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Budget sets a clear action plan for making India $5 trillion economy

India is cruising towards becoming a $5 trillion economy. Indian alcobev industry stalwarts add credence to FICCI’s take on the budget.

Commenting on the Union Budget 2019-20 recently presented by the Finance Minister Ms Nirmala Sitharaman, Mr Sandip Somany, President, FICCI said, “Directionally the budget is good, and it takes forward the plan that was laid out by the government during the Interim budget. There are several positives in the budget, and it provides a set of benefits for most segments of the society. We see a clear action plan for realising the vision of making India a US$ 5 trillion economy over the next few years with a focus on ease of living.”

Anand Kripalu

“A balanced budget that draws from a long-term vision for the country! Through policy reforms to rejuvenate investment, ‘Make in India’ and Ease of Doing Business, as well as measures to tackle the country’s water shortage and climate change, the budget lives up to the government’s vison of a New India that aims at inclusive growth. The acknowledgement of India Inc’s role as the nation’s job and wealth creators is heartening. Operating with the high standards of compliance, in a sector that is in urgent need of regulatory reform, we are delighted at the Government’s vision of ‘Minimum Government Maximum Governance’, which we hope the Centre will encourage States to adopt towards the alcoholic beverages sector,” points out Anand Kripalu, Managing Director and CEO, Diageo India.

The budget maintained its focus on infrastructure development. While the government would continue with its existing major national programmes like Bharatmala, Sagarmala, Rural roads, Udan and Inland waterways scheme, the vision of taking connectivity to the next level through ‘One Nation One Grid’ for electricity and a similar plan for gas grids, water grids, i-ways and regional airports is indeed ambitious and would be transformational in its impact. “FICCI has been advocating the need for such networks and would work with the government on realising this vision. We are also encouraged by the Minister’s focus on promoting public-private partnership for modernisation and upgradation of the nation’s railway infrastructure,” added Mr Somany.

The MSME sector also got its due focus in the budget. Availability of finance and delay in payments are the two key issues faced by MSMEs. The government has attempted to address these through allocation of `350 crore for interest subvention scheme for GST registered MSMEs and creation of a payments platform to enable filing of bills and payment thereof on the platform itself. Also noteworthy is the suggestion to set up a social stock exchange for listing of social enterprises and voluntary organisations. This is expected to open up new avenues for funding for entities working in the social sectors.

Neeraj Kumar

With the Indian economy poised to become a $3 trillion economy in 2019, the Union Budget balanced prudently between focus on enablers for near term growth with a visionary 10 year road map to sustain and scale this growth.

Closer to our category, the announcement to develop 17 iconic world-class tourist sites is good news. We continue to expect greater transparency and ease of doing business in states and central regulatory framework to enable sustainable and compliant growth for our sector, says Neeraj Kumar, MD Beam Global Spirits & Wine India.

Abhishek Khaitan

The industry sees a confident and clear articulation to boost growth by reduction in corporate tax and sops to housing sector and startups. The focus on sustainability with electric vehicles and water is visionary but enabling infrastructure needs to be implemented.

“The budget is focussed on vision and inclusive growth,” believes Mr Abhishek Khaitan, Managing Director, Radico Khaitan Limited. The new government till date has pursued pro-growth initiatives and, I believe, this budget will continue the impetus to further boost economic growth and investor confidence. The government is well positioned for a swift and efficient execution of progressive initiatives. Smt Nirmala Sitharaman’s maiden Budget – the first to be presented by a female Finance Minister — emphasises on infrastructure development, freeing up liquidity to troubled NBFCs, generating jobs in the MSME sector, and generally enhancing the ease of doing business. As a listed corporate, we believe that having a 35% public float is positive in terms of better corporate governance standards and valuations and carries a potential of increasing India’s weight in the global indices.

The budget is equally focused on welfare, health, sanitation, water, transformation, standard of living and support to farmers.

Nirmala Sitharaman ji stressing on the ‘Gaon, Garib and Kisan’ aims at enabling the rural economy through multiple schemes. With the aim of boosting the agricultural sector in the country, the government’s plan to reassess the implementation of zero budget farming has the potential of nearly doubling farmers’ income. Additionally, 10 thousand new farmer producer organisations will be set up for ensuring market reach for the farmers. The other schemes announced in the budget such as Pradhan Mantri Matsya Sampada Yojana, cluster-based rural industrialisation for promoting 50,000 artisans, 75000 skilled agri entrepreneurs and overall focus on dairy sector are all very laudable.

The vision of each house having water, electricity and cooking gas by 2022 is commendable and there is a very close interdependence between water, sanitation, health, nutrition, and human well-being. We view water as a central resource for a sustainable India and the thrust to provide piped water to all rural households by 2024 is what inclusive growth is all about.

To conclude I commend Ms Sitharaman for appreciating the contribution of India’s private sector in the fantastic rise of the country’s economy. While the fiscal balance has been managed well with the deficit aimed at just over 3%, the overall, the budget is pro-poor, pro-rural and pro-ease of doing business. The simplification of the GST, the simplification of tax reforms and indirect taxes and the support to startups not only will help in bringing in more capital and employment, it will significantly benefit society at large and help achieve aspirations of millions of Indians.

“I would emphasise that the government has taken due cognisance of the funding needs of a growing economy and this is reflected in a series of measures announced to deepen the country’s capital markets as well as help increase inflows both through the institutional investment and direct investment route. In our pre-budget consultation, FICCI had suggested the need to look at FDI norms in sectors such as insurance, animation, gaming etc. and we are glad this found a mention in the budget,” said Mr Somany. Additionally, to attract cross border investments, the statutory limit of FPI in a company is proposed to be increased from the current 24% to the sector foreign investment limit.

The announcement to further provide `70,000 crore for capital infusion into public sector banks along with measures to strengthen the governance processes within the banks should help in improving the credit flow to the industry. “The NBFC sector has been in focus on account of the stress being faced due to liquidity crunch in the last few months. Acknowledging the important role played by NBFCs, some key measures have been taken which should help ease the liquidity situation for the fundamentally sound NBFCs going ahead. As this happens, we hope to see greater amounts being sanctioned and disbursed by the para-banks particularly in the MSME and retail segment,” said Mr Somany.

