Tag Archives: Ambrosia India Magazine

Greater Than Gin, yes, what can be?

In the last couple of years, there has been a count of nearly 15 new gins entering the market, reviving the gin spirit, so to say. Of that 11 are from Goa. “It started off as a fluke as we decided that Goa had the best bottling partners for us. Since then, it seems quite a few others have taken that to be the precedent set and got to work,” that is Anand Virmani, the founder of Nao Spirits, manufacturers of Greater Than and Hapusa – premium crafted gins that are making waves in the markets available.

Virmani has his own take on how the crafted gin segment is evolving. He believes that Goa is not any more liberal than many other states in the country when it comes to excise policies. He dismisses it as a factor for launching Greater Than in Goa. Similarly, for the availability of botanicals, he states that the main ingredient for gin has to be either imported our sourced from the Himalayas in the north and that Goa is no different than any other part of the country when it comes to sourcing botanicals. As regards to water quality which Goa touts about, he is of the view that since all water in the production process has to be demineralised, the oriGinal water quality should not really matter.

But when it comes to Goa as the watering hole, he believes so that it is a great marketing tool. “The spirit of trying out new things is certainly important, especially since so many tourists come to Goa and take back gin bottles with them.”

Ambrosia: What is the reason for resurgence of gin which had taken a beating when vodka entered the Indian market?

Virmani: Vodka did this to gin in the 1950s globally. Gin has come back primarily because of the resurgence of cocktail bars which propagate classic cocktails, many of which just happen to use gin as their base. Ambrosia: There is a talk about uniqueness of the botanicals that goes into gin making. From a consumer perspective, what does botanicals signify?Virmani: Botanicals are what separate one gin from another. They are the main flavour components in any gin. Also, only high quality gins like ours use actual botanicals as opposed to artificial flavouring used by the cheaper, cold-compounded gins.

Ambrosia: What kind of growth are you seeing in the overall Gin market in India?

Virmani: The premium+ gin market in India (which excludes the low-end mass produced gins) are growing phenomenally well; easily around 30%+ CAGR. Ambrosia: We see a lot of premium brands being launched, is it because they are not meant for the masses?Virmani: Craft gin can only ever be premium. A low-priced gin, will not ever be a craft product. Even so, we aim to make our gins as accessible as possible.

Ambrosia: Could you tell us about the spark that led to the creation of Greater Than?

Virmani: The spark was quite simply the growing disbelief that India was not able to produce a single brand of gin that we could proudly call our own. It did not make sense to us, especially since India was the birthplace of the Gin & Tonic as well as the heart of the world spice trade.

Ambrosia: Which are the markets it is presently available now and what are your expansion plans?

Virmani: Our gins are present in seven different states across India currently as well as in over 15 countries outside India. We continue to grow as far and wide as we can without over-stretching ourselves. Assam has been our newest addition within India while New Zealand has become our most recent export market to come online.

Ambrosia: How is Hapusa different from Greater Than?

Virmani: Hapusa is a very small batch produced gin. It is primarily made with Himalayan juniper along with other botanicals found and sourced from across the country.

Ambrosia: Which are the markets it is present in – how do the two compete with each other – what is the USP of both?

Virmani: Greater Than is a classic London Dry Gin and is ideal for making cocktails or Gin & Tonics. Hapusa however, is far more characteristic and best enjoyed as a sipping gin or included in stirred cocktails like the Negroni or Martini.

Ambrosia: What next from ‘Nao Spirits’?

Virmani: Lots more

Canned alcoholic beverages market size worth $13.4 billion by 2028

The global canned alcoholic beverages market size is expected to reach USD 13.4 billion by 2028, according to a new report by Grand View Research, Inc. The market is expected to expand at a CAGR of 13.3% from 2021 to 2028. Canned alcoholic beverages are gaining popularity among consumers since cans are more convenient, portable, and travel-friendly. Moreover, these metal cans are less expensive as compared to glass bottles and have a considerably higher recycling rate than glass.

In Asia Pacific, the market is expected to witness a CAGR of 13.9% from 2021 to 2028. The major factor driving the market in the region is the presence of young consumers and rapidly growing economies.
The wine segment is projected to register the fastest CAGR of 13.7% from 2021 to 2028. The rising awareness among consumers for more eco-friendly alternatives to plastic bottles coupled with the growing taste for convenient products is propelling the demand for canned wine.


