Coca-Cola, Pepsi boycotted in Tamil Nadu, rival Manpasand Beverages’ MD D H Singh makes waves in drinks space

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New Delhi | Updated: March 28, 2017 3:43:10 PM

When trade associations in Tamil Nadu called for a ban on cola giants Pepsi and Coca-Cola in the wake of Jallikattu protests and a resurgence of swadeshi sentiments in January last, it was a nimble-footed David which moved in with lightning speed to...

Vadodara-based Manpasand Beverages Ltd (MANB) has recently unveiled its aggressive expansion outreach into south Indian states. (Reuters/Manpasand Website)

When trade associations in Tamil Nadu called for a ban on cola giants Pepsi and Coca-Cola in the wake of Jallikattu protests and a resurgence of swadeshi sentiments in January last, it was a nimble-footed David which moved in with lightning speed to take advantage of the vacuum being created in the retail cold drinks space by the Goliaths. Vadodara-based Manpasand Beverages Ltd (MANB)—which has been making waves over the recent past with its array of premium and carbonated fruit juices at a time when health consciousness is pushing down sales of aerated synthetic colas—has recently unveiled its aggressive expansion outreach into south Indian states. This includes the setting up of a Rs 150 crore manufacturing facility in Sri City, a border town between Andhra Pradesh and Tamil Nadu, to cater to the burgeoning demand for home-grown cold drinks in key southern states.

A pure play beverage major which clocked net sales turnover of Rs 560 crore last fiscal in the R25,000 crore soft drinks market, MANB had so far been concentrating on consolidating its presence in the North and the West, with a strategy focused towards customers in semi-urban and rural markets. With opportunities in the South, MANB is set to double its production capacity over 12-18 months, by adding four new manufacturing facilities to the four it has.

The venue for my luncheon meeting with Dhirendra Hansraj Singh, the chairman & MD of MANB, is his farmhouse adjacent to the company’s new facility at Savli near Vadodara in Gujarat. Summers are setting in and by the time I reach my destination, a two-hour drive from Ahmedabad, my throat is parched.

I am chaperoned to a landscaped hamlet-like enclosure with small cottages and a solitary cow grazing a short distance away to authenticate the surreal rustic setting. My host, the 55-year-old sportsperson-turned-government employee-turned entrepreneur Singh, I am told, is a bit of a maverick and the central cottage with its red terracotta shingle roof is his office.

I climb the wooden steps leading up to the office, taken by surprise at the simplicity of the interiors. There’s none of the opulence one would associate with the office of the owner of a company that has the unique distinction of being the sole listed company in the beverage space. Instead, it reminds me of a spartan roadside kiosk, with the umpteen products of MANB adorning the glass shelves, alongside the rough-hewn wooden table and three chairs.

Singh, a diminutive figure clad in a crisp white kurta pyjama and a tan linen jacket, is an earthy son-of-the-soil. Soon, I am served a fizzy black drink which looks, tastes and smells suspiciously like Pepsi or Coke, but with a subtle difference. Noticing my confusion, Singh exultantly declares the drink to be one of MANB’s latest offerings—a fizzy black grape juice with “cola ka maaza” from its basket of Fruits Up carbonated fruit juices. The product, a runaway hit, has entered the exalted R100 crore club, and is giving cola majors sleepless nights. Overtures have been made to buy out the brand already, Singh informs me.

Talking about his latest southern foray, Singh admits that the timing of his entry, fortuitously coinciding with the ban on the colas, has been a stroke of good luck. He chuckles, recalling how he used his agility as a “small” player to leverage the move. “It would take an MNC like Coca-Cola or Pepsi a year to just launch a new product, as all approvals would have to be sought from their US headquarters. In contrast, my entire team flew to Tamil Nadu overnight following the cola ban to stitch the strategy for setting up a new plant.”

By this time, we have been served an array of popular Gujarati starters. There’s the ubiquitous khaman, dhokla, patra, and bite-sized kachoris served with tangy green chutney and spicy kachumber. Hailing from Varanasi, Singh confesses he didn’t relish Gujarati cuisine when he came to the state as an employee of ONGC in the early 1980s, as almost all dishes had gur and imli. “I was a plain graduate and bagged a job through sports quota as I was an excellent volleyball player.” But while in Gujarat, he did as the Gujaratis do—not only did he acquire a taste for Gujarati food, but acquired an appetite for business as well, setting up Manpasand in the mid 1990s after a brief dalliance with real estate.

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Here, too, it was a chance meeting with a Tetra Pak executive that gave him the idea of utilising their surplus capacity at Mumbai’s Mahanand Dairy to package and sell juices. “I ventured into packaging mango juice in Tetra Pak packages and sent the first consignment of five truckloads of MANB’s first product, Mango Sip, from Mumbai to Gorakhpur in eastern Uttar Pradesh. It was my test market as I was only familiar with markets in my native state,” Singh reminisces. The consignment of Mango Sip, priced aggressively at R5 a piece, was a stupendous success, getting him an order for 25 truckloads. “Since then, the demand for our products has always outstripped supply,” he states with obvious pride.

The juices segment that time had two big players—Parle Agro Frooti and Godrej Jumpin. “When we introduced Mango Sip, most people bought it thinking this too was the product of a big company as the packaging was the same,” he laughs.

The main course arrives—aromatic vegetable pulao, paneer in thick red spicy gravy and daal tadka with butter rotis and salad. Singh confesses he likes to keep his food basic, simple UP fare.

What was the strategy he adopted to grab the market from right under the nose of the established players? “Being a novice in the world of business, I gathered knowledge by travelling extensively by road to the interiors of the country. I would just sit at roadside kiosks for hours, observing the mindset of shopkeepers and consumers. I realised the small shopkeeper has no lofty ambitions. All he wants is to sell goods which give him more commission. I paid more commission—R1 against the 50 paise which was being paid by the biggies, established personal relationships with small traders in towns and kasbas, and soon these traders became my salesmen, promoting my products in a big way.” Today MANB’s beverage brands are present in 24 states through more than 2 lakh traders, over 2,000 distributors and 200-plus super stockists.

On the road to success, Singh also adopted the winning formula of “choosing clean highways to avoid collision with rivals.” That’s by focusing on categories and price bands where there is virtually no competition. One of MANB’s largest selling offerings is the 160ml Fruits Up bottled fruit juices. At R10 a bottle, the size is a runaway hit in rural belts, as are 125ml size bottles. Almost 60% of company’s sales come from these sizes. Not surprising, then, that Singh intends to keep “small my mainstay as I believe not so much in the valuations game but the volume game.”

The meal is over. We skip the dessert as we’ve been binging on MANB juices alongside.

Keeping a close eye on the shift to health drinks, MANB has introduced packaged coconut water Coco Sip and ORS initially in the Northeast. Plans are afoot to enter the market for vegetable and fruit pulp mixes as well as healthy snacks. “But I would never market my products as good for health or they’ll end up in chemist shops,” is the parting shot of a now seasoned businessman who can teach his rivals a thing or two about a market he has now mastered.


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