Another novel feature of the budget is to marry the benefits of rural infrastructure development with sustainable livelihood opportunities. Having achieved tremendous success over the last five years in terms of promoting connectivity, housing, provision of electricity and clean energy in rural areas, the focus now is to promote traditional resource-based industries and create avenues for self-employment and entrepreneurship. “From the point of view of the farm community, the decisions to set up 10,000 farmer producer organisations and fully leverage the benefits of e-NAM for getting fair and remunerative price are welcome. In FICCI’s Agenda for the New Government, both these points were highlighted, and we had urged the government that these are essential components of any strategy aimed towards doubling income of our farmers over the next few years,” said Mr Somany. To strengthen the education system in the country, FICCI had suggested that the government finalises and implements the National Education Policy, sets up a National Science, Technology and Human Research Foundation; and hasten the setting up of Higher Education Commission of India. FICCI would like to thank the government for having incorporated these suggestions in the budget proposals.

On the disinvestment front, FICCI welcomes the government’s decision to enhance the target for the current year to `1.05 lakh crore. We had of course suggested that given the demands on exchequer, government should look at a target of `1.5 lakh crore. Additionally, the government’s decision to consider divesting its stake in select public sector units to below 51% is interesting and we look forward to details on this subject. “On the taxation front, while we are happy to note the decision to raise the turnover limit from `250 crore to `400 crore for companies that would attract a corporate tax rate of 25%, we had hoped that this rate will be applicable to all firms. Given the way tax policies are evolving globally, we need to be competitive if we are to attract and retain investments at a high level. With the Economic Survey also highlighting the critical role played by private investments in addressing concerns related to growth and employment, a bigger boost to the corporate sector was expected,” said Mr Somany.

Enhanced deduction for interest payments on loan taken for affordable housing, clarification on Angel Tax and the thrust on speedier resolution of legacy tax disputes in the indirect tax segment are some of the other important announcements on the tax side.

Finally, government has remained focussed on making India a ‘cash-lite economy’ and once again we saw in this budget a couple of suggestions that would help the country move ahead on this track.

The Industry Today And The Opportunities Of The Future

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The first guest speaker at the TFWA Asia Pacific Conference was Andrew Ford, President of the Asia Pacific Travel Retail Association. He detailed the four areas of his organisation’s activity – advocacy and helping the industry to defend itself, research, (including a report on young China produced in partnership with TFWA), training, and events. With more and more issues facing the industry, and the policy changes that have been taking place in Europe coming to Asia, airports are, he said, more engaged and more aware of the need for advocacy. The association’s Economic Impact report will, he stated, provide valuable insight into the scale and scope of the industry in Asia.

A thought-provoking keynote address from The Economist’s Foreign Editor Robert Guest looked at how the geopolitical climate is affecting trading relationships between the world’s superpowers. He spoke of how societies can be ‘open’ or ‘closed’. Travel, he said, can only be good for the world as it broadens the mind. When you let people in, he concluded, you get the benefit of their ideas and culture – and that makes the world more prosperous.

Next on stage, Kate Ancketill, CEO of GDR Creative Intelligence offered fascinating insight into how ‘new retail’ (combining online, offline logistics and data across a single value chain) will define the retail landscape of the future. Multi-tracking, which sees the same retail space adapted and regularly updated to suit a wide range of consumers, is one of the most important movements that is shaping today’s retail.

3Sixty’s Executive Vice President Roberto Graziani spoke of the retail revolution that started with e-commerce and accelerated with the development of smartphone technology. With 25% of all e-commerce sales in the US already being carried out on a mobile, online channels will soon overtake offline. Effective partnerships to leverage data, strong use of data analytics and innovation are essential for omnichannel to truly elevate travel retail.

Offering an airline’s perspective, Campbell Wilson, SVP of Sales and Marketing at Singapore Airlines said that the airline is usually the anchor in any data consortium. He said that sales can no longer only take place on board, and airlines must go online to give travellers what they want, when they want it.

Przemyslaw Lesniak, CEO of Lagardère Travel Retail Pacific stated that in the current travel retail market, being a superb retailer is no longer enough. He outlined how he had adopted the welcoming and fun characteristics of the local culture within his own business. More than a brand or retailer, we should actually strive to be ‘an unforgettable host’, he said.

Dong-ik Shin, Director of Concession Planning Team at Incheon International Airport explored the role of retail in the airport of the future. He described a virtuous cycle, in which revenue from travel retail is used to improve facilities and maintain lower charges. This helps airlines to become more competitive and bring in more passengers, which in turn increases retail revenues. Already enjoying duty free revenues which are growing much faster than passenger traffic, his airport’s vision is, he said, to become the world’s best for shopping and dining by 2025.

Duty Free World Council’s President Frank O’Connell took to the stage to announce the launch of an industry-wide training platform, created in partnership with the Institute of International Retail. While face-to-face training can be costly and takes staff off the sales floor, the new programme is a cost-effective way to deliver an internationally recognised educational programme. It will provide clear career pathways which will help to improve staff retention, and build a community of loyal staff which will positively impact returns.

Moving on to the highly pertinent subject of sustainability, Vanessa Wright, Group Vice President of Pernod Ricard stated that increasingly consumers want to work for and buy from companies that ‘do the right thing’. There are a number of simple measures that the travel retail industry can take, such as offsetting, but sustainability should be the responsibility of all in an organisation, not simply that of one department. Her own company’s action plan detailed a commitment to strive for sustainability ‘from grain to glass’.

Gemma Bateson, JTI Worldwide Duty Free Corporate Affairs Director examined the challenges arising from the legislative constraints encroaching on brands’ capacity to market themselves effectively. While regulation is not per se a ‘bad thing’, that regulation, which is often designed for the different circumstances of the domestic market, must be proportionate and sensible. The demand for regulation relating to product labelling will affect all categories, and she called for a united approach in combatting the threat.

Nestlé International Travel Retail’s General Manager Stewart Dryburgh said that there was plenty of room for growth in his category, and confectionery & fine food could be worth US $10 billion in 10 years’ time. Key to this growth is meeting consumers’ three core needs, which are Deeper Connections (meaning how connected consumers are to friends and family); Better for You (the ability to choose healthier products); and Elevated Experiences (which means enjoying a bigger and better experience).

The day concluded with a look into the future of technology from Alan Brennan, Managing Director at creative commercial tech agency dcGTR. He said success within the duty free and travel retail industry will be affected by our ability to research and establish what our customers want. Virtual reality technology can enable us to understand how customers would behave in a store, and what choices they would make, without the need to invest in a physical building.

