Liquor License, Alcohol Tax & Liquor Business Secrets in India | Mokksh Sani | FO516 Raj Shamani

39:57No, they want to make more money. For sure. They don't want to reduce the consumption or they don't want to reduce anything. That's not true. So they have no interest in reducing. But now, no, they have. In fact, they reduced it twice since I've been in Karnataka. I've been in Karnataka now since seven years. And during my seven years, so when I entered, you'll be surprised, the bottle was for seven and a half thousand, black label. So I have seen the jump from 7.5 to 6 ,000. And now I believe the next, it's in fact, then the next 10 days is going to be reduced. It is coming down to around 5 ,000.

40:38That's significant down. Why? That's significant down. Because you've realized that people are now buying from different states. So though bar consumption cannot drop because that's something that you're in a bar. And if you're used to going to a bar, you're going to drink there. But home consumption is dropping. so the travelers who are traveling to Punjab, Chandigarh, Bombay, Goa they're buying from there and bringing in the flight but tell me isn't it illegal if you see Living Lucas is only there in Bombay we have a store in Bombay, we have a store in Goa today Goa, my sales are lovely at the airport so everyone at the, because Goa is again cheap so people are buying at the airport and traveling to Karnataka or traveling to Mumbai also or traveling wherever what was the difference between Goa price of a bottle versus in Bombay Goa Black Label is about 3300 that's still much still cheaper and tell me it's interesting the kind of things that you are doing which is very fascinating and I'm having like 50 questions at the same time and I don't even know why but the isn't I think taking alcohol from one state and taking it to another state isn't it illegal no in permissible limits it's okay you're not you're not carrying more than two bottles that's fine okay so you can you can have two bottles and you can not so if if there are more then that's a problem it's more for home consumption it's not for selling or something it's a personal drinking home consumption so I think it's but somebody can argue that their consumption is XYZ versus somebody else's so that is not allowed no no so like you can go and be like hey you drink let's say 10 bottles and somebody has to do it carry it too the guy comes to his he's enjoying his he's seen two bottles in his hand carry he won't have a bomb no is it allowed in flight will not allow you flight allows about 5 bottles I believe per person that too in your main bag I'm not no we seal the bags anyways it's like duty free we give you the sealed bags and you can carry in the hand also so in the hand you can carry 5 bottles 5 bottles so it'll be like 5 litres 5 litres there's no limit of 50 ml 100 ml that liquid no because we are sealing the bags but that can be open no isn't it like a security hazard then it's not a security we have stores in Bombay we have before check-in also so security checks also so once we seal the bag it can be open but it can't once open then it cannot be sealed again explain me every state now because every state will be excised will be rule books will be rules of course so explain me different states and break down like like things for me how does this business operate in Maharashtra how does this business operate in Karnataka how does it operate in Goa I think Maharashtra, Goa, Karnataka all three states have a similar policy taxation is different tax is different but you can apply for a license in Goa also you have to buy a license you can't apply for a license sorry you cannot apply for a license you have to buy a license from an existing in Goa and in Karnataka and in Maharashtra so the government doesn't issue new licenses from 1978 in Maharashtra there is no new license issue so how do you write it what do you do?

44:18So, existing you have there are 1700 licenses in Maharashtra I can buy from you for example you own one license I can buy it from you or I own I want to give up one license you can buy it from me okay that's how you can transfer the name and buy it officially official government goes to revenue name transfer and how much does it get sold for one license in Maharashtra somebody has to buy now the price is about 9 8 to 9 crores 8 to 9 crores for one license and what does that license mean what does it mean how many areas can you serve are there some rules or something no you can open 7.5 square foot wine shop in fact they have put a number on the square feet of the store if you take ordinary license which is called square foot 2 in Maharashtra it costs you about 9 crores legally 9 crores yes which you are giving from the money you are legally licensed it's not like you give certain amount of now it is between the buyer and seller the price is determined between the buyer government government government government government government which is about the legal fees which is about the legal fees name transfer and then there is a limit of 750 750 square feet and if you have to open a store like yours so our maximum stores are 750 square feet then we have a bigger format called mansions obviously mansions is something which officially government has says you can apply for it you pay three times the license fee and you can apply for a bigger square feet where you can open up to 5000 square feet if you want to open above 5000 or above 6000 square feet if you want to open that comes in a different category and you have to pay five times the fees for that so there is three times the fees for up to five six thousand square feet and six thousand one hundred or six thousand one onwards there's another license over five times the fees do you have a bigger store which one's your biggest store five thousand so mansions is about 27 30 crores you would pay for not crores the license fee i'm talking about this is a yearly license fee so two three times the license fee means about 18 into 3 is about 56 lakhs okay so that's that's just the license fee that's a license and then 9 crore you would buy i would buy the license for so that license gets converted into an elite license it's called an elite license so you convert the fl2 into an elite the only difference in an elite is that you get to open for one hour more than the regular timing and you can open a 5999 square foot store and what is the regular timing 10 30 from morning to from 10 30 to 10 30 okay that is from 10 30 to 11 30 okay so now so that's so you buy a license then you can take it anywhere so that's one second is once you have a license in one store let's say your mallard store for example right you would only supply it to the restaurants and bars in that area or no no the distribution is the so there is in our business we mainly have three licenses three different licenses three different businesses you can say fl1 which is a distributor license fl2 which is a retail license and fl3 which is a bar license okay So all these three are different.

48:00And a bar and a retailer have to buy from the distributor. Okay. So the distributor is common. In Maharashtra, we have numerous distributors for every brand. So we can buy from the distributor. The companies appoint these distributors and supply them. Got it. Can you buy directly from the company? No. Why? It's a chain. It's company is only supposed to. so the company basically either manufacture in their factory if they manufacture they also need a distributor because they have the supplier but like somewhere like you you're as good as 75 stores so you're as big as a distributor probably bigger than a lot of distributors I'm a retailer so you can't call me a distributor I am a distributor also but I have a distribution network but that's separate from Living Liquids it's under the Living Liquids umbrella but where my living because retail stores are concerned you can't call them as I'm not calling them I'm saying just because your what would I say your purchase would be so high companies would want to build relationships with you and they can't you buy at a better price and be like hey I don't want to pay a distributor commission why don't you give me directly because 75 stores is a big I can negotiate the commission because you can't bypass but I can't bypass and why is that like why would companies not do you do it directly is there a regulation problem yeah there is a regulation problem they cannot supply their license only can supply to a to a fl1 trade they cannot supply there's a regulation issue so i come from fmcg and in fmcg this is what happens companies they have distributors c and f area wise so they have state wise and then city wise and then inside cities they have multiple beats they've divided right but if they're like a big supermarket like for example, DMART.

