Business Today

Local flavour

Rajiv Bhuva        Print Edition: June 10, 2012

When Surat resident Kanak Patel wants to beat the scorching summer heat of a May afternoon, he opens a chilled bottle of Sosyo and downs it in a minute. "It is Surat's own cola," he says. Alluding to its taste, which many liken to rum and soda, he adds with a grin: "You could say this is Gujarat's answer to prohibition."

WATCH VIDEO: Abbas Hajoori on Sosyo's future plan

Sosyo is not really a cola, as Abbas Hajoori, Partner, Hajoori & Sons, is quick to point out. The 55-year-old third-generation entrepreneur bottles it at his factory in Batpore, 15 km from Surat. He laughs at the mention of prohibition. His family has made the non-alcoholic fizzy beverage, which contains apple and grape, for 89 years.

 THE LOW-DOWN
  • Hajoori & Sons started making a swadeshi soft drink in 1923
  • Sosyo was originally called 'Whisky No'
  • Its main market is Gujarat, where it is among the top three soft drinks in most locations
  • It plans a nationwide presence by 2016
In 1923, a Dawoodi Bohra Muslim teen named Abbas Abdul Rahim Hajoori, who used to bottle Vimto, a British soft drink, became inspired by Mahatma Gandhi's Swadeshi movement. He gave up Vimto and started manufacturing a soft drink with a unique alcohol-like taste which he named 'Whisky No'. It was a hit in Surat, and its popularity spread beyond the city. The founder died early and his brother took up the reins. In 1957, Whisky No was renamed 'Socio', to suggest a social drink. But people often spelled it 'Sosyo' and "it has been Sosyo ever since," says Hajoori.

He proudly shows off a 1962 picture of Jawaharlal Nehru sipping Sosyo during a visit to Navsari district near Surat. Over the years, through franchisees, Sosyo made its mark in several parts of Gujarat, including Ahmedabad, Rajkot, Porbandar and Baroda. It was also sold in Goa, Kochi and Udupi, but distribution to those places was discontinued, as financial problems in the family business made it unviable.

"We have survived because we are a strong regional brand," says Hajoori. Bipin Palan, a Sosyo bottler in Porbandar, 685 km from Surat, underscores the brand loyalty the drink commands. "One would go Sosyo-hunting to at least five shops before drinking a Thums Up, or not drinking anything at all," he says.

Despite its ups and downs, especially in the last two decades, Sosyo has given other soft drinks a run for their money. Sevanti Lal, a 55-year-old restaurant owner in Surat, recalls how Sosyo's rivals would pick up entire crates of Sosyo from all over Surat. "They got an incentive of Rs 10 per crate," he says. Multinational cola brands had more might than Sosyo not just on the advertising and sales front but also in procurement, so the Hajooris had their work cut out. "There was a time when the glow signs used by Sosyo were procured by competitors for fancy prices," says an advertising professional who wishes to remain anonymous. The Hajooris, however, bear no grudges. "We have brand loyalty and quality taste," says Abbas Hajoori's son Aliasgar, who shapes Sosyo's marketing strategy.

The involvement of Ali, as his father Abbas calls him, in the business since 2010 has altered its DNA. "We now focus strongly on marketing and expansion," says Abbas. Ali adds: "We have a 27 per cent market share in Gujarat, and now need a national presence."

In Gujarat, Coca-Cola-owned Thums Up is the top selling soft drink. The next two are Pepsi and Sosyo, with Sosyo sometimes bagging second place. Coke comes fourth. Ali has taken the number of distributors in Surat from just two in 2010 to 40 at present. Sosyo advertises on youth-oriented channels such as MTV, UTV Bindass and UTV Movies, and on FM radio, where its tagline "Apna desh, apna drink" can be heard all across Gujarat. "We have continued the Swadeshi legacy in our advertising," says Abbas.

The Hajooris refuse to give away sales numbers, but say that the company spends five per cent of revenues on promotion. "Our volumes in 2010/11 were three times those of the previous year," says Ali.

Hajoori & Sons General Manager Michael George says the company's marketing strategy was ahead of its time even as far back as 1988, when it roped in beauty queen Poonam Gidwani for a commercial. Abbas adds that the advertisement played in cinema halls and also on Bombino video cassettes. Sosyo may enjoy tailwinds today, but Abbas has not forgotten the turbulent patches. One was after Coke re-entered India, from 1998 to 2001. Another was 2005 to 2009, when MNCs sold 200 ml bottles at Rs 5. "Though gross margins hover between 27 and 30 per cent, price is a critical factor in this business," says Abbas. "It is a volume play."

He sees capacity as a constraint. "We cannot keep up with demand even now," he says. But in recent years the business has undergone a metamorphosis, with the company appointing franchisees who double up as bottlers and have their own distribution channels.

"We sell them the drink concentrate," says Abbas. Sosyo is currently sold in Australia, the UK, Canada, New Zealand, South Africa, the United Arab Emirates and the US. Exports account for 10 per cent of total turnover. Brand loyalty is strong even among overseas consumers. "I never miss my favourite Sosyo on my visits to Jamnagar," says Meera Watson, who lives in Kansas in the US and has roots in Gujarat. "My cousins there have Sosyo every evening, when they go for a walk after dinner." Diasporic Gujaratis in the US and UK may be happy to know that the Hajooris are in the final stages of negotiation to start bottling and distributing Sosyo in those countries.

The Hajooris' ambitious plans require capital. But the family follows Islamic financial principles, which forbid the payment and charging of interest. "We have never borrowed a single rupee for our business," says Abbas. "That is one reason why we have been slow to expand." But there have been benefits, too. "We survived the recession because there were no loans on our books," he says.

Hajoori & Sons makes several beverages besides Sosyo, including Kashmira Masala Soda, Lemee Misty, and Lemee Orange. It plans to diversify into packaged water and other drinks. For Sosyo, it plans a pan-India presence by 2016. If all goes according to plan, Sosyo will be going strong at 93.

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