India, currently ranked one of the top five startup communities in the world, has become a launchpad for entrepreneurs. But that doesn’t mean it’s always a smooth path to success. Just ask Oscar de Sequeira Nazareth, whose handcrafted liqueur, Licor Armada, has gained international recognition despite significant local obstacles.
Every entrepreneur has a story, and Nazareth’s starts on a quiet December day in 2011. The Portugal-bred finance executive was holidaying at his family home in Goa when he came upon a centuries-old liqueur recipe tucked in an ancestral cookbook dating back to the Portuguese Empire.
‘I was surprised to see [a recipe] for a cardamom liqueur,’ recalls Nazareth, who was working as an equities trader in London at the time. ‘So I decided to follow the instructions as I’d never attempted to make something like that. It matured before I returned to the UK—one taste and I was convinced I had a winner on my hands!’
He did indeed. Licor Armada went on to win Gold Outstanding awards two years running, in 2014 and 2015, at the prestigious International Wine & Spirit Competition (IWSC). Out of 7,000 entries last year, it was the only non-European liqueur to earn the accolade. Licor Armada also earned a Silver award this year in the Liqueur-Spice category.
Such international recognition was still a pipe dream when Nazareth marked his 29th birthday in 2012 by leaving the financial services industry and returning to his birthplace to commercially produce the liqueur.
Nazareth—who believes the original recipe can be traced to his grandmother’s hometown of Oliveira do Hospital in central Portugal—enlisted the help of relatives, including an aunt who produces Goan wine. They began by mixing the spices to find the perfect blend, and making a few necessary changes.
‘I did make a couple of changes for legal reasons, most notably to the alcohol content, which went from 50%—illegal in India as well as way too strong—to around 30%,’ he says. ‘However, I stayed as true to the original recipe as I could.’
Nazareth has always insisted on using fresh spices sourced from the region—one of the reasons he moved to Goa to start the business—and continues to produce in small batches to ensure quality.
Originally the brand was going to be called Licor de Especiarias (Liqueur of Spices), which, Nazareth admits, is somewhat tricky to pronounce if you don’t speak Portuguese. After some brainstorming with his family, he landed on Armada for its reference to the recipe’s historical and geographical origins.
‘Armada is a well-known name for a naval fleet and spices would come to Portugal from Asia via a series of ships,’ Nazareth explains.
An only child, Nazareth moved from Goa to the city of Coimbra in Portugal at age 4. When he turned 18, he moved to London to study financial risk management at Cass Business School before entering the finance industry—experiences that would prove valuable when launching Licor Armada and dealing with the red tape that came with it.
‘Although my immediate experience was rather specific to the field, I did gain an insight into what makes a business work from the financial side—particularly the importance of cash flow!’ he says. ‘I also had knowledge of company law and taxation. Despite this being specific to the UK, quite a lot of it did cross over to my circumstances in India.’
Nazareth has managed to keep his costs down by contract bottling, benefiting from very little investment in land, machinery and the like. ‘The other big advantage is that I don’t have to deal with all the paperwork and taxation; most of it is taken care of by the distillery,’ he adds.
Even with his experience and network in Goa, Nazareth admits that starting and running an alcohol-based business in a culture where drinking is disapproved of was much tougher than expected. Unlike other entrepreneurs, he has not benefited from the government’s new business funding assistance, which has seen a fivefold increase in the last year alone.
‘Major difficulties include a ban on advertising (although some companies find devious ways to sneak past official censorship), a cultural environment where open drinking of any kind is often seriously frowned upon, and of course, this being India, the interminable bureaucracy,’ Nazareth says.
Nevertheless, he believes things will only get better for entrepreneurs. ‘There seems to be a sustained attempt to cut government bureaucracy and incentivize startups, as well as a change in social attitudes that traditionally preferred employees to entrepreneurs,’ Nazareth explains. ‘I’m guessing that as more startups gain large valuations and make the media, more people will start to consider it as a viable career option.’
Aside from bureaucracy and cultural perceptions of drinking, Nazareth had to contend with one unforeseen issue—recognition in Goa, the only state in India where Armada can be sold.
‘Due to 450 years of Portuguese influence I was expecting a high percentage of liqueur drinkers in the state, whereas in reality only a few families recognized what I was making,’ he says. ‘I’ve had people tell me my wine is too sweet, and once I was told that they loved my whisky.’
‘The other issue in India is that most alcoholic-beverage consumers tend to go by brand recognition, rather than trusting their own taste or judgment. As a result, it’s very difficult to gain traction without a large marketing budget.’
To combat this, the company eschewed the local market in favor of international export and Western tourists. ‘When I realized that the country still has enormous barriers to inter-state trade, particularly alcohol, we switched gears and focused on securing international exports,’ Nazareth says. ‘These are more profitable by far than domestic sales, and usually the product is met with a far more receptive audience.’
‘A nice side effect is that when they see it doing well with Westerners, locals gain a new level of respect for Armada,’ he adds.
Nazareth stresses that the management of his small band of employees, mainly women, is as important as his vision for the brand.
‘We feel employment is far more dignified than simply handing out [charitable assistance]. We employ fewer than 10 people, and most of them are women from underprivileged backgrounds—normally they might have been at home, looking after their small children,’ he explains.
‘By offering local employment they can still be close to their kids, who stay with the grandparents—and if, say, they’re urgently needed at home, I’m happy to drop the employees off myself,’ Nazareth says. ‘Sadly, this common-sense attitude is something of a rarity when it comes to most jobs in Goa.’
‘We provide healthcare for all employees, as well as supporting their children with their schooling. And we pay what we think are fair wages; this is somewhat above the going market rate for our employees’ skills.’
Looking ahead, Nazareth aims to have a bottle of Armada in ‘every serious bar’ around the world. But when it comes to expanding his offerings, he says, ‘We’re sometimes asked if we’re ever coming up with another product—my usual answer is ‘I will if I can unearth another centuries-old family recipe!’’
‘We’re not interested in launching faddish, me-too products just to grab market share,’ he says. ‘Our vision is quite simple—to keep making our unique, all-natural, handcrafted, world-class spirit with no compromise.’
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Main photo: Alamy