Author Archives: admin

Relocation of Gaffel-Kölsch

Et bliev nix wie et wor” (“Nothing stays as it was”): that’s the wording of Article 5 in the Kölsch Constitution, a compilation of eleven idioms in the local dialect. And that also applies to the Cologne-based brewery Privatbrauerei Gaffel: capacities in its previous inner-city facility were exhausted – more space was urgently required. Needless to say, the family-managed brewery wanted to keep its independence and continue to produce efficiently. So Gaffel took a bold step towards an auspicious future – and merged its two breweries into a single plant.

It was not so very long ago that Privatbrauerei Gaffel was still operating two breweries: since 1908, it had been brewing its traditional Gaffel-Kölsch right in the heart of Cologne’s inner city, just a stone’s throw away from Cologne Cathedral. And in 1998, it then took over the Richmodis-Brauerei in the suburb of Porz-Gremberghoven. Kegs and “Pittermännchen” (10-litre Kölsch barrels), moreover, are filled in Cologne’s northern Bilderstöckchen district. Gaffel has always had its bottles contract-filled.

But it was precisely this inner-city location that entailed a few problems: Supplying the brewery with raw materials and expendables, as well as tanker-truck traffic, grew into a progressively more difficult logistical challenge; The space constraints entailed by the fact that the building complex was located in the middle of a street near Cologne’s main station did not permit any expansion. On a mere 2,000 square metres, Gaffel was brewing almost half a million hectolitres a year.

So there was only one logical consequence for Gaffel: to merge its three facilities into one in the medium term. The premises of what used to be the Richmodis Brewery were downright predestined for this plan. Not only was the autobahn only a short distance away but the existing infrastructure was likewise well-nigh ideal: the production facility is situated in a designated industrial estate – there are no problems about producing round the clock there. What’s more, the premises possess their own deep well with certified water rights. So this was a no-brainer.

Turnkey solution

No sooner said than done. Back in 2012, Gaffel had already started to make plans for the relocation, put it out to tender in the normal way among the vendors of brewery process technology – and in the end opted for Krones. “It was not really the most favourable quotation but it definitely was the best overall technical solution,” says Reiner Radke, Technology and Logistics Director, and emphasises a few major points in addition: “We’re largely using Evoguard double-seat valves throughout our production operation. These are substantially smaller than competitors’ models, and all the components

can be replaced without having to use special tools. Similar considerations apply for the Evoguard pumps, which additionally consume less energy than comparable units. What’s more, our staff were already familiar with Krones equipment: the existing Richmodis brewhouse was from Steinecker, and in our Eigelstein facility we’d already been using the Botec F1 process control system with integrated Siemens-S7 technology.”

So Gaffel placed an order with Krones for a turnkey solution, except for the new boiler house, which the brewery installed itself. Gaffel wanted to keep on using some of the existing Richmodis kit, and supplement this with new units. The only components that Gaffel took along from its original brewery in the heart of Cologne were a sheet filter and Steinecker’s TFS filtration system. “We wanted to keep the sheet filter because we’re filling in cold-sterile mode – no flash pasteurisation even, let alone pasteurisation proper,” explains Reiner Radke. “We took a deliberate decision against membrane filtration for a variety of reasons, one of them being that we’re assuming we’ll be able to run the TFS with cellulose instead of diatomite in the not too distant future.”

35 per cent less thermal energy

As far as energy savings were concerned, particularly, the new brewhouse provided Gaffel with quite a few advantages: The decision taken in favour of the EquiTherm energy recovery system made a crucial contribution towards reducing energy consumption at Gaffel’s new brewery – down by around 35 per cent for thermal energy and by about 30 per cent for electricity, in each case referenced to one hectolitre. “In terms of energy-efficiency, the EquiTherm is second to none. What’s more, the thermal impact on the mash during heat-up is small,” is Reiner Radke’s verdict. “Our energy-utilisation figures are in equilibrium: all of the thermal energy we’re producing is also consumed. At the same time, the technical outlay required to achieve this was manageable.”

The new boiler house likewise makes its contribution towards saving energy: it was possible to almost halve the previous figure for steam consumption of around ten tons of steam per hour.

Gaffel can now use solely natural gas, which is usually more affordable. What’s more, the central CIP system has a positive effect on energy consumption. Its centralisation, separated for unfiltrate and filtrate, has made for a reduction in the range of cleaning agents and disinfectants required. Gaffel is now using only caustic soda solution and nitric/phosphoric acid as cleaning agents, and peracetic acid as a disinfectant. The brewery does entirely without chlorine-based products or similar agents. “This simplifies our handling routines, reduces consumption and has less of an impact on the wastewater,” says Reiner Radke. Inductive flow meters have been installed in every department for measuring consumption levels, thus making sure that these latter can be accurately assigned and checked. Outside the central chemicals store Krones built a discharge station, so as to secure the wastewater against possible disasters.

Fermentation and storage cellar expanded

Gaffel likewise had its capacities for bright-beer, fermentation and storage tanks expanded by Krones in one go. In its old facility, the brewery had still worked with open fermentation and bitter foam on the green beer wort. It is now changing over to the two-tank fermentation process in cylindro-conical tanks. Needless to say, the brewery wanted to keep the high quality standards at their excellent levels. And the sampling tests proved that this had actually been achieved: “The customers didn’t even notice that we’d relocated – they were able to continue to relish the excellent taste of Gaffel-Kölsch that they’d been used to,” explains Reiner Radke. “We supplied the 2016 Cologne carnival season still from the old brewery. After that, we discontinued production there, relocated the filtration system to the new brewery, and started production here more or less seamlessly – without having to blend old beer stocks with freshly brewed beer.” And taking delivery of the new tanks likewise went off without a hitch. “The new cylindro-conical tanks are about 22 metres high and six metres in diameter. That was the maximum size we were able to transport from the banks of the Rhine through Cologne – but it worked,” explains Reiner Radke. “One of the major advantages here was that the tanks arrived in fully insulated condition on site, where they were placed on steel support frames. All that needed to be done after that was to link them up to each other.”

Central filtering-aid management

Filtering aids and stabilising agents are managed centrally at Gaffel. Krones installed a big-bag system with weighing-cell technology, dosing unit and initial blending tank. Dosing and initial blending have been fully automated. The staff use a crane to suspend the new big bags as needed, and other than that have no contact with the diatomite. “This increases occupational safety and reduces possible health risks. In a modern-day brewing operation, there is less and less physical work to do, what we need here nowadays is the staff’s intellectual input,” says Reiner Radke.

Krones likewise supplied a new diatomite disposal tank, a carbonation system and a water deaeration system for the filter cellar. The Hydronomic water treatment system consists of a manganese-removal module, an activated-carbon filter and a reverse-osmosis system. These components treat the water extracted from the brewery’s own deep well. Gaffel likewise had a ventilation system installed centrally for the entire brewery, tasked with preventing mould formation. All sections of the brewery are run from two control centres, featuring a redundant Krones Botec F1 system for managing the process. The vector-based, zoomable, graphical interfaces have been designed for intuitive operator control: each employee can configure the individual modules for program control on a screen window at his/her own discretion, using multiple displays (dashboard function).

Good cooperation

At peak times, up to 90 fitters were working on site. The safety precautions taken certainly paid off: during all of that time, there was not a single workplace accident.

It is now possible to operate the brewery in three shifts with only ten employees, six of whom are working in production and four in quality assurance. “Theoretically, we’d be able to run the brewery with one operator per shift, if it weren’t for the tanker-truck and container traffic,” explains Reiner Radke. “Our cooperation with Krones was good and professional, and since a project of this kind does of course also change over time it was important that both sides adopted a flexible stance when it came to any modifications required. Any difficulties cropping up were dealt with satisfactorily for both parties, any differences of opinion equitably resolved. Line erection proceeded on schedule as planned.”

Article 10 of the Kölsch Constitution reads: “Drinks de ejne met?” (“Like to have a drink with us?”) – Reiner Radke’s answer to this question can meanwhile be a confident “Yes”, now that this project has been successfully concluded.

Matthias Pohl

Krones AG

Tel. +49 8161 953-266

British Brewing Company launches their very own brew on tap this June

Craft beer enthusiasts in the city are either hard at work on, or looking for some new and freshly brewed beer options to sip on. Not until a while ago, the ordinary Indian tippler only had a handful of options for a refreshing cold pint; but now, the young beer drinkers of the city are experimenting with newer and more exotic brews.

