A Spirited Fight
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Image: Vikas Khot
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REARING FOR A FIGHT: Deepak Roy wants to take Officer's choice whiskey to the No 1 slot
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ake mine a double. That’s a favourite line of the grizzled cowboy in old Western movies. Now, Deepak Roy may not wear a large-brimmed hat or boots with spurs, but he would perfectly fit into a modern-day corporate Western.
When he walked through the doors of Allied Blenders and Distillers (ABD) in 2007, he had his sights fixed on one target: Officer’s Choice Whisky. But the rest of the bar was in a shambles. Its promoter Kishore Chhabria had raided the safe to finance his legal battles with his brother Manu Chhabria, who ran the more famous and publicly listed Shaw Wallace. There was no head bartender for ages, employee morale was at its lowest and banks wouldn’t lend the company a penny. This was just the challenge the new CEO needed.
Roy is no ordinary liquor salesman. He was the founding CEO of Diageo’s India business (formerly International Distillers India, prior to the merger that created Diageo). When he left, he was president, South Asia, Russia and Baltic regions at Guinness UDV, a Diageo company. He is credited with the success of brands like Smirnoff in India.
He was also slated to head the biggest spirits company in India, United Spirits, a promise he claims liquor baron Vijay Mallya never kept.
In the two years Roy has been around at ABD, he seems to have worked magic. Officer’s Choice achieved a milestone in sales — it crossed 10 million cases in a year, a record that only 11 other liquor brands in the world have surpassed. Sales have increased 31 percent for the last three years and Roy says that he will have the balance sheet cleaned up by March next year. So, will he take the company public next, encash his shares and quit?
The worry lines on his forehead become evident as he raises his eyebrows. He won’t say if he has an unfinished agenda after quitting Mallya’s group because he was denied the top post. Roy says, “This is just the beginning. We will come to that when we further unleash the power of the Officer’s Choice brand.”
And United Spirits has felt that power in Haryana, Madhya Pradesh and Rajasthan where Officer’s Choice has displaced Mallya heavyweights like Blenders Pride and McDowell’s No. 1. Roy uses the cliché ‘low hanging fruits’ to describe his achievements.
Didn’t the competition trouble him? Again, there is a slight trace of emotion. Roy admits that United Spirits holds a virtual monopoly in Uttar Pradesh, India’s most populous state and won’t give him an inch. In Punjab, big liquor distributors won’t stock his Officer’s Choice. Roy shrugs it off.
Over the course of an interview, Roy makes it clear several times that he is in no need of a job. Why is he working so hard then? We have to go back to 2002 when Roy left Diageo.
Diageo, in a global re-organisation, wanted to sell some of its local brands. Roy who was then heading the company’s operations, put in a bid. He won the bid, bought Gilbey’s Green Label Whisky and Gilbey’s Old Gold Whisky with a consortium of bankers (IDFC and Ashok Wadhwa) for Rs. 78 crore. He got a sweat equity of 26 percent in the business.
Later, Mallya bought out the financial investors. The brands were valued at Rs. 120 crore when Mallya finally bought out Roy. Roy won’t share the exact amounts but he made a little more than four times the worth of his initial stake. He then joined Mallya, who promised him the top role in the spirits business as a part of the deal. But Mallya dithered and Roy quit in 2005. The current managing director of United Spirits business, Vijay Kumar Rekhi, took charge of Roy’s businesses too.
Roy then started his own premium wine company Valle de Vin with Ravi Jain, another Mallya man, and recently launched its first brand, Zampa, in the market. So, when Chhabria first approached him, Roy was reluctant to take up an assignment in a one-brand company. But a 5 percent stake and an opportunity to play with Titans lured him. Currently, his stake is valued about Rs. 50 crore.
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