49:55DMART would go to directly like a lot of companies and buy nationally. Instead of, so I'm trying to understand. Is there a same as FLCG? This is governed by excise. We are completely governed by excise department. In every state. And it is state wise. It's not central body. This is every excise of every state is different. But the rule is one. No one allows direct company to supply a retail or the restaurant and why are they working as a regulation is there a reason because they want to track also the paperwork they want to track the quantity they want to track the number of bottles you bought why they want to track because that much of tax you will be paying we still come under VAT we don't come under GST so so they need to track all of that but that's almost every trade they have to track everything things.

50:53And everyone will be bad actors who will be out of track and will be out of track. It's not just this. I'm sure someone somewhere is selling a mic also in up or down a plus or minus. So tracking is not a reason or is it like because it's a high revenue, high quality, high margin thing. There's a lot of checks and balances, a lot of control because today with illegal alcohol, a lot of things can happen but with an illegal mic nothing can really go wrong. Fair. But with an illegal alcohol lot of things can go wrong. It can be a life threatening thing also. So I think that's the reason checks and balances are very important in our industry.

51:32And I think it's worked for the longest period. You think it's good to have that? It's good to have that. Because I'm not able to understand and it might sound stupid and dumb because I'm trying to compare an apple to something very different. See I'll tell you where it is. I'll tell you what it is because though I may have 75 stores but my store size is small so if the factory has to remove a truck load it cannot supply a truck load to me it will have to then drop it will have to drop and deliver at my 75 locations which they are not used to doing they will then rather drop it at one location and that distributor such they would have 20 distributors to service me got it i i understand that game i was like but you're such a big buyer you would you can have a warehouse by yourself and that's one thing i can have i can have my centralized warehouse but again brands don't like to give all the powers in your hand that's also a brand's you know they like they want their distributors to make money they want their distributors to exist because it's not about 75 stores it's not about 1700 stores so they want those uh you know the distributors to make money as well let's let's explain the economics okay if there's one alcohol bottle which is let's say 5 000 rupees okay and then where does the every like every rupee goes so what would be the 4200 so 4200 black level that's what we're talking about 75-78 % tax that's like all money gone after that your distributor about 5.5 % to 7.5 % depends on your distributed distributor between 5.5 % to 7.5 % distributor gets there's a 9 % retailer margin the balance is all between COG and ANP as I said marketing how much ANP you will about

53:565 % okay so what's it that's what it is that's what it is what's it what's it what's it if if your manufacturing cost is so low that that's what you have to keep. So, of 4 ,200 pay, what would be the manufacturing cost if you had to give another? Because see, Black Label is now made in Scotland. So, even if Black Label's cost of, say, over here would be about,

54:29I think, 400 or 500 rupees would be the cost of the bottle. With their profits. I don't know what the cost is. It could be 100 rupees is the cost. But the billing price here in Maharashtra will not be more than 450 to 500 rupees. And a retailer would make how much? 9%. So, a retailer would make something for 400 rupees? Yes. Okay. And an A &P would make it for retail. But the retailer would make it for a brand. Not a big brand, but it would make it for the rest of the brand. so I'm just assuming that they're nice and they're spending their money not keeping it themselves okay so 4 ,200 per product retailer makes 400 rupees 420 rupees and the government makes about 4000 rupees and the manufacturer who is making he is making 500-400 rupees he is making 200 rupees 200 rupees so the cost of alcohol and a bottle is 200 rupees which gets sold at 4 ,200

55:40So why is it look like that you guys because you're selling it you make shit tons of money because we are at the last point we are the guys who are taking the money from you so you're swiping your card and paying us thinking that everything is going in your pockets. And it looks like majority money is going to you and half of that would be going to government and paying some officials that's what we all assume that's what the world assumes I'm sure. The state makes about 36 ,000 crores from alcohol. Every year. Every year. And growing. So every year there's a budget given to the state. Bigger is Karnataka.

56:2048 ,000 this year was Karnataka. I'm still blown away with this. I would never expect this. Yeah. I think if an alcohol bottle, which is 5 ,000 rupees. A manufacturer would make like 200-300 rupees and the retailer would make 400-500 rupees. And all the rest of it is agents, governments, agents, governments. It's the cost. Agent also, no. Distributor can be fixed. Imagine. I have all 400-500-400-500. All 400-500. Major will go to 2-500 rupees and government will go to 2-500 rupees. 3-000 rupees. So all of you have come to 1-200 rupees. you all came. You have 3 people to get the distributor, retailer and manufacturer.

57:11And the rest of the 3 ,000 government. And all around the world governments take so much that India is? No, I don't think. This is Maharashtra. This is Maharashtra. Haryana is lower. That's why Haryana is, if you see, consumption is high. But the alcohol revenue to the government is only about 12 ,000. 12 ,000 crores last year. Okay. Because they don't put much taxes. They don't put much taxes. Goa is much cheaper. Goa is much lower. So as I said, the prices are cheaper. If I have a$900 in Chandigarh, my Glenwalk is$900. So, understand the government. Then, it's about 400-500. 400-500? I mean, 45-55 % would go over.

57:57Then, minimum. And this is only India? And is Vodamax? All around the world, 40-50 % government. charge no no I think UK is expensive UK charges about 12 pounds fixed whatever your bottle price no it's not expensive rather it charges fixed whatever the price of your product maybe it charges only 12 pounds a bottle 1200 so if you have black level or red level or single malt you have 12 pounds as taxes so for the problem is there there is the problem So the price of Red Label or the price of Glenwalk would rather be the same price what you get in India. I don't know Glenwalk and Red Label. I'm just saying Glenwalk.

