I am a marketer at heart,” declares Hina Nagarajan, the vivacious new MD and CEO of United Spirits. “My foundation was all in marketing and sales, and I love building brands,” says the 57-year old, IIM-A alumna who flagged off her career with a 14-year stint at Nestle, marketing infant nutrition and milk products.
The transition to general management happened with ICI Paints (makers of Dulux) where she led strategy, R&D and innovation and was part of the turnaround team that made the business more consumer-centric to take on market leader Asian Paints. “That’s when I decided that I really wanted to progress in general management,” confesses Nagarajan, and the opportunity came in 2007 to become the CEO of Dallas-based cosmetics major, Mary Kay. “It was a very purpose-filled and fulfilling role because of the mission of enriching women’s lives,” she says.
Turnaround queen
But she got the proverbial seven year itch – mainly because she wanted to get back to marketing (Mary Kay was more direct selling) and the right opportunity came from Reckitt, which offered her the role of CEO of Malaysia and Singapore. “The business there was declining, and there was very low employee engagement. I turned it around to become a cash cow fast,” she says. From there it was a short hop to becoming Reckitt’s boss for North Asia (China, Hong Kong, Taiwan). Post Reckitt came the move to Diageo, where she joined the London office to run Africa emerging markets.
The pandemic has ensured that Nagarajan, who took over as the chief of USL in July 2021, still remains remote to several of her employees in India, as the company’s offices are expected to reopen only in March. “All my inductions were on Zoom. I spent four-and-a-half months working out of a hotel room engaging with clients, vendors, employees over multiple Zoom calls,” she confesses.
We too are interacting with her virtually – but Nagarajan bridges the remote gap effortlessly with her smiling warmth and candid responses. If this had been in person, she says, her choice for a meeting would be Masala Klub or the Blue Ginger at the Taj West End in Bangalore. “I am a vegetarian and I love Indian and Thai food – though I don’t mind Japanese once in a while, as I am reasonably experimental,” she says.
What were the expectations from Nagarajan as India chief? She says when the role was offered, the discussion was not only on hard business but also about how — as the woman CEO of Diageo India — she could be a real role model to change the paradigm of this industry and perceptions of women and alcohol. And also dial up on Diageo and society with meaningful contributions — be it on sustainability, diversity and inclusion (the goal is to have 50 per cent women in leadership by 2025 from the current 31 per cent) and drinking better.
The accidental businesswoman
Nagarajan, who grew up in Delhi, came into the corporate world quite by accident. “I was pursuing a degree in hotel management in Delhi and was staying in a hostel there. When I came home during one of the weekends, my brother told me that he was appearing for the CAT (Common Admission Test) exam and asked me to do the same. So, I decided to follow him and wrote the exam. “...as luck would have it, I landed up getting a call from all three IIMs in existence then,” she says.
At IIM Ahmedabad, which Nagarajan joined in 1985, her batchmates were the likes of Raghuram Rajan, the former RBI Governor; Nachiket Mor, the former director of Bill and Melinda Gates Foundation; Phaneesh Murthy, once the poster-boy of the Indian IT outsourcing industry and a former director with Infosys, and Harish Bhat, Tata Sons’ Brand Custodian.
“It was a very eclectic group, very intellectual and stimulating which resulted in most of us forming lifelong relationships,” says Nagarajan, who is in touch more with Murthy’s and Rajan’s wives, who were batchmates too. While Rajan and Murthy found their life partners at IIM, Nagarajan married her colleague at Nestle, who is now an entrepreneur and who she describes as her soul mate who reshaped his life and career around hers.
Back to what she has been doing at USL and she describes how since taking over, she has managed to make the company completely debt-free. “There was an expectation that we should be looking at higher topline growth. And that’s what I have come in and done,” says the CEO, who believes that while India as a market is quite complex, the industry itself is even more complicated.
“So, there were many parallels from my role in Africa,” she says, describing how there she managed about 37 countries as Head of Emerging Markets for Diageo. “India is 37 countries rolled into one. So, it helps to have an outside-in view of the market here and how we can improve on the foundation that has been built over the last few years.”
The size of the alcoholic beverage market in India is ₹3.9 lakh crore, according to ICRIER, and growing at 6.8 per cent. USL is the market leader with a volume share of around 23 per cent; Diageo has a 55.9 per cent stake in USL
While the pandemic for most industries proved very challenging, the liquor sector grew. The various State governments used that opportunity to raise revenue by slapping additional taxes on liquor products even as the States’ reserves bottomed out.
Good unlock
Nagarajan readily acknowledges that the liquor industry boomed during the pandemic, with more at-home consumption happening than ever before – referring to the “lipstick effect” syndrome. “But what caught everyone by surprise was the emergence of new trends in consumption. There was a huge acceleration in premiumisation and at-home consumption, which led consumers to look for better choices. I think alcohol (consumption) got normalised at home, which is good, and the more normalised it becomes, the problems/stigma associated with alcohol will go away,” says Nagarajan, describing it as a good unlock. Her personal favourite drink happens to be Tanqueray, a British gin brand owned by Diageo.
While the company believes that innovation will be one of the key growth drivers going forward (USL wants 25 per cent-30 per cent of its growth coming from innovation every year), one can’t resist asking her about the strategy to counter the growing dominance of competitors like Pernod Ricard, the makers of Chivas Regal Scotch whisky and Absolut vodka. Nagarajan believes that as the company gets closer to its customers, it will keep paying off. “The consumer is moving very rapidly and preferences are moving, but I think staying agile and understanding insights will be critical,” she says.
One of the initiatives in this direction, she says, has been the launch of the portal, in.thebar.com, a digital platform for higher consumer engagement, giving people ideas for celebrations, for cocktail ideas. “A big shift in our approach is to go beyond ‘present forward’ to ‘future back’,” she says. USL has also put together cross-functional teams — called sprints — which will work on specific mandated projects delivering outcomes and moving on to the next initiative.
An example of this new agility is how Epitome Reserve, a craft brand, happened in 85 days from start to finish. A renovation on Royal Challenge Whisky — with root to market change happened in 45 days. “We have gone on something called Radical Liberation, which is looking at all the things we think are non-essential work in the organisation and found ways to liberate 150,000 man hours. That’s about 62 full-time employees worth of work — and the resources have been redeployed to growth drivers.
And digital acceleration is moving to the next level at the company with investments in digital in the supply chain, making the company ready for the future.
Nagarajan credits her personal savviness with the digital medium to the stint she did in China, which as she points out was ahead of anywhere in the world. “The three years there were a big immersion on how digital works, how e-commerce works, interacting with Alibaba, etc.”
Because of that learning, Nagarajan says today she is on the global digital transformation, ‘Sprint’, at Diageo and able to provide valuable inputs.
Nagarajan says she spends her off-time playing scrabble long distance with her son, who is an economist in Boston (we are very competitive, she says), watching movies with her husband, and one of these days, hopes to get back to playing either the sitar or piano — both of which she has learnt in the past.
Time is drawing to a close, but we don’t let her go before asking about the fate of the IPL team, RCB which, despite having some great talent, hasn’t been able to deliver, unlike the rest of the portfolio of USL brands. “Our focus and objective are to make sure the team wins. You see, it is growing from strength to strength. So, there is no reason to believe that RCB can’t win the IPL.”