Tag Archives: alcobev industry

Bacardi bullish about the company’s prospects in India over the next decade

The Art of Botanicals experience aims to open dialogue and provoke thought around finding creative and inspiring ways to move towards a more sustainable way of living. For this, they have collaborated with Herbivore Farms – an urban farm for flavourful, nutritious & pesticide-free produce. In their endeavour to #StirCreativity through sustainability, Bombay Sapphire Creative Lab presents “The Art of Botanicals” in association with Herbivore Farms. Zeenah Vilcassim, Marketing Director, Bacardi India, elaborates on her role in growing the Bacardi Indian Business and the focus on premium spirits.

Zeenah Vilcassim, Marketing Director, Bacardi India Pvt. Ltd.

What has been your experience after taking over in your new position?

I am an economist and data analyst by training. Immediately after my training, I moved into a management consultancy role at Ernst & Young in investment banking. Things kept getting interesting as I gained experience across different industries, moving to more creative spaces such as media, content, digital marketing, partnerships, and consumer insights – before becoming the Dewar’s Global Brand Director at Bacardi. This varied set of experiences coupled with my whisky knowledge – and we all know India is a whisky market – has really helped me navigate the complex environment that is India. Whilst it’s not without challenges, I believe India is one of the most exciting consumer markets in the world. Economic indicators are on the rise, and India is one of the fastest growing spirits markets with a diverse set of consumers that are becoming more and more educated about premium spirits. The next ten years of Bacardi and the whole industry will be hugely shaped and influenced by India and I’m thrilled to be a part of that journey.

Which of the brands in the Bacardi portfolio excite you and will these be the focus of your marketing initiatives?

We are firmly focussed on premium spirits, and you will know that both brown and white spirits play a big part on our Best 10 strategy – a strategy we put in place in 2018 for the growth of the Indian business 5x by 2030. We will drive our core brands like Bacardi, but will also continue to push the new premium aged range Bacardi Reserva. We will continue our market leadership with Grey Goose and launch new innovations for Bombay Sapphire. We will drive a strong whisky portfolio with our newly launched Premium Indian Whisky: Legacy, in addition to William Lawsons, Dewar’s Premium, and our beloved single Malts Aberfeldy and Royal Brackla. But we will also work towards being at the forefront of growing categories like premium tequila with Patron and new innovations coming into the market that are relevant to the Indian consumer. The future is looking very bright for all our brands, and we will always keep our consumer at the heart and innovate and grow based on their preferences and needs.

How well placed is Bombay Sapphire in the Global and Indian gin market?  

Bombay Sapphire is no.1 in the premium and above gin category in India and globally, we are the market leaders in international spirits with Bombay Sapphire. In addition to our iconic blue bottle and our unique cold vapour infusion process, our mission is to be the world’s most sustainable gin. Now while it might seem like everyone is talking about sustainability at the moment, this is a mission we have been working on for over the last eight years. We launched our distillery in 2014 that runs on 100% renewable energy and has been awarded the carbon trust standard.  All of our bottles are made from 100% recycled materials including the metal cap as well as the product labels which are made from paper approved by the Forestry Stewardship Council and we’ve worked on making every one of our botanicals 100% sustainably sourced throughout its supply chain. We are the only gin in the world that can claim that all its botanicals are 100% sustainably sourced. It’s our responsibility to take as much care about the farmers and their communities as we do about the botanicals they grow and harvest for Bombay Sapphire. Therefore, we have invested in sustainable farming practices across every single element of the supply chain for all our botanicals.

We will only work with suppliers who act responsibly and ensure a sustainable future for farmers, their communities, and the environment. Last year was when the last out of our 10 key botanicals was given the ‘For Life’ certification of sustainability. We have accomplished something in the space we only thought was a pipe dream 10 years ago.

We believe we are incredibly well placed to not just retain our market leadership position, but also to grow it further and India is a big part of that strategy. We know the craft gin revolution in India is well and truly here so in addition to our strong credible message around sustainability we will also continue to innovate with products that are relevant to the Indian consumer – the first of which is the Bombay Sapphire Sunset that we launched recently in Goa. Inspired by the warm glow of the setting sun in addition to our 10 key botanicals, Bombay Sunset consists of three new Botanicals – Indian White Cardamom, Indian Golden Turmeric, and Spanish Mandarin peel. It is a unique take on a premium gin and highly limited edition – once it’s done it’s done. But rest assure there will more innovations from Bombay Sapphire coming your way soon to the Indian market.

What was the Art of Botanicals event message for consumers besides being a fun event?

Bombay Sapphire’s brand positioning is all about fostering creative self-expression and this is critical to our core. We believe that we’re all actually born creative beings, but life beats it out of us and stop us from believing we are truly creative. As a brand Bombay Sapphire aims to inspire creativity in every aspect of life to every and any person around the world. This is emphasised and brought to life through our “Stir Creativity” platform, reminding the audience that creativity can be found anywhere and is an inherent part of every human being. This ties back into the versatility of Bombay Sapphire’s premium gin and how one can get creative with it anytime, anywhere.

