At USL, Anand Kri­palu Has to En­sure a United Spirit

Di­a­geo has hired Mon­delez’s In­dia head to bring about a deep cul­tural change in its new ac­qui­si­tion

The Economic Times - - Business Of Brands - KALA VIJAYRAGHAVAN & SA­GAR MALVIYA

Af­ter more than two decades of sell­ing soaps, de­ter­gents and, more re­cently, choco­lates, Anand Kri­palu is get­ting ready for a new role — sell­ing spir­its. The 54-year-old pres­i­dent, In­dia and south Asia, of Mon­delez In­ter­na­tional (for­merly Cad­bury In­dia) is in his last few days at the choco­late-maker. He is hand­ing over re­spon­si­bil­i­ties to for­mer Pep­sico In­dia head Manu Anand, be­fore walk­ing over to United Spir­its (USL) next month as its CEO-des­ig­nate.

In his new role, Kri­palu will have to nav­i­gate many chal­leng­ing tran­si­tions. Top of­fi­cials close to USL say Di­a­geo, the new dom­i­nant share­holder, has hired Kri­palu with the man­date to bring about a deep cul­tural change. His pre­vi­ous two stints were with process-driven MNCs. Now, at USL, he will need to tran­si­tion an en­tre­pre­neur-ori­ented com­pany into one with an MNC cul­ture.

Di­a­geo com­pleted the ac­qui­si­tion of a 25.02% stake in the Vi­jay Mallya-led USL, emerg­ing as the sin­gle largest share­holder. Since then, it has been ring­ing in many changes in the com­pany. Hir­ing Kri­palu was one. He will take charge as MD & CEO once the cur­rent MD Ashok Capoor re­tires in April 2014. The other tran­si­tion for Kri­palu would be mov­ing into the liquor busi­ness, which is far more com­plex and tightly reg­u­lated than fast-mov­ing con­sumer goods. “Kri­palu’s chal­lenge will be to op­er­ate within the in­dus­try’s reg­u­la­tory frame­work and old part­ner­ships and re­la­tion­ships,” says D Shivaku­mar, the for­mer MD of Nokia, who worked with Kri­palu, his se­nior at HUL till 2003.

Adds Nitin Mathur, con­sumer re­search an­a­lyst at Espírito Santo Se­cu­ri­ties: “Un­like FMCG where sales can be im­proved if you ex­pand reach and dis­tri­bu­tion, the liquor busi­ness is highly com­plex and push­ing your prod­ucts isn’t easy due to state reg­u­la­tions.”

Kri­palu’s FMCG skill sets ac­quired over two decades won’t be with­out use. “His un­der­stand­ing of brands and mar­ket­ing, given his tremen­dous ex­pe­ri­ence, will keep him ahead wher­ever he goes,” says vet­eran ad­man Piyush Pandey, ex­ec­u­tive chair­man & national creative di­rec­tor of Ogilvy & Mather In­dia. He has worked with Kri­palu for two decades. But Kri­palu will need to rein­vent him­self for his new as­sign­ment at USL. He brings a nat­u­rally ag­gres­sive style, but will need to add to it diplo­macy in man­ag­ing var­ied stake­hold­ers within a reg­u­la­tory frame­work, sources who have worked with him be­fore say. “Kri­palu is a peo­ple’s per­son, but has this loud voice which can in­tim­i­date peo­ple and give him a bully im­age,” says the CEO of a global ap­parel com­pany who had ear­lier worked with Kri­palu closely. “But if you are con­vinced about your view and back it with strong data and logic, he will al­low you to have your way.” There are also a few things that will work to Kri­palu’s ad­van­tage as he eases into his new role. “USL is not a turn­around game. The fo­cus now is to build the com­pany for the next level of growth,” says Shiv Kumar. And growth is very much in Kri­palu’s DNA. “He al­ways op­er­ates with a growth mind­set,” says an­other of Kri­palu’s for­mer col­leagues who now heads an­other com­pany. “Anand had a good sense of busi­ness P&L and knew what had to be done to push growth, busi­ness ef­fi­cien­cies and what are the trade-offs that will con­trib­ute to the big pic­ture. He can take the hard calls.” Un­der Kri­palu, Cad­bury In­dia grew from Rs 880 crore in rev­enues in 2005 to Rs 4,066 crore in 2012. “He is a builder, of teams and an or­gan­i­sa­tion. He has this re­mark­able abil­ity to ex­e­cute a plan well on the ground,” says a se­nior col­league who now heads an­other com­pany out­side In­dia. He worked closely with Kri­palu be­tween 2005 and 2012. “His big­gest strength lies in ex­e­cut­ing a vi­sion into re­al­ity.” The only glitch un­der Kri­palu’s watch was in­ves­ti­ga­tions by the Direc­torate of Cen­tral Ex­cise In­tel­li­gence and by the Se­cu­ri­ties Ex­change Com­mis­sion (un­der the For­eign Cor­rupt Prac­tices Act) sur-

Kri­palu brings a nat­u­rally ag­gres­sive style, but will need to add to it diplo­macy in man­ag­ing var­ied stake­hold­ers

round­ing Cad­bury In­dia’s sec­ond man­u­fac­tur­ing fa­cil­ity in Baddi. Th­ese al­leged ir­reg­u­lar­i­ties were re­ported af­ter Kraft ac­quired Cad­bury and the fomer’s foods busi­ness, in­clud­ing Cad­bury, was spun off as Mon­delez In­ter­na­tional.

Kri­palu takes charge of USL at a time when the In­dian liquor mar­ket, the world’s third largest, has grown merely 4% be­tween April and July in con­trast to higher dou­ble-digit from 2006 to 2012.

USL will also start sell­ing all Di­a­geo brands in In­dia un­der a sales agency ar­range­ment, which will go live from next month. Di­a­geo In­dia will re­main re­spon­si­ble for the strat­egy, mar­ket­ing, im­port, man­u­fac­ture, and bot­tling of Di­a­geo’s brands in In­dia. While the USL ac­qui­si­tion could help Di­a­geo achieve its goal of gen­er­at­ing 50% of rev­enues from emerg­ing mar­kets be­fore 2015, Kri­palu will have to achieve an ac­cept­able level of prof­itabil­ity and man­age the many con­trast­ing prod­uct lines in the port­fo­lio of USL and Di­a­geo.

For in­stance, Di­a­geo’s ex­po­sure is con­cen­trated in the pre­mium seg­ment, while USL has a large amount of vol­ume, over 75%, in the less prof­itable ‘reg­u­lar’ and ‘econ­omy’ seg­ments. Kri­palu will be ex­pected to si­mul­ta­ne­ously grow the pre­mium prod­ucts and also boost vol­umes at the lower end of the of the price pyra­mid.

Cad­bury sales

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