Worldwide Alcohol Consumption Declines -1.6%

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IWSR 2018 Global Beverage Alcohol Data shows growth in spirits, but beer and wine volume is down; market expected to grow by 3% over next five years.

Beverage alcohol drinkers across the globe consumed a total of 27.6bn nine-litre cases of alcohol in 2018, but while that number represents a decrease of -1.6% from the year prior, new data from the IWSR forecasts that total alcohol consumption will steadily increase over the next five years, to 28.5bn cases in 2023. In terms of retail value, the global market for beverage alcohol in 2018 was just over $1tn, a number which the IWSR expects to grow 7% by 2023 as consumers continue to trade up to higher-quality products. These figures – and more than 1.5m other points of data – are included in the just-released IWSR Drinks Market Analysis Global Database, which also shows:

Gin was the Leading Global Growth Category in 2018, and Forecasted to Reach 88m Cases by 2023

The largest gain in global beverage alcohol consumption in 2018 was in the gin category, which posted total growth of 8.3% versus 2017. Pink gin was a key growth driver, helping the category sell more than 72m nine-litre cases globally last year. In the UK alone, gin was up 32.5% in 2018, and the Philippines (the world’s large

st gin market) posted growth of 8%, fueled by a booming cocktail scene and premiumisation of the market. By 2023, the gin category is expected to reach 88.4m cases globally, with particular strong growth in key markets such as the UK, Philippines, South Africa, Brazil, Uganda, Germany, Australia, Italy, Canada and France. Notably, Brazil has emerged as a new hotspot for the categ ory, with volumes there more than doubling last year and forecasted to grow at 27.5% CAGR 2018-2023, as the gin-and-tonic trend has increased in upmarket bars of São Paulo and Rio de Janeiro.

Consumption of Whisky and Agave-Based Spirits Continues to Increase

Spurred by innovation in whisky cocktails and highballs, the global whisky category increased by 7% last year, driven in large part by a strong Indian economy (whisky grew by 10.5% in India, as consumers continue to trade up in the category). The US and Japan posted 5% and 8% growth, respectively. The IWSR forecasts whisky to grow by 5.7% CAGR from 2018 to 2023, to almost 581m nine-litre cases. Also, continued interest in tequila and mezcal (especially in the US), and innovation in more premium variants and cocktails, drove the agave-based spirits category to 5.5% global growth in 2018 – and is expected to post 4% growth over the next five years (2018-2023 CAGR).

Mixed Drinks and Cider Grow

The mixed drinks category (which includes premixed cocktails, long drinks, and flavoured alcoholic beverages) grew 5% globally in 2018. By 2023, it is projected that more than 597m nine-litre cases of mixed drinks will be consumed across the world. The growth is backed by continued strong gains in ready-to-drink (RTD) cans in the US an

d Japan, the category’s two largest markets. In Japan, most RTDs are locally made and almost exclusive to Japan. Their popularity is partly due to the fact that they are relatively dry, which makes them more food-friendly and sessionable. In the US, the popularity of alcohol seltzers has been a tremendous engine for growth in the RTD market. In the cider category, as investment levels in those products continue to rise, almost 270m cases are expected by 2023, a 2.0% CAGR 2018-2023. Both of those categories (mixed drinks and cider) are taking share from beer as perceived accessibility increases (less bitter, easier to drink).

Vodka, Liqueurs, and Cane Spirits are in Decline

Vodka lost volume in 2018 (-2.6%) as the market for lower-priced brands continued its decline in Russia and the Ukraine (two of the largest markets for this spirit). Higher-priced vodkas, however, showed a more positive trend last year. Nonetheless, the outlook for total vodka over the next five years remains sluggish as the category is forecasted at -1.7% CAGR 2018-2023. Also in decline is the flavoured spirits category (liqueurs), which dropped by -1.5% globally in 2018, and is expected to continue to slip in 2019 before rebounding slightly in 2020. Cane spirits (primarily Brazilian cachaça) was down -1.6% last year, and is forecasted to lose another 4.5m cases by 2023.

Beer Continued to Lose Volume in 2018, but is Expected to Rebound

Global beer declined -2.2% in 2018, impacted greatly from volume decreases in China (-13%). Other large markets such as the US and Brazil also fell (-1.6% and -2.3%, respectively), while Mexico and Germany saw growth (6.6% and 1%, respectively). The future outlook for beer, however, paints a more positive picture, as the category is expected to show a slight increase in 2019 and post a 0.7% CAGR 2018-2023.

Wine Volume Declines, but Value Increases

Wine, which had posted strong global growth in 2017, lost -1.6% in volume in 2018 as wine consumption declined in major markets such as China, Italy, France, Germany and Spain (the US market was flat). However, though consumers are drinking less wine, they’re increasingly drinking better – pushing wine value to increase. Globally, the retail value of wine is projected at $224.5bn by 2023, up from $215.8bn in 2018. The one bright spot in wine volume is the sparkling wine category, which is expected to show a five-year CAGR of 1.17% 2018-2023, driven in large part by prosecco.

Low- and No-Alcohol Products on the Rise

Low- and no-alcohol brands are showing significant growth in key markets as consumers increasingly seek better-for-you products, and explore ways to reduce their alcohol intake. Growth of no-alcohol beer is expected at 8.8%, and low-alcohol beer at 2.8%. No-alcohol still wine is forecasted at 13.5%, and low-alcohol still wine at 5.6%. Growth of no-alcohol mixed drinks is predicted at 8.6%. (Above figures are all CAGR 2018-2023.)

Top Ten Performing Global Markets, 2018-2023

A look at the world’s fastest-growing beverage alcohol markets shows an emergence across a variety of developing countries. A combination of growing legal-drinking-age populations and healthy economies is driving some of this growth, which is expected to continue over the next five years. “Every year our analysts spend months traveling the world to speak with suppliers, wholesalers, retailers, and other beverage alcohol professionals to assess what is happening market by market in this fast-changing business,” says Mark Meek, the IWSR’s CEO. “The raw data we collect is enormously valuable, but equally important is what that data tells us in terms of trends, challenges, and opportunities facing the industry.”

When to bottle craft beer?

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Craft beer which is available mostly in kegs is now moving to the retail shelf. A look at some of the compelling reasons.

As the craft beer demand continues to grow, the more successful craft beer produces have a happy dilemma when growing organically, is moving on from the first phase when the start-up microbrewery only kegs the beer to bottling beers.

