Technology - the key to success

The rising mercury gets a big push as one of the world's largest democracy, India prepares for its 15th Lok Sabha Election this month. While a well packaged election manifesto of Congress encounters the fiery remarks of the BJP veterans, it's a wait and watch game for all of us right now.

Talking about packaging, no one can beat the packaging techniques used by alcobev industry. With the growth of the alcobev market, the ancillary industry has also registered a boost in recent times. However, the economic slowdown has set an impact on some segments of the technology service providers. This issue of Ambrosia offers an extensive insight into the supplier's side including KHS, Hindustan Glass, and Guala Caps.

From domestic majors like Praj Industries to the international players like Ziemann, Pall India Pvt. Ltd all reveal the latest technological trends in brewing and distilling.

In the profile section we have Vijay Rekhi, President, USL sharing the company's strategy to become the world number one by 2011, his views on Indian Prohibition Policy and the on going tussle between EU and Indian government on duty issue. The interaction with the owners of Amrut Distilleries, Neelkantha Rao Jagdale and Rakshit Jagdale is interesting enough to show how an Indian Single Malt has managed to set its mark in Europe and US. The changing dynamics of the spirits market is highlighted in a special story on ‘Spirited Performance Lifts Pernod Ricard to No. 2 Slot in India' which discusses the carefully strategised plan of Pernod Ricard India which has helped the company achieve the number 2 slot in India.

It's the wine industry that is buzzing with activity now. We have carried a special report on the recently concluded international wine event Vinitaly. An article on the on going issue between the EU and French Rosé producers over the issue of producing Rosé by blending, the confusing world of Italian IGT wines and the story of the Flying Winemakers are bound to keep the readers engaged.

Cheers & Happy Reading!

Rojita Tiwari

"Come 2011, USL will be the number one spirits company in the world by volume"

In an exclusive interview with Ambrosia, Vijay Rekhi, President, United Spirits Ltd., touches upon some crucial and long pending issues like Indian Prohibition Policy, on going tussle between EU and Indian government on duty issue, USL's strategy to become the world number one by 2011.

Do we foresee a Constitutional Amendment in the Indian prohibition policy and also a formation of a centralised alcohol policy with single taxation system in India in near future?

Process involved in Constitutional amendment is long drawn and time consuming. It is very unlikely in the near future. With regard to formation of a centralised alcohol policy, I am to inform you that Confederation of Indian Alcoholic Beverages- CIABC, a national body representing both national and international players in the alcoholic beverages industry has initiated the process with Ministry of Food Processing Industries, the nodal ministry for this industry. While some consensus have been arrived with regard to non revenue issues, there is still no agreement on either single taxation system/structure let alone single rate across the country because each state depend very heavily on the revenue generated by this industry.

Do you think the irrational taxation in individual states of India is a major hurdle for the alcobev companies? How is CIABC gearing up to tackle this issue?

Each Individual state is empowered by the constitution to decide on all matters including taxation related to alcoholic beverages. It is also true that this industry generates huge revenue to the state exchequer and the requirement of each state is different. This results in different taxation. Industry has accepted this as inevitable and USL has managed to work within this parameter efficiently.

Radico enjoys ‘the magic moment'

India's second largest liquor major Radico Khaitan has pulled off another big feat with its Magic Moments Vodka hitting the million-case mark this year. The company is now gearing up to take its Vodka even higher and launching new products in the premium segment. Abhishek Khaitan, MD, Radico Khaitan unravels more of the magic behind the moment in an exclusive interview with Amitabh Joshi.

Excerpts: Sitting in the plush office of Radico Khaitan's Managing Director, Abhishek Khaitan, one can quickly feel the energy which drives the company. Young, sharp and exuding flair and confidence, the Radico MD has turned the company around into a 21st Century leader in the liquor industry. With an almost intuitive sense of the market, Abhishek Khaitan has managed to command a place in the higher reaches of India's tough and gritty liquor business.

"What we've always believed in Radico is that eventually the consumer is always the king. If you provide the consumer with the right product and the right marketing mix where your product can be differentiated from what's available in the market, then you'll win the consumer's heart", says Abhishek Khaitan. And that's the philosophy which Radico has always followed.

Radico started its branded division ten years ago and though its Contessa rum, a favourite particularly among the country's military circles-was already around, the real action only began with the new set-up.

Thereon, under Abhishek's stewardship the company built upon the foundation put in place by Abhishek's father and Chairman of Radico, Dr.Lalit Khaitan, while making strides into the bottling industry.

Amrut - the elixir of malt whiskies

While Indian whisky is still battling to get the status of whisky in Europe, there is one Indian brand which is going places and winning awards and accolades in Europe. ‘Amrut single malt' has established itself as a unique brand in the international whisky market, but the road to success was not that easy says, Neelakanta Rao Jagdale, Chairman and Rakshit N. Jagdale, Executive Director, Amrut Distilleries Ltd. in interview with Ambrosia.

