Why’s Everyone Getting So Worked Up About An ‘Old’ Monk News? And Why’s India’s Grand Old Rum Limping Behind?
THE REAMS of ‘listicles’ (articles in the form of lists – the latest wave to hit online media) on the ‘disappearing’ Old Monk, triggered by an insightful piece on the subject by Bhaichand Patel in the Times of India, has caused an outpouring of nostalgia. As if India doesn’t have any other story to get excited about.
Consumer inflation is at an all-time high, Asaram case witnesses are being bumped off with the same rapidity as those ensnared by the Vyapam Scam, Lalitgate is not dead yet … but people are obsessing over Old Monk.
Let me first state the basic fact. Old Monk, which is cask-aged for seven years and has distinct chocolate brown hue, ceased to be India’s No. 1 rum brand – it used to be the No. 1 spirits brand as recently as 2002 – a long time ago. I wrote about it last year, on July 2, to be precise: http://www.dailymail.co.uk/indiahome/indianews/article-2678409/FORTUNE-COOKIE-A-slice-Goa-bottle-wine.html. The authoritative international website on food and beverage issues, FoodNavigator.com, commented on the fact even earlier (on April 30, 2013). Citing Impact Databank figures in the article, ‘Old Monk’s Vow of Silence Sees Rum Brand in Free Fall’, the website’s analyst, R. Whitehead, underlined two stark facts:
(1) In 2002, Old Monk, selling 8 million cases (that is, 96 million bottles – one case has 12 750ml bottles), was India’s No. 1 spirits brand, ahead of its closest rival, Bagpiper, by 2 million cases.
(2) And it was selling twice as much as McDowell’s No. 1 Celebration, produced by United Spirits Limited, which was then owned by Vijay Mallya. (To read the original analysis, go to: http://www.foodnavigator-asia.com/Business/Old-Monk-s-vow-of-silence-sees-rum-brand-in-freefall)
Cut to the present and the research agency Euromonitor’s 2014 data cited in a Financial Times article in a series titled ‘The Business of Rum’, which triggered off the present outpouring of angst about Old Monk, shows Celebration firmly ensconced at the top of India’s rum market, estimated at 40 million cases (or 480 million bottles), or 16 per cent of the entire spirits market. (http://www.ft.com/cms/s/0/c67ea076-0ada-11e5-98d3-00144feabdc0.html#axzz3fnQvNbub)
In 2014, according to The Spirits Business, quoting the industry bellwether, IWSR, Indians bought 18.3 million cases of Celebration rum (90,000 cases more than even the much-marketed Bacardi), but only 2.1 million cases of Old Monk. Celebration, now owned by the global alcobev behemoth Diageo, is today the world’s No. 1 rum brand, a feat Old Monk could not achieve even at the peak of its glory. (Go to: http://www.thespiritsbusiness.com/2015/06/rum-brand-champions-2015/)
What explains this unusual riches-to-rags story, reminiscent of Apple before the return of Steve Jobs? Here’s my list of five reasons why Old Monk is slipping perilously and is in dire need of a rescue act, which the current management led by the octogenarian Brig. Kapil Mohan (Retd.) is not in a position to pull off:
(1) India’s alcobev market is driven by young consumers, who have moved to white spirits. This is not the generation that drinks what its parents have lost their alcoholic virginity to. And Mohan Meakin, the company that owns Old Monk, has shown neither the imagination, nor the determination to connect with this market.
(2) Most people who talk about Old Monk in glowing terms are harking back to their college days or that time of their life when they could not afford their single malts or expensive wines. Old Monk has been riding on nostalgia, but it has been its biggest enemy. Nostalgia must translate into sales on the ground.
(3) Old Monk has also come up against regulatory road blocks, which is why it’s not available in Tamil Nadu, and is now engaged in a battle for survival in Telengana. And by franchising out its operations to distilleries across the country, without obviously maintaining any quality control, Mohan Meakin has only ensured that the quality of Old Monk is highly uneven. The rum bottled in either Solan or Ghaziabad tastes like the original – not the rest.
(4) Brig. Mohan has been at the helm of Mohan Meakin since 1973. It’s a vastly different market today that neither he, nor his nephew Hemant, who’s the deputy managing director, seems to understand. To survive, the company needs to professionalise.
(5) Or else, it needs to sell to the big players, so what prevents the management, which had delisted the company from the stock exchange about a decade ago, from bailing out? My hunch, and it’s entirely a hunch, is that the stumbling block is the prized real estate that the Ghaziabad distillery is sitting on. It’s land worth thousands of crores. If the management is not prepared to sell, what stops it from putting the plot on the auction block, relocate its distillery, professionalise its top rung and spend the money it earns from the land sale to build up a war chest to save Old Monk. It owes it to the only brand for which it shall be remembered when its epitaph is written.