Preliminary cordialities out of the way, Misra, who speaks in a measured tone, quickly recounts his early years spent across Assam, the Northeast in general, and Bihar, thanks to his father’s employment as an engineer with the government. “It was a lot like being an Army kid — I grew up with people from different backgrounds,” he says.
A server spreads out two menu cards on the table. Both of us have to get back to work so the wisest — in this case lightest — choice is a clear soup and steamed fish on wild rice with vegetables in bouillon. That’s what we both end up ordering, along with Himalayan Sparkling Water, one of the company’s more recent launches.
Himalayan accounts for around 3 per cent of TGB’s total revenue. What’s interesting is that its aquifer in the foothills of Paonta Sahib in Himachal Pradesh is rechargeable, and has a capacity of approximately a billion liters per year, a very small portion of which is used currently. “The water quality is naturally balanced with minerals, has been tested by labs across Europe and is as good as anything out there,” Misra says and adds that it is topped up by both melting snow as well as rainfall. “We believe Himalayan can be a global brand.” The company has just entered the USA through a tie-up with a company called Talking Rain; it is already available in Singapore and there’s a blueprint to enter a few other markets, one step at a time.
The sparkling water is one baby step in TGB’s move towards premiumisation. From a business plan perspective, TGB is all encompassing — there’s water, squashes, tea, coffee, vitaminised drinks, even a small private-label business.
What, I ask, were his takeaways from his earlier stint at the Taj Group of Hotels. Misra takes a break from his soup and admits that as a manager he has imbibed leadership styles from all three of his bosses at the Taj. That lesson includes adherence to systems and processes, focusing on the customer and having a keen eye for detail. “In fact, I recall (Mr) Kerkar using the example of JRD (Tata), who would put his finger under a seat in a hotel room to check if there was any dust.”
Was his own transition from hotels to the beverage business something of a challenge? In the hotel business, Misra says, managers were directly in touch with the customer, so feedback, or reactions to service and delivery happen in real-time. “With beverages, the visibility exists until the stockist but after that there is no real way to monitor the reaction to the product until feedback had already been sent in. Sure there are focus groups and all, but adapting to that change while being customer-centric is part of the leap. That, and changing the mindset from RevPAR (revenue per available room) to market share.”
Some things, of course, remain the same across businesses and one is the focus on Ebitda (or earnings before interest, taxes, depreciation and amortisation), which has doubled over the past year for TGB, despite revenue staying flat. That is partly on account of increased margins and partly thanks to the sale of the company’s tea operations in Sri Lanka. That apart, the company’s investments in Nourishco Beverages, a joint venture between TGB and PepsiCo India Holdings, is also paying back now.
There have also been a series of programmes in the company to drive cost efficiencies, along with restructuring of the Russia business, and exiting a JV in China, Misra says. TGB has seen its market cap almost double in 2017 toRs183.4 billion as of January 15, on the back of seven quarters of consecutive growth.
Which leads me to the next question: For a company like TGB which operates from Mumbai to South Africa and serves up a range of brands, how does Misra tie it all together into a cohesive strategy? Isn’t it unwieldy to have so many categories and sub-categories as they are listed on the company’s website. Misra says that is actually an advantage — the wide range and its ability to push those in a variety of geographies.
Take the ready-to-drink category: Tetley iced tea is being launched in Canada; Tetley squash in three different flavors and an RTD green tea beverage, Fruski, is being pilot-launched in the national capital region. Inspired by the success of Starbucks, which has launched over a hundred stores in India in partnership with TGB, the company has also pilot launched a tea shop, Tata Cha, in Indiranagar, Bengaluru.
There’s no sign of the food yet so we hit the buzzer on the table. Fresh fish takes time to season the right way and I tell myself it is actually a blessing in disguise because talking with your mouth full is no easy task.
Misra talks about the company's strategy in the medium term: focus on premiumisation of products and rationalisation of businesses; if you are not making profit, get out of the business rather than get emotional about it.
The food finally arrives: A substantial chunk of steamed and mildly seasoned sole looks delectable. We get cracking with the help of a generous array of knives, forks and spoons laid out on our table. Lunch wrapped up and washed down with the last of the Himalayan, we decide to skip dessert.
Misra shares a little secret as we leave the Musk Room: It is a myth that one has to be a domain expert to be successful. “It’s more about leadership, and getting one’s hands dirty.”