58:43I don't even know. I'm just saying Glenwalk if it's$1 ,700 in Maharashtra. Okay. If it's$1 ,200 if it's going to be$1 ,200 if it's going to be$400 or$500. Then it'll be apple to apple. $1 ,700 or$1 ,800 Glenwalk is available in UK itself. UK as well. And India as well. But if you hire the brand, you'll have a difference. then you would make more money in UK and any other market which is identical which is a mass market like Brazil I'm assuming it will be a cheap market Mexico will be a cheap market US is cheaper US is cheaper UA is cheaper UA even tax is less on alcohol and even US has less US is less so why our government charges more tax on this is that there must be some reason so because if it's a taboo reason then UAE is more taboo than India so if you see last last even they made smoking expensive right cigarettes they made it expensive which is a good thing which is a good thing so that's how that's how could be the thought maybe that people if you can afford it then might as well pay for it then we established that where they made it very expensive there is consumption more let's say Karnataka consumption is higher than any other state because if even though it's expensive it's expensive thesis to government but at least they're making money that way we're the second largest industry after tobacco to service the government but there what I'm trying to answer the second largest revenue from alcohol in our state at least what is your view to stop what is that like completely ban in states that you should have to get a particular tax or high tax completely open or completely banned if you want to basically

1:00:47ban to not because of your business not because of my business but also it's a social drink it's also today a part of our lifestyle so I think shutting it down would be not the right thing But at the same time, I think even our age limits are high. It's 25 in Manashtra. Besides other states, it's 21. Legal alcohol consumption. Age. So I think that's something that Manashtra should look at it. 21 is decent enough. You can marry after 18, but you can buy 25. Why is that? That's the government norm. But see, because the prohibition, I was reading a stat, prohibition doesn't work a lot especially Bihar if you look at Bihar UP is supplying Bihar UP has become the highest grossing revenue of alcohol so Bihar doesn't get such a bad but today that bad is getting in black so how did it help and number of deaths that's almost about 3 a day in our country majority comes from Bihar because you do that if you don't give a path then someone will leave that path so rather give it a legitimate way route is what I feel so I think that doesn't work anywhere prohibition is not working prohibition doesn't work anywhere so if prohibition doesn't work if you don't have more money and taxes then it doesn't work so what should be the way to do it but the government is getting more government's making the money whatever they require to run the state and the consumer is also buying it so I think it's working well for everyone's system but the uniformity if you look at it is not fair that you have a brand in fact there should be uniformity of whatever people buy then I think the right number will also grow I think that's what I personally feel the number will grow in every state and you you think and that's how you will curb illegal alcohol so there was an article today in fact I was reading that the industry of illegal alcohol has gone to as big as 60 ,000 crores what do you mean by illegal alcohol which is made illegally so not tracked by government not tracked by government or someone who's mixing something someone who's mixing so the black label there are people that you can buy today you know black label or whatever you drink there are brands that you can buy from grey market So the grey market exists.

1:03:26And inside the bottle, what you're drinking, you don't know. And you're actually consuming that. So I would rather say that I would rather buy from a legitimate liquor store. You know, you'd rather say that you buy from a legitimate liquor store. And why buy from a bootlegger? And you don't know what's inside. You may be paying half the price or little more than half the price. But what are you actually doing then to your health? Because you actually don't know what's inside it. and how would you know this is legitimate or illegitimate if you're buying from a legal liquor store it has to be legitimate it's no way he's gonna risk his license but can you look at the taste the probably some quality some metric something which can tell you whether it's legitimate or not so the government has been working on certain you know they've been working on certain QR codes and stuff that where it was produced they can't deploy it but I think Haryana has just started it and Maharashtra will follow it very soon where you will be able to scan a code and say whether this bottle has been already supplied to an X retail store or X where has this bottle actually come from you can track the entire history of the bottle but can you tell if you drink two alcohols I can tell you can tell a different thing which is real and which is not I can tell because of the experience that I have but the common man usually cannot tell there's a bottle crisis going on There is a bottle crisis because of the war.

1:04:57Glass bottle crisis, I was reading about it. Yes, there is a glass bottle. Because of that, it's only going up and up and up. Obviously, now that's why the companies, the brands are asked for a price hike and they want a price hike. But ultimately, I think this will all, once the war settled down, everything will come back. But is it costing you something in your day-to-day operations? As a manufacturer, yes. Not as a retailer, because as a retailer, it doesn't make me a difference if my product becomes 100 rupees expensive the consumer is going to pay for it obviously the pinches to the to the consumer which he will eventually look at it but as a retailer i would not feel a pinch right now but as a manufacturer yes because i have to either absorb that cost or take a hard call of increasing the price and then if you increase the price the market share goes down market share can go down at what point does the market share go down 10 20 30 percent or 5 percent depends if my competitors are not increasing the price if they're increasing the price are they ready to absorb do they have the margin so basically if you look at us if you look at us today glen walk which is mine a three-year-old scotch which can be compared to a red label or a valentine i'm already 35 percent cheaper than them today in Maharashtra.

1:06:16I am forwarding this to my consumers. I'm forwarding the right price to my consumers. So over there I have I'm you know hard on margins and if I have to absorb the glass cost I will have to increase the price. So basically the gap between me and my next competitor kind of comes down but they because they are enjoying that extra margin probably they absorb the price. But if you increase your price let's say you're 35 % cheaper today tomorrow you become 25 % cheaper. Will you lose market share? I will lose market share because the consumer starts feeling then that I am cheating the consumer. The consumer does not know the real reason why we've increased the price and our market share could go down by 5-10 % which is something which I would not want.

1:07:02In living liquids what are the 5 or 6 things that you see before you decide that obviously

1:07:16locality it has to be because a posh locality a decent locality I can't be opening a store in Dharaavi today I will have to go to a good you know Hiran Nani type of a locality or a good locality could be there are expats could be there are good working class people living good you know a good area location uh my neighboring stores could be there's a nature's basket there's a there's a food store there's a hyper store next door because so then there are shoppers coming there probably enough parking space where consumers can customers can come it has to be road-facing, can't be a bi-lane or a lane, has to be a wide road.

1:08:09But do you see other competition as well? How many other shops are there? We do see a competition, and we would not want to be very close to a neighboring liquor store. That's something that we technically would not want it to happen that way. And by rule, there is a rule that we have to be 500 meters away from another liquor store. So there is a rule in, you cannot open as close as 500 meters.

1:08:36No, it's 250 meters. 500 meters was, now it's 200 or 220 meters. Now it's 220 meters. You cannot come in more than 220 meters close to another existing liquor store. That's only in Maharashtra. But... So then almost every place will be already. So how would you find gaps? We find the gap because as I said today, we've built the name. We've built the name as Living Liquid. So it's as good as a brand opening versus a ODP. So I'm just saying today, if you have a branded restaurant opening versus a unbranded restaurant who's been there since archive days, you'd more go towards a brand. So today, there is Living Liquid has created its, I can say, legitimate following that we have today that people trust us.