The margins created by retailing your beer instead of selling it wholesale have sustained the growth of microbreweries. This successful approach has succeeded in generating phenomenal growth in the industry.

Wholesaling only has downsides, mainly for those micro breweries that do not have their own direct chain of distribution. Those without direct distribution have struggled in the past and are the micro breweries most likely to disappear. Microbreweries without their own direct outlets are those that have tended to fail first over the years. The need to have a substantial distribution network was recognised immediately for example by BrewDog in Scotland, and Whitewater Brewery in Northern Ireland.

The important initial capital outlay required to open a microbrewery needs a rapid growth of sales and margins to sustain the business. You have to have a guaranteed high margin from your own distribution from the very start, or you will need deep pockets to sustain the start up from zero.

Many of your clients will also want to enjoy their favourite beer at home or on a picnic. And you need to serve them, or they will buy their tipple from the competition. Therefore you need to satisfy this type of consumption by offering bottled beer, pretty soon after starting your brewery. Initially the quantities to be bottled are relatively modest – maybe only 500 or 1000 bottles at a time for each of your various recipes. Initially, therefore, the easy way, although an expensive way, is to contract bottle outside the premises. This seems the way to go. Contract bottling has many disadvantages and could eat into your margins because of extra logistics cost and scheduling. In-house bottling could be the solution. Bottling in-house requires generally more money than anticipated.

More and more fancy craft beer is also showing up in aluminum cans. Five years ago, just a few dozen craft brewers in the U.S. were canning, while today there are more than 500. The beer in a can cools faster. The can protects from beer-degrading light. Beer cans are portable and take up less space, advantages both for retailers and for consumers who want to take them camping, hiking or fishing. There’s also more space on a can for wraparound design and decoration.

While glass bottles take longer to cool down, they also stay cold longer once they come out of the cooler. Plus, glass producers and plenty of brewers will tell you translucent amber glass has been working fine to protect beer from light and air. The biggest selling point for the bottle, though, is flavour. There’s at least a perception that cans impart a metallic taste, whereas liquid stored in a bottle comes out tasting pure.

The metal touching your lips is still a factor in terms of flavour, but most craft brewers suggest pouring out beer into a glass before sipping, whatever package it comes in. It may be coolness, or it may be convenience, but the bottom line is, cans are getting cheaper. Bottling in-house remains a simpler, cheaper process. The Brewers Association estimates just 3% of craft beer on the shelves is in a can. Sixty percent still goes out in bottles, and the rest is sold in kegs. Glass has been a very reliable package and tradition will prove itself well that glass is not going anywhere.

In India quite a few microbreweries plan to launch bottled beer brands to cash in on rising demand for India’s craft beer. So far, India has seen just a few craft beer brands such as Bira, White Owl and Simba, sold off shelves despite nearly 170 microbreweries that opened over the past decade. Karnataka government does not allow brewpubs to distribute in-house beer and are permitted to produce a maximum of just 1000 litres a day. Windmills Craftworks will start producing cans of craft beer from their newly-acquired 2000-litre production brewery in Goa.

India’s craft beer industry accounts for 2-3% of the country’s beer market which is largely skewed towards the stronger version. The surge of interest in craft beer has been driven by millennials, many particularly interested in this form of beer that is more authentic, premium and has a complex flavour compared to regular lager sold by MNCs.

But making and selling craft beer at a larger scale isn’t easy. Besides licenses and distribution, brewpubs have to wrestle with cold chain supply infrastructure, short shelf-life of craft beer and smaller budgets compared to United Breweries, Ab InBev and and Carlsberg that together control 90% of the market. As a result, many are planning to roll out variants such as hefeweizen, stout and light golden ale – that can survive better in these tough conditions. And some are opting for pricier cans to package their products instead of glass bottles. Cans are lighter, unbreakable, carry more branding information, have little oxygen uptake and do not allow light to enter easily, unlike bottles. International craft beer brands can collaborate and set up bottling plants in India to retail now. Big commercial beer brands are also waiting, and will hop on the craft brewery segment in the next two-three years. Perhaps herein lies the opportunity for Praj, Krones, Alfa Laval and KHS.

Australian Wine Exports Continue To Grow in Value

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With premiumisation on the rise value of exports is going up.

The total value of Australian wine exports increased by 5% to $2.78 billion in the 12 months to March 2019, with the average value per litre climbing to $3.41, the highest level since 2009. Wine Australia Chief Executive Officer Andreas Clark said that the continued growth in the value of exports was an extremely positive trend for the sector.

Mr Clark said that while the volume of exports had declined slightly by 3% to 814 million litres (90 million 9-litre case equivalents), the increasing value overall and on average was overwhelmingly positive.

“What we are seeing is a drop in volumes in the lower value categories and this places Australia well as the global consumer premiumises and drinks less but more expensive wines,” Mr Clark said. In the China market we have grown our value again and we are outperforming competitors, with the Global Trade Atlas figures showing that in the year ended February 2019, Australia had a 29% share of the imported wine market – up from 26% a year ago

“We are also seeing positive trends in the USA off-trade market where sales of Australian wine grew 3% in value to US$521 million in the year ended December 2018. Even more encouraging is that Australian wine priced above US$15 per bottle has also grown by 3% according to market monitor IRI Worldwide.” Mr Clark said Australian wine supplies would remain tight in the short term with much of the 2018 vintage yet to hit the market and the expectation that 2019 vintage would be below the long-term average. In the year ended March 2019, there was robust growth in most price segments (see Figure 1) with exports in higher priced categories recording the most significant growth, reflecting global premiumisation trends.

In the 12 months to March 2019, the value of wine exported in glass bottles increased 3% to $2.22 billion and decreased in volume 5% to 355 million litres (39 million 9-litre case equivalents). The combination of the increased value and lower volume means that the average value of bottled wine increased 9% to $6.24 per litre FOB, a near-record.

Other packaging formats include soft pack, which increased 12% in value to $15 million and 9 per cent in volume to 7.7 million litres, and other alternative packaging, which decreased by 2% in value to $6.2 million and 10% in volume to 964 thousand litres. Shipments of unpackaged wine increased in value by 11% to $541 million and decreased in volume by 2% to 450 million litres (50 9-litre case equivalents). The average value of unpackaged wine exports increased by 14% to $1.20 per litre FOB. Nearly all destinations imported more Australian wine in the year ended March 2019 than the previous period. North America is still the exception, with excellent growth in exports to Canada unable to outweigh the decline in exports to the United States of America (USA).

