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It's gala time for the alcoholic beverages
industry as India emerges as the Asian giant with an
unquenchable thirst.
 India
is now regarded as the largest spirits market in Asia-Pacific
accounting for a huge chunk of regional revenues.
The picture is getting prettier, what with the cost of imported
spirits & wines in India dropping following the government's
decision last year to withdraw additional duties on foreign
alcohol products.
Foreign beverage groups are now feeling more than welcome,
better able to compete with domestic brands in the country in
terms of pricing.
In a country which houses a sixth of the world's population,
rising economic power has turned it into one of the most
lucrative markets in the region.
The leading company in the market was UB Group. The
second-largest player was Radico Khaitan.
There's no doubt India is on a high. In a country where 50% of
the citizens are below 25 years - it's no wonder that
multinationals are making a beeline for the sub-continent,
leaving behind shrinking markets in the developed world.
Let's not forget that there's also a huge shift from country
liquor to more refined varieties--as India's rural generation is
significantly integrating with the economic and cultural shift.
 Alcohol
consumption generally commences at age 16-18 and peaks at 30-35.
And India's 18-35 year age group is upwards of 247 million and
growing.
India is one of the biggest whisky markets in the world and
liquor companies are watching it closely and pumping in new
brands into the country.
The Indian Scotch whisky market is growing at an annual rate of
40 per cent.
Whisky accounts for most of the 100 million cases of spirits
which are consumed each year in India. But high taxes mean that
Scotch has captured a miniscule percentage of the market.
And now we have just about the best of every multinational in
the spirits industry - from Bacardi, Focus Brands (Under the
Jubilant Group), Diageo India to Pernod Ricard. We seem almost
spoilt for choice.
There's little doubt about who the primary target consumer for
many of the big league players. Says Mahesh Madhavan, President
& CEO at Bacardi – Martini India Limited : "The target audience
remains from a legal drinking age to about thirty.
Predominantly, the company is looking at people who are
first-jobbers, youngsters who are just coming out of university
and entering their professional lives".
To size up what the Indian market has to offer let's consider
the vision of the fourth largest spirits company in the world
whose brands include Jim Beam, Sauza, Canadian Club,
Courvoisier, Maker's Mark, Laphroaig, Larios, Whisky DYC,
Teacher's, De Kuyper, Knob Creek, Starbucks Liqueurs and Clos Du
Bois. After it set foot in India, acquiring Allied Domecq
Spirits and Wine (I) Pvt Ltd in 2005-06, Beam Global Spirits and
Wines Inc is really beaming. Says Harish Moolchandani, Managing
Director, Beam Global Spirits and Wines (India) : "This year has
been a really satisfying year. We have recorded 40% growth for
our flagship brand- Teacher's 50, which is a 12- yr-old Scotch
whisky and over 23 % growth for Teachers Highland Cream-Overall,
respectively".
The company describes India's economy as structured and buoyant
in a way which augurs well for the alcobev industry. "I will not
be surprised to see further consolidation taking place in the
alcobev industry and while this goes on, many new entrants will
come into a piping hot market", says the Beam Global MD.
And here's what our very own USL has to say about Indian
consumers. "Disposable income is rising in the hands of young
consumers. Awareness of brands and demand for variety and
exclusivity is high. All these provide huge opportunities for
premiumisation, creating niche products, brands that cater to
the aspiration of the younger generation."
USL is kicked about the fact that vodka is an emerging segment
where almost 1-2 brands are introduced every month. Wine as a
category is also catching up and lots of opportunities are seen
in this sector.
Meanwhile, at Spirits giant Diageo India, Managing Director Asif
Adil sums up the business saying, "We have identified great
opportunity in luxury spirits. Accordingly, we will continue to
promote our luxury spirits brands including Johnnie Walker Gold
Label, Johnnie Walker Blue Label. We have established the
Reserve Brands Group consisting of ‘Armani clad' professionals
working towards delivering the luxury experience from Kashmir to
Kanyakumari".
India has also experienced a doubling of its wine consumption
over the last three years. Accordingly, Diageo has developed a
wine ladder beginning with its domestic wine brand, Nilaya and
then on to its selection of premium international wines like
Barton & Guestier, Piat d'Or and Blossom Hill and moving on to
the Thomas Barton Reserve Wines. This is an integrated approach
to provide differentiated consumers with good products at
different prices.
Breathing down Diageo's neck, Pernod Ricard says consolidation
is the key word. The company will continue to consolidate in
India with its domestic brands, and put stronger emphasis behind
its International portfolio. "The challenges are many and the
opportunities will not wait. The global acquisition of Absolut
Vodka is a key move and fills a gap in our portfolio," says
Param Uberoi, Chairman and CEO, Pernod Ricard- India. He adds :
"Together with our other International brands it will be
fantastic to take this iconic brand forward".
Elsewhere, in terms of 9 litre cases, the company has done 6
million plus for Royal Stag, 3.5 million plus for Imperial Blue,
1 million plus for Blenders Pride.
The momentum on Chivas Regal & 100 Pipers is great as well -
giving a clear picture that the Indian spirits market is truly
coming of age.
To read this section in detail and access interviews of Vijay
Rekhi, Abhishek Khaitan, Asif Adil, Param Uberoi, Mahesh
Madhavan, Harish Moolchandani, Chris Burn, Deepak Roy, Amit
Dahanukar subscribe to Ambrosia :
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