1:09:29The trust that we've built over the years, over the last 20 years, the trust that we've built. People have seen us across airports. People have seen us in shopping malls. People have seen us in supermarkets, hypermarkets. And there's a trust that they believe in. So I think because of that, we're okay with it. You were the first one to start selling alcohol online. I was the first one to start selling online. But online was only... In the country? I guess in the country yes because after us West Bengal has just got the approval last two years back where West Bengal online has become official and I think Swiggy and Zomato are delivering or something of that sort I've heard but during COVID time there was a you know because I'm sure in COVID time everyone saw a line and wine shops outside of the wine we were the only

1:10:27why were we allowed to sell so when you said necessity the word when you said necessity is the wrong word we were the only one business which was officially allowed to open within 15 days of covid really? yes alcohol stores were the only business which was open so if you see supermarkets were allowed, food and grocery stores were allowed. Restaurants were shut but liquor stores were open. Because liquor is a necessity. I now put it up I term it as a necessity that's the reason I term it as necessary. But with the government you will have to But you have opened in 15 days you have opened which you have put in essential goods.

1:11:08Which you have put in essential goods. That's wrong. For you it's great. No, no. To me I think for the common man it's great. Because again you are making him go and buy illegal alcohol. he's going to find ways how to get it. Who wants to drink. Who wants to drink, he'll drink. He's going to again go and buy. So basically, you're doing something. You're opening doors to, you know, you're opening a Pandora box again. Where, what comes out from that, you don't know. Okay, so you were allowed to sell alcohol in 15 days. Yeah. So the government, and there were huge lines, because the 15 days we were closed, they had this assumption that when they were closed, so people were trying to stock people were in lines you know there was a crazy queue outside our stores and we remember our only thing was that we had to shut it early we were allowed some 5 or 6 hours of operations we could open by 1 and close at 6 or 7 I don't remember but it was something of that sort but the line was also long and people didn't trust it why would it stop the government so people were buying in bulk so to ease the consumer and these lines don't have to be because covid norms follow so government has released that you start online so that online permission went on for about 3 years is when we really people and we were the first one to come up with an app and as I said by then we were already a brand so people trusted us they rounded our app and we had a crazy following on the app So online was three years.

1:12:51Yes. And then it closed. And then it closed. Are you worried that actually how much business was online at this time? Nearly 25 % was online. 25 %? After COVID opening? Yes. So then the government started? You have a habit. Today how many of us are shopping online? Like Amazon, Flipkart. If you see their numbers, they're great. has it stopped going out yeah we all shop online today and I think the spend happens much more because we are at our leisure we are sitting in our office or we are sitting in our home and we are ordering and he is also asking he is asking plastic money you saw I don't know I don't know I don't know I don't know I don't know I don't know I don't know so I think online is a great platform government should relax it but all depends on the government now Now, as in Bengal, I have given quick commerce or swigin to deliver alcohol.

1:13:52Does that bother you? Is that a threat? That if I have done it here, then they have a bigger business. They have better delivery, reach, convenience and bigger bank account. And if people have a better business, 10-15 minutes or 15 minutes, if people have a better alcohol, then probably your business is a threat. if it's legal then it's difficult why? it's been in Bengal? Maharashtra comes under Prohibition Act and under Prohibition Act this is not allowed so delivery by itself is not allowed under the Prohibition Act licenses are not allowed under the Prohibition Act so a lot of times whichever government has come they've promised that we may open new licenses through various means and norms but 1978 was the last license issued and today there's no license issued so Maharashtra has an act called a Prohibition Act I'm sure you've read it you've seen it and under that all of these norms don't fit so we are protected that way also it's a good thing so you're protected by regulation but if somebody is able to crack this then you think it's going to disrupt it will disrupt but then i think then we will also do something about do something i mean we will also have a good play in it obviously with the experience as i said with the brand name with the experience with all the consumer patterns and behaviors that we know and we have so many consumers all over the city i think that will also help us some way or the other and your reach would be my reach would be far better because any newcomer that comes today i know they have a lot of money they have a lot of backing and they're big and they're huge and probably they know it but we also know the format luckily we know the format and probably might some quick commerce might partner it with you in order to it could be that as well today we have malls are with us so I think that we could be we only serve as the back end how big is duty free business it's quite big in India but I think the The metros is much bigger.

1:16:11The smaller tier two, tier two, tier three cities are much smaller. Okay. But the metro businesses are decently sizable. Very, very. Okay. And what's more profitable? Airport stores or like a city store? City store? Because airport stores, your rentals, as I said, are so high. The margins. Then why are you there? I'm there today because it's not branding, but it's also our flagship stores. And I have a problem personally. I don't like shutting my stores down it's like a baby for me and it's like you know I can't unless it's really really and majorly red I would only transfer or shut my license otherwise I there's no reason I would shut my store because today it's also a feather in our hat that having you know airport stores has also helped us build the brand name that we are build the trust that we have so you would operate at thin profit margin you're like it's okay it's okay branding toh bhot jyada mil rehi i would and you said abhi you use word consumer psychology ki apko consumers pata hai consumer ke psychology pata hai behavior pata give me two three stats two three things that you understand about consumer who buys alcohol so this my consumer psychology that i know also helped me create my own brands i knew this i know this sweet spot the price the pain point of his uh the the kind of when we sell brands day in day out and there's a new brand that is born every second day you know there's a new brand that comes to our shelf the every second day we are the first ones who get the feedback from the consumer no he did like it he did not like it there's a taste profile what he preferred what he didn't prefer whether it was a color whether it was a taste whether it was a strength whether he really liked it and for whatever reason the first feedback actually we get so i think uh which also helped me use all of this to create our own brands so this is one second could be the price points which are right which are wrong uh divide divide let's say market into three pieces okay motor motor ideal profile ki jo based on consumer data and psychology that you understand about the alcohol in India.