This June, your favourite neighbourhood Gastropub, British Brewing Company known for its local and international beers, lip-smacking cocktails, spirits and an extensive list of wines along with simple and unpretentious food is all set to launch their very own first exclusive craft beer called ‘THE ONE’ – brewed by one of the most young and hip breweries in the country today. Under its all new property called ‘The Beer Diaries’, they will introduce one new signature brew every three months under contract.

THE ONE is a 6.5% Belgian style Golden Ale, with a typical spice on the nose and a crisp finish that is subtle but has hints of alcohol that a Belgian style Golden Ale promises to have. The flavour of the beer is effervescent and sweet on the palate. This one promises to be a Belgian Golden Ale in its true sense!

“In Great Britain, a “local” pub, bar, restaurant is the centre of town life and is a place to relax, meet friends and family, refuel the body and the spirit, share news, be entertained and reconnect in an unhurried and welcoming atmosphere. We’ve always been striving to meet the needs and demands of the discerning diner. To further excite and upgrade the beer drinking experience British style we are finally launching our very own beer called ‘THE ONE’ which is a Belgian Golden Ale. So just drop by, sit back and relax with a glass of this beery goodness at your nearest British Brewing Company outlet” says Ajit Dhumal, director at British Brewing Company, Mumbai.

With the launch of this all new brew, British Brewing Company will let one choose yet another interesting pour with a classic style and a locally inspired twist.

The taste of Scotch


Global Malts Ambassador for Diageo, Donald Colville, explains the nuances of Scotch and especially those of Diageo Malts.

Donald Colville, Diageo Global Scotch Ambassador – Malts, on his first visit to India is a man on a mission. Given the task of supporting the development of all of Diageo’s Single Malt Scotch Whiskies – The Singleton, Talisker, Cardhu, Lagavulin, Caol Ila and Oban, while managing the Global PR and Influencer strategy for Diageo Scotch Whiskies, he also overlooks the Diageo Scotch Whisky Education courses worldwide. He is an expert on all of Diageo’s 28 single malt distilleries and

related sites.

Donald joined Diageo in 2008 and was appointed as Diageo’s Global Scotch Whisky Ambassador – Malts in December 2010.

Growing up in Scotland’s historical whisky capital, Campbeltown, Donald has deep roots in whisky distilling as his great-grandfather previously operated the Dalintober Distillery, a supplier to the

Johnnie Walker blends.

There are six Scotch regions Speyside, Highlands, Lowlands, Islands, Campbeltown and Islay. The Highlands is the largest of the whisky producing regions in Scotland and generally produces more

full-bodies whiskies with deeper notes of peat and smoke. Lowlands is located at the southernmost part of Scotland, and is a flat region with no mountains. Scotch from this region are generally considered

as the most light bodied of the Single Malts. Speyside, is the center for whisky in Scotland. More than half the distilleries in Scotland are located in Speyside. Although geographically part of the Highlands, its unique characteristics the waters of the river Spey, which distilleries use straight from the river Spey in their production process, make the Speyside scotch the country’s most complex, and known for their

sweetness and elegant flavors and aromas. Campbeltown was once the whisky capital of Scotland. The Scotch here is peaty, and has a salty hint and a briny character. Islay, pronunced “eye-luh”, scotch is considered to be the smokiest and strongest-flavored Scotch of the single malts. Their strong flavor is believed to be due to the region’s exposure to the high winds and seas of the west coast. Island – considered by all as a region of its own, produces Scotch that can be described as a milder version of

Islay whisky (sort of like a hybrid between Highland and Islay whiskies).

Malts, responsible f Talisker, Cardhu, Lagavulin, Caol Ila and Oban, to name a few. Some of the classic

single malts in the Diageo repertoire include:

Lagavulin 16 YO Aged in oak casks for at least sixteen years, this much sought-after that’s typical of southern Islay, but also has a beautiful complexity that offers hints of sweet and malty notes.

Oban 14 YO A combination of rich sweet orange notes with a gentle smoky dryness and appetising spice distinguishes this lovingly-matured Highland malt.

Caol Ila Malt 12 YO A smoky, sea-fresh aperitif, this one comes with beautiful notes of citrus and malt from remote Island of Islay.

Talisker 10 YO Made by the sea, this is the classic stalwart of the Talisker family. A rich dried-fruit sweetness, clouds of smoke, strong barley-malt flavours, warming and intense, this one.

Singleton of Glen Ord 12 YO A fruity, well-composed liquid that manages to be both light and smooth without compromising any depth of flavour or fullness of palate. Savour the good taste.

Many of the whiskies from Diageo’s repertoire are appropriately paired with Indian food. “There is Talisker which is from Scotland with a smoky flavour which combines well with the chillies in the Indian food. There is also Glenmore which is a complex whisky and goes well with richer, spicier food that is the norm in India. In India there is a wide variety of breads and Glenmore is apt for them too,”

says Colville.

He is also the judge at the Diageo Reserve World Class Comp part of the competition are the seminars

and the training sessions that are held to improve the skills in the industry.” He also adds that there has been an unbelievable improvement in the skills of the bartenders as compared to past years. “I can see that there is a staggering difference in the learning and understanding of flavours, in the use of new modern techniques and the use of spices among the bartenders in India now,” says Colville.

IMFL. In the first six months of 2016, India emerged as the third-biggest export market for Scotch, The average age of the whisky drinker too is coming down, says Colville. From being a drink of the middle age and elderly men, there is an expanding of the net. It has now become age neutral.” It has

also helped that whiskies now come in a number of flavours and a wide variety of cocktails can be concocted which appeal to a diverse audience.

Whisky, which Colville describes as age- and gender-neutral, accounts for almost 60% of the IMFL. While India remains the whisky capital of the world, Scotch remains the world’s favourite whisky,” says Colville.

“Using single malt in a long drink or a cocktail is another way to popularise the drink,” says Colville. The idea of using a Lagavulin, a Talisker or a Cardhu in a cocktail might sound incongruous to the

whisky connoisseur but Colville says it can be a platform for creating a wonderful drink. “If you taste a Talisker Old Fashioned and a generic Old Fashioned, there is a marked difference, and that could be a start of a journey.”

Colville shows a preference for blended Scotch whiskies because they are blend of many good single malts. Our biggest-selling brands in India are Black Dog and Johnnie Walker Black Label. In single malt, it would be Talisker.” People can try different things. One has to be open to experimentation. So, the best way to consume single malt — any way you want.”

Diageo operates 28 malt distilleries, accounting for nearly one-third of the industry’s total capacity, along with Scotland’s largest grain distillery at Cameronbridge. Of these 14 are for single malts and 14 are for blended Scotches. The company’s leading brand is Johnnie Walker; the best-selling blended Scotch in the world, but it boasts other high-ranking blended brands such as J&B and Bells, along with an array of respected single malts, including Cardhu, Talisker, Mortlach and The Singleton.

There are 118 licensed distilleries in Scotland. Ninety three percent are for blending and seven percent are for single malts.

United Spirits focus on profitability while maintaining growth

While premium brands provide profitability, the popular brands provide volumes. USL is

focusing on finding the right balance given the tough conditions prevailing in the market place.

The USL Diageo combine is the biggest alcobev company in India and they are making a strong emphasis to grow from strength to strength. While the popular brands continue to grow it is the premium brands that bring in the profits.

United Spirits Ltd (USL) will continue with the popular segment consisting of mass or value brands like Bagpiper, Director’s Special and Haywards whiskies using franchises for that business in some states to focus more on premium brands. Given the tough conditions in some states other companies too follow a similar strategy. Around 59% of volumes still come from the popular segment and franchising is a part of United Spirits’ strategy of selective participation.

Franchising helps extract the best value from popular brands and liberate the company’s management as much as possible so that they can focus on the bigger potential profit pools of the future, which

are in the prestige and above segment, Kripalu said.

USL’s popular segment consists of mass or value brands like Bagpiper, Director’s Special and Haywards whiskies.

Diageo is a global leader in beverage alcohol with an outstanding collection of brands across spirits and beer. These brands include Johnnie Walker, Crown Royal, J&B, Buchanan’s and Windsor whiskies, Smirnoff, Ketel One and Cîroc vodkas, Captain Morgan rum, Baileys liqueur, Don Julio tequila, Tanqueray gin and Guinness beer.

Two policy developments during the year – demonetisation and the judicial ban on the sale of alcohol along national and state highways – adding to the introduction of prohibition in the State of Bihar, created a volatile and tough environment for alcobev companies, including ours – but, I believe we have outperformed competition in this challenging environment, said Mahendra Kumar Sharma, Chairman, in a letter to shareholders. We have also performed favourably compared to most other fastmoving consumer goods (FMCG) peer companies. We will continue to build on this momentum.

