Downturn is a word that hasn’t particularly bothered the 55-year-old Ravi Jaipuriya. Pepsi’s largest bottler in India, and one of the Indian franchisees for Costa Coffee, Kentucky Fried Chicken and Pizza Hut, is among a handful of businessmen tycoons — in India or anywhere in the world — who is fortunate enough to be in industries that the worldwide economic slowdown largely bypassed.
And it is people like Jaipuriya, and a handful of others like him, who not only beat the downturn, but also helped keep the Indian economic engine chugging. And, in doing so, he, and others like him, helped the country grow at 6.1 per cent even as major industries like automobiles, cement, capital goods, construction, etc., barely managed to stay alive.
A scion of one of Delhi’s oldest business families — “old money” in social-speak — Jaipuriya, chairman of RJ Corp, looks back at the last 12-15 months as a period of unprecedented growth.
“We doubled our sales during the period others refer to as the downturn,” says Jaipuriya, offering us a cup of Costa Coffee, but refuses to share any figures. He doesn’t need to, as his empire is privately held.
Jaipuriya, who controls about 25 per cent of Pepsi’s bottling and distribution capacity in India, over 70 KFC and Pizza Hut outlets in north and east India, and 40 Costa Coffee outlets in several cities, has also won Pepsi’s Top Bottler in the World Award once.
The award was handed to him by then US president George W Bush.
In a season fraught with reports of falling demand and liquidity crunch, RJ Corp’s growth did not rise, it skyrocketed.
Jaipuriya is modest about his good fortune.
“The weather gods have been very kind to us this year,” he says, referring to the intense summer this year. “That’s what fuelled the thirst for Pepsi and other drinks.”
Then, he also owns Cream Bell ice creams, which, endorsed by actor Saif Ali Khan, has emerged as a serious challenger to big daddies Unilever (Kwality Walls), Mother Dairy, Amul and Vadilal in the Rs 1,000-crore ice cream market in India.
Backed by an aggressive marketing campaign, Cream Bell and premium beer brand Budweiser, another major international brand for which Jaipuriya owns the India rights, RJ Corp really made hay while the sun shone.
“There was no real downturn for us. In fact, it was one of the better years for the company. The slowdown did hit the prospects of the export sector and the ones in the realty business. But to us, the downturn offered more joy than anguish,” he says.
Yet another vital source of strength for RJ Corp lay in its efforts to harness opportunities in areas yet untapped in a continent far, far away — Africa.
The Dark Continent was, and continues to be, a source of unbridled growth and opportunities for RJ Corp. In Zambia, Mozambique and Uganda, Jaipuriya is a household name.
“In Uganda, for instance,” Jaipuriya says, “the national dairy is run by RJ Corp. Ninety per cent of dairy products consumed in that country comes from our stable.”
But the global economic crisis that many say started after poor Americans bought expensive homes they could not afford to pay the EMIs of, sparking the sub prime crisis in the US and the recession that followed, did have one major impact on RJ Corp’s plans.
The company, which also runs two Delhi Public School branches in Gurgaon and Jaipur, had to postpone its initial public offering (IPO) by two years because of the slowdown.
“This was a direct fallout of the slowdown. The market was simply not ready for an IPO. So, we did not take any chances,” he says.
“Yet another setback came when a venture capital firm went back on its commitment to fund the expansion of our restaurant business. But its decision had more to do with what was happening outside India. The downturn did not directly impact our business, but it did affect our long-term growth plans by delaying our money raising programme,” he says.
RJ Corp is now focused on building on the platform it has built.
“We launched Nimbooz (a soft drink) and the initial sales are very encouraging. We are also focusing on the sale of mango juices in pet bottles. And over the last year, we have built up the infrastructure needed to support these expansion plans,” Jaipuriya says.
His goal: “By this time next year, RJ Corp should have a reasonably pan-Indian presence,” he says.
The downturn, experts say, will be a distant memory by then. No wonder Jaipuriya is bullish about the future.
For a company which started out as a Pepsi bottler after Manmohan Singh as finance minister opened the economy's doors to foreign players in 1991, RJ Corp and Ravi Jaipuriya have come a long way.
The firm has diversified into markets as niche as stem cell banking along the way, bringing to fore an upbeat India’s taste for variety and adventure.