The ‘Art of Botanicals’ experiential platform by Bombay Sapphire aims to showcase the many ways in which one can express themselves creatively while living consciously. Given Bombay Sapphire’s ten sustainably sourced botanicals, we simultaneously showcased this through innovative cocktails inspired by collaborators in the sustainability space across Mumbai and Bangalore. The “Art of Botanicals” platform is an immersive event that ties various experiences back into the key message of “creativity” and “sustainability” with collaborating brands such as Herbivore Farms (Mumbai) and Anand Malligavad (Bangalore).

What according to you is a sustainable marketing strategy?

Sustainability in business is the ability of an organisation to thrive over time in a way that protects and replenishes resources. We have always believed in communicating with our audience with empathy and listening closely to what our consumers have to say. Therefore, to be transparent with them across aspects such as the brand’s efforts towards sustainability, its ecosystem, and the way it functions, is imperative.

We have also committed to reviewing our global supply chain, with the aim of removing non-essential, non-recyclable single-use plastic and are currently reducing the use of PET bottles for select smaller SKU’s in India and moving to glass instead. As part of our overall efforts during F19, we also reduced our glass bottle weight and increased use of “Returnable Glass Bottles” which resulted in 1500 Metric tonnes of lesser Carbon emission and are working towards a plan to reduce it further by 20% resulting in a reduction in carbon emissions by 1800 Metric Tonnes.

What is the overall strategy for the promotion of your brands in the marketplace?

Our strategy has always been to invest in creating sustainable platforms and experiences across brands; creating greater impact and increased emphasis on cultural relevance year on year. Our brand campaigns have been at the forefront of popular culture, resonating with consumers across demographics. Being a brand that has been synonymous with identifying and popularising new cultural trends for over 157 years, we’ve been the first-movers in the creation of campaigns and experiences, inspired by alternative cultural trends, resulting in platforms like Bacardi NH7 Weekender, BREEZER Vivid Shuffle, Dewar’s You’ve Got Chef’d, and our latest Art of Botanicals platform.

Bacardi has generated immense love through platforms such as Bacardi NH7 Weekender, one of the most iconic, immersive music experiences that was one of the first platforms for alternative music and has seen over half a million consumers walk through the festival.

BREEZER Vivid Shuffle is India’s biggest Hip-Hop festival, which celebrates grassroots Indian hip-hop culture – built on Breezer’s commitment to champion and support youth sub-culture.

With a varied target group, each of our brands connect with consumers in their own unique way – Bacardi leverages its legacy in music, Bombay Sapphire speaks of a consumer’s creative expression, Breezer encourages the genre of hip-hop and dance subcultures, while Grey Goose elevates lifestyle.

We have worked with some of the most engaging and popular content creators and platforms to stay ahead of the curve. Overall, our innovative way of reaching out to audiences has resulted in content that has received over 100% increase in organic engagement as opposed to solely leveraging traditional models. All of this was followed by Bacardi India winning the award for the ‘Best Brand Extension Campaign of the Year’ at the Kalelido awards hosted by Brand Equity in March 2019 for the brand’s work on the ’Bacardi House Party Sessions’ campaign. Bacardi House Party Sessions had garnered an overall unique reach of 5M and drove 1.3M conversations on social media.

Are you looking at inorganic growth to become the market leader (Inorganic growth is through mergers and acquisitions/buying and selling companies)?

Because we also aim to keep our consumers at the heart by understanding their needs and preferences, we wouldn’t rule out any possibility. If the right opportunity presents itself, we will always look to deliver to our consumers, what makes sense to them and our firm commitment to being the number one premium spirits company.

Any new BII whisky launch in the pipeline?

With India being the largest whisky drinking nation that reflected an annual consumption reaching 220 million cases in 2019, the opportunity to expand in the Indian market has been tremendous. While we continue to premiumise our portfolio across categories like Dewar’s Premium and Double Double ranges as well as our single malts (Aberfeldy and Royal Brackla), we also recently announced our first-ever Premium India Whisky, Legacy.

India is one of the fastest growing markets for Bacardí globally, and the organisation is rapidly investing behind its strategic and ambitious vision for the market. The Indian whisky category is primed for the next stage of its evolution, and we saw this as the perfect opportunity to drive that shift forward. We have found our own way to take the category codes we know work and put a modern contemporary spin on them. Legacy Premium Indian whisky is proudly Indian and truly embodies the culture and passion of India. Legacy has now been introduced across shelves in Maharashtra, Telangana, and Uttar Pradesh with plans to expand into further markets in the coming months and years.

Legacy has been crafted with a one-of-a-kind blend that combines Indian and Scottish malts with Indian grains. A rich blend layered with subtle peaty notes, fruity notes, and undertones of toasted oaks with a whiff of spice and a delicate vanillic smoky finish, Bacardí has created an impeccably smooth yet perfectly balanced whisky for the Indian consumer.

This momentous launch in our companies’ history also demonstrates the true commitment Bacardi Global has been putting in, especially for India.  

