Kaya Spirits - Best Distillers 2018 Kaya Spirits Annual Information Memorandum 2019 | Page 6

Synopsis of Business Model
Ÿ INDIA MADE FOREIGN LIQUOR is a
venture where a liquor (Whisky,
Brandy, Rum, Gin, Vodka) label &
blend is first developed followed by
development of its packaging
materials which completes the
product/s transformation into
brand/s.
Ÿ A company is formed and registered
to carry on the business operations.
Ÿ Thereafter suitable liquor bottling
unit/s or distilleries are identified in
designated regions and contractual
bottling or production is done after
getting the label/s or brand/s
registered with the local excise depts.
Ÿ The label/s or brand/s are again
registered in the local state excise
departments, where they are
intended to sale and thereafter sales
starts.
Ÿ Marketing and brand building
activities along with trade discounts &
schemes are operated in the market
to gain sales volumes and market
share.
FORMATION OF COMPANY
A company is registered with the nature
of activities defined as manufacturing
and marketing with the registrar of
companies to carry out the said liquor
business.
OPERATIONS
DEVELOPMENT OF BRANDS:
Category/s are identified in which the
company wants to do business as Whisky,
Brandy, Rum, Gin or Vodka.
The company then plans to create
“Products” in those identified categories.
A suitable name is thought or identified
according to the kind of Product the
company wants to create.
A designer is hired and briefed about the
name and the brand positioning and thus
10 Kaya Blenders & Distillers Limited
the label design is created.
As soon as the label design is finalized or
at least the name is finalized, it is sent for
trade mark registration to protect the IP
rights and prevent any counterfeit.
Thus a “Brand” is born.
A blender or chemist is hired to create
suitable blend/s for the said brand/s
according to the various categories or
sub-categories of the product.
The created blends are then researched
according to their acceptance among
consumers where an expanded market
research done by either hired research
companies or by an in-house team.
The blend/s are finalized after intense
and prolonged research to have better
chance of acceptance among consumers.
The designer also creates the artwork for
all other packaging materials as bottles,
caps, mono-cartoons, canisters, CC
boxes, etc., as per suitability and com-
pletes the formation of a “Brand”.
PRODUCTION & LOGISTICS:
There are bottling units (Bottlers)
scattered across the country owned by
various entrepreneurs.
Suitable units are identified based on the
quality of water, ease of procurement of
all packaging materials called “dry goods”
and ENA, or the extra-neutral alcohol
which forms the base of the spirit called
“wet goods”.
Security deposits to the tune of around Rs
50 lacs are even paid to sign an agree-
ment for production of brands in those
bottling units by the brand owners,
referred as Kaya Blenders & Distillers Ltd.
(KBDL) here.
Generally a payment between Rs 50 to Rs
75 per case of production is paid to the
bottler depending on the agreement as
bottling fee. The amount is paid by KBDL
on a monthly basis.
Our Licenses & Accreditations
These bottling units owned by others
used to outsource production are called
“contract bottling units or CBUs”.
The brand owners (KBDL) thereafter
sources all the packaging materials
namely all the dry & wet goods to the
CBUs for production at its own cost.
The labels of the brands created are
registered with the local excise of the
bottling unit required for production
which incurs an expense on the part of
KBDL and generally has a validity period
of one year and thereafter renewed each
year with fees as applicable.
There is a very high investment required
for procurement of both dry & wet goods
as most have minimum order quantities
and are mostly required to be paid in
advance.
For example the MOQ (minimum order
quantity) for ENA (spirit) is 20000 liters
which incurs an approximate cost of
around Rs 15 lacs and is paid in advance
by KBDL. The MOQ for the glass bottle is
around 100000 pcs which incurs a cost of
around Rs 15 lacs and is also paid in
advance by KBDL. Similarly with the caps,
CC boxes, labels, etc.
The finished products are moved from
the CBUs to the wholesalers/ distribu-
tors/ corporation by KBDL and incurs
logistics expenses paid upfront on
completion of each delivery cycle.
SALES & PAYMENT COLLECTION:
Manpower is hired by KBDL in the
capacity of state/regional/zonal heads
and territory sales executives to procure
orders and collect payments from
retailers, wholesalers and distributors.
This is a 3 tier business whereby stocks
produced at the CBUs are sold to
wholesalers known as L-1s or distributors
or to the govt. corporations and thereaf-
ter the same goes to the retail from
where a consumer buys in unit/s.
Company is Accredited for Scotch imports authorised by Scotland Govt. vide reference No. 40370-50416
Company is certified by FSSAI Vide central License No. 10016063000900
Company is Certified by Import/Export Registration vide IEC No. 3016903725
Company is licensed to sell from Punjab Govt. vide Letter No. DP0103403247462
Company is licensed to sell from Arunachal Pradesh Govt. vide Registration No. Ex-489/BLR/2016
Company is licensed to sell from Uttrakhand Govt. vide letter No. 462 Dated June 29,2016
Company is licensed to sell from Orissa Govt. vide letter No. LA-41/2016-OREDR No. 5147
Company is licensed to sell from Mizoram Govt. vide letter No. C 18015/19/2016
Company is licensed to sell from Himachal Pradesh Govt. vide letter No. 7-731/2016-EXN-11314
Company is licensed to sell from Andhra Pradesh Govt. vide letter No. C.R. No H4/6884/2017/CPE/Ex dated
Nov 2017.
Company is licensed to sell from Goa Govt. vide Letter No :41 dated 27-11-2017
Company is licensed to sell from Chhattisgarh Govt. vide Registration No. 128/2018 dated 08/10/2017
Company is licensed to sell from Haryana vide Letter No. 5389/X.11, Dated 1/1/2018
Company is licensed to sell in Karnataka via order no. ECD/05/MP(Label)/2018-19 dtd. 26-07-201
Company is having license to sell in Assam vide letter No.-III-488/2018-2019/395
Company is licensed to sell in Telengana vide letter No. TSBCL/I/2018-2019 dtd. 29-05-2018 and Cr. No.
293/2018/DDB/E1/G1-1&2
Licenses applied in Portblair, Rajasthan, Silvasa, Kerela, Agartala, Tripura, M.P, UP & J&K.
Annual Information Memorandum 2018-19
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