Excerpts: In recent times, appreciation for other malt whiskies, besides scotch malt, has been on the rise. Scotch malt is undoubtedly the leader but malts from America, Japan, and Australia have also found place in the international malt map. This is the reason, when Amrut Single Malt entered the UK market, it was welcomed with open arms, says Rakshit who has also obtained his MBA degree from UK. He not only brings to the business his acumen of the European market, but also strategises its next move.

The company follows a blend of the conventional process of making single malt with an adaptation to the Indian condition.

Amrut Single Malt is made from selected Indian barley grown at the foothills of the Himalayas nurtured by the sparkling rivulet waters flowing and cultivated by old and traditional agricultural practices. It is then carefully mashed and distilled in small batches to preserve the natural aroma and matured in oak barrels in a unique tropical condition, at an altitude of 3,000 feet above sea level at Bangalore, the Garden City of India.

To retain the natural characteristics of this oak aged Indian Malt Whisky, it is not chill filtered. Therefore some haze may be noticed in the product. Amrut presents this product as a humble tribute to the Indian farmer, who has grown this barley with care and affection with which he has tilled the soil.

Asked about how and when did they become conscious of the popularity and potential of this brand, says Rakshit ‘This is something which we have discovered in past 4 to 5 years while participating in almost all major shows in Europe.' People want to know more about malts and how it is made, for example, the curiosity surrounding Bourbon whisky. It is a malt whisky except the fact that it contains multiple grains because of which bourbon can not be called malt whisky by law.

Bourbon also requires three to four years of minimum aging. Fortunately, people are discovering that like wines, different countries and regions could also produce malt whiskies. The world is looking beyond the scotch malts which holds 80 - 85 per cent market share.

UB Breweries Greenfield projects on full steam

UB Breweries expansion plans and activities to set up number of Green Field Projects are going on a high pace. Cedric Vaz, Executive Vice President Manufacturing, UB Breweries, spoke to Rojita Tiwari about his views on the issues faced by the breweries in India and his future plans for the company. Excerpts:

Excerpts: Is the investment scenario in India, in terms of up gradation of breweries, still going on the same pace or has it been affected due to the economic downturn?

The up gradation of breweries in India will continue at the same pace, to bring the older ones quickly to International standards, on par with the newer breweries .We do not see the current economic downturn impact this, since there has been hardly any impact on beer consumption.

Recently there has been announcement of number of Greenfield projects to be built by UB breweries considering the excessive demand. Are you looking at alternative cost effective measures while going ahead with your expansion plans?

The new Greenfield's being set up in India will have the latest international brewing technology and high speed bottling lines, appropriately redesigned to suit Indian requirement and manufacturing strengths. These will help significantly alter the cost structure in the breweries.

What are the common issues that Indian breweries face today? How are you tackling these issues?

Previously, breweries in India have had to deal with the challenge of product inconsistency, due to fragmented manufacturing and breweries of different vintage. However, with the rapid upgradation programmes that the major brewers including UB, have undertaken over the last few years, we have been able to tackle this issue successfully and have matched, and in some cases bettered the standards that International brewing entrants into India have set.

Winemaker with Midas Touch

John Worontschak is a well known name in the international wine market. He has been traveling around continents while offering consultancy to wineries and thus earning the name "The Flying Winemaker". John Worontschak spoke to Rojita Tiwari about the global wine market and other concerning issues, during his last trip to this part of the world.

Excerpts: When you are involved in multiple projects spreading across Canada, Mexico, Peru, Brazil, Uruguay, France, Germany, Spain, Italy, Romania, Israel and working as a consultant to wineries in England, Mexico, Israel, Russia, Moldova and South Africa, you are bound to become an expert on global wine industry. It is not possible without facing challenges though. Every new market has its own set of challenges, said John.

If you talk about UK, the problem at the moment is weakening Pound and impact on the purchasing power along with the dominance of super markets which has pushed prices further down. So the problem for producers to produce wines which will be bought over by the super markets in UK is affecting the quality of wines. There is no room for manoeuvre. Australian wine market is situated.

Know your Wine Quotient (Wine Quiz)

The right match for the March Quiz is: (1-E/2-D/3-A/4-B/5-F/6-C). Unfortunately we did not receive any correct answer for the last month's quiz. To make the Quiz for this month more interesting and informative, I have worked an interesting "Italian Red Wine Trail" covering some great wines from 7 of the key Italian wine regions. I am sure you will enjoy reading and responding to this column and it will provide you some learning about these regions, native grape varietals and these big wines.

Discoveries Winemaker Tour -New Trend of Wine Development

In words of the economists, recession is the declining desire of retail consumption in most of commercial activities. However, we could not make such comment on all kinds of consumption behaviour corresponding to marketing and sales strategies. Celia Cheng talks about the "Discoveries Winemaker Tour" which is an exceptional business model practiced in Hong Kong.

Excerpts: From a realistic point of view, it is encouraging to witness great success of intelligent and creative campaign in terms of new trend in development of wine. Discoveries Winemaker Tour 2009 Programme This campaign "Discoveries Winemaker Tour 2009 Programme" is a newly launched programme which has started in February 2009 for a year. Based on a special theme and creative idea, it is about organising monthly wine and food-paired events jointly run by m.a.x. concepts, wine merchant Cottage Vineyards and a famous local wine instructor, Mr. Damon Yuen, to help wine and food lovers discover ‘some of the wine world's best kept secrets', enhanced by new and unusual pairings where little or no references exist.

