Nadessan Sivaprakasam offers a surprising answer when explaining the success of KALS Group, the burgeoning Indian beverage company.
“The biggest strength of KALS is crisis management,” the Joint Managing Director tells The CEO Magazine.
Sivaprakasam and his colleagues proved their crisis management mettle right from the start. Their plans to open a distillery in an Indian village in 2007 provoked widespread opposition, with some 5,000 locals telling them to pack up and move elsewhere. Government officials counseled the same and gave them 30 days to find a new location.
But the KALS founders persisted. They met with countless villagers over the ensuing month and took them on tours of other working factories, showing them the minimal environmental impact of installing a distillery. Eventually, they won over the population.
We want to keep the community happy in whatever possible manner we can.
“It’s running well. It’s very cooperative with the public. We are giving employment to almost a thousand people in that village. So, they’re very happy with us,” Sivaprakasam says of the distillery.
“We are doing a lot of CSR for that area. We want to keep the community happy in whatever possible manner we can.”
Secrets of success
KALS has come a long way since opening its first plant in Tamil Nadu, becoming one of India’s premier beverage companies over the past 15 years.
The Sivaprakasam family originally sold arrack – a local tipple – from its own chain of retail stores. But they pursued a vision of distilling spirits and brewing beer in southern India, slaking the thirsts of discerning customers with a fondness for foreign alcoholic beverages.
Adding to the secret of their success is a simple but straightforward business strategy of satisfying customers.
“We want to satisfy the aspirations of the consumers, no matter who they are. That is how we are successful,” Sivaprakasam says. “Instead of thinking globally and doing locally, we always think locally and act locally. That is so we can understand customer requirements fully and we cater to them.”
By any measure, KALS has grown quickly, selling across India and increasingly exporting into markets such as Singapore, Malaysia and Dubai, along with African countries. It now produces whiskey, vodka, gin, brandy and rum, as well as brewing premium beers. Its brands have become acclaimed, especially its flagship 1848 brandy.
“Now, when I’m going and meeting anyone, they don’t call me the owner of KALS, they call me the owner of 1848,” Sivaprakasam says, jokingly.
Another secret of the Group’s success is its commitment to quality, which extends to its brewing operations, as it produces beer in accordance with German purity laws at a plant built with German technology.
We want to satisfy the aspirations of the consumers, no matter who they are. That is how we are successful.
“We made it an end-to-end German brewery,” Sivaprakasam explains. “We have made a product, Kolt, which is more expensive than Kingfisher lager, but consumers were drawn to this premium product.”
The company partners with VLB Berlin to provide staff with training in best practices for brewing. It also built a manufacturing facility to produce canned beer, which is serving markets such as Kerala and Puducherry.
“We are even buying hops from Germany,” he adds. “That is one of the key items that differentiates the beer and goes to show our commitment to going the extra mile to provide a quality product for consumers.”
Inside of KALS, Sivaprakasam is seen by his team as a ‘one-stop shop’ for giving solutions. “They call me a troubleshooter. Whatever the trouble or problem, they come to me and I am able to solve their problem,” he says.
But he cites his brother, company Chair and Joint Managing Director Vasudevan Sivaprakasam, as the visionary who conceived the plans for creating a top-quality beverage company, which would produce drinks for all segments of the Indian and international markets.
“He’s the real visionary. He’s the dream factory for the Group,” Sivaprakasam says proudly. “Vasudevan always keeps me on target, always. That is one of the biggest strengths for KALS: we are a giant family. All my brothers have joined.”
People are another strength for KALS, and Sivaprakasam proudly speaks of how the company paid its employees throughout the COVID-19 pandemic – a tough time that temporarily paused expansion plans.
Company management, he reveals, contributed up to 30 percent of their salaries to help weather the crisis, insisting that they wanted to contribute in getting the company through the uncertain times.
Sivaprakasam, who has a pharmacy degree and completed the Owner/President Management course at Harvard Business School, seeks input from staff on decisions – and doesn’t mind disagreement.
“My team always have freedom to argue,” he insists. “I want them to argue and make decisions.”
He similarly wants to empower his team to improve constantly, even if it means making mistakes.
“I’ve told my team, ‘Don’t ever worry about any mistakes you have made. If you’ve made a mistake, correct it. Don’t worry about it’,” he says. “We have never penalized anyone for any mistakes. We penalize only for ethics.
We want people to grow the business. So that is why we are always thinking about people.
“We want people to grow the business. So that is why we are always thinking about people.”
KALS set the ambitious expansion goal in 2021 of doubling its workforce from 5,000 to 10,000 employees by 2024, despite the difficulties of the COVID-19 pandemic. The thinking, according to Sivaprakasam, came from his brother’s emphasis on investing in employees.
“Vasudevan says, ‘Don’t get behind revenue or money, get behind people. Get more people, keep them happy, then we need revenue for keeping them happy, which will ultimately help you to reach your goal’,” he reveals.
KALS has aggressively expanded through acquisitions, purchasing breweries and distilleries over the past five years without taking on excessive debt. The company has also pursued a strategy of backward integration to secure its supply chain by acquiring a sugar mill and a glassworks factory.
“One of the biggest issues for the liquor industry, and therefore the company, is access to glass. If we cannot get it, which is not uncommon during times of crisis, it creates a massive problem for KALS,” Sivaprakasam admits. “Ensuing we gain control over our own glass will then leave us to focus on what really matters: our liquor.”
When I’m sitting on the other side of a table and I can show that I understand their problems, the negotiations are simple.
Going into these acquisitions, KALS maintains a strategy of seeking to understand suppliers and striking partnerships with them, many of whom the company has worked with for more than a decade.
“We always believe in standing in others’ shoes and understanding what their problems are,” he confirms. “When I’m sitting on the other side of a table and I can show that I understand their problems, the negotiations are simple.”
The focus on quality and completely satisfying customers are Sivaprakasam’s main preoccupations these days. But he also is aware of the social impacts of alcohol consumption and encourages moderation.
“Drink responsibly,” he exhorts his customers. “This is one message I want to give to whoever consumes my drinks.”