For the year, while overall net sales grew by a modest 4%, the Company improved gross margins by 156 bps to 42.9% and profit after tax grew 39%, both aided by improved productivity and operational

efficiencies. The above, coupled with stringent corporate governance and compliance norms, the Company has adopted and adhered to, have led to a further upgradation of our long-term credit

rating to AA which will enable it to access more economical sources of debt. It will help to deleverage the balance sheet and reduce the level of overall debt, including through the disposal of noncore assets,

to further improve financial performance by optimising on total debt and financing costs.

In the last three years since Diageo took a controlling interest in United Spirits, the journey has been to transform the Company into a world-class organisation that is known and recognised for its performance, compliance culture, ethical values and transparency, thereby gaining the trust and respect of all stakeholders and society at large. We have made fair progress in the pursuit and achievement of

that vision leading to being accepted and acknowledged as a valuable and integral part of the Diageo group, says Sharma. On our part, over the last few years we have aligned and strengthened our business

strategy, brand portfolio and investments, compliance standards, governance and financial/operational control mechanisms, talent development, environmental footprint and sustainability efforts and much more, to those of Diageo’s standards globally, to pursue greater integration with the parent, in true spirit of interdependence. We now identify and adhere to the Diageo ethos more closely than ever before, even while we build on the positive aspects of our legacy, including our understanding of the Indian market, consumer franchise of our brands and wellestablished distribution network.

No stone has been left unturned, and no effort spared to examine every brand, every assumption, every process or control and much more, in our quest to become the best performing, most trusted and respected consumer products Company in India.

Said Anand Kripalu, Managing Director and CEO, I am very pleased with our performance delivery in the year gone by and how we’ve held up against what can be described as the single-most challenging

year from a regulatory perspective. Our results are commendable seeing as they come in the face of a very subdued economic environment and several regulatory changes. Beginning with the surprise announcement of total prohibition in Bihar, coping with the aftermath of demonetisation and culminating in the Supreme Court banning the sale of alcohol near national and state highways! Timely

interventions, out-of-the-bottle thinking and employees rallying together to mitigate these risks as quickly and effectively as possible have helped us survive and grow in this tumultuous year.

On the other hand, our industry fundamentals remain promising as demographic factors, increasing aspirations and changing attitudes to alcohol continue to fuel growth. We have significantly increased the quantum of investments behind our focus brands during the year, communicating more creatively with consumers, and at scale. Our strategy of premiumising offerings, refreshing and renovating brands as well as innovating with new consumption occasions, led to strong, ahead-of-industry, growth of our

Prestige and above segment, which grew net sales 14% during the year. Our renovated brands, McDowell’s No. 1 whisky net sales grew 8%, Royal Challenge grew 16% and Signature grew by 29% in this year, gaining market share as well. The Scotch category also grew net sales 32%, driven by Johnnie Walker, Black Dog, Black & White and VAT 69.

To stay focussed on the most profitable parts of our business viz. Prestige and above, we created a fit-for-purpose business model to selectively participate in the Popular segment in certain states. In others, we have begun franchising our MK Sharma Two policy developments during the year – demonetisation and the judicial ban on the sale of alcohol along national and state highways – adding to the ntroduction

of prohibition in the State of Bihar, created a volatile and tough environment for alcobev companies, including ours – but, I believe we have in this challenging environment, 6 AMBROSIA • July 2017

Popular brands to local partners to improve operational and cost efficiencies.

At Diageo, standards are everything. Our high-quality standards are manifest in every product in our portfolio and our state-of-the-art Technical Centre is the custodian of our valued portfolio. Our new

Packaging Centre at Kumbalgudu will more fully serve our innovation agenda, going forward, Kripalu added.

We only do business the right way. We strengthened our compliance and governance norms this year with the introduction of the Diageo Know Your Business Partner Programme, a more thorough due diligence of our business partners, he pointed out to shareholders.

We also restructured our organisation to fit our strategic objectives and ensure that we respond quickly to customer and consumer needs, making it leaner, flatter and more agile; roles and spans are bigger; decision making is faster; and accountability sharper. We firmly believe that when consumed responsibly, alcohol can be part of a balanced lifestyle and play a positive role in social occasions and

celebration, he continued.

On the company social responsiblility programme, Kripalu said, “We champion responsible drinking and support road safety programmes all over India. This year we extended our partnerships to other corporates such as Essar Oil to create awareness and drive behaviour change through their network of 3,200+ petrol pumps, many of which are situated along national highways. Over the last few years, we have transformed and aligned ourselves more closely to the Diageo value system which has begun to

underpin our entire business value chain, as well as our relationships with all our stakeholders, including our employees and the community at large.

Road safety and anti-drink driving are central to our strategy to address alcohol harm and promote responsible consumption. Our signature ‘Diageo Road to Safety’ programme, now in its third year, is executed in partnership with state governments and reputed not-for-profit organisations. In February this year, we were proud recipients of the ‘National CSR Excellence Award 2017’ for this campaign.

The USL-DIAGEO – ROAD TO SAFETY programme, together with the Institute of Road Traffic Education (IRTE), covered new ground, reaching 50 new cities in 15 states and trained over 3,900

traffic officials in road safety capacitybuilding, along with 6,000 commercial vehicle drivers.

FY16 reached 2.8 million citizens through its network of Radio, TV and Digital. Till date, the campaign has garnered over 3 million pledges in support against drunken driving. Citizens were encouraged to always have a ‘Designated Driver’ and to ‘Never Drink & Drive’. Campaign ambassador and youth icon, Virat Kohli together with leading celebrities Chris Gayle, Karisma Kapoor and Gul Panag amplified the message of never drinking and driving.

DIAGEO-ESSAR OIL (EOL) – ROAD TO SAFETY PARTNERSHIP, a first-of-its kind CSR partnership was launched in February this year. This Road Safety campaign aimed at educating the

commercial vehicle drivers is being rolled out across 3,200 Essar Oil’s retail outlets on the state and national highways.

Moving forward, I see these values-led and value-creating relationships propelling our growth even more appreciably forward. We are part of something bigger, and we are certainly proud to have become an integral and valuable part of Diageo.

Strong market share gains achieved during the year as a result of renovation of key brands – McDowell No. 1 Whisky, core variant renovated in November 2015 grew by 8%. Signature has grown almost 29% and Royal Challenge net sales grew 16% post renovation.

Our brand portfolio took a major leap with pioneering innovations to power future growth. We launched Silk, another landmark in McDowell’s No. 1 brand building journey and the first Indian

whisky with honey flavour, and also introduced our premium Captain Morgan Original Rum to meet the evolving desires of rum connoisseurs.

Introduced gifting and personalisation at the point of purchase for some of our premium whisky brands for special occasions, whether it is weddings or festivals like Holi and Diwali. Consumers loved these

gift packs, as evident in the fact that they were happy to pay the premium for the beautiful packaging that they were proud to gift to friends, family and business associates alike.

Simi Bartender is a chatbot – a conversational interface that helps consumers with cocktail recipes. Launched during the year, this innovative digital experience offers bartending solutions, with over

2,000 DIY cocktail recipes, to enthusiastic consumers ready to play host at parties.

Posted strong 43.5% volume share in the categories in which we operate (including wine and flavoured spirits). P&A represents 41.13% in volume and 60% of the overall business (net sales).

We are now fully aligned to Diageo’s commercial capability standards with an overall ‘stable’ rating and best practice showcase in certain criteria. This is a significant improvement from the past year. These standards help benchmark selling capabilities across the world, including Customer Planning and Performance Management, Outlet Execution Standards, Rewards & Recognition and Commercial Scorecards.

Deployed a fit-for-purpose model to optimise our Popular brands business. In certain states such as Andhra Pradesh, Puducherry, Goa, Andaman and Nicobar and Kerala, we believe that other local parties are better advantaged to maximise value of our popular brands and have appointed franchisees for these brands through a fixed fee model.

This will enable us to focus on the biggest growth opportunities. Partnered with innovative start-up ‘HipBar’, a cloud-based app catering to drinks connoisseurs. Customers can use their smartphone to buy their favourite spirits bottle through the HipBar app, which can be redeemed

by portion in any partner restaurant or hotel across the country.

It is our constant endeavour to bring cost and operational efficiencies into the system through

sustainable initiatives across the value chain of our business. These include creation of an

integrated supply team to boost collaboration and faster decision-making, besides greater

focus on productivity and savings. These initiatives led to ` 200 crore in cost savings during

FY17 – the highest ever till date.