Pernod Ricard to acquire Código 1530 Ultra Premium and Prestige tequila

Pernod Ricard recently announced the signing of an agreement for the acquisition of a majority shareholding of Código 1530 Tequila, a range of Ultra-Premium and Prestige tequila. This new investment into the fast-growing agave category, mainly driven by the US market, complements the Group’s very comprehensive portfolio across price points and occasions.

Founded in 2016 by Ron Snyder, Federico Vaughan and George Strait, the story of Código 1530 tequila, produced in the Mexican state of Jalisco, is based on the transmission of an ancestral tequila recipe following Los Códigos, “the codes” in English. Código tequila has positioned itself within a very competitive category, thanks to the unique quality proposition of its range of Ultra-Premium (Blanco, Rosa and Reposado) and Prestige products (Añejo, Barrel Strength Añejo and Origen Extra Añejo).

Código is already available within 50 states across the US and is at the early stage of its international development with a presence in over 30 markets. Thanks to Pernod Ricard’s distribution expertise in ultra-premium & prestige brands and its successful experience in collaborating with entrepreneurs, Código is now poised to accelerate its global development and reach new consumers.

Through this partnership, Pernod Ricard is expanding and diversifying the value proposition of its portfolio of tequila brands, which already includes Olmeca, Altos and Avion. The Group is also adding two new Mezcal references (Código Mezcal Artisanal and Código Mezcal Ancestral) to its market leading Mezcal portfolio built around the Del Maguey and Ojo de Tigre brands. The strengthening of the agave portfolio follows the Group’s recent investment in the sotol category through its acquisition of a minority stake in the ultra-premium Nocheluna brand.

Alexandre Ricard, Chairman and CEO of Pernod Ricard, said, “Código’s range of exquisite tequilas reinforces our offer of Ultra Premium+ agave products in the US, where the category is enjoying a very strong momentum. It is a privilege to partner with Ron Snyder, Federico Vaughan and George Strait with whom we share a common vision for Código 1530 and common ambition to strongly accelerate and strengthen the success of the brand.”

The House of Suntory Introduces Hibiki Blossom Harmony, a limited-edition blended whisky

The House of Suntory, the founding House of Japanese Whisky, recently announced the release of Hibiki Blossom Harmony, a limited-edition blend featuring whiskies finished in Sakura casks.

The Sakura Blossom season in early spring has always been an occasion for celebration in Japan, with many gathering around the beautiful flowering Sakura trees that inspire the Japanese to appreciate life as it blooms. Hibiki Blossom Harmony captures this joyful spirit by blending a rare selection of whiskies finished in Sakura wood casks with diverse matured malt and grain whiskies to create this particular Hibiki. 

This limited-edition bottle will be available beginning in October in select global markets including in the United States, the United Kingdom, Australia, Germany, France, Spain, Austria, United Arab Emirates, Netherlands, Italy, Turkey, China, Hong Kong, Singapore, Taiwan, South Korea, Thailand and Vietnam. The expression is bottled at 43% ABV and has a suggested retail price of $160 USD. 

Hibiki is a harmonious blend of various malt and grain whiskies from Suntory’s Yamazaki, Hakushu and Chita distilleries. Constantly pushing the boundaries of what Japanese Whisky can be, the House of Suntory continues to explore and experiment with various wood types. The Sakura cask was one that intrigued Fifth Generation Chief Blender Shinji Fukuyo.

“I have been mesmerised by the Sakura cask for the last five years now due to its symbolism, but also because of its distinctive, subtly floral and spicy aroma and flavour notes,” says Fukuyo. “There have been many experiments with malt and grain whisky components, and we found that there was a special alchemy between the grain whiskies and the Sakura cask. It is this special relationship – harmony – that inspired me to create this blend.”

Achieving the right balance and orchestration proved to be a great challenge from the start since the Sakura cask is one with strong character that can easily become overbearing. After a period of trial and error, Fukuyo found that the grain whiskies finished in the Sakura cask best elevated the overall balance, and the end result is a particularly distinctive expression of Hibiki. It begins with an enticing floral bouquet, followed by the signature Hibiki depth and complexity of honey, candied orange peel, jasmine and chocolatey decadence. The finish features surprising bittersweet spicy notes.

Meaning “Resonance” in Japanese, Hibiki embodies the Suntory philosophy ‘To Create Harmony with People and Nature’. As a House of Master Blenders, the House of Suntory has gone to great lengths to explore the breadth and depth of what Harmony can mean for a blend. Hibiki Blossom Harmony celebrates a particular kind of Harmony.

Diageo acquires premium cold brew coffee liqueur, Mr Black

Diageo recently announced that it has acquired Mr Black, the Australian premium cold brew coffee liqueur. Mr Black was launched in 2013, by designer Tom Baker and award-winning distiller, Philip Moore, with the vision of bringing the global coffee culture to the world of spirits and cocktails. Mr Black has grown to become the leading premium-priced coffee liqueur in the United States, applying modern coffee brewing techniques and quality sourcing to reinvigorate coffee cocktail culture and consumers’ desire for premium coffee cocktails, such as the espresso martini and coffee old fashioned.