The regions in growth are: • Northeast Asia, up 8% to $1.2 billion, • Europe, up 3% to $612 million, • Southeast Asia, up 7% to $170 million, • Oceania, up 15% to $107 million, and the Middle East, up 16% to $32 million.

Australian wine exports to China (including Hong Kong and Macau) increased by 7% in value to $1.11 billion and decreased by 14% in volume to 154 million litres (17 million 9-litre case equivalents) in the year ended March 2019.

The volume decline in the China market is confined almost exclusively to exports in the below $2.50 per litre value segment, reflecting both a tightening of Australian supply in this segment and also the increased supply availability from competitors such as Chile.

There were 2603 active exporters in the period, a 16% increase from the previous year. During the year, 1786 companies either started exporting or increased the value of their exports, contributing $374 million to the growth in overall value. This growth was partially offset by 1328 exporters whose export value decreased or they ceased shipment altogether; their exports declined by $246 million.

Volume and value growth rates by exporter size illustrate largely positive performances (see Figure 3). While volume decreased by 4% for the largest exporters (those exporting more than 100,000 9-litre case equivalents), all other exporter segments showed healthy growth rates in both volume and value, with the smallest exporters exhibiting the strongest growth.

Scotch Whisky makes strong Economic Impact

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With the Brexit debate dominating British politics, the fate of Scotch, the money spinner for Scotland will be closely watched.

The Scotch Whisky industry is strategically important to the economies of Scotland and the United Kingdom. This report – building on work by the Centre for Economics and Business Research (CEBR) – explores Scotch Whisky’s direct contribution to GVA, international trade, employment, supply chain and revenue through excise duty. The contribution of the Scotch Whisky industry to the UK economy has grown by 10% since 2016 to £5.5bn.

A new report by the Scotch Whisky Association, building on research carried out by the Centre for Economic and Business Research (CEBR), also reveals Scotland’s national drink generates two-thirds of all spirits Gross Value Added (GVA) in the UK. The industry has been buoyed in recent years by record exports, reaching £4.7bn in 2018, and several new distilleries beginning production and opening their doors to tourists.

This success comes despite the industry continuing to pay the fourth highest duty rates in the EU, and one of the highest of spirit producing nations globally. Recent freezes to UK duty have helped the industry to reinforce its vital importance to the UK economy. Karen Betts, Chief Executive of the SWA, said:“This research shows the huge contribution that our industry plays to both the Scottish and UK economies.

“Significantly, the research shows that our industry’s GVA increased by 10% to £5.5bn between 2016 and 2018, as a result of Scotch Whisky companies’ continued export success and the industry’s consistent investment – over £500 million in the last 5 years – in production, distribution, marketing and tourism.

“Despite the challenges of Brexit, this is investment that continues to flow, with more projects planned and more distilleries set to open – a

sign that the Scotch Whisky industry remains confident about the future. This is great news for our many employees, our investors, supply chain and, of course, for our consumers all over the world, who love Scotch. “This report also highlights the high rate of domestic tax that Scotch Whisky faces in the UK. In the US, Scotch and other whiskies are taxed at just 27% of the rate that HM Treasury taxes us here at home. We will continue to press the Chancellor for fairer treatment of Scotch Whisky in our domestic market, which reflects the vital economic contribution the thousands of people who work in whisky make to the UK economy every day.”

Scotch Whisky provides £3.8bn in direct in GVA to Scotland – helped by regulations in place that requires all Scotch Whisky to be distilled and matured for at least three years in Scotland. This means Scotch Whisky

contributes more than double than life sciences (£1.5bn) to the Scottish economy, supporting more than 42,000 jobs across the UK, including 10,500 people directly in Scotland, and 7,000 in rural communities.

The sector was found to perform a crucial role in driving productivity across Scotland. The manufacturer of beverages in Scotland – dominated by Scotch – produces £210,505 GVA per employee. Comparatively, the industry is more productive than the energy sector (including renewables) at £173,511 per head, life sciences at £93,735 per head, and creative industries at £60,712 per head.

Exchequer Secretary to the Treasury Robert Jenrick MP said: “I’m delighted to see how this important sector is thriving. “We are supporting the Scotch whisky success story by freezing duty on spirits again this year. “Our record of reductions and freezes to alcohol duties have provided more than £4bn of support to the drinks sector here in the UK.” Rural Economy Secretary Fergus Ewing MSP said: “I welcome the contribution that the Scotch Whisky industry makes to the Scottish Economy. “The industry’s performance is testament to the hard work of those who work in this important sector, making Scotch Whisky one of Scotland’s greatest global exports.”

France’s buoyant US Spirits Business Tops 200 Million Bottles

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France has been known for its luxury spirits brands and the US is one of the biggest markets in the world for premium spirits. Naturally French exports are directed to this market.

French spirits exports to the US have doubled in ten years and now account for more than 200 million bottles a year, says Christophe Macra MW, spirits expert and one of France’s Masters of Wine.

He said that interest in spirits was growing worldwide due to better distillation quality, innovation and new spirit-producing regions entering the market. Spirits consumption would continue to grow in both economically prosperous and developing regions.

At a spirits Master Class and review of market trends at Vinexpo 2019, Macra traced four trends in spirits development. He also predicted which five spirits categories would dominate global spirits in five years time. M Macra illustrated his review of international trends with a tasting of Calvados Armagnac, Gin and a Gentian aperitif and cocktail ingredient from France, Vodka from Ireland, Mezcal from Mexico, Whiskies from Sweden and Taiwan. The diversity of spirits and their origins showed that “The world wants spirits and people want to drink them”.

A growing spirits distribution sector worldwide – especially in France where there were now between 20 and 30 national distributors compared with three or so 29 years ago – was further evidence of trade and consumer demand. Trends pushing spirits expansion are: revivals of traditional spirits such as Calvados and Armagnac where there was growing interest in Asia; rediscovery of locally-produced spirits, eg Irish Whisky, Gin and Vodka; global interest in little-known spirits such as Mezcal; new exotic spirits such as agricultural rum from Tahiti, “where no spirits at all were made 10 years ago”.