1:18:31A profile which is cheap market, mass premium and premium. Okay. So, somebody who is buying at cheap, what is the price point? And what is he looking at and what is his behavior? Explain. And then do this. At 150 rupees, he wants a kick. That's it. If he is spending 150 rupees a day, he wants to sleep well. He wants that Nasha and he should have a good sleep at home that's all he wants and obviously taste profile he sees that color because they that's what I feel that people see alcohol with their eyes first the strength of the color the way it's orange and dark they prefer that means they feel that it's more strength and Nasha will be more and if you can give them something at 150 rupees is nothing like it.

1:19:29That's it. And he's not looking for taste, preference, anything. It's just like just to be honest. He is looking at taste and preference but the first priority is the right price because he would never be able to afford more than that. Okay. And what in India is the most important in India? Your early range whiskey. Whiskey? Whiskey. 150 rupees on whiskey? Quarter. Three pegs. Quarter is what? 180 ml. 180 ml and which brand would be killing it in this it's then there are in this price bracket there are regional brands so which regional brand Maharashtra would be Maharashtra now has just introduced a new policy called MML Maharashtra made alcohol so they are killing it so which brand would be who would be killing it 1-2 there's a lot of brands there is Derby there is

1:20:24there is Derby and there is Orin City okay these brands you've not even heard of I've not heard of any I've only seen okay and then Karnataka would have a different profile Karnataka has a different profile there you have again in 150 rupees you have these brands called Original Choice which is your comparative to these these brands which is at 150 rupees okay so that's there and they would be ideally very profitable these houses the guys who are not very profitable very thin margin because at 150 rupees you really as I said 80 % is the government and whatever so they wouldn't have large businesses the business is very large but margins are very thin okay so then we come to the second second price range what will be 220 that would be your McDonald's number one no I'm saying like the customer is mid premium like this 150 to 500 I'm assuming would be a customer okay then your second range is starting from Blender's Pride what that is that is about 500 rupees okay so from 500 to how much 500 to about 700 this range will be in this range the customer will be in this range okay and what is the profile of this kind of customer who are these?

1:21:43college kids he could be anyone he could be someone who is if he is drinking about one bottle a week I'm saying a full bottle so he is spending about you can say 6 ,000 rupees on alcohol a month which and if he's giving about 10 % of his so his salary would be somewhere around 30 40 ,000 rupees a month okay that could be a guy working at a call center could be a guy working in our offices could be anyone okay this that would be that profile what do this person optimizes for he he thinks he wants a cool brand he just wants to be cool he wants a cool brand at that price point so glenwalk came in that cool brand uh segment when we launched at 1700 rupees and our competition our scotch whiskey competition was 1500 and we bring a scotch at 1700 because the next scotch was at 2500 was unaffordable by him so his jump from 1500 to 1700 was much easier rather his jump from 1500 to 2400 okay but you said 5700 your customer that is the 180 ml okay okay you're talking about a bottle yeah i'm talking about a bottle so my 180 ml also or rather we have a 200 ml is at 600 rupees okay so his jump of 100 rupees was easier than going to a jump of 1100 or 1200 rupees got it and what's the difference between a whiskey and a scotch so whiskey is uh probably does not have a malt mixed in it and a scotch has about 15 single malt mix in it and what does that mean that kind of uh i can say it smoothens your alcohol okay so a single malt malt is basically what kind of brings your harshness levels down and gives you a very smooth uh taste okay so that's where you realize this is the so i want to make a cool brand for this profile yes and give them a better product yes 100 give them a upgrade them from a whiskey to a scotch because there was no upgrade happening from the from the longest of time that i was in the business i never saw that guy getting upgraded because his upgrade was so far off unless he gets a a double salary jump he's never gonna be able to upgrade make his expense double so we really saw that you know price point as I said the sweet spot and we brought him there I said we'll make less money but at least we'll upgrade the consumer and let him first get upgraded and then let him at least and how did you identify someone's need like do you have your customers told you that they want to upgrade but the salary is not there like what is the how did you identify see i thought uh there was this gap that's why when i went to scotland it was a very it was a trial and error for me means i said i'm going to make a pallet a pallet only has about 800 cases i sat obviously it's a it's a journey that i went through of four years and all of that but the idea was again as i said i always liked doing my experiments and trials so when i went to scotland i went i sat with the blenders i made this blend and i knew what i wanted for my consumer i exactly knew what i could give him but i was always wondering whether this would work this would not work so when i created the palette and i came back I thought this palette would last me at least 45 days to 60 days we were wiped off in 15 days nice so I had a practical problem but I had a good problem in my hand yeah and I understood that my pilot has worked and somewhere we got the confidence okay now this is what we should do nice okay so this is what this is how it started this is the second price and then the premium one premium one was a single malt and

1:26:03again our single malts were not being explored more than the age i mean there are single malts which are available in the country are like 12 years 15 years 18 years whatever the age profiles but the taste was not different they were not getting blends like how you get blends into single malt they were not getting blends where i saw the gap again and when i went to scotland and i sat with them and i said now i want to make a premium single malt but blends with flavors so we made a sherry cast finish which gives you a sherry wine so we actually cask it in a sherry cask for about six months and it takes all the flavors of the wine and in a single malt gets mixed so we've got a sherry cask we've got a oak cask we've got a bourbon cask we've got a rum finish so we've got four different finishes and this is what we're trying to give you in a single malt okay so it's like enjoying you know something flavored in in your single malt which which has more body which has more flavor it has much more than what you're actually just drinking by age because it's more or less otherwise it's more monotonous you're drinking the same liquid just for different ages and that gap i i identified that this was not this was missing in the single malt segment is what we brought to india and that's how we got it and then this price range would be six thousand okay and what is the what is a six thousand rupee customer getting which a 15 150 rupees customer is not getting

1:27:50obviously the quality okay status there is no no it's not status it's also the quality it's also made distilled that many times it's a pure in a in a way if i can say it so these whiskeys would be distilled about once or twice and we distill it 14 15 times as much as single malls single malls are made in with a single grain they are made they are made a single grain the facility is obviously much more techniques that are used in making developing these brands i mean there's a lot more i mean you just don't charge something for something what is not there so the taste is quite superior the smoothness the smell the bottle the packaging the brand a customer is able to identify differentiate between this the taste smoothness and everything 100 % A common man is able to do it Yes Yes 100 % On the first sip he takes He will understand If he's drinking a single malt At least Or a whiskey And if he also compares us To the You know Other single malts He will Differentiate that Yes this is a blend This is sherry cask This is rum cask Okay He does identify and understand Tell me top 3 things Which makes An alcohol more expensive Bottle The packaging

1:29:07duties no what my point was from a cheap bottle of alcohol let's say there is one type of alcohol which would be thousand rupees and then there's the same type of alcohol which is probably available in 50 000 as well what is the difference like a whiskey would be available in 1700 rupees and is available at 1 lakh rupees as well because that is the age right of the whiskey obviously a a 1 lakh rupee bottle that you're saying would not just be 1 lakh rupees just because the bottle is fancy. It would be the liquid has been aged for that many years. So I'm sure a 1 lakh rupee bottle would be at least a 25 or a 30 year old aged whiskey which has been kept in a barrel for 30 years somewhere in Scotland or Japan.