Over the last five years, Mr Black has been the fastest growing brand in the global coffee liqueur category. Now available in 22 countries, the brand appeals to craft cocktail lovers and consumers seeking delicious tasting cocktails in bars and restaurants, and for indulgent, at-home occasions. Mr Black sources and roasts coffee to its own bespoke specification, creating the premium liqueur with a delicious and rich coffee taste.

In 2015, Diageo acquired a minority stake in Mr Black through Distill Ventures, the Diageo-backed accelerator programme. Distill Ventures receives funding from Diageo and works with the company to support entrepreneurs as they launch and grow innovative drinks brands.

Co-founder, Tom Baker, will remain actively involved with the brand, working with the Diageo team to build on Mr Black’s success.

Claudia Schubert, President, U.S. Spirits and Canada, Diageo said, “With its award-winning liquid, eye-catching design and packaging, and ability to thrive in culture, we believe Mr Black is just getting started in the dynamic coffee liqueur segment. This acquisition is in line with our strategy to acquire high growth brands in exciting categories, and we are delighted to welcome Mr Black into our portfolio.”

Tom Baker, Co-founder of Mr Black said, “Coffee is more than just a drink – it’s a culture, ritual, obsession, aesthetic, experience, tradition and a community.

KALS launches Foster’s nationally post Acquisition

As a company KALS has been growing organically and inorganically acquiring breweries and distilleries along the way. With the acquisition of Foster’s in India, the company has added a new dimension to its growth plans. A report.

KALS is looking to brew a new vision in the Indian beer industry with its acquisition of Foster’s Beer and three breweries from ABI, which include the East Coast Brewery in Odisha, SICA in Pondicherry and Malabar in Kerala, all formerly SAB breweries. The company has acquired a package deal from ABI which includes three breweries, Kerala, Pondicherry and Odisha along with the Foster’s brand.

The brand has been purchased on an outright ownership basis for India, in other words, KALS now owns Foster’s, it’s variants and all IP related properties for the territory of India. The acquisition fits very well into KALS premium growth vision and they believe that the brand is vibrant with high consumer brand recall.

Not long ago Foster’s was a Pan India brand that was well accepted and this belief has been reaffirmed by the consumers and market since its relaunch few weeks ago. KALS has also acquired a brewery in Rajasthan, formerly Mount Shivalik, with brand rights of Thunderbolt, Golden Peacock amongst others for the state of Rajasthan.

All these acquisitions have given KALS a combined brewing capacity of 3 Million HL, putting KALS as the largest standalone Indian brewer in the market.

Foster’s, the famous Australian beer, is an internationally-distributed brand of lager. It is owned by the international brewing group Asahi Group Holdings, and is brewed under licence in a number of countries, including its biggest market, the UK, where the European rights to the brand are owned by Heineken International.

KALS is in the process of rolling out Foster’s Nationally and as part of the process, the brand has been launched in Pondicherry, Odisha, Uttar Pradesh and Karnataka with plans to roll out in the other markets in the next few weeks.

In last 24 months KALS has created a solid foundation, especially in creating brewing capabilities across the country with five breweries located strategically making them the largest, stand-alone Indian brewing company.

According to spokesperson of the KALS group, the promotional strategy is currently a work in progress, and we are getting ready for the oncoming season. Plans are also afoot to launch a vodka brand which is a new segment for KALS.

KALS Distilleries and KALS Breweries was launched in one of the most backward districts of Tamil Nadu in the year 2010 and 2013 successively. Both these manufacturing units have become one of the largest players of alcoholic beverages to TASMAC, a Government run wholesale-cum-retail undertaking in Tamil Nadu. The products of KALS Distilleries and KALS Breweries have already made their imprints in the

States of Kerala and Puducherry and Karnataka.

KALS Breweries, a state-of-the-art and automated plant with its own dedicated system software, was set up with German know-how. It has also entered into a tie-up with VLB, Berlin for talent infusion and development of brewing. KALS also has exclusive manufacturing facility to produce canned beer is already installed and the products are being sent to Kerala, Puducherry and other states.

The Management of the KALS Group of Companies are particular about ensuring compliance with high standards of quality keeping the consumer preference in focus. Legal compliances are given top priority. KALS Distilleries and KALS Breweries are the first alcoholic beverage manufactories in Tamil Nadu to obtain clearance from the statutory Site Approval Committee.

This drive towards ensuring quality and satisfaction of consumer preference enabled IMFS and beer products of KALS to record the second largest sales in Tamil Nadu. KALS Group of Companies occupy the top few sales in terms of performance of alcoholic beverage products in Tamil Nadu all through the year. La Martine VSOP Premium Brandy and 1848 Premium XO Brandy are the premium segment products highly cherished and sought-after by consumers in Tamil Nadu. Kolt Extra Strong Beer, Black Pearl Triple Super Strong Beer and Sterren 7 Premium Quality Lager Beer are among the most popular beer products in Tamil Nadu. Both KALS Distilleries and KALS Breweries have a wide range of products serving all sections of society.

UK wants to say Cheers with Scotch despite tariffs

In a recent visit to India, UK Ex-Prime Minister Boris Johnson decided to push for a Free Trade Agreement. The idea was to have fewer trade barriers between the two countries. In other words, an agreement that would help both countries ship products and services without excessive taxes.