During the year under review, your Company has achieved a sales volume of over 90 million cases and this resulted in decline of 3.2% compared to prior period (previous year 93 million cases, excluding royalty / franchise markets). Net sales/income from operations of the Company’s brands grew 3.6% in the financial year ended March 31, 2017 and stood at ` 85,476 million net of duties and taxes (previous

year ` 82,482 million). Sales volume of the Company’s brands in the ‘Prestige and Above’ segment grew 7.7% in the financial year ended March 31, 2017 and stood at 37 million cases (previous year 34 million cases). Net sales of the ’Prestige and Above’ segment grew 13% and stood at ` 49,660 million net of duties and taxes (previous year ` 46,013 million). The ’Prestige and Above’ segment represents 41% of total sales volumes and 58% of total net sales with 4 basis points and 5 basis points improvement respectively compared to previous year.

After a lackluster out turn in 2016, economic activity is projected to pick up pace in 2017 and 2018,

especially in emerging market and developing economies. However, there is a wide dispersion of possible outcomes around the projections, given uncertainty surrounding the policy stance of the incoming U.S. administration and its global ramifications. The global economy remained on a subdued

growth path, estimated to growth at 3.1% in 2016 against 3.2% in 2015. With estimated growth of 6.3% in financial year (FY) 2016-17 (against 6.7% in the previous year), the emerging and developing Asian countries were the key contributors of the global growth, led by India and China.

Propelled by the central government’s demonetization reform, market interest rates and yields on

g-secs are expected to be lower in FY18 as compared to FY17, which is likely to provide a boost to the Indian economy. With fiscal gains resulting from demonetisation and implementation of GST also getting realized, India is likely to be the fastest growing major economy in the world during FY18. GDP is expected to grow to in the range of 6.75% to 7.50% against the

7.1% growth registered in FY17. (Source: Economic Survey 2016-17 dated Jan 17)

Driven by the rapid increase in the urban population,the Indian spirits is on a high. Further boosting the market growth is the increasing disposable income and growing preference for whiskies, coupled with changing demographics. With over half the country’s population (54%) above 25 years of age, and

the estimated median age of the country’s population pegged at 28 years, as of 2016, the growth metrics for the industry are quite favourable. A change in outlook towards social consumption of alcohol, improvement in life styles, increasing aspirations, growing prominence of ‘pub and cocktail culture’ in urban cities and emergence of novel Food & Beverage formats is further pushing demand for alcoholic beverages in the country. The per capita consumption of alcohol, however, was just above 2 litres of pure alcohol (lpa)/head in 2016. The Total Beverage Alcohol (TBA) market in India is pegged at ` 378347 millions, of this, Western style spirits accounts for over 52%,

The year gone by was challenging for the Alcobev industry. Industry growth was pulled down by several factors during the year under review, and as a result, liquor consumption remained by and large flat. Consumption of Whisky was estimated to grow at 1.15% for FY17 while Spirits remained flat. Bihar, the fourth largest state by population, went dry in April, impacting the overall growth for the year by ~1.5%. The supply in Punjab was disrupted for a month due to procedural technical issues. Significant rise in tax had put the burden of overall cost on states like Andhra Pradesh, Telangana, Karnataka and Maharashtra.

Demonetisation impacted businesses by knocking off about 15%-20% of sales in  November and December, impacting the overall year by another 1.5%. With many more police checks taking place, there has also been increased clampdown on drink-driving. The market has also been severely affected

by the Apex Court’s ruling banning liquor vendors within 500 metres of a state or national highway, which has caused  significant disruption as many license holders simply stopped buying stocks. Due to this, some believe that  up to 15% of retail outlets will be lost forever, although most expect

that over time this supply will be replaced by alternatives.

India is one of the largest markets for spirits globally. Approximately 6% of the global alcohol beverage growth is driven by our country. Going ahead, almost 11% of the global spirits growth is expected to come from India. Despite being a country with a population of about 1.3 bn, of which about 58% lies in the age group of 25 years or above, India’s per-capita consumption of alcoholic beverages stands at approximately 4 litres per annum, which is quite low compared to various other developing countries where per capita consumption of alcohol exceeds 10 litre per annum.

Due to rising income levels, the pace of growth of consumption in Tier-2/3/4 cities as well as rural areas could outpace that in urban cities, going forward. Moreover, with the rise in disposable income, consumers would tend to upgrade their preferences, resulting in higher demand for prestige, premium

and luxury segments.

The Alcobev industry in India is witnessing significant changes influenced by western culture; thus a strong trend towards premiumisation is clearly visible. For the industry as a whole, the premium and above segment is expected to grow at a CAGR of 14% over 2016-2021, whereas the prestige segment is estimated to grow at 12% over the same period. Following the industry footprints, your Company

is also strategically focusing on Prestige and above brands. The Company is constantly working on renovation and innovation of its brands. To emphasize more on the same, the Company has chosen purpose-led marketing platforms and occasion driven special packs.

In India, the alcohol industry works in a highly regulated environment under both central and state governments. Additionally, national laws and regulatory bodies, such as the Food Safety and Standards Authority of India (FSSAI), also significantly impact the Alcobev industry. A spate of recent

regulations has further tightened the regulatory controls on the industry. Some of the recent regulatory changes in the industry include – 1) Reduction in distance limit for liquor vendors to 220

meters from 500 meters in areas with population up to 20,000; 2) Exemption to hill states of Sikkim and Meghalaya; and 3) Permission to liquor shops whose licenses had not expired

by April 1, 2017 to continue until their permits expire or until September 30, 2017.

As a result, nearly a third of liquor outlets will be impacted and migration of these could take time. The resultant disruption will impact the revenues of liquor firms. This ruling will lead to short-term disruptions as liquor vendors relocate, although it is unlikely to significantly impact medium to long term growth prospects for the industry.

Under the GST regime, liquor is excluded from the GST net. Undenatured ethyl alcohol, which is a key ingredient for the spirits industry, has been kept out of GST. GST rate on molasses has increased by 10% to 18%, whereas the rate on new packaging materials has increased by 6% to 18%. The general tax on services has increased by 3% to 18%. As a result of this new regime, the alcobev manufacturers will not get input credit on all input taxes in the supply chain. This is likely to have an unfavourable impact on margins. The Company will continue to work with the central government to mitigate this impact, and will approach the state governments for appropriate price increases.

Despite the rising cost of ethanol, one of the major raw materials used by the industry, aggressive productivity led initiatives enabled the Company to save ` 2000 million in material costs during the year. This compared quite favourably with the ` 1400 million savings secured during FY16. Integration with the Diageo supply chain is also creating some avenues for better pricing efficiencies in the system, which is also expected to gain from the Government of India’s efforts to source ethanol from lowcost

alternative sources such as bio-waste and feedstock (wheat, straw, corn straw, rice straw, etc). Realisation of these efforts would help improve availability of ethanol and stabilize prices.


The Company’s portfolio includes brands such as McDowell’s No.1, Royal Challenge, Signature, and Antiquity, among others. Your Company also imports Smirnoff and Ciroc in India.

The is a subsidiary of Diageo plc – a global leader in beverage alcohol with an outstanding portfolio of brands across spirits, beer and wine categories. Pursuant to its acquisitions in 2013 and 2014, Diageo plc has a 54.8% shareholding in your Company, making India one of its largest markets.

The Company has 18 brands in its portfolio which sell more than a million cases every year, of which 4 brands sell more than 10 million cases each annually. The Company exports to over 37 countries across the globe.

With its 60 manufacturing facilities spread across states and union territories in Indian and also its presence through franchisee partners in other parts of countries, the Company not only ensures faster turnaround of products but also minimizes risks related to local states’ policy changes.

Similarly, strong distribution ensures continuous supplies to all key markets, as well as reach to all of the 81,000 retail outlets.

The Company has set out a strategic road map which includes its five strategic pillars to steer its future growth trajectory. These are: 1. Strengthen and accelerate core brands. Transformation of its key brands to win greater market share is a major agenda for the Company. The main beneficiaries of this approach are Signature, McDowells, Royal Challenge, Black Dog among others. From renovating brands, diversification within the geographies and enhancing the customer reach, your Company has been

making significant strides in its journey of transformation. The Company has upgraded three of its key brands viz. (1) McDowell’s No. 1 whiskey, (2) Royal Challenge whiskey and (3) Signature whiskey and the Company’s innovation pipeline during the year has created new offering(s) in the segment with the launch of McDowell’s No.1 “Silk”, Royal Challenge “Bolt” and a new variant of Captain Morgan,

which will help attract new consumers and drive future growth. It has been the Company’s endeavour to strengthen and accelerate its core brands through continued investment, to win across each of the 3 India’s – Affluent, Middle and Aspiring. Renovation and rejuvenation of the existing brands is another key aspect of this strategy, which also involves innovation and introduction of new to market brands.