1:29:56If it's a whiskey, it's a single malt, say Japanese single malts or single malts made in Scotland. these are the only two places in Malts are actually actually supposed to be and what is the difference between one year old and 30 year old good question what's the difference it's a taste profile it's the taste profile you really cannot say what's the difference it's it is the taste profile it is what you like and is it more to do with status and quality and it's like I've made it in life so now I can drink expensive things obviously it's like flying in a plane and flying in a charter i mean yeah that is what you made it driving a car worth five lakhs and one car or five crores it's it is the status no doubt it is the status and you start liking you start liking things which are premium or which no one else is having it which one would be the most expensive alcohol that you've ever sold oh glenfiddich 50 years old somewhere around 25 lakhs a bottle 25 lakhs a bottle yeah people buy that a lot or like no no not a lot it's all like one bottle probably in one or two years okay it's mainly for gifting if it's you know it's someone's 50th birthday and obviously it's it's more like that which is the oldest alcohol I think about 90 year old McCallion does a 90 year old bottle and how much of that if I didn't if I read it right it was available in Haryana for about one and a half or two crores wild wild which are regular bottles which get sold at maximum price for you two or three under 50 ,000 rupees is a no brainer today there is no doubt yeah so tequilas mezcals single malts wines under 50 ,000 rupees to the tag of 50 ,000 is not a difficult task to be sold.

1:32:06But anywhere above 50 ,000, once that benchmark crosses, then it's obviously, it has to be a fluent consumer who is buying and the brand has to be that well-known. And how do you build a brand when you can't advertise? So brands which can't advertise, I think we build it by a global story. The more your brand are seen across duty-free, across the world, that definitely builds your brands hence today with Glenwalk also in early stage only we decided that we need to have our global division and travel retail division because if travel retail does not exist we will not be able to build the brand so the brand doesn't exist yeah so you would then have to pay heavy to distributors because they will be the they will know that they are the ones who are driving demand so all airports will charge you a premium just to get a spot wouldn't they to brand and advertise with them yes they charge a very heavy premium but uh but there's also a long queue in getting your brands selected because they select they get if india has three thousand or four thousand or odd brands they have i don't know i don't have the count of number of brands that an airport gets offered on a day-to-day basis so how do you get into an airport then so it's uh to getting into an airport is definitely your presentation how you present to them uh your liquid your packaging your pricing your story behind the alcohol your your sales numbers wherever you're existingly selling you've got to be they got to be great it can't just be that i have only made a brand for the airport and coming directly to them there's a story behind that today when we went to ua dubai was the first market that we touched when we went to ua with our product obviously sanjay that being our partner and owner and founder of the company or of the brand made a decent impact but apart from that they also like the liquid when they tried the liquid and the price point as i said we're 35 percent cheaper in the scotch category we also pitched in the same price difference to them and in that price range when they saw us and when they saw our india numbers they were very very thrilled and they were excited and immediately they kept a new way also has a very big fan following of sanjidad plus a lot of indian Indian people you know kind of shop there and live there and travel so it was easier for you it was much much easier how do people find out about your brand if you haven't done anything somewhere you haven't done anything and you can't market it so how would the things move in Dubai sorry you have given your alcohol Dubai duty free they have put anywhere inside this behemoth of 500 5000 I don't know world of alcohol how would somebody know that this brand this brand exists also so we do advertise with them in flight magazines we do advertise with on their on their apps there is a duty free app especially so we do advertise in all of that and that does help us and

1:35:30you know having Sanjidat with us as a partner definitely helped because the word of mouth had already spread that Sanjay Dutt has launched his own whiskey. Even in India, though we can't advertise, but it was a business news. So as a business news, we had at least 200, over 200 articles in the first three months itself. Through various media channels, right from Types of India to all the reputed channels. entity we had in a showcase they had a slot for us i remember so i i think we had enough publicity and enough word of mouth so drive demand we were a household name when we launched so it's a celebrity that worked it definitely i give sanju the credit and he's been an integral part of our company so that's why you have multiple celebrities that's why i have multiple celebrities how many celebrities you work with now?

1:36:33With every celebrity. Our company's policy is that we don't mix brands with any celebrity. We've given them one month segment. So if scotch is with someone, I will not do a scotch with someone else. If whiskey is with someone, I will not do a whiskey with someone else. And that's how we've segmented it. So today with Glenwalk, there's Sanjadat. With Glen Journey as a single malt is Ajay. Ajay Devkan. With vodka, we have Baatshah. We've just signed Saif with my Irish whiskey. Okay. And we've signed Varun Dhawan for ready to drink. Okay. So we currently have five. So ready to drink is Seltzer type.

1:37:15Seltzer type or you can say Breezer type is what we are eyeing at. We're launching that in the next two months. So Saif and Varun are gonna launch. Saif and Varun in the next two months, three months will be launched. And we have another five celebrities in the pipeline for this year you've already signed them conversations going on conversations so now my question was why every celebrity wants to work with you and because we've proved ourselves uh we've done 300 000 cases last year that's 25 26 we've done 300 000 cases uh we're the fastest growing brand at least in Maharashtra if not in the country but in the country we've been able to reach 16 states in the last two years this year we will reach 28 states and 6 countries we are already in so internationally we are in 6 countries and 16 states in India.