For the UK Scotch whisky is the elixir perhaps because of Brexit. UK voted to leave the European Union and perhaps what went unnoticed was third of the country’s whisky exports -  £1.3 billion ($1.65 billion) worth actually, went to EU countries. Post-Brexit however, that isn’t the case. The move has cost the scotch whiskey industry £5 million ($6.3 million) every week. And now they’re being forced to work with every EU country independently. They have to deal with different shipping norms, separate customs requirements and a whole host of packaging regulations.

It turns out that all these issues have prompted the UK to think differently and find newer markets. First, they targetted Australia and struck a deal — to remove a 5% tariff on scotch whisky. Elsewhere the UK managed to obtain the coveted “protected status” for its whisky by inking separate deals with Japan, Norway, Iceland and Liechtenstein. This will protect their scotch whisky from imitation, misuse, or any other forms of intellectual abuse.

And the focus shifted to India, a country that consumes more whiskey than any other country in the world. One in every two bottles of whiskey is now sold in India and the UK wants to make up for the loss in sales in the European Union by growing its market in India.

The UK allows ALL imports of Alcoholic Beverages into the country to be taxed to NIL customs duty and this is not just from India, it’s from 70+ other countries, that supply AlcoBev to the UK. Similarly, the conditions about a minimum three-year maturity, type of substrate used, the absence of additives, etc. are all equally applicable to Whiskies from all supplying countries, including the UK. So, there are no India-specific barriers that some players are seeking removal of. On the other hand, India imposes customs duty of 150% on all imports of Alcoholic Spirits, from all countries including the UK (which has the largest share of such imports), says I P Suresh Menon, Secretary General, ISWAI (International Spirits and Wine Association of India).

But the whiskey definitely dominates the Indian market, almost contributing 60% of sales to the IMFL (Indian Made Foreign Liquor) segment. But if you’re a person who enjoys a glass every now and then, you’d know there’s a difference between Indian whiskey and Scotch whisky.

Scotch whiskey is typically of Scottish origin and made from grains - primarily barley. On the other hand, IMFL is made from molasses, a by-product of sugar production and grains. It is much cheaper. So in some ways, IMFL liquor outsells its foreign counterpart in a massive way. But there’s another roadblock for foreign manufacturers - Taxes! See, taxing liquor is a wonderful source of revenue for the Indian government. For instance, five southern states namely Andhra Pradesh, Telangana, Tamil Nadu, Karnataka, and Kerala generate 10% of their revenues from taxes on liquor sales alone. And you can see why they want to impose even higher taxes on imported liquor. In fact, import duties can go as high as 150% in some cases. And that means, even though Scotch Whisky imports in the country have risen 200% in the past decade, it still only commands a tiny 2% market share in the Indian markets.

Now imagine if the tariffs were removed completely. What would that mean for the UK and Scotch Whisky industry. Well market sources contend that the market share could reach as high as 6%.

And so you can see why this makes total sense for whiskey manufacturers in the UK. But do Indians benefit in any way?

Well, for starters Scotch Whisky will likely become more affordable and more Indian whisky producers will use more Scotch in their IMFL and will premiumise their brands to an extent that the difference between Scotch and IMFL would not be much different. So it will mean that Indian consumers will get a product as good as Scotch at a favourable price. But cutting importing duties could also bump up revenues for the government. For instance, last year, the Maharashtra government slashed excise duty by 50% on imported liquor. And it now expects revenue to rise by ₹150 crores — from the sale of imported scotch annually.

And finally, with over 19 million new consumers coming of “legal drinking age” each year, India is definitely a market that liquor makers would like to tap into. Guess it will be a win-win situation for consumers. The Indian government may be tempted to go ahead with deal as the possibility of revenues rising in a sustainable manner is a good possibility.

According to Director General of the Confederation of Indian Alcoholic Beverage Companies (CIABC apex body for domestic liquor firms), Vinod Giri, this FTA also holds significant importance for India in the scope of future trade with the United Kingdom as trade competitors like Bangladesh, Sri Lanka, and Pakistan enjoy duty-free merits under the UK’s generalised scheme of preferences. Indian liquor producers are keen to enjoy newer markets for their products in the United Kingdom but are hindered by the stipulation that whiskey exported to the Brits should be Grain based and aged for three years. At the same time, liquor produced in India is not aged.

  • Refined Oil (9.7% of all UK goods imported from India)
  • Clothing (9.6%)
  • Medical and pharmaceutical Products (5.6 %)
  • Miscellaneous Metal Manufactures (5.1%)
  • Textile Fabrics (5.0%)

All these products were the primary imports to India from the United Kingdom, but as the pact stands on the brink of either collapse or being executed after several reconsiderations. A recent list had brought forward 240 odd items which would face trade duty deductions once the agreement is executed. From this pool of 240 things, a few that stand out are whisky, cars, vaccines, basmati rice, wool, and tea premix. As of now, no indication has been released about the possible way out of the situation, but in the coming future, it’s possible that the pact might be passed with several reconsiderations and follow-up procedures. Currently, diplomatic negotiations of the highest level are going on between the countries.

