Ramesh Krishnan, engineer by qualification, embarked on his professional journey four decades ago with Lucas TVS (A TVS Group company) based in erstwhile Madras-an automobile hub of India. Following a nine-year tenure there, he transitioned to Unilever in 1994, marking a significant shift in his career towards the food and beverage industry. Ramesh subsequently held roles at prominent companies such as Coca-Cola, Diageo, and Carlsberg. Throughout his career, he broadened his expertise by acquiring skills in finance (cost accounting), Human Resource Management, and learning & development (L&D).
Ramesh currently holds the position of Chief Executive Officer at The Nepal Distilleries Pvt. Ltd., a role he has occupied for over a year. He had been providing consulting services to The Nepal Distilleries since 2018 and joined the company as a full-time employee last year. Notably, during his time with Carlsberg India, Krishnan frequently travelled to Nepal. Ramesh had spent a decade working in Tanzania with Coca-Cola and Diageo and returned to India in 2011. Recently, the HRM Nepal interviewed Krishnan to gain insights into Nepal’s spirits market and management practices. Excerpts:
Q. How would you like to assess the current spirits market?
A. The spirits sector constitutes a segment of the broader alcohol industry, distinct from the brewery business. Over the past decade, this industry has witnessed increasing segmentation based on alcohol content, categorised into 25 UP, 40 UP, and 70 UP segments. In Nepal, the declining disposable income of the average person, impacting their ability to dine out, has consequently reduced the funds available for alcohol consumption. This has led many consumers to opt for beverages with lower alcohol percentages, particularly those in the 70 UP segment. Given the country’s relatively small population, the spirits market is characterised by fragmentation across various alcohol categories, making it challenging for individual players to achieve sustainable success. Consequently, the 25 UP market is further dividing due to consumers’ purchasing power, highlighting the economic factors influencing the spirits industry.
Conversely, the market is attracting more entrants, which fosters business growth. However, this influx of players intensifies competition. Furthermore, Nepal’s legal drinking age population is decreasing as approximately 100,000 individuals emigrate annually. The remaining population is ageing, leading to reduced alcohol consumption. Notably, a portion of the spirits market is shifting towards the brewery sector, specifically targeting the younger generation who show a preference for beer, thereby creating additional competition. This challenge is not unique to Nepal Distilleries; all businesses in the spirits industry face similar pressures due to increased competition, market segmentation, a smaller population, and limited export opportunities at present.
Q. Is this situation due to the economic slowdown after the Covid-19 pandemic?
A. This trend has become noticeable over the past five to six years, with a temporary surge observed following the Covid-19 pandemic. During the pandemic waves, our activity was limited. The post-Covid spike was initially fuelled by the misconception that alcohol could eradicate the Covid-19 virus. However, this increase was short-lived as the economy slowed down, posing an ongoing challenge in the current economic climate.
Q. Could the rise of beer culture be contributing to the challenges faced by the spirits market?
A. That’s not quite what I meant. My point is that a larger proportion of young people seem to prefer drinking beer over spirits. While consumers have individual preferences, it appears that the younger demographic is particularly drawn to beer.
Q. Considering that consumers are already shifting towards the 70 UP category due to affordability, and given the government’s annual tax increases, what potential impacts do you foresee on the spirits industry under the current circumstances of rising taxes?
A. As an industry, we have consistently communicated that increased governmental taxation leads to decreased alcohol consumption, which could consequently result in a revenue shortfall for the government. Our sector is a significant contributor to governmental revenue. Despite annual tax hikes, the industry’s growth has not kept pace. Ideally, we would prefer tax rates to remain stable or reduced, as this would alleviate the pressure to increase product prices, thereby maintaining affordability. However, if the government continues to raise taxes, we will inevitably need to pass the majority of this increased cost onto consumers. This will result in higher prices, potentially making our products unaffordable for the average person.
Q. Considering the decline in consumption, what is the current capacity utilisation rate of distilleries?
A. While I lack specific knowledge about other industries, based on our experience, I can state that industries are currently operating at approximately 60% of their installed capacity. There is significant potential for increased production, as capacity is not a limiting factor. We have made substantial investments in infrastructure, incorporating new technologies, and have essentially built a new factory with entirely new process equipment. Furthermore, we have achieved ISO 9001 certification for our processes and ISO 22000 certification from DNV (Det Norske Veritas), a globally recognised and stringent certifying body. This underscores our successful implementation of a food safety management system that adheres to international standards. Over the past seven years, we have consistently invested in our infrastructure, personnel and processes.