Similarly, in Sweden 12 whisky distillers operate using locally grown malt and wood casks. Taiwanese whisky was now a huge market characterised by accelerated maturation in a warm climate and excellent cask selection. M. Macra was asked to forecast the five spirits likely to dominate world growth in the next three to five years. He nominated: World Whisky – “still very strong and growing”; Rum – “mostly spirit made from molasses, but a growing contribution from rhum agricole; Brandy – “high quality brandies of all kinds”; Tequila and Mezcal – “growing interest worldwide” and Local craft spirits – “small distillers of high quality –hence the trend to ‘drink local’”

The Way Forward For India And The Alcobev Industry

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While captains of industry welcome the new government and are hopeful of industry friendly policies, they are also looking at sustainable growth for the future. The alcobev industry has sputtered along in spurts and jerks. With a new government in place, the industry is hopeful of new impetus for growth.

“A stable government is indeed welcome for the nation and economy. We hope that the new government will reinforce its progressive policies towards the industry, and usher in the next phase of reforms to promote ease of doing business and ‘Making in India’. We also look towards the Federal government to encourage states to urgently bring comprehensive regulatory reform into key state- GDP contributing sectors such as alcoholic beverages,” says, Anand Kripalu, Managing Director and CEO, Diageo India.

The beer industry has its fair share of challenges. And with the competition heating up and input prices rising it is becoming difficult to invest in growth. “With a strong mandate that the government has received, we look forward to sustained reforms that will spur further growth in the economy. We also look forward to continued emphasis on ease of doing business,” says Shekhar Ramamurthy, Managing Director, United Breweries Ltd.

ABD in its new avatar, has discovered growth in volumes and is now translating it in to value by creating millionaire brands of its premium brands. The elections and the policies will be closely watched. Will Bihar lift prohibition under the new government? That is perhaps the question on the lips of all marketers.

“It is indeed a blessing that India has elected a strong and stable Goverment and I look forward to more structural reforms so that India can continue on a strong growth trajectory with gainful employment for all its citizens. I also expect the federal goverment to build consensus amongst all states to include potable alcohol in GST,” said Deepak Roy, ABD Vice Chairman.

Plagued by high taxes, both Central and State, the Indian alcobev industry is struggling to find the way forward. Some years ago it was the number game and companies like USL managed to cross the 100 million cases mark and brands like Officer’s Choice crossed the 30 million cases mark. But those numbers did not translate into profits and only companies like Pernod Ricard consistently remained in the black.

But now companies are scaling down their volumes where the margins are thinner, introducing premium brands and focussing on profits. Diageo is working to get consumers to ‘premiumise’. The company is working to taking a long term view and creating business value. The history associated with Diageo’s iconic brands, too, bears testimony to such far-sightedness.

However, despite all the challenges in the Indian alcobev industry, Radico has managed to do well, particularly after the opening of the UP market. They have also successfully launched 8 PM Premium Black followed by a big media blitz. Even Magic Moments is maintaining its leadership position backed by heavy advertising on TV channels.

While congratulating on the grand come back of PM Narendra Modi, Dr. Lalit Khaitan, Chairman of Radico Khaitan Ltd. says, “The voters have endorsed Modi’s decisive leadership, his ability to take the country from red tape to red carpet, his government’s multiple schemes to pull out millions from abject poverty and provide them essential services like electricity, cooking gas, bank accounts and free health services.”

Whereas down South KALS Group has been growing very fast particularly after acquiring Imperial and introducing more products like Sparta and so on. It is aspiring to expand to other markets beyond South and has chalked out long term plans.

KALS CMD Mr.S Vasudevan says on the historic victory of the NDA government, “I wish our Honourable Prime Minister Mr. Modi for his impeccable victory. This is a well-deserved victory for transforming our nation in terms of controls, governance, and GDP growth. I personally look forward to having reforms in the IMFL Industry as well that contributes significant revenue to the respective states. I wish the new government all the very best and I’m confident under the leadership of our Honourable PM, India will get into the strides of excellence.”

In India Diageo is taking a long term view well emphasised by the purchase of USL for over US$ 3 billion which could create tremendous opportunities for the next 20 to 30 years.

USL added about 5,000 employees to Diageo’s global workforce, and it wasn’t just about gaining access to a strategically important market. The company’s Indian talent pool and its investments in IT and service centres in India serve not just the Indian market, but the group globally.

And having overcome the legacy issues associated with the USL acquisition, Diageo claims to have set itself the ambitious target of “changing the alcohol industry in India”. Much of that effort revolves around a campaign to inculcate the spirit of ‘responsible drinking’, which translates into reinforcing moderation, and in promoting road safety in collaboration with State governments.

And the way Diageo hopes to make the transformation in India is to “premiumise” the business by inducing consumers not to “drink more”, but to “drink better”, by moving to up-scale brands. That has also seen it franchise out some of the lower-end brands it acquired along with USL, and renovate its brands.

Companies like Pernod Ricard has had a sound strategy in place as well. Not only most of its brands are millionaire brands but they enjoy good margins and the company has consistently delivered profits over the years.

But the company too has suffered from disruptions and would like more business friendly policies. Says Guillaume Girard-Reydet, Managing Director, Pernod Ricard India, “The people of India have exhibited with full clarity, their confidence in stability and progress in current reforms. I encourage this government to continue the momentum on reforms in the economy, to increase ease of doing business and comprehensive regulations enabling best growth for India.”

Pernod Ricard launched recently its 2030 ‘Sustainability & Responsibility’ roadmap as part of the Group’s strategic plan to ‘Transform & Accelerate’. This roadmap sets out 8 ambitious and concrete 2030 targets supporting the United Nations Sustainable Development Goals (SDGs) which was unveiled at the Martell Cognac distillery in France. The Group is taking bold next steps in addressing both environmental topics, to preserve the terroirs its products come from, and social responsibility, in particular by accelerating the fight against alcohol misuse.

Scotch Whisky Association is also looking at a long term boost to its business value. It has drawn up plans till 2050.

Mumbaikars appear to be more discerning about their alcohol now than they were seven years ago. Consumption of hard, and, at times, spurious, country liquor has barely increased, but the tribe of wine-drinkers has risen by over 67% in the seven-year period.

Consumption of country liquor (CL) increased only 5.7% in this period, prompting experts to say that people with lower income who opt for it have controlled their drinking habit. However, those preferring the costlier IMFLs have increased by almost 30%, show the seven-year data. The consumption of the ‘safe’ option – beer – has only increased by 6% in this period. Beer and wine have less chemical spirit (up to 17%) content than IMFL and CL (which have up to 44%).