Regarding to creative m.a.x. concepts, it is a restaurant line of Maxim's Group, has been diversifying its portfolio of characteristic restaurants since 1998 to perfect dining experience of great food, pleasant ambience and attentive service. There are totally 27 restaurants including of Western, Japanese, Vietnamese, Thai and international distinctive cuisines, successful diversification is certainly edge of platform to Discoveries Winemaker Tour Programme.

Sneak peak in to the development of Grape Wine Parks in Maharashtra

Grape is one of the most commercially important crops of the world and is a fairly good source of minerals like calcium, phosphorous, iron and vitamins like B1 and B2. Its juice is mild, laxative and acts as stimulant for kidneys. It is one of the most ancient crops known to man.

Among all fruit crops Grape is one of the major crop in India with 60,000 hectares cultivated area & 16 lakh MTs annual production. Maharashtra state is a leading state in cultivation, production and export of grapes in the whole country. In Maharashtra, total area under grape cultivation is 40,000 hectares with annual production of 11 lakh MTs of grapes. In Maharashtra among all districts Nasik, Sangli, Solapur, Pune, Ahmednagar, Latur, Osmanabad and Satara are main grape producing districts. In the state major grapes are produced for eating purpose (98%) and limited quantity (2%) is utilised for production of dry fruit like raisin and grape juice, syrup, jam, jelly, wine etc. Every year production of raisins in Maharashtra is about 50,000 MTs and about 25,000 to 28,000 MTs of fresh grapes are exported from Maharashtra state to different countries.

However, due to natural calamities or sudden changes in weather conditions the quality of grapes is getting affected. As a result of which, farmers get low price for their export quality grapes and also in the local market, the average price realised by the farmer is less i.e. around Rs. 8 – 10 /Kg. This situation gets further aggravated by unscrupulous middleman, who deceives farmers by not paying for even the basic cost of cultivation. There are 16 bi-products which are made from grapes viz. raisin, grape juice, squash, syrup, jam, jelly, vinegar, wine, pickles, chocolates, tartaric acid, oil, cattle feed, tannin etc. But looking at the world scenario of different bi-products, it was necessary to consider setting up of projects for manufacturing other value added products from grapes, such as good quality of WINE so as to prevent losses, obtain more income and provide additional employment to rural people in Maharashtra. It was also observed that if the farmers in the state cultivate peculiar types of wine grapes varieties and make good quality of wine from them, then they can get more income from domestic and export markets.

War of the Rosé

Controversy over the production of Rosé in Europe reached to new level when the European Union passed a law allowing the blending of red and white wines to produce Rosé. Though the method is legal in Champagne, not many traditional Rosé producers are happy about it.

While the E.U. commission believes that this new technique will help European rosé reach growing markets, there are too many hue and cries against the new policy. EU had always worked towards getting the European wine industry back on track and preparing the industry to face the increasing threat from New World wine producing countries. This time it is the wine reform policy of the EU which has come under scanner. As per the wine industry reform 2007 planned by the E.U.'s agriculture and rural development commission, as a part of an effort to cut back on Europe's surplus wine production and make its wines more competitive, one measure was to loosen winemaking regulations to comply with the standards of the International Organisation of the Vine and Wine (OIV). Many winemakers complained that European value brands couldn't compete with low cost wines from the Southern Hemisphere because laws forbid cost-saving techniques like using oak chips. The commission developed a series of amendments to permitted winemaking practices, and the 27 member states gave it initial approval. One of the measures allows the new rosé technique. "The wine reform was agreed to by the 27 states," said Michael Mann, a spokesman for the commission to one of the UK media. "The E.U. wine producers' body backed the change. An initial vote on the detailed implementing of rules on enological practices received a positive vote. France voted in favour."

The flying winemakers

Wine is an ever growing phenomenon across the globe. Last few decades have seen many new world countries emerging and trying to carve their name on the international wine map. The most considerable growth is in Latin America, Africa and Asia Pacific.

Excerpts: With the growing demand for the expertise in viticulture, wine making and packaging, came the opportunity for the skilled pool of experts! Experts - who have achieved great heights in the wine making industry by offering this knowledge and skill. Thus came into existence, the profile of top viticulturists and flying winemakers. This profile is one of the key reasons for initiation of many new projects in both Old and New world wine countries and also for the enhancement of the quality of wines from the new world countries. Needless to say, this skill set obviously did not come at a cheap price. But I guess the business houses/families were willing to pay the heavy premium to ensure smooth roll out of their business ventures. Also this gave the establishments a base which was efficient and futuristic. With the success of some of the initial projects and clever marketing done by some of these professionals, the demand for using a top name as consulting winemaker grew further. Thus the scope of work of these professionals grew over to multiple countries and destinations. Soon emerged several influential winemakers and viticulturists who started consulting wine projects across different hemispheres and countries.