Amid reports of the UK seeking massive tariff concessions on imports of scotch whiskey during ongoing free trade agreement (FTA) negotiations, liquor sector association Confederation of Indian Alcoholic Beverage Companies (CIABC) has written to the government strongly objecting to any plans to slash Basic Customs Duty (BCD).

A reduction in BCD, it said, will adversely affect Indian Made Foreign Liquor (IMFL) brands since imports already dominate the Indian alcoholic beverages market. CIABC has been part of several recent meetings hosted by the Ministry of Commerce with stakeholders before the trade talks with the UK.

“India exports just ₹5 crore worth of alcoholic beverages annually to the UK against an import of ₹1,300 crores. Exports to the UK constitute only 0.2% of India’s total exports of alcoholic beverages whereas imports from the UK are 24% of India’s total import of alcoholic beverages,” said Vinod Giri, DG, CIABC.

Giri further noted that “restrictive” trade policies are also hampering the growth of Indian exports. “While the export of alcoholic beverages from India stood at 7.3 million cases (9 litre each) in the year 2019-20, exports to the entire EU (including the UK) were less than 30,000 cases which consisted of Indian super premium malt whiskies,” he pointed out.

CIABC said that the United Kingdom should also remove restrictions such as a minimum three years’ maturation period for whiskey and rum, since it has been scientifically established that in warm Indian conditions, spirit ages 3-3.5 times faster than in the UK. Giri added that a BCD cut would skew the balance of trade.

A notion worth dispelling is that Scotch whiskies are costlier to produce; it is 50% more expensive to produce it in India than in Scotland.

In wake of the Indo-UK trade discussions, many ‘experts’ argue for reduction in tariff, particularly slashing custom tariffs on imported Scotch and on ‘Intermediate’ products which they say are nothing but high-strength, potable, undenatured ethyl alcohol used for bottling and blending in India.

They argue on three main grounds. One, that India has a large trade surplus in the category and can afford greater imports; two, customs duty reduction on intermediate products will encourage ‘Make in India’; and three, even if tariff is reduced the bulk of consumption will remain locally produced whiskies — so why bother.

This industry contributes nearly ₹250,000 crore in taxes and for most states it constitutes 15-30% of revenue. Customs duty is not even ₹5000 crore in comparison. Second, this industry uses agricultural products as primary raw material and nearly 50 lakh farmers depend on it. It provides employment to 20 lakh people. Any disruption will have widespread ramifications for the government, farmers and labour market.

The problem with the first argument is that it hides the true balance of trade on alcoholic beverages using a wider head of ‘Food and Drinks’. If one separates alcoholic beverages/products for human consumption from the wider clubbing of ‘Food and Drinks’, a very different picture emerges.

As per DGFT data for 2018-19, India exports only ₹5 crore worth of alcoholic products/beverages to the UK, against import of ₹1300 crore. Clubbing alcohol under a much bigger ‘Food & Drink’ category to claim favourable balance of trade is highly misleading.

The second argument is also a misconception. Scotch Whisky goes through two major stages of productions — distillation and bottling. The ‘Intermediate’ Scotch whisky is actually the output of the first stage, it has been produced and matured in Scotland. What happens in India is only bottling. Therefore, while incentivising intermediate products through reduced or zero duty will lead to an increase of usage of bottling plants in India, which will be a big loss for Indian farmers and manufacturers.

The third argument misses out on three vital points. One, in product categories with multiple price segments like whisky, consumers seamlessly shift to the next category up or down depending on affordability.

So, when a Scotch whisky is sold at a lower price it takes away consumers from products in the price segment, starting a domino effect that makes the domestic industry the net loser. Two, introduction of Scotch whisky at lower price attacks the profit driving end of portfolio of Indian companies, thus jeopardising their viability. Third, Indian premium whiskies like Amrut, Paul John or Rampur are now regarded amongst the best in the world but are unable to make the same headway in the domestic market due to an unsupportive regime and reducing customs duty further just will not help.

Another notion worth dispelling is that Scotch whiskies are costlier to produce. Rather, it costs at least 50% more to produce a whisky of similar quality in India than in Scotland. This is primarily on account of a higher cost of capital and higher taxes in India, interstate restrictions and higher evaporation losses.

Also, many states offer concessionary taxes on imported products, but reduction in customs tariffs cannot be done without removing compensatory state-based concessions as otherwise it will create a hugely discriminatory tax regime against Indian products.

If we talk about reciprocal duty concessions, the problem is that barriers put up by the UK are not tariff based but non-tariff ones. India, being a sugar producing country, has evolved whisky recipes based on spirit distilled from molasses. The UK does not accept this as it is not “recipe standards”. The result of these non-tariff barriers is that of the 70 lakh cases of whisky exported from India every year, the whole of the EU including the UK accounts for less than 30,000!

Indian industry is not against reducing customs duty on alcohol, but it should be in a phased manner and up to a point where it creates a level playing field.