“People go for IMFL and CL or may be a mix for a better and quicker kick. But since the chemical spirit is higher in both of them, there are chances of them adversely affecting a patron’s health. It’s hence a worrying sign that Mumbaikars are increasingly drinking more IMFL than beer,” said an expert who works for the de-addiction campaign.

Excise duty on beer has made prices similar to that of IMFL. This, experts say, comes as a major discouragement for those who want to switch over to liquors with lesser pure spirits. On the contrary, countries in the West and a few in Asia like China encourage beer to ensure minimal damage to the health of regular drinkers, by offering cheaper pricing.

Between 2010 and 2017, alcohol consumption in India increased by 38% from 4.3 to 5.9 litre per adult per year, said the researchers. In the same time, consumption in the US (9.3-9.8 litres) and in China (7.1-7.4 litres) increased marginally.

This summer, it must be Beer

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After a prolonged winter which benefitted IMFL sales it is now time for beer sales to perk up.

The beer market in India has been growing steadily over the years. is currently in its growth stage. The market is evolving from manufacturing usual beer products such as strong- lager beers to craft beers, Mead and Apple Ciders adopting trends and technologies from markets such as America and Europe. Today, there is presence of more than 140 beer brands in Indian beer market, which could address the palate of each customer segment. The per capita beer consumption in India is still very low compared to other countries in Asia Pacific region and therefore the market could witness huge growth in the coming years owing to factors such as shift from hard liquor to beer consumption by consumers in India, increase in disposable income, change in societal perspective and others.

The beer market in India is at its growth stage with major companies in the market looking for further market expansion with introduction of new products and by strengthening their distribution network. The market has been growing majorly due to increase in number of youth population, higher disposable income, rising preference of consumers for low alcohol beverages and others. Drinking in bars is fast becoming a social phenomenon in cities such as Delhi, Mumbai and Bangalore and with emergence of craft beers, the growth in beer consumption increased rapidly. Besides the rising number of pubs and bars, another factor which increased beer consumption was increase in premium modern trade and on-premise outlets in metropolitan cities which increased the range of product availability and improved the retail environment. Some state governments, for instance Maharashtra, Uttar Pradesh and Kerala, offered separate licenses for beer sale further boosting growth prospects for the industry.

Beer sales in India grew 4.6% in 2018, helped by the diminishing impact of a highway ban, demonetisation, but companies expect sales to taper off this year due to an increase in taxation and liquor curbs during the general election.

Growth last year was still slower than in the previous years, when it ranged from 5.2% to 18% between 2009 and 2016, according to Global-Data Plc, a UK-based research agency.

The beer industry has seen various merger and acquisition in India which has concentrated market competition, further and further during the last five years. For instance, acquisitions such as US-based Molson Coors Brewing Company acquiring Mount Shivalik Breweries (Thunderbolt beer manufacturer) in 2015, AB In Bev acquisition of SAB Miller in 2016 and so forth.

It is observed that Indian beer market is facing multiple obstacles which have influenced its growth potential, such as licensing restrictions, high taxes and advertising bans and these could be reasons for low beer consumption per capita in the country as compared to other regions in Asia Pacific region.

The Southern and western regions in India were witnessed to dominate the country’s beer market in FY’2018 in terms of sales volume. One of the main reasons for their dominance was that, majority of the states in these regions do not have winter season and has either humid or summer season prevailing for most of the months in an year, which acts as another factor for increased beer consumption in these states.. On the other hand, north and east side states grabbed the remaining market during FY’2018.

Competition stage in the country’s beer segment was witnessed to be concentrated major 3 players in terms of sales volume in FY’2018. Companies compete on the basis of product variants product quality and distribution network, brand value and promotion strategies. Some of the major players operating within this segment include UB Group, Carlsberg and Anheuser-Busch InBev and other players include Molson Coors, Mohan Meakin, White Rhino, B9 Beverages Pvt Ltd, Arbor Brewing Company India, Gateway Brewing Company and others. Pricing, brand value as well as marketing strategies adopted by a particular company are considered as of high importance in order to reach a wider target audience in the country.

Over the forecasted period, India beer market will witness various acquisitions, entry of new players and brands, and tie-ups which will drive this market further towards growth. It is expected that the demand for premium beer will rise in the future with an increase in personal disposable income and higher living standards. It is also expected that most of the state governments will start to delink beer taxation from IMFL soon on the basis of alcohol content paving the way for rational growth in the market. Both in terms of revenues and sales volume, the market is expected to attain high growth over the forecast period FY’2018-FY’2023.

Revenue in the Beer segment amounts to US$12,393m in 2019. The market is expected to grow annually by 8.0% (CAGR 2019-2023).

In global comparison, most revenue is generated in United States (US$77,029m in 2019).

In relation to total population figures, per person revenues of US$9.05 are generated in 2019.

The average per capita consumption stands at 3.6 L in 2019.

Market leader Heineken-controlled United Breweries grew in double digits last year, ahead of the overall market. Both beer and Indian-made foreign liquor (IMFL) declined 3% in 2017. While India’s IMFL market recovered and grew 10% last year, the most since 2012, the beer category hasn’t seen a similar surge. A key reason was lower demand in two crucial states.

A year ago, West Bengal increased duty on beer to 45.5% from 30% in January and then reduced it to 42.7% in March after initial supply disruptions, leading to tipplers shifting from beer to lower-priced spirits. In Maharashtra, excise duty on beer was increased by 17% and the revised pricing structure was obtained only after mid-December 2017, leading to a shortage of beer as manufacturers cut back on supplies.

As India is a strong beer market with over 80% sales of strong beer, international players see a a huge opportunity for states to adapt taxation policies that are based on alcohol content and not absolute volume. India is not among the top 10 beer markets in the world, but is the second-largest consumer base globally.”

In India, the liquor market is regulated, with high levels of taxation. In many parts, the state government controls wholesale or retail distribution.Over the past two years, West Bengal, Chhattisgarh and Jharkhand have changed policies to allow liquor sales only through government owned corporations, similar to states such as Delhi, Rajasthan, Kerala and Tamil Nadu.

Heineken, owner of United Breweries, Anheuser-Busch InBev and Carlsberg, the world’s top three brewers that together control about 90% of India’s beer market, have been betting on premium brands to drive sales in the warm, tropical country with promising demographics and increasing affluence.

Mead – From bee to bottle

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Mead is the new beer or wine for millenials. A look at the history, its production process and its growing importance.