Evolve route to consumer; The Company’s focus in this area is on leveraging outlet as a media to build brand imagery in the luxury, premium core and prestige core categories, especially keeping in view

the prohibition on liquor advertising in India. Consumerwinning activations are used to create demand, with trade emerging as the ambassador for the Company’s business in these categories. In the popular category, the Company leverages scale to promote the route to consumer. The thrust on this front is on creation of a `sell-out’ culture, with 20% of the country’s alcobev stores being converted

into `Perfect Stores’.

3. Drive out costs to invest in growth: To mitigate pricing shortfall and improve margins,

the Company continues to strengthen its productivity programme, which was launched in

FY15. Procurement efficiencies are continuously boosted and network optimization is also enabled to

enhance productivity.

4. Corporate citizenship: As a responsible corporate citizen, the Company continues to influence public policy through innovative initiatives, along with programme activations to ensure road safety

and empower women.

5. Creating a future-ready organisation: To create a fit-for-purpose organization, the Company is

going in for right sizing, while bringing in new capabilities and creating a performance-led culture. Targeted improvement interventions to measure employee engagement are also undertaken on a regular basis. Having established a practice of following highest compliance and governance standards, the Company has also played leadership role in shaping the regulatory landscape in the industry. Your Company has added new capabilities in all business aspects, and has improved systems and key

processes thereby right sizing the Company for future growth.

Operating model changes through Franchising During the year under review, in line with the Company’s approach to selectively participate in the popular segment, the Company has entered into agreements to franchise selected, mainly Popular segment brands in Andhra Pradesh, Goa and has moved to a complete franchise agreement for all your Company brands in Kerala effective 1 January 2017.

The Company has entered into additional agreements to franchise popular segment brands in Union Territory of Puducherry, Union Territory of Andaman and Nicobar, Chandigarh and Rajasthan effective April 1, 2017, in Madhya Pradesh, Himachal Pradesh, Jammu and Kashmir and Delhi effective 1 May 2017 and in Sikkim and Uttar Pradesh effective from June 1, 2017.

The individual agreements are for between 3 to 5 years. The franchisees will be responsible for manufacturing and distribution of the franchised brands in their respective states on payment of an agreed royalty fee which will be accounted as part of net sales.

These changes will allow your Company to further improve it’s operating model and focus the business on the biggest profitable growth opportunities. Volume and net sales for these franchised brands accounted for 10.3 million cases and approximately ` 6,400 million net sales in the full year ended March 31, 2017.

The Company’s growth in the past few years has been encouraging and was supported by a strategic revenue mix, up gradation and strengthening of brands. With the Diageo brand portfolio integration, your Company is today a market leader by volume and value, and it also holds a place of pride

in the Indian alcobev industry, with an outstanding portfolio of reputed brands across key categories and multiple price points.

The Company has successfully improved both top line and operating profit in a highly regulated and competitive environment, while further strengthening its core brands to leadership position across all segments. The company’s performance in the popular segment reflects its prioritized geographical participation strategy, while its double digit net sales growth in the “Prestige and Above” segment clearly endorses the success of its premiumisation strategy.

During the year, the Company has achieved a sales volume of 90mn cases and net sales of ` 85,480 million in the financial year ended March 31, 2017. Overall volume declined 3% and net sales were up 4% impacted primarily by Bihar prohibition and one off impact of operating model changes. Excluding

the one-off impact volumes were up 1% with net sales up 8% despite a subdued economic environment mainly impacted by demonetisation and the run up to the highway ban.

The Prestige & Above segment represents 41% of total volumes and 58% of total net sales, up 4 ppts and 5 ppts respectively compared to last year. The Prestige and Above segment net sales were up 13% with 5ppts positive price/mix. Positive price/mix was driven by selective price increases in certain states and continued focus on premiumisation and brand renovation in the segment. Signature volume grew by 26% and grew net sales by 29% supported by successful renovation. McDowell’s No 1. whisky variants (excluding Platinum) volume grew by 7% and net sales grew by 8%.Royal Challenge volume grew by 15% and net sales grew by 16%. The scotch portfolio in the premium and luxury segment grew volume by 29% and net sales by 32% driven mainly by Johnnie Walker, Black Dog,

Black & White and VAT 69.

The Popular segment represents 59% of total volumes and 42% of total net sales, down 4ppts and 5ppts respectively compared to last year. The total Popular segment witnessed a decline of 10% in volumes and 9% in revenue during the year, impacted by Bihar prohibition and one off impact of

operating model changes. Excluding the Bihar prohibition and one off impact of the operating model changes, the popular segment declined volume 3% and net sales 2% in the full year. Priority states volume was flat and net sales grew 1% in the full year driven by Hayward’s, Bagpiper and Director’s


During the year the company utilized its cash from operations to repay its loans which has led to a reduction in net debt. This reduction in debt value together with renegotiation of borrowings and favourable mix of debt instruments reduced the total interest cost in the full year. Significant improvement in your Company’s overall financial flexibility, corporate governance and compliance framework has led to further improvement in our credit rating. During the year, ICRA Limited

upgraded the Long Term Rating from “A+” to “AA” with positive outlook, while the Short Term Rating was reaffirmed at “A1+” which is the highest rating. These improved ratings will enable the Company to access more economical sources of debt leading to lower interest cost and increased shareholder value.

The Company is the market leader in terms of value (with a market share of 44%) and the market dynamics are highly attractive, given the foray of global players in the Indian market, and a visible shift to premiumisation, as well as the shift to the franchisee model in some states. The Company enjoys a strong portfolio of brands (supported further by Diageo’s brands), and a focused strategy towards profitability by new management could lead to meaningful gains on the margin front from the current levels. Better pricing, strong cost optimization focus and a more rational competitive landscape (focus on profits vs volume) should lead to an overall higher industry profit pool. Strategic initiatives such as moving selectively to asset light/franchisee model and monetizing non-core assets would further help boost medium-term returns. GST-related concerns, however, will likely continue to weigh on the stock

performance over the short term. (Source: JP Morgan’s Report dated 03.04.17)

While Diageo has embarked on the right path to growth and profitability, an improved political and business environment, with a global recovery could see the company grow from strength to strength.

Total US Beverage Alcohol Consumption Drops by 3.8m Nine-Liter Cases in 2016

Beer, cider and mixed drinks drive decline, while wine and spirits post growth

Released today, the IWSR US Beverage Alcohol Review (US BAR) provides a complete picture of annual volume trends and underlying drivers in the US market. Results from 2016 data show a fast-evolving product marketplace where lower-priced brands struggle to capture consumer attention. The term ‘category blur’, which refers to consumers drinking products across all categories instead of just sticking to one type of product, has become more prevalent and made it difficult for marketers to predict – or rely on – a loyal customer.

Total beverage alcohol consumption in the US lost 3.5m nine-liter cases in 2016 to end the year with 3.39bn nine-liter cases. The segments in decline – beer, cider and mixed drinks (FABs, long drinks and pre-mixed cocktails) – posted a combined loss of 14m nine-liter cases, a total that was unable to be offset by the addition of 10.4m nine-liter cases from spirits and wine. In total, on-premise sales volumes decreased slightly last year, bringing share of beverage alcohol consumption down as more consumers chose to drink at home. Off-premise sales picked up last year, resulting in an increased share of the market overall.

Distilled spirits ended the year up by 2.6% at 220.8m nine-liter cases and, as a result, gained 0.2% share of total beverage alcohol. The wine industry increased for its 22nd consecutive year to end last year with a total of 358.3m nine-liter cases. The beer industry modestly decreased -0.2% to 241.3m hectoliters (hl) in 2016. The overall mixed drinks category decreased 3.2% in 2016 over the prior year, falling to 101.6m nine-liter cases. The cider category skyrocketed the past three years to reach an all-time high of 2.6m hl in 2015, only to fall by -15.1% last year to end 2016 with 2.2m hl.

Widely seen as the most accurate source of beverage alcohol consumption trends, the IWSR does however see a return to growth for total US beverage alcohol, with consumption forecasts to increase starting in 2018 and reaching a compound annual growth rate (CAGR) of 0.2% by 2021.