1:38:24Crazy. There's a trust that they've seen in me. I've proved myself. And I think every celebrity somewhere sees that if we could do it with Sanju, I'm sure I can do this again with them. And there's clarity in the business. I don't mix brands with anyone. Everyone has a different company under which they are there every celebrity with me is in a different company he is a stake owner of his company along with me so and whose brand are you bullish on next next kon sitni ban jai fastest would be i think next

1:39:08my money would be on varun and probably I would want all my of course but I see the fastest segment would be Varun's because at 120 rupees or 150 rupees ready to drink which will be rum base, gin base and a wine base category we're doing the similar thing with Batsha vodka base ready to drink that's the reason my money is with Batsha and with Varun because that's going to pick up who do you think is better to build an alcohol brand with? A Bollywood actor? A pop star? Or some creator who's now become big? Or like a comedian? Like for example, Samair Ayana building a brand or like Bhuvan Bum building a brand or then maybe then doing Karan Ojala from pop culture and then Bollywood who would be the top right now let's say Ranbir Kapoor I don't know I would definitely love to work with Ranbir Kapoor from all of these names and Sameh Rana because I know they're following I know what they bring on the table and so what would you build with let's say Ranbir Kapoor a good cognac okay expensive expensive high end high end has to be high end and Sameh Sameh could be something fun could be something with Sameh it could be a beer.

1:40:50But beer you don't want to enter? I don't want to enter but with Sameh I would do a beer because his audience is very his audience is more younger, more chirpy. But breezer type sort wouldn't work with him? It would. A ready to drink also would work with Sameh. But it's already gone for me. So you would spend more on quality than on advertising? I will but you wouldn't do let's say concert marketing branding all that stuff no we have branding we will we do it and we have to do it so I think we've already gotten that side of the business including bar brandings including we've started making clubs now on our name so club bars we've started developing on our name so you will soon have a Glenwalk bar in Bandra you will have a Glen Journey bar in Bandra so those bar would be operated by you not necessarily operated by us but the brand the name of the bar is behind the brand so some club inside that the bar would be yours yes and we're talking to Khajim Khana so it's okay we're already we've not signed but I think by the time this will air it'll already be out we'll have it so inside Khajim Khana there used to be a Black Dog bar okay years back it's changing it's changing to Glenwalk are you scared of the giants?

1:42:17do they not trouble you? the companies? I'm the largest retailer to them

1:42:27so no but that way I don't think as I said I think there's enough space for everyone there's no there's no need to be scared of anything as such What's the biggest challenge in your business? Licenses in retail. And in the manufacturing company, it's the number of licenses that you need. The number of approvals that you need. It's more than, if I have to actually put it in words, it's more than 25 licenses that I need. And 25 licenses to get to just import one brand is not easy. how much time do you take does it take to get you 25 licenses times and we have to do this every year you have to do this every year you have to go through this for every state differently for every year so your legals must be happy imagine you spend about the first after every march 31st you spend about 60 days in just getting mixed making sure that all your licenses are in place because till then you cannot sell your alcohol.

1:43:37Like how did you convince Sanjay Dutt to come become a partner? How do you even know him? When did you first meet him? I met Sanju about 20 years back. 20 years ago? 20 years ago. What was he doing? Who was he doing? I had an opening of Living Liquids in Andheri. I think you know it. Star Bazaar. So I wanted to, it was a, it was a, so I think if I'm not mistaken 2010 2009 2007 is when 2007 is when I was opening that store and it was a big format store it was a 2000 square feet store and I had a dream that I wanted a celebrity to open and ribbon cut that store so i had a friend banti walia i called banti walia and i said banti i he was an event company and an event management company and stuff so i called him i said banti do you have any celebrity that we could go to i don't have a big budget but i would like he said bro i'll take you to sanju and sanju is a great friend of mine he's like a brother to me and he won't say no and i'm sure he'll not even charge you or whatever but we'll see it it's not so tough and you know I would love you to meet him I said fine I remember he was shooting at Meiboop studio and Banti and me were sitting in his vanity van and Sanju comes and I was like I was I had no words you know I could not even speak well that time to him that sir what do I so I was just like sir I have a small liquor store opening and he said liquor don't worry I'll come which way to tell Banti and Banti will come to me and we became friends i mean we exchanged numbers there and he came for the opening trust me bro he did not even charge me one rupee he did not even charge me one rupee he didn't want to ask anything from me next day out of courtesy i have sent him a hamper home of some 20 30 bottles or whatever he liked to drink that time i asked banti what does he drink and i made a hamper and i sent it to his house and that's about it he did not being a star and i'm telling you back then 2007 he was at his peak.

1:46:01Yeah. And that's the kind of person he is. But why would you come for free? I have no idea. Just... I have absolutely no idea. It was probably for the love for Bunty. I can't say that he saw something in me or anything of that sort. Because I was just a 25-year-old kid and I don't think there was any more conversation that we had in terms of commercials or anything. So it was love for his friendship for Bunty and he said he will come. and he said Banti ne bola don't worry I'll be there and I remember Banti picked him up from his house and brought him till there and he was there for an hour in our store interacting with guests customers my parents my elder brother I still have the picture with with my nephew who's 22 now and he was like three four years old that time I still have that picture since I started since since I stepped in 25 years I've made so many brands and what are we recognized for?

1:46:59I mean, we are recognized for a beautiful store, but what are we recognized for? What other recognition do we have? And how can I be a global platform? You know, I can't open living liquids across the world. Obviously, that's something that will be too much to ask for. Given the time span that I have, I'm sure I won't be able to reach the entire world but I said if I have that aspiration that I want to make something I can at least attempt making a brand for myself which if success is there in destiny then I can make it a global brand and that's how the thought of Glenwalk came into my mind before Glenwalk in fact I had launched a gin it was called Sochi with no celebrity with no one and it tanked so I have had my share of you know it never picked up I don't say it tanked it never picked up no because there's no marketing it was no marketing it was a beautiful product my friends still today remember the gin and I know I will launch that gin again someday probably next year right now probably is the wrong time because I have my hands full but next year I will launch that gin back with someone and I know that gin will do very well because the product was very beautiful but for some reason I couldn't really and I was thinking then if this failed should I stop or should I, so I said why not get into the best category that is what India really likes you'll be surprised 75 % of India drinks whiskey so India is really a whiskey market so I said why not make something what India has maximum consumption of I mean gin is probably one or two percent consumption in our country so I said let's try our hands on that so I once I got the product here as I said I imported it my first call because on my speed dial was only one celebrity I knew and I was friends with was someone whom I could just call directly and say bro can I drop in can I come home and I told him I said bro I've made something and I want you to see it I want you to try it and I have something that I want to talk to you he said come home come home for lunch and I sat with him I showed him the bottle and I knew that Glenwalk was for the masses who could not upgrade or who wanted to upgrade so it was for the masses and Sanju is clearly a mass hero he's clearly someone the mass loves him so when I showed him and he was like you think I can carry this and I said bro I really think you can do this and he's like so if you're saying let's do it it took me about two hours of brainstorming with him then he asked me questions how would we you know kind of how the production go and the quality has to be you know Moksham giving my name and I said don't worry about that you know me since now 20 years 25 years and that's a trust that he has on me and he trusted me and he said bro you're doing it chalo I'm on and let's do it that's it here's my last question which is if some entrepreneur is watching this and they want to build a business now based on your understanding of what's going on in the world and what are the opportunities what would be one opportunity that somebody can start today to build a really big business in the liquor space any space up to you which you feel is it opportunity which you are not able to do right now or maybe you are not doing but you feel there is a big business to be built in India someone sitting in India 25 year old Moksha version want to build a van wants to build a van see the first thing is if someone wants to really make it big how big I don't know but if someone wants to make it decently big A obviously your intentions and hard work and all of that is is a given that you need to have that and your dedication what you want to put in that all is fine but should have enough money that he can pull off the business for at least for the first three years on by himself he should not start a business thinking that he would if he does well he'd get investors in the next six months.