Mead or honey wine is made by fermenting honey with water. Like beer, mead is sometimes flavored with fruits, spices, grains or hops. But it’s generally higher in alcohol than beer and more in line with grape wine – typically between eight and 20% ABV. Also like wine, mead is produced in a variety of sweetness levels, from bone dry to lusciously sweet and can be still or sparkling.

Within the world of mead, there are sub-group. For example, if mead is mixed with beer or brewed with hops and malt, it becomes a hybrid style closer in taste to beer known as braggot. This beverage, unlike its purely mead-made counterparts, can be produced in breweries. Mead with added fruit is known as melomel, while hydromel is a watered-down version consumed in Spain and France. Great Mead is mead that’s meant to age.

Honey wine occupies a somewhat precarious position between beer and wine. Legally, mead is produced in “wineries” and bottles are usually sold in wine shops. But, thanks to the presence of hops, which some brewers choose to add as a natural preservative, mead is often clumped into the craft beer category. But, the reality is that mead is in a category of its own much like cider or sake.

A ubiquitous alcoholic beverage, everyone – ancient Greeks, Africans, and Chinese – all drank mead as far back as 3000 BCE. Mead holds particular importance in Norse mythology, especially in the legend of a fabled beverage with magical powers known as “Poetic Mead”. As the story goes, mythological gods created a man named Norseman Kvasir who was so wise he could answer any question. When he was eventually killed, his blood was mixed with honey, and whoever drank this honey-blood mead took on Kvasir’s power of intelligence. And it’s likely this myth that inspired Danish craft mead producer Dansk Mjod to make its Viking Blod Mead, which is flavoured and coloured red from hibiscus.

Mead is frequently consumed in Eastern Europe and Russia. Pretty much any country that produced honey has a history of mead production and appreciation.

Outside of Europe, Mead has been and continues to be popular in Ethiopia, where it’s referred to as tej. Customarily a home-brewed beverage, tej is usually flavoured with powdered leaves of the gesho plant, an African shrub which imparts a slightly bitter flavor and preserves the drink, like hops do for beer.

While Ethiopians typically drink tej out of a bulbous glass container called a berele, nowadays in the US mead is usually served in wine glasses. Though sometimes the drink will come in an Old World drinking vessel like a mazer cup from Germany, which is also the name for the world’s largest mead competition. And, for serious history buffs, there’s always a mead horn. Mead is an ancient drink, thought by many to be the first fermented beverage. Mead is diluted honey that has been fermented. The earliest meads were likely accidental fermentations with wild yeasts, but this eventually developed into organised, intentional meadmaking.

But with the rise of beer and spirits, mead started falling out of fashion in the 1700s and never really made a worldwide comeback. The traditional wine industry has largely ignored the shift to tastes for sweeter beverages and/or more direct use of fruit, spice and other flavours. The craft beer industry on the other hand has embraced these changes. Meads with more alcohol, more body/viscosity and more sugar/acidity definitely have a lot more going on, and a glass of complex wine like a late harvest Riesling or Vidal Ice Wine.

There are almost as many kinds of mead as there are meadmakers. There are several general categories that meadmakers use to classify their products. Traditional meads are made from water, honey and yeast. They range from dry to semisweet. The driest are lacking in the characteristic honey sweetness, but they capture the true “essence” of the honey. The sweeter versions retain some of the sweetness of the honey without being syrupy or cloying. Bochets are made from caramelised honey which adds a layer of complexity, especially to sweet meads.

Sack meads are very sweet traditional meads, often aged for extended periods. They can have the character and complexity of a port or sherry, or the sweetness and fruitiness of a late harvest grape varietal. Melomels are meads made with fruit. Depending on the process and fruits used, these can be very fruity, aromatic and sweet, or dry with just a hint of fruit essence (or anywhere in between).

Metheglins are meads made with herbs and spices. Our word “medicine” likely descended from this term. The varieties in this category are almost limitless. Frequent spices used are clove, cinnamon, ginger, and other “wintery” spices. Juniper is another common additive, as are many herbs in the mint and sage group such as mint, lavender, rosemary, sage, etc. Pyment is a fermented blend of honey and grape juice – probably an ancestor of our grape wines. Pyment can be as diverse as the grapes and honeys used to produce it.

Hippocras is a spiced pyment, usually sweet.It is believed to have been popular among early Mediterranean peoples.

Cyser is mead made with apples, and can be as varied as the myriad apple varieties and the numerous British, French, and American interpretations of cider. The addition of honey allows more variation in sweetness, alcohol content, and shelf life.

Hydromel is a newer category used to classify any mead that is less than 10% alcohol (unless you speak French – then it’s just mead). Our Bee Brews are hydromels. These meads can be as varied as the other categories listed above, if not as common.

Braggot is mead made from malted grains and honey, often with hops as well. It can be thought of as a beer/mead hybrid, and probably predates all-grain beers in origin. Modern interpretations vary from sweet “barleywine-style” braggots, to light, hoppy brews.

Mead is experiencing a renaissance, both among commercial producers and homebrewers.

That growing interest has Jeff Herbert, owner of Superstition Meadery, the first of its kind in Arizona, calling mead “the smallest, but fastest growing sector of the U.S. alcohol business.” He sees it firsthand. Superstition made 300 gallons/year when it opened in 2012, and it’s on track to produce 20,000 gallons in 2017. “That number will more than double in 2018, and in 2019, we plan to produce 100,000 gallons of mead and hard cider,” he says.

“Mead is growing because it is amazing,” he says. “Mead is delicious, and the range of style traverses from dry to sweet, still to sparkling, from quaffable to the most complex beverage that will ever pass your lips.” In India Rohan Rehani, co-founder of Moonshine Meadery, tasted mead, he hated it. It was December 2014 and Rehani and his friend Nitin Vishwas were visiting someone in the US. During the trip, Rehani was curious to taste this alcoholic beverage made with fermented honey that had become the new cool drink in America. But he went beyond just trying it out – one day, Rehani and his friends attempted to brew their own batch of mead.

Moonshine’s mead is made from multi-flower honey locally sourced from Maharashtra. “The taste of the mead changes completely depending on what honey we are using,” said Rehani. “Just like all grapes aren’t the same, all honey is not the same. The flavour differs depending on the nectar source [flowers]. There is lychee honey, ajwain honey, eucalyptus honey, jamun honey and each one has a slightly different taste which has a huge impact on the final taste.”