Accordingly, it has put forward its recommendation to reduce import taxes, aggregate of customs duty and AIDC, from 150% to 100% now and to 75% in five years’ time. It has also recommended a threshold import price for taxation at $5 per bottle, and reciprocal concessions from the UK allowing whiskies from India to be allowed in the UK market as ‘Indian Whisky’ without minimum maturity conditions.

Anheuser-Busch InBev launches Budweiser Magnum whiskey in India

For a numero uno beer brand to become a whisky brand is step in the right direction  especially if the country is India which is  a whisky drinking country.

The world over, whiskey has been seeing a renaissance. Bourbons, Scotch, craft distillations are all riding a wave of popularity among millennials. There has never been a better time to be a whiskey lover. The brown liquor is now more popular, more diverse and, most importantly, more delicious than ever.

The Indian alcohol market has been dominated by darker liquids, with 72% of total spirits’ consumption in the country being whiskey. According to the research report – ‘India Whisky Market Outlook, 2027-28’ – India consumed 237.22 million cases of whiskey in 2021 and the consumption is to reach 289.49 million cases by 2027-28, which would generate revenue of over ₹287000 crores.

In a first, brewing company Anheuser-Busch InBev or AB InBev, which has a diverse portfolio of global beer brands, including Budweiser, Corona, Hoegaarden, Stella Artois, among others, entered the spirits market in India with the launch of blended American whiskey under its brand Magnum Double Barrel in select markets. The move is part of the company’s Beyond Beer portfolio. It also is in line with its strategy to tap the trend towards premiumisation in the alcoholic beverages market in the country, while keeping consumer centricity at the core.

Artfully curated for the Indian palate but distinctively global in manufacturing craftsmanship, Magnum Double Barrel whiskey is a combination of American corn whiskey aged in white oak barrels in Kentucky and the finest of Indian single malts aged in ex-Bourbon casks, in Goa. The company is sourcing and blending Magnum Double Barrel whiskey in partnership with Sazerac and their Indian subsidiary JDPL; which has resulted in a blend of signature flavours that are silky soft with a malty and complex, creamy finish.

Commenting on the Beyond Beer portfolio and product launch, Vineet Sharma, Vice President Marketing – South Asia, AB InBev said, “Beyond being the 2nd largest spirits’ market in the world (10% of global spirits consumption) and the biggest whiskey market by volume / consumption — India also enjoys the benefits of favourable demographics, trends complimentary to premiumisation, a positive outlook on ease of doing business (EODB), and policy. We see a huge opportunity for premium offerings across the beverage category, in line with our overall premiumisation strategy. For Indian consumers, the attitude towards premiumisation is category agnostic making the country a lucrative ground for innovations across price points and categories. As a consumer-first organisation, we are actively listening to our patrons and tracking trends, behaviours and the launch of American blended whiskey — Magnum Double Barrel — is an effort to energise, reinvigorate the category, adding much-needed newness, fereshness to it. It is a true homage to the collaboration and exchange between continents, countries and cultures. The unique concoction of American corn whiskey with the finest Indian single malt is a first for the Indian audience.”

For most Indian drinkers, whiskey is an aspirational drink and the elemental choice. Widespread up-trading was evident pre-pandemic; 2021 has seen the trend accelerate significantly. As the second-largest importer of Scotch after France, India has the necessary expertise and skill to distil superior quality, globally admired, critically acclaimed liquids and ready audience in the country’s LDA (legal drinking age) + millennial consumers with disposable income that allows them to experiment. Thus, it’s a lucrative market to tap.

Taking us through their distribution strategy, Sharma said, “India is now amongst the top five markets for Budweiser globally and holds steadfast in its position as the country’s fastest growing premium brand. Over the last few years, we have gone from strength-to-strength and have an established distribution network across the nation. At present, Magnum Double Barrel will be available at select alcohol retail outlets, premium pubs, bars and leading restaurants. The plan is to listen, learn and expand.”

The company has already introduced the product in leading alcohol retail outlets in Maharashtra at ₹2,800, Goa at ₹1,800 for a 750ml bottle, and soon will be available in Karnataka, Haryana, West Bengal, Uttar Pradesh, and Punjab.

Further revealing the plans to promote the brand, Sharma informed that Magnum Double Barrel’s launch campaign — Make New Happen — delivers on the spirit of innovation and originality. “The objective of the campaign is to liberate whiskey by creatively tapping the cultural nerve of consumers who are rewriting the rules of its consumption and breaking perceptions around it. The communication caters to the ever-evolving, diverse tastes and preferences of consumers above legal drinking age who emphasise savouring their drinks by experimenting with flavours and discovering premium alternatives to classic blends. We also have long-standing relationships with music festivals, events, and allied partners, and we will be sampling across to get feedback from consumers. We really want the unique blend to take center stage and let the product speak for itself. We will continue to spotlight people, places, and passions by expertly crafting experiences for contemporary India,” he added.

Dubai slashes 30% tax on Alcohol

What that means to an Indian Tourist or International Traveler?

In a landmark announcement, starting 1st January 2023 Dubai has scrapped their 30% municipality tax on all alcoholic beverages as well as the personal liquor licence fee. This means that alcohol will now be free-to-obtain for those eligible to legally purchase alcoholic beverages in Dubai.

