Critical Situation in an Organisation and it's managerial solution of OLD MONK

3. WHILE THE BREWERY THAT
MAKES OLD MONK WAS
ESTABLISHED IN 1855, THE
BRAND OLD MONK WAS
LAUNCHED ALMOST A
CENTURY LATER, IN 1954, BY
A COMPANY CALLED MOHAN
MEAKIN PVT. LTD.

4. • SOON AFTER 2002, THE BRAND STARTED DECLINING, AND COMPETITORS
GREW STRONGER. BY 2005, CELEBRATION RUM OVERTOOK OLD MONK
IN SALES VOLUME. BY 2011, OLD MONK SALES HAD DROPPED TO
BARELY 3 MILLION CASES. IN COMPARISON, CELEBRATION RUM SOLD
OVER 11 MILLION CASES.
• IT CONTINUED TO GET WORSE. BY 2014, CELEBRATION RUM WAS
SELLING MORE THAN 7 TIMES THE VOLUME OF OLD MONK. THE ONCE-
ICONIC BRAND WAS NOW AT BARELY HALF ITS SALES VOLUME FROM LESS
THAN 10 YEARS AGO. THIS SAME YEAR, ITS MAKER POSTED A LOSS OF
ALMOST RS. 20 CRORE. THEN IN 2015, IT HAD TO FIGHT A SCARE THAT
THE BRAND WAS GOING OUT OF PRODUCTION.
• THE BRAND THAT ENJOYED A FAIRY-TALE-LIKE SUCCESS WAS LIVING A
NIGHTMARE-LIKE DOWNFALL.

5. HOW COULD A BRAND LIKE OLD MONK SEE SUCH A COLLAPSE?
THE FALL OF OLD MONK CAN BE ATTRIBUTED LARGELY TO 2 FACTORS –
DISTRIBUTION AND A DETERIORATED BRAND IMAGE.
FOR A LIQUOR BRAND, MANAGING LOGISTICS AND RETAIL DISTRIBUTION IS
A CRITICAL COMPONENT OF A BUSINESS. MOREOVER, IT ALSO NEEDS TO
BE AGILE TO RESPOND TO CHANGING GOVT. POLICIES. OLD MONK FAILED
ON BOTH FRONTS. IT HAD OUTSOURCED ITS DISTRIBUTION TO THIRD
PARTIES. AND FAILED TO MONITOR THEM STRICTLY. THIS ULTIMATELY LED
TO POOR DECISIONS REGARDING THE TRADE CHANNEL. IN COMPARISON,
ITS BIGGEST COMPETITOR MCDOWELL’S CELEBRATION RUM OWNED BY
UNITED SPIRITS GREW ITS DISTRIBUTION ON BACK OF ITS LARGER
BRAND PORTFOLIO ALLOWING MORE NEGOTIATION POWER AND GOOD

6. MOHAN MEAKIN ALSO FELL VICTIM TO
CHANGES IN GOVT. POLICIES. A NEW RULE IN
UP LED TO SHUTTING DOWN ITS BREWERY IN
LUCKNOW, AND A STATE-TAKEOVER OF
LIQUOR SALES IN TAMIL NADU MEANT
OVERNIGHT DISAPPEARANCE FROM THE
SHELVES OF ONE OF THE LARGEST RUM
CONSUMING STATES IN INDIA.

7. AS FOREIGN BRANDS AND A VARIETY OF LIQUORS ENTERED THE INDIAN MARKET, THEY TOOK
AWAY THE LIFESTYLE TAG FROM OLD MONK. THIS BRAND WITH A GREAT FOLLOWING WOULD
SOON FIND ITSELF RELEGATED TO THE LAST POSITION IN MENUS OF INDIAN BARS AND HOTELS
– STOCKED FOR THE HARDCORE LOYALISTS BUT NOWHERE CONSIDERED APPROPRIATE TO BE
DRUNK BY THE MAJORITY.
THE NEW CLASS OF CONSUMERS EARNED ENOUGH MONEY TO INDULGE IN PREMIUM WHISKIES
AND GENERALLY MORE EXPENSIVE BRANDS. QUITE INTERESTINGLY, MCDOWELL’S
CELEBRATION RUM INCREASED ITS PRICES TO TAP INTO THIS NEW MINDSET, WHILE OLD MONK
STAYED CHEAP, AND LOST ITS SHEEN. BY 2008, IT HAD LOST ITS DISTINCTION OF BEING THE
INDIAN ARMY’S MOST-LOVED DRINK.
IT IS FELT THAT ONE OF THE REASONS WHY OLD MONK LOST TOUCH WITH THE MARKET AND
WITH ITS BUSINESS REALITY IS THE AGE OF ITS MANAGEMENT. BRIGADIER (RETD.) KAPIL
MOHAN, OLD MONK’S CREATOR, WAS THE COMPANY’S CHAIRPERSON AND MANAGING
DIRECTOR UNTIL HIS LAST DAYS. HE WAS 88 YEARS OLD. A MEMBER OF ITS BOARD OF
DIRECTORS IS 80 YEARS OLD. A FORMER FINANCIAL DIRECTOR WHO RETIRED IN 2012, WAS
86 YEARS OLD AT THAT TIME.
OVER THE YEARS, OLD MONK WAS ALSO APPROACHED BY MANY SUITORS FOR A BUYOUT. BUT
NONE OF THE DEALS MATERIALISED. THERE WAS AN EFFORT TO BRING BACK THE GLORY DAYS,
AND SOME INITIAL RESULTS PROMISED THIS, AS THE COMPANY TURNED UP A PROFIT OF RS. 3