Key Category Insights

Whisky: Bourbon increased 6.4% last year to 15.9m nine-liter cases. Imported whisky grew 3.4% in 2016. Irish whiskey increased 17.6%, the highest rate in over a decade. Canadian whisky grew by 2.4%, driven by Crown Royal and Fireball. Scotch posted the lowest growth rate among all imported whisky categories with an increase of 0.5%.

Gin: The gin category finally made progress after consecutive years of decline, advancing by 1%. This was achieved from performance in the premium-and-above segments in addition to high-end imports.

Vodka: The vodka category grew 2.3% to 74.8m nine-liter cases, driven by domestic brands like Tito’s and New Amsterdam.

Rum: The rum category posted a decline of -1.2% as consumer interest has shifted to whisky and tequila.

Tequila: Tequila sales grew 7.4% in 2016, reaching an all-time high of 16.3m cases and achieving a 7.5% share of overall spirits.

Brandy/Cognac: The domestic brandy category (+4.1%) is being revitalized through high-quality offerings from small producers. Cognac increased 18.8% in 2016, with Hennessy standing out as the star performer.

Wine: Still wine increased 1.1% in 2016 on the strength of premium-and-above varietals such as pinot noir, rose, cabernet sauvignon, red blends and sauvignon blanc. Sparkling wine achieved one of its best performances in 2016 (+7.2%). Wines priced at or above $10.00 to experience the most growth in 2016 (+7.2%).

Beer: The current trend of premiumization and drinking less but better does not translate into volume gains for the beer category. The domestic beer category was down -1.5% in total. Removing craft volumes results in domestic beer down -2.8%. To put that loss into perspective, a decline of -2.7% in the domestic beer subcategory is equal to 4.9m hl. A volume loss of that magnitude is equivalent to one of the largest domestic craft brewers closing its doors. The imported beer segment increased by 6%, primarily led by Mexican imports.

Prepared Cocktails/Mixed Drinks: The mixed drinks category is predominately made up of malt-based FABs (flavored alcoholic beverages) which hold a 90.3% share of the category, with the remaining 9.7% attributed to pre-mixed cocktails and long drinks.

Uncorking the Armenian wines

Having rediscovered its wine, Armenia, once considered a cradle of winemaking, is again trying to gain popularity in the world of wine.

The story of Armenian wine began when Noah planted the first vineyard on Mt. Ararat and famously became drunk on his own wine, mentioned in Genesis 9:20. It is no coincidence that Armenia, known as the birthplace of wine, is also the site of the oldest known winemaking ruins, dating back to 6,200 years. Also, Herodotus, Greek historian, mentioned in his work ‘The Histories’ that merchants would carry wine down the Tigris and Euphrates to Babylon in barrels of palm tree wood during the fifth century. This is the first cited example in the recorded history about the use of barrels for wine storage.

Armenia has incredible amount of proven evidence that shows winemaking began 6,200 years ago. During a 2011 excavation, archaeologists announced the discovery of the world’s oldest wine production facility in Armenia. Located in the Areni cave complex, it consisted of a shallow basin for pressing grapes, a vat for storage, and fermentation jars. They also found grape seeds, remains of pressed grapes, and dozens of dried vines. James Owen from National Geographic wrote- “The site gives us a new insight into the earliest phase of horticulture—how they grew the first orchards and vineyards.”

Revival of Armenian Wines

The development of wines began in 2007 when new vineyards and organisations came in to existence. After building growth during 90s and early 2000, the wine sector is now one of the crucial segments for Armenia’s economic growth and employment. In the last five years wine production has increased exponentially. Government has taken several steps to promote the wine production in the country and established the Vine and Wine Foundation in 2016. It implements government policy and development projects in viticulture and wine making sector. The primary objective of the foundation is to preserve and develop the rich cultural and historical heritage of Armenian wine in Armenia as well as around the world.

According to 2014-2025 development policy of the government, the country seeks to develop several sectors that will contribute to economic growth and poverty reduction. Particularly 2010-2020 Sustainable Agricultural and Rural Development Policy prioritises high-value added processing industries, such as wine production. The industry has received large investments, mainly from foreign investors and local entrepreneurs, secured advanced technology and improvement of production processes.

Currently, there are more than 45 Armenian companies producing over 100 varieties of wines. Overall 83percent is produced in the Ararat Valley and Armavir region. The other four winemaking regions are Tavoush, Aragatzotn, Syunik, and Vayots Dzor.

Volumes of wine produced in Armenia have been showing a steady growth from 5.9 to 6.8 million litres in the last 5 years.

Given the favourable government policies for wine production and the number of newly established wineries, it will not be wrong to expect an increase in the wine production volume. During recent years wine exports as well as the local wine sales have noticeably increased. Armenia’s key markets include Russian followed by the USA and China. Armenian wine market has expanded and wines are exported to Italy, Lithuania, Canada, and Switzerland. Larger exports volumes in new markets were observed in France, Belgium. According to International Trade Centre, Lithuania, Poland and France are promising markets where an overall sale has a tendency to grow.

Terroir and Native Grapes

Armenia has an exceptional geographical and climatic condition for vine cultivation. Volcanic soils, harsh climate and high altitude create an interesting union of the terroir’s elements.

The complex interaction of natural conditions within the small territory of the country induced and affected the formation of quite a peculiar range of soil types, from the volcanic and semi-desert zone to the mountain meadow soils of alpine type. The climate is dry and continental due to mountains in most of the regions,” Syune Barseghyan of Armenia Wine Company (AWC) said.

Armenian grapes are distinguished by their aromas. Armenian ingenious grape varieties include Areni and Voskehat. Areni is the best known variety. It is thick-skinned and late-ripening grape, considered to be one of the finest varieties that produce fresh, bright red wines with soft, elegant red fruit flavours. Used for the production of dry wines, as well as sparkling and dessert ones, Voskehat, which means ‘golden berry’, is believed to have been cultivated about 3.5 thousand years ago.

An Icon of Modern Winemaking- Armenia Wine Company

A family-owned company, Armenia Wine Company is born out of the love the family has for its country. While vineyards plantation started in 2006, the company was established in 2008. Flaunting an array of award winning wines and state of the art winery, the AWC is the leader in local market as well as in exports in wine segment.

Even though Armenia has been producing wines for more than 6000 years, it was the Armenia Wine Company that raised the standard of the Armenian wine at international level. Armenia is a country with 1000m average altitude that produces natural high sugar concentration, aromatic and colourful grapes. The AWC is the first company to accomplish the perfect alchemy from Armenian high quality grapes to create international standard wines. “We are thankful to our French consultant, our ‘on-site’ French winemaker expertise and the state of the art European technology for making this possible,” Barseghyan said.

The company’s portfolio is represented by wines which display indigenous grapes and terroir diversity. Maintaining the diversity, the company is working in three main winemaking regions – Armavir, Aragatsotn and Vayots Dzor. “Vineyards located in Armavir region provide us the main white Kangun variety used for making still white and sparkling wines. French grape varieties Merlot, Cabernet Sauvignon and Cabernet Franc used as blends with Armenian grapes. Vayots Dzor region, known for the world oldest winery (6200 year old), provides us the iconic Areni grape used in our red wines,” informed Barseghyan.

Armenia Wine Company produces four ranges of wines- Armenia, Yerevan, Takar and Tariri. “We are producing wine for every taste and palate and our assortment includes classical red, white, rose, sparkling as well as dessert wines like Muscat and wines made from Pomegranate. Armenia and Yerevan are young, soft, fruity wines that show the unique characteristic of local grape varieties in their natural state. Takar and Tariri are premium wines, much more complex, aged in oak barrels. The price of our wines ranges from USD 3 to 23,” Barseghyan said.

The annual production capacity of the company is 4 million bottles of wine, 1 million bottles of sparkling wine and 3.5 million bottles of brandy. According to the company’s statistics, local consumption of AWC wine constituted about 44 percent of the still wine and 74 percent of the sparkling wine in 2016. This year, the numbers are significantly different due to large increase in exports. The export volume of still wine has reached to 72 percent and 61 percent for sparkling, whereas local sales have accordingly constituted 28 percent of still wine, and 39 percent of sparkling.

The ARC’s products are exported to more than 14 countries including USA, Canada, China, Mexico, Japan, Russia, Israel, France, Belgium, Czech Republic, Lithuania, Bulgaria and Belarus. This year, the company is planning to sell its wines in new markets such as UK, Poland, Finland and Kazakhstan.