Q. Given the anticipated revival of the tourism sector and the optimistic outlook for increased tourist arrivals in 2025 within the hospitality industry, do you foresee a corresponding rise in sales this year?
A. That’s certainly what we’re hoping for. I recently read in the newspapers about the increased number of permits issued for climbing Mount Everest and other high peaks at the beginning of the spring season. Just last week, while travelling from Bangkok, I was delighted to see a significant number of international tourists arriving in Nepal. This influx is crucial for consumption. We have developed high-quality products with appealing packaging, which we believe will attract foreign visitors. Ultimately, we are focused on quality sales, and the initial draw for consumers is often the packaging. We are keen to explore how we can capitalise on this potential increase in consumers. Given the post-Covid situation, we are heavily reliant on this. Our aim is to ensure that our products are readily accessible throughout the country in areas frequented by tourists.
Q. Do you currently export your products as well?
A. We currently export our products to 14 countries. Our initial foray into exporting was in 1992, approximately 32 years ago. Our export destinations include more developed nations in Europe, as well as Japan and South Korea, among others, often through consignment arrangements. Our Khukri rum is particularly popular in these international markets. We also export our ‘Coronation’ rum. Furthermore, we have introduced a premium variant of Khukri rum, the ‘Cask series,’ priced at Rs. 10,000 per litre. We are also preparing to launch a new Coronation rum to coincide with the 51st anniversary of late King Birendra’s coronation.
Q. Does your innovative packaging design play a crucial role in attracting consumers?
A. We cater to two primary consumer groups: local Nepali consumers and visitors from the subcontinent and other parts of the world. The Khukri XXX rum, with its 65-year history, is widely recognised, along with our newer offerings such as white rum and ‘Aristocrat’. For international visitors unfamiliar with Khukri rum, the uniquely shaped bottle, resembling a ‘Khukri’, serves as the initial point of attraction. Over the past decade, we have invested in new glass designs, caps and labels to enhance consumer appeal. Tourists often seek out local products, and the ‘Khukri’ symbol embodies the pride of the Gurkhas and is deeply rooted in the local culture. We are also planning to introduce ‘Karda’, a small knife shaped like a Khukri. The Khukri rum range encompasses various segments, including Khukri White Rum, Khukri Spice Rum, Khukri Dark Rum, and Khukri ‘Coronation’.
Q. What is the inspiration behind Nepal Distilleries’ product names such as Coronation, Aristocrat, and Karda, among others? Has the success of Khukri rum influenced this naming strategy?
A. We consider these names to reflect the pride of the nation, as we are a 100% Nepali product company. The grain spirit used for our neutral spirits and the molasses used for our other Khukri products are entirely sourced from within Nepal. Nepal Distilleries maintains strong backward linkages within the country, procuring molasses from the Madhesh province and other regions of the Terai. As part of our community engagement, we also assist sugarcane farmers in enhancing their crop yields. While our primary raw materials – molasses and spirit – originate from Nepal, we do import some packaging materials that are not currently available domestically. Ultimately, our products are 100% Nepali, crafted using traditional Nepali methods.
Q. What is the current number of products that you are producing?
A. Categorically, we currently produce within three main segments: rum, vodka and grain spirits. Within the rum category, we offer dark rum, white rum and spice rum. We also have a 40 UP rum marketed under the name ‘Karda’. Our vodka product is called ‘Nude’, and our grain spirit, which is similar in style to whisky, is named ‘Aristocrat’.
Q. As the Chief Executive Officer of Nepal Distilleries, what management practices are you fostering within the company?
A. Having completed 40 years in my professional life, which began in 1985 after finishing my engineering studies in Chennai, India, I’ve had the opportunity to work with prominent companies such as Pepsi, Coca-Cola, Carlsberg and Diageo. My previous role was as the Executive Director of Carlsberg in India, where I also oversaw the Gorkha Brewery, which involved frequent travel to Nepal over the past decade. Prior to this, I spent a significant period of 10 years in Tanzania, Africa.
Having experienced both India and Tanzania, I recognise the similarities among developing nations. However, Nepal stands out as a developing country that was never colonised, uniquely remaining independent. At Nepal Distilleries, our vision is to establish processes and cultivate a people-centric approach that meets or exceeds the standards of leading multinational corporations. We consistently benchmark ourselves against the best in the industry. My firm belief is that people are the cornerstone of an organisation’s success. While financial resources can acquire equipment, it is the right team that is essential to operate that equipment and drive the business forward.