1:52:04I think most of the businesses fail there. But be very specific and give me an example of what kind of business somebody should build and how much money would it take them to build today? Something which you feel is an opportunity. See, I'm completely in the F &B space. So I think F &B completely suits. I really cannot comment on something else, which I'm not part of. I think in food and beverage, if you talk about alcohol, see, you need deep pockets to sustain. When I'm saying two years, three years, be by yourself, either be committed to be a local brand, regional brand. If you have less money and you want to do alcohol, it's a great business.

1:52:41But then don't try and jump cities unless you have the backing for yourself. Because don't bank on any investor coming in early because either he's going to take maximum equity back from you and you'll be internally working. And at the end of the day, you'll be working for him, which is also not good. So have enough money that you can sustain the business, but run it only regionally till you prove your numbers. That's one mistake what people do is they go all across the country thinking that they can expand too soon. And investors will bank them in the next six months, which they fall flat on.

1:53:23So definitely liquor is good. b i would say if you don't have a capacity to open a full-blown restaurant then start with qsrs so i think if if someone wants to look and doesn't have the capacity to do a full-blown restaurant qsr i don't think there's any branded qsr across the city yet as a food chain what food could be burgers could be fries could be but he had to say sari mcdonald's and stuff at just McDonald's is again a restaurant. I'm saying a QSR. McDonald's is again a restaurant. Jumbo King would be there, no? Jumbo King is a QSR. That says big bread. Burgers or fries. I don't know about that.

1:54:10But where do you see them? Outside airports now. That's it? But where do you see them? I'm saying in your city, in Bandra, in Andheri, where do you see them? In Pabai? Can you really see them? do they have 75 80 100 locations i don't know so you think there's an opportunity there is an opportunity opportunity of qsrs definitely and what specific food you think india will be eating right now and would want to be eating rolls there's an opportunity you feel that's somebody some somewhere should be building this i really like this i wouldn't call it quick service restaurant maybe quick service restaurant only something like bene i really think what bene has done is incredible.

1:54:53I love their taste. They're expanding fast. Akhil is an incredible person. But again, that's an expensive That's an expensive model. But they didn't have a small bantra that's not like very expensive affair. I think South Indian food by itself was long due when you know the Shivsagar of the world we've already had but that never upgraded. And they were always built to suit a palate of a region. Like Bombay Shivsagar is a Bombay type dosa it's not authentic it's not authentic it's not authentic dosa so bene is trying to do that and they are i see pandra juhu and now in i think town they've started if you see delhi there's this brand called hatti cafe in bangalore yeah yeah i think that's not something that's there in in bombay so if you also look at that as a qsr and want to build that as a coffee shop but not as a coffee shop as a qsr can be built aggressively so many people have said this to me and they're talking about it here to make it very regional and make it national or pick up something like korean or something international only and qsr has an opportunity.

1:56:13See Korean still has a play you know Korean will not do in Meera Road I'm just saying it might not do in Dhaissar it might not do well where there's a taste profile but something that is Indian and regional will any which ways do well the chances of you know you being successful are higher than Korean because in the scalability will be, I think, kind of reduced. Do you think healthy food will be a thing? Quick healthy food or you don't think? Quick healthy also is an option. It will be. Why not? Because that's something which I feel is probably missing in India. Because India is not salad eating country.

1:57:02But the only change I've seen in US probably or New York specifically. That may be a city specific. If you went 10 years ago and now you go 10 years ago, it's the same. There's no change in that city. There's no change. It's the same. It's the same. There's no change. There's no change. That is, the store of salad is very big. So salad, I think New York has really up their game. And all around the world, vegan salad, all the butter in India has not come. So I think food changes all around. So do you think in India, salad is becoming a thing or not? India salad is becoming a thing. But I think the amount of healthy bread options that we're getting, people are also moving towards that.

1:57:48Because we need, I think we eat carbs, like no one's business. So I think healthy breads is really gone crazy with our country. Got it. And you go to these bougie cafes and all of the world and you get so many sado breads and these breads. And, you know, earlier you only had those limited multigrain. And today you have so many more that you are spoiled for choice. And they kind of give you the same calorie count. 50 protein breads. they kind of give the same calorie count so I think it's better that way than having salads true well better toh nahi but easier for people to do it alright well thank you so much I had an amazing time I didn't even know we were recording a podcast today it was fun hi how are you good to see you sir tell me what is a friendship profile you have I in fact told them that I want to do this venture.

1:58:53And so there were seven friends. And I invited all seven to do a restaurant with me. Nice. So there was a 10 ,000 square feet space that we took in Phoenix at Palladium, the backside, which was Pelle Phoenix. In 2003, we opened a 10 ,000 square feet, three brands of restaurants. So seven friends of mine all got together. So today when we shut that, somehow all became restauranteurs. Thank you so much for watching this episode till the end. Now you have to do three things. Number one, subscribe to this channel right now. The more you subscribe, the better the guests we will be able to get for you.

1:59:32Number two, please comment and let us know what did we do wrong and what did we do right? Because the more you give us feedback, the better we will be able to make episodes for you. And number three, please share this episode with at least one person because one conversation can change someone's entire life. I'll see you next time. Until then, keep figuring out.