Father-Daughter Duo Rocking the Wine Business-Van Ardi

Returning to his roots, both physically and metaphorically, founder and winemaker, Varuzhan Mouradian and his family moved from California to Armenia. Having fallen in love with wines, he knew he had developed a passion for making wine he couldn’t ignore. Van is the ancient capital of Armenia with rich winemaking history, where the family’s ancestors belonged. The winemaker and the family named the winery Van Ardi, meaning ‘Sun of Van’.

After scouting various winemaking areas in the country, Van Ardi settled on an exquisite plot in Ashtarak, also an ancient winemaking region of Armenia. The land was bare, and filled with stones and boulders, but its volcanic soil, slope, and position, created a tangible terroir that evoked a sense of promise. Today, the nine hectares of land is being used to plant five grape varieties.

The winery started producing wines in 2013 while the vineyards were planted in 2008. Van Ardi uses endemic Armenian varieties like Areni, Kakhet, Haghtanak, and Kangun besides Syrah. Selling more of red wines and rose, Van Ardi currently produces 50,000 bottles which is approximately 37,500 litres. Van Ardi plans to expand the winery to increase the production up to 130,000 bottles.

Van Ardi has been exporting wines since its first vintage. Initially it exported 40 percent to Russia and the rest was consumed locally. Now, 50 percent is consumed locally and the rest is exported to Russia, USA, France, United Kingdom, The Netherlands, Lithuania, Belgium, Sweden and Germany. Van Ardi’s wines range from USD 5.5- 10.5.

Describing the competition as ‘healthy’ in Armenia, Ani Mouradian, Director of Marketing and Communication at Van Ardi, said, “Most of the wineries have their own character and are different from each other in function and the kind of wines they produce. Given the number of wineries, competition has increased exponentially in the past three years. However, Van Ardi does not have any threats and we don’t see anyone pushing us off shelves. We are barely meeting our demand; if we had more wine out there, they would be consumed as well.”

Speaking about the competition it faces abroad, Mouradian said, “I feel the countries that have similar profiles in development (Moldova) or are nearby (Georgia) are our biggest competitors as they share/claim a similar history of winemaking. It is very difficult for Armenian wines to make it in foreign markets, because we can’t be price competitive.”

Steeped In Tradition- Voskevaz Winery

Combining the traditional art of winemaking and innovation, Voskevaz Winery produces high quality wines which are unique in their profile as they are produced via autochthonous style; it refers to the winemaking methods as well as to the use of only local grape varieties.

The winery was established in 1932. The renaissance of the winery began in 2004, after the establishment of Voskevaz Wine Cellar LLC. The winery is equipped with the latest Italian facilities to produce high quality wine. Today Voskevaz produces wine using both traditional old karases and modern wine-making technology. However, all of them, without exception, reflect the true nature of Armenia. The wines are produced only from local grape varieties and for wine aging rare high-quality Armenian oak barrels are used. Voskevaz Winery aims to revive the use of this ancient winemaking technology. These wines reflect the true nature of Armenian winemaking.

When it comes to the production of sweet wines in Armenia, Voskevaz Winery has pioneered the use of wine withering technology. Voskevaz products start from USD 5-52 and it sells 10 percent of the produce in Armenia. It mainly exports to Russian Federation, USA (Los Angeles for now), Lithuania, Netherlands, Great Britain and China.

Boasting of several medals at various prestigious local and international wine awards such as Mundus Vini Grand International Wine Award, Decanter World Wine Awards, Sommelier Wine Awards, Black Sea Wines and “Areni Wine Festival”, Voskevaz produces varieties of wines.

The Classic Wine line includes Voskevaz Red Dry, Voskevaz Red Semi-sweet wines (made from Kakhet and Haghtanak local grape varieties) and Voskevaz White Dry, Voskevaz White Semi-sweet wines (made from Voskehat (Kharji), Kangun Armenian grape varieties), Voskevaz Pomegranate fruit wine made from high quality Armenian pomegranate and Voskevaz Rose Dry (made from Areni variety). Vintage Line includes Areni Red Dry, Nuraz Red Dry, Voskepar White Dry, Urzana White Dry wines, Vanakan Red Non Vintage Dry wine made from Haghtanak and Kakhet grape varieties. Vintage liquor wine line includes Muscat Rozali white wine made from rare Muscat Vardabuyr grape variety and Katarine Red wine made from Kakhet variety. Voskevaz Karasi Collection includes three wines made from fine autochthonous Armenian grape varieties Areni Noir, Haghtanak and Voskehat. The wines are fermented in traditional karases (clay jars of 1000 litres) and aged in new Armenian oak barriques.

Voskevaz Karasi Collection, Areni Noir, is one of the rare wines that reflect the pure nature of Areni Noir variety with its terroir. This wine is made with preserved old vines from Vayots Dzor region vineyards at elevation of around 1600m above sea level. Two winemaking tools, 100 year-old Karas and Armenian oak barrel, are used to create this outstanding wine. In our opinion, this kind of harmonious combination of karas and barrel is perfect for the wine tasting and aroma evolution,” said Mary Hovhanisyan, Marketing Manager.

Also, two more wines made from local Voskehat and Haghtanak grape varieties are included in Voskevaz Karasi Collection. This is a stunning example of world-class wines that will be interesting both for the local and foreign consumer. In our opinion Armenian grape varieties are quite promising and have unique character and great potential,” said Hovhanisyan.

One of the Biggest Wineries- Karas Wines

Karas is a newly established winery in the West of Armavir Region. Located in Ararat Valley, between Mount Aragats and Mount Ararat, Armavir is the smallest and the most densely populated region in Armenia. The convenient location and the favourable climate have allowed this thriving region to become the epicenter of agricultural development.

In 2003 the pursuit for developing an inspiring project led Tierras de Armenia to discover these lands which are rich in minerals and suitable for high quality wine production. The innovation and technology were the key factors in achieving the company’s objective.

In 2010, the company had its first commercial production and defined a new way in the production of Armenian wines. In the period of six years the Karas Wines have grown from 50,000 bottles to 1, 300, 000 bottles and aims to produce 3,000, 000 bottles,” said Gabriel Rogel, Winemaker.

To achieve perfect quality, every element, as essential as the overall experience, is taken into account- the location of the vineyards, the window for perfect ripeness, the wine’s journey to its optimal maturity, the visual components, the length of flavours, the aromatic notes as well as the body of the wine. All of these components combine to not only measure the quality and sample of the wine, but more importantly, enhance the experience of the sample.”

Karas has more than 400 hectares of vineyards located at an average altitude of 1100 metres above sea level. The vineyards are part of Tierras de Armenia CJSC, a company that owns 2300 hectares of land in the west of the Armavir region. The soil characteristics are mainly volcanic and that rich loam also contains a stony texture spread with rocks of clay ideally suited for the production of highly concentrated wines rich in colour, aromas and flavours.

Both international and indigenous varieties are planted in the vineyards, including Chardonnay, Viognier, Kangun for white wines and Malbec, Tannat, Syrah, Merlot and Cabernet Franc for red ones. The vineyards are cultivated with modern techniques together with an individual approach for each varietal, aiming to develop the potential of each.

Karas Wines key markets are the USA and Russia. However, it exports to other countries like France, Germany, Chez Republic, Nederland, Estonia, China, Belgium, Canada and Argentina. The company gets maximum revenue from its premium wines with Karas Red Classic being the best seller,” said Rogel.

Talking about the competition, Rogel acknowledged the fact that Armenian wines are not so famous in the world. However, Armenian wines have something new to offer the world.

Reinvigorating Armenian Wines- ArmAs

Golden Grape ArmAs was founded in 2007 by Armenak Aslanian. Along with his daughters, he preserves an 80-year-old family tradition of wine, naming ArmAs in honour of his grandfather Armenak Aslanian Sr., the original winemaker in the family. He continues to develop ArmAs Estate with a vision to partake in upholding and revitalizing Armenia’s winemaking legacy, in the oldest known area for viticulture and oenology.

ArmAs creates elegant wines that stem from one of the country’s best natural resources, the idyllic terroir of the vine. ArmAs estate is a picturesque display of agricultural achievement, set against the backdrop of the inspiring Mount Ararat. The 180 hectares of previously desolate and disconnected rock-strewn countryside was diligently transformed into a stunning panorama including vineyards, orchards, and a world-class winery.

The ArmAs winery and distillery was completely designed and constructed by Italian architects, engineers, construction crews, and wine industry professionals. During a four year period, from concept, to completion, and utilisation, numerous teams of varied areas of expertise trained local specialists and exceptional students for continuing maintenance and management. The state of the art winery is held to the highest international standards and boasts the latest enological equipment, as well as French and Karabakh oak barrels used for traditional aging.