A valid Emirates ID, or Passport for tourists, will still be required to apply for the same. But the reason why this is an important development, especially for travellers that flock Dubai from India, they can now enjoy buying alcohol at reduced rates at restaurants and also off the counter using their passports.

Most travellers from India or elsewhere aren’t always aware that they can buy alcohol from designated retailers or wine shops (as Indians know it) in Dubai using their passports if they are off legal age. And due to this lack of awareness, most travellers often leads for them to consume alcohol at restaurants, hotel bars, etc which often charge mark up of 4-5 times on alcohol.

Such instances were recently also observed during the FIFA World Cup as well when global tourists visited Dubai due to its close proximity to Qatar. But it is also obvious that Dubai is not only looking to make things easier for expats working in the country but also looking to become an even more attractive country for professionals and tourists for the future, especially with its Emirati neighbours like Saudi, Qatar, etc becoming more aggressive to attract professionals and tourists.

What is also important to note is that this ruling is currently being implemented on a trial basis for a period of one year with further decisions to make it permanent to be taken later.

Will alcohol be cheaper in restaurants and duty free though?

Although the taxes have been reduced, experts are unsure whether this tax break will be passed onto the consumer or not, especially in restaurants.

Tourists also expecting for the prices to reduce further at duty free will have to wait since there isn’t any clarity if this reduction on tax will prompt manufacturers to drive the prices lower further. If you thought that this tax break will make alcohol cheaper in duty free as well – then no – the liquor supplied in duty free is already without the taxes which means it will still continue to be at similar prices, although there are subsequent drivers that do allow distributors to drop prices further.

So if you are planning to visit Dubai in 2023 and enjoy the tipple, then things got more interesting for you.

Diageo India initiates removal of mono cartons of VAT 69, Black & White and Black Dog

In line with its initiative Society 2030: Spirit of Progress and its 10-year ESG action plan, Diageo India will be initiating a phased removal of mono cartons from its popular Scotch brands in India VAT 69, Black & White and Black Dog. Although there isn’t a clear timeline on when this removal is expected to commence, it includes Diageo’s global effort to be zero-waste to landfill from its own operations and offices by 2030.

The move comes following the announcement in May this year for the removal of mono cartons from its scotch portfolio brands globally, which included brands like Johnnie Walker Black Label, Johnnie Walker Red Label, Buchanan’s Blended Scotch Whisky and Bell’s Original Blended Scotch Whisky.

Although there isn’t a timeline on when the phased removal in India will commence, in May Diageo had stated that the removal of these mono cartons will allow the company to assess the response from the consumer, which if successful will be expanded to other brands as well in 2023.

What will the customer response be to this announcement in India remains to be seen, especially since standing out in a shelf space in a country like India is important, due to its stringent marketing policies. It will also be interesting to see if this move will prompt other manufacturers to follow a similar path.

Currently there isn’t any update yet if there will be any changes made to the packaging (we will update the article periodically), considering mono cartons play an important role in branding and packaging of the product. Also whether the removal of mono cartons is expected to affect the product pricing, also remains to be seen. Since manufacturers spend a considerable cost towards packaging their products, the cost is often passed onto the consumer.

Diageo believes that the phased removal will engage consumers to participate, contribute and promote a progressive move to a sustainable future and will result in saving 10,000 tonnes of paper and reducing 7,000 tonnes of carbon emissions annually.

ABD launches ‘ICONiQ White Whisky’ in Metaverse

Allied Blenders and Distillers (ABD), the domestic alcobev company, has launched of its new whisky “ICONiQ White” on the metaverse, before the offering becomes available in the market.

The brand has been launched first in ABD MetaBar – the organisation’s presence in the metaverse. The brand will subsequently be launched in the physical world in markets nationally.

ABD India forayed into the metaverse with ABD MetaBar, an immersive virtual reality space providing consumers and enthusiasts with a differentiated experience of product discovery. Optimised for both mobile and desktop usage, the MetaBar taps into the growing interest in the Metaverse especially the youth and their willingness to experiment with novel digital activations.

Shekhar Ramamurthy, Executive Deputy Chairman, ABD, said, “A core belief at ABD is to ‘Think Differently’. The launch of ICONiQ White in ABD MetaBar, ahead of its physical launch, gives consumers an opportunity to immerse with the brand before they experience it in stores. We believe this is the shape of things to come and ABD would like to lead that change.”

Bikram Basu, Chief Strategy and Marketing Officer, ABD, said, “ICONiQ White is a contemporary whisky for blend, packaging, and positioning. It will appeal to the young adult and plays in an affordable premium segment which has the largest pool of consumers today. We are here with something very special and here to win.”

Sohini Pani, Founder and Managing Director – River, said, “Crafting the communication mix for ‘ICONiQ White’ was a delightful experience. It all started with the name. ‘ICONiQ’ is bold and trendy, while ‘White’ is a surprising twist in the world of whisky. The visual space and the idea pitch the brand as a playful companion for fun-loving younger audiences. The icing on the cake was the opportunity for us to build ground-up the ABD MetaBar a few months ago and work towards the launch of Iconiq White on the platform.”