Drawing upon my extensive experience, my personal passion and primary focus here is to develop leaders. I consider this a key purpose in my current stage of life. We have implemented a mentorship programme, alongside a year-long leadership development initiative in partnership with a renowned Nepali trainer, Indra Gurung, who has been collaborating with us for the past two years. We have enrolled 20 of our managers in this programme, which encompasses skill enhancement, leadership development, managerial capability improvement, and mentorship. I am actively involved in mentoring these individuals. My leadership philosophy centres on equipping them with the necessary tools and knowledge, exposing them to best practices, establishing robust processes, and implementing performance measurement systems.
We have clearly defined job descriptions and Key Performance Indicators (KPIs). We conduct performance assessments three times annually, including 360-degree feedback. My overarching goal is to establish effective processes and ensure that the right individuals are in the right roles.
Q. What are the key innovations you are implementing in the areas of branding, packaging and product development?
A. We believe that innovation should extend beyond just existing products and new offerings for consumers. There are two distinct facets to innovation: product innovation and company-wide innovation. Regarding our products, when the new management assumed leadership, our immediate priority was to achieve ISO certification from DNV, first for our processes (ISO 9001) and subsequently for food safety (ISO 22000). The initial benefit we realised was an enhanced and consistent product quality over time, ensuring uniformity across every bottle, every day.
Secondly, we introduced new product lines, including white rum, and ventured into entirely new categories with vodka and grain spirits. Approximately six months ago, we launched the Cask series, a single malt-style rum. While our standard rum is priced at Rs. 2,200, the Cask series retails for Rs. 10,000. Furthermore, we are strategically focusing on exports, recognising the shrinking domestic market in Nepal. As a 100% Nepali product, entering the international market is essential for sales growth.
Considering the limited number of products that have been consistently marketed internationally as ‘from Nepal’ over the past six decades, we take pride in Khukri rum, a 64-year-old product originating in 1959 and entirely produced in Nepal. Just recently, I learned that the recipes for mo:mos were brought from Tibet. In this context, we are immensely proud of Khukri rum and are determined to introduce it to a global audience. To enhance our expertise, we sent our blender to Scotland for specialised training and she returned just two weeks ago. We also have a master blender from Britain who provides us with guidance. Additionally, we are committed to fostering leadership from within Nepal and are actively involved in grooming future leaders.
Q. Finally, are there any compelling insights you would like to share with our readers?
A. From an HR standpoint, I’d like to revisit a point I made during the HR Meet 2025, where I participated as a panellist, emphasising the critical need for exposure. My firm belief is that while there is an abundance of talent available, providing the right exposure is paramount. We are actively exploring ways to create opportunities for our people to gain broader experiences, which is why we recently sent our blender for a two-week training programme. I strongly believe that educated, passionate and hardworking individuals require sufficient exposure to flourish. Facilitating this exposure is a personal priority, aligning with my overarching purpose of developing leadership. Having now lived in Nepal for a full year, after providing consulting services to Nepal Distilleries since 2018, I have gained a deeper understanding of the local context.
Q. How long are you planning to be in Nepal?
A. At 61 years old, my wife and I have made our home here in Nepal, while our children reside in the USA and Canada. I believe that as long as one’s health permits, having a sense of purpose in life is essential. At this stage, I feel fortunate that my motivation is not primarily financial, given my 40 years of work, but rather the desire to contribute and add value. In fact, during the HR Meet 2025 panel discussion, I strongly disagreed with the statement that Nepal’s lack of growth is due to the mindset of its people. I was surprised to hear such a perspective from very senior professionals. In my view, Nepal’s challenges stem from a lack of exposure and leadership, not from any inherent flaw in mindset.
The distinction between a leader and a manager lies in inspiration; a leader inspires. Many individuals have inspired us, even without our direct acquaintance. Personally, I draw inspiration from three sources: Nelson Mandela, A.P.J. Abdul Kalam, and the countless unsung heroes who have sacrificed their lives in various struggles. It is crucial for us to consider how to cultivate effective leaders who can, in turn, train others. Having served on boards and in top-level management for many years, I’ve had the privilege of mentoring individuals. I believe this opportunity is a meaningful one. In my opinion, the doctor and the teacher represent two of the noblest professions on earth.