Only the free run, or the noble juice, of the harvested grapes is reserved for the wines, retaining its finest natural qualities. Indeed, the achievement and individual features that each of the finished wines have attained in the cellar is a testament both to the innate characteristics of the vines, as well as the nurture that these grapes received from the vineyards to the bottle.

When Tradition Meets Technology- Hin Areni

Hin Areni strives to ensure that Areni grape is given the chance to show its beauty and that Armenian winemaking can duly pride itself with quality. The winery combines traditions of winemaking with state-of-the-art modern equipment. A renowned winery design expert from Argentina – Mario Japaz, has designed the winery.

The winery is equipped with modern technology. The grapes are picked and selected by hand, then they undergo gentle pressing in a pneumatic press. The storage is done with T control in SSA tanks. The wines are aged in barrels made from oak grown on the lush slopes of Artskah. The winery has the capacity to process over 250 tonnes of grapes.

The vineyards are situated at an elevation of 1215-1250 meters above the sea level, in and around Areni, namely in Tapq, Getap and Ishkatap. Hin Areni has a total of 32 hectares of vineyards. The sedimentary and rich volcanic soil, coupled with high elevation climate of Areni gives the wines a bold structure and expressive aromatic bouquet.

Hin Areni’s Voskehat is a finely crafted wine, made from grapes harvested in the historic village of Areni, known for its millennial wine making traditions. Supple and elegant, floral to the nose, this wine boasts rich aromas of honey and hints of apricot; it is pleasantly tart and crisp to the finish. While Areni wine is complex yet delicate, slightly peppery to the nose, this wine boasts rich aromas of red berries and is pleasantly tart and crisp to the finish.

Enhancing the Quality of Wines- MAP Company

The Wine Brandy Factory of Hoktemberian was founded in 1944 in the village of Lenughi. After privatisation in 1995 it was renamed- MAP CJSC. Now, the factory is well equipped with modern winemaking machinery. Due to all this, MAP Company has become one of the leading companies in Armenia that can produce up to 14 million litres of first-class alcohol drink annually. The entire cycle of wine and brandy production (receiving grapes, processing, ethyl alcohol distillation, ageing in oak casks in wine-cellars, brandy blending and bottling) is carried out by a classic technology.

Famous for its cognacs, currently, the factory produces wine, fruit wine and cognac (brandy). A variety of red and white wine is produced by the MAP winery. The Aramé brand includes red and white semi-sweet vintage wine as well as wine derived from the Muscat, Saperavi and Areni grapes. The Aramé Grand Reserve is a special edition of red and white dry aged wine. The winery also produces Tigran red dry wine, and Hasmik red semi-sweet wine. Nowadays, MAP products can be found not only in Armenia, but also abroad mainly in Russian Federation, several countries of Europe, and the US.

Vineyards of MAP Company are located in the Ararat valley, which is considered one of the most favourable places in the country for grape growing. The total vineyard area is 114 hectares. More than 10 varieties of grapes are grown; the main ones are Karmrayut, Nerkeni, Tigrani, Kakheti, Haghtanak, Kangun, Rkatsiteli, Saperavi, and Muscat.

Toprit Saifi

Paul John Single Malts win big at ‘Icons of Whisky India 2017’ Awards

Bags three prestigious awards – Best Master Distiller India, The Best Indian Single Malt Whisky and the acclaimed World Whisky Brand Ambassador of the Year 2017.

Paul John Single Malts, the great Indian Single Malt Whisky bagged three top honours at the Icons of Whisky India Awards 2017 – Best Master Distiller India for Michael D’Souza, The Best Indian Single Malt Whisky as well as the venerated World Whisky Brand Ambassador of the Year 2017 for Mr. Paul P. John. The brand whisked away the highest number of wins at the global awards ceremony thus making it one of the world’s top whisky brands to watch out for.

Speaking on the accomplishment, Mr. Paul John, Chairman of John Distilleries said, “We are truly overjoyed. Whisky Magazine’s Icons of Whisky award is a celebrated award ceremony across the globe. Being honoured by them across significant spheres of whisky making is a testament to our efforts towards producing world-quality whisky.”

The prestigious ‘Icons of Whisky’ Awards recognises the contribution of whisky brands in the industry from around the world and celebrates the winning brand’s dedication in delivering exceptional work across categories. Winning the eminent awards from among an assemblage of some of the most expert whisky producers and distillers from around the world made it a landmark victory for the Indian brand.

The special ceremony, to felicitate the brand on its achievements, took place at ITC Maurya in Delhi and was hosted by, none other than, Mr. Sandeep Arora, Editor, South Asia, Whisky Magazine.

Brought to the world from the sultry coasts of Goa, the Paul John Single Malts are made from carefully chosen indigenous ingredients including 6 row barley from the foothills of the Himalayas. Moreover the tropical climate of the region provides the ideal temperature and ambiance for the whisky to mature to the perfection.

John Distilleries first launched the Paul John Single Malt whisky in the United Kingdom in 2012. Ever since, its success in this sphere has been invincible. It didn’t take much time for experts from across the globe to take notice of the exceptional single malt whisky, further opening doors to some of the biggest, internationally recognized awards for the brand.

Paul John Single Malt Whisky reached its milestone moment when it was rated ‘Liquid Gold’ by Jim Murray’s Whisky Bible – the world’s leading whisky guide that professionally analyses the finest whiskies from around the world. Whisky Guru Jim Murray grades these whiskies on a score of 100. These scores are reflective of four key criteria that they are judged on – nose, taste, finish and balance and are each scored for out of 25. The Paul John Single Malt Whisky was graded a spectacular 94.5 and was described as “the smoke, through serious maturation, has now moved into a stunning structured herbal nature with lavender and mint, such a brilliant mouth feel, a sublime peated malt from India.”

The exclusive range of Indian Single Malts by Paul John are now available in 30 countries including Europe, UK, USA, Australia, Canada, New Zealand, Asia, Duty Free Shops (Dubai, Qatar, Singapore & Bangalore) and was recently introduced in the Indian markets including Delhi, Bangalore, Mumbai, Pune, Chandigarh, Pondicherry, Daman and Hyderabad.

Sula announces Nick Pringle as COO

Nick Pringle, COO, Sula

Sula has announced the appointment of Nick Pringle as the company’s Chief Operating Officer (COO), effective immediately. In his capacity as the COO of India’s leading wine company and fastest growing alcobev company, Nick will work closely with Rajeev Samant, Founder and CEO, Sula Vineyards, while overlooking the company’s strategy and operations.

Rajeev Samant commented, “I am delighted that Nick Pringle is joining Sula as COO. Nick brings a wealth of experience from his previous roles at Accolade Wines and AB InBev and is the right person to help steer Sula Vineyards, one of Asia’s fastest growing wine and alcobev companies, to even greater heights!”

Nick has over 20 years of experience in the wine and spirits industry. He has worked extensively in international markets to create a significant category across emerging markets for wine and spirits consumption and he strongly believes that numerous opportunities lie in the Indian alcobev industry.

Nick Pringle stated, “India is a very young and dynamic market. It has immense potential to grow in the wine sector and the enthusiasm, with great people that Sula possesses is infectious! Despite barriers, Sula entered the wine industry here in India and carved a niche for itself as both, the best and leading wine company. Sula recognised the changing industry trends and launched Sula Selections and Artisan Spirits to diversify itself, becoming a genuine front runner in the industry. I am proud to be associated with a brand that has turned things around for the industry altogether and look forward to creating more milestones for us to achieve together.”

Prior to this, Nick worked at AB InBev for 12 years. He later joined Constellation to assume a variety of roles and eventually joined Accolade Wines to strengthen Hardys globally in 2011.

At Accolade Wines, Nick was in charge of emerging markets and responsible for travel retail relationships across regions spanning Africa, the Middle East, South and Central America, Asia Sub-Continent and Southern Europe. Key markets for growth from his regions were Central and South America, Africa and India, which became a passion for him, while in India an increasing number of consumers were experimenting and progressing from beer and spirits to the wine category, during this time he was working in partnership with Sula. In 2016, Nick was appointed as Head of Accolade Wines for China, a significantly growing market for the company, before being given this amazing opportunity with Sula.

Before working in the wine and spirits industry, Nick was a professional cricketer and played for his home county – Somerset, from 1986 to 1991. Now he loves to see his son, Mathew play cricket and enjoys playing with him too. A thorough sportsman, he also used to play rugby and he loves watching football. Nick is a fitness enthusiast and also takes keen interest in music and travelling.