have you targeted only the metros?
No, we are proud that Teacher’s is available across India. So you can say that you can find Teachers in 50 per cent of the stores in India. Even if I don’t go and sell Teacher’s to the people, stocking Teacher’s in the shop is a shopkeeper’s pride and this is how he announces that this is a good shop. Even if there are some markets where I don’t have my distribution, I will still see the shops stocking Teacher’s brand there.
Q. Given the ban on liquor advertisements, how have you promoted and created awareness for Teacher’s in India?
By being as creative as possible in the most regulated environment. We have been one of the most responsible corporate citizens in the country and we respect the law. We would like to use all the channels possible for our brand building efforts. We have mostly used the BTL route, but we have to use the communication platform that is legally compliant in the respective Tier market. So, we have been using through the line approach for our brand building in the country.
Q. Do you have any surrogate product used in advertising?
We have no surrogate products that could prove that we have any surrogate brands for advertising.
Q. What other forms of advertising have you done around Teacher’s to keep the brand recall high in the minds of Indian consumers?
Like I said, through the line; we have done a lot of BTL activities and used the media available to us. Thus, we have been using print, electronic, social media, Facebook, Twitter and so on. We have been trying to be as contemporary as possible to build our brand image in India.
Q. What would be your focus areas for the brand in 2012?
We are very much going to be focused on the Teacher’s franchise. The launch of Teacher’s 25 and Teacher’s Single Malt will help our cause of not only building the Teacher’s franchise in this country, but also popularise and create its own niche segment in the minds of the consumer. With its halo effect, it is only going to help the brand grow from strength to strength.
Q. What is the current market position and market share of Teacher’s in India?
Teacher’s enjoys a little over 37 per cent share of the market in India. We are the No. 1 selling scotch brand in the country and we are growing at a little over 20 per cent year-on-year.
Q. What are the growth targets for Teacher’s in terms of revenues and sales?
In terms of volumes, we are growing at above 20 per cent, but we are playing the market even more smartly by having around 200-300 basis point adding to my value. So, if I am growing my volumes by 20 per cent, then my value will be increasing by 22-23 per cent. Every year there are too many variables on stake, so we are getting to a volume leading to a value chain proposition for us.
Q. Liquor prices had gone up around two months’ back. Did Teacher’s also increase its prices? How did it affect your sales?
Of course, we have to fall in line with the increased duties and there in no way you can accommodate that in your PNL. Obviously, we try every inch possible to make our product as affordable as possible for our consumers. The impact wouldn’t be seen in just two months, but it would definitely be seen in the next couple of years. With hike in duties, there will be a dipping point for our product, where it will not grow as much as it should and that might lead to the availability of what we call, grey stocks, and that too at the cost of the exchequer and the consumers. The consumers, because we are not giving them enough chance to make the right choices. So, at the end of the day it is the consumers and the brand custodian who take the brunt.
Q. What is the current positioning for brand Teacher’s in India?
We are operating at the premium level of the market, while Teacher’s Highland Cream is actually at the top end of the pecking order. We are playing up the inspirational value. We believe in offering the best and not necessarily at the least price, and that has been our effort; we have been very true to our quality. The consistent quality in the spirits, especially the Scotch, is the key to our success. Teacher’s can boast of its consistently high quality over the decades, forget about years, because this brand has been in existence for a little over 180 years – 1830 onwards, to be precise. Yes, Teacher’s has had its share of challenges, but has never compromised on its quality. I have been a custodian of this brand for over a decade and a half and can vouch for it.
Q. What is the spends allocated for the marketing of Teacher’s in India?
We spend about 22-23 per cent of our total net sales for the marketing activities in India.
Q. How big is India as a market for the scotch segment? What are the annual sales of the scotch segment?
According to the reports from the Scotch Whiskey Association, the sales are up by 23 per cent for the last quarter. I won’t say that would happen year-on-year, but sales in the last quarter is much higher. I reckon this year Scotch whiskey sales would be up by 25 per cent, which is a huge number. Nobody can understand this number. In Europe and the US they usually talk about high single digit growth, I have never seen people talk about double digit numbers. Last year, it was around 12-13 per cent; I don’t know why this year is so high this year, you don’t expect it to happen in such an economic environment.
Q. Please tell us more about the Teacher’s Achievement Awards. How has impacted your brand image?
Teacher’s Achievements Awards is now in its 11th year. In early 2000, we were contemplating what should be the platform for brand Teacher’s and what were the values that we could attribute to the brand. We went to our agencies and talked internally and also to our regional marketing teams. What we figured out was that in India people were not very forthcoming while talking about their aspirations and achievements. This was one of the platforms that was identified as the common theme that linked the qualities of Brand Teacher’s.
We have been building a lot of pillars around the Teacher’s Achievements Awards. One thing we were particular about the Awards was that we would not dilute it and keep it as inclusive, robust, transparent and visible as we could. Along with inducting a very knowledgeable advisory board and an accomplished jury, we also had validators who made sure that we were not going wrong. Thus, a lot of hard work has gone into bringing Teacher’s Achievement Awards to the stature that it is today and various stakeholders have contributed to its success.
Q. Any special plans around X-mas and New Year?
In India, Scotch attracts a lot of promotion around the time of Diwali, weddings and leading up to Christmas and New Year celebrations. We would definitely be a part of that. Indians are celebrating more these days than before and I can see that our upwardly mobile users are looking out for a reason to celebrate and make every occasion special amid their busy lives.