The online segment is expected to register the fastest CAGR of 13.6% from 2021 to 2028. The hassle-free shopping experience offered by various online platforms is expected to drive the growth of the segment.


The hand seltzers segment held the largest revenue share in 2020 and is expected to maintain its dominance over the forecast period. Hard seltzers are carbonated water-based drinks, which are usually infused with fruits and spirits. These have become quite popular among millennials due to their low alcohol content. Low prices of hard seltzer, easy availability across supermarkets and convenience stores are factors anticipated to boost their sales in the upcoming years.


The liquor stores segment contributed a majority of the share to become the largest division in the global revenue in 2020. These stores have been a widespread and well-established distribution channel for canned alcoholic beverages. The wide availability of both premium and private label brands at these stores attract consumers to purchase products through these channels.


In addition, a report published by Fior Markets claims the global functional beverages market is expected to grow from $125.39 billion in 2020 to $216.7 billion by 2028, growing at a CAGR of 7.08% during the forecast period 2021-2028.


Functional beverages are liquids that often contain a health claim and are used to hydrate the body and maintain nutritional balance. On the basis of type, the global functional beverages market is segmented into drinks, energy drinks, fruit and vegetable juices, herbal and fruit teas, fortified water, rehydration solutions, dairy beverages, non-dairy beverages and others.


The energy drinks segment dominated the market and held the largest market share of 20.9% in the year 2020. This growth is attributed to the rising adoption of energy drinks and the increase in reliance on them for instant energy amongst an increasingly busy population.


The market is booming and there’s already a large number of brands. Some popular drinks include Tequila Cazadores RTDs, Onda Sparkling Tequila, Miami Cocktail Co., Dogfish Head RTDs, St. Agrestis Spritz, and Lunar Tamarind & Rice Paddy Herb.

Tequila Cazadores RTDs
These ready-to-drink (RTD) tequila cocktails are available in Margarita, Spicy Margarita and Paloma flavours and continue the trend of tequila RTDs outshining almost all other canned drinks.


Onda Sparkling Tequila
The best designed of the tequila RTDs, this sparkling beverage (which features actress Shay Mitchell as the “Chief Brand Officer”) just launched two new flavours, Watermelon and an incredibly refreshing Blood Orange. Fizzy, light and citrusy.

Miami Cocktail Co.
While this RTD brand flashes a lot of healthy catchphrases (vegan, gluten-free, non-GMO, “clean calorie”) their organic spritzes should appeal to anyone. Ridiculously great in hot weather, the brand offers everything from Rosé Bellini Spritz to a Grapefruit & Hibiscus Paloma Spritz.

Dogfish Head RTDs
It turns out it takes a brewery (and distillery) to finally make a good vodka soda. The Blueberry Shrub RTD here is light but flavourful. And brown spirits fans: The Cherry Bergamot Whiskey Sour is the rare summer-ready whiskey drink.

 

St. Agrestis Spritz

The Spritz however, is a refreshing, herbal/citrus combo of the St. Agrestis Paradiso Aperitivo, sparkling Italian wine and sparkling water.

Lunar Tamarind & Rice Paddy Herb
Described as the “first and only Asian American craft hard seltzer made with real, premium fruits and ingredients from Asia,” the brand just launched a limited-edition “Heritage” line that pays tribute to well-known Asian foods and is co-developed with New York-based chefs and owners of popular local restaurants. The Tamarind & Rice Paddy Herb release will be unlike any canned drink you’ll try now … and portends a promising and innovative future for the category.


Beverage Cans Market size is estimated to reach $17.24bn by 2025, growing at a CAGR of 4.9% during the forecast period 2020-2025. Beverage cans are the metal containers that are used to store liquid drinks like alcoholic beverages, carbonated soft drinks, fruit and vegetable juices, energy or sports drinks and others. These cans are usually made of aluminum and steel. The increased demand for the alcohol beverage which is to be stored at low temperatures is driving the usage of this beverage cans as they help in storing the drinks at low temperatures which helps to hold the taste and properties of drinks. The rise in health concerns among the people to avoid plastic containers as they are harmful and non-bio-degradable is driving the usage of beverage cans market during the forecast period 2020-2025.


The global Beverage Cans Market based on Material type has Aluminum and Steel. The Aluminum segment registers for the highest market share in 2019 and is set to continue for the forecast period 2020-2025, owing to the increased usage of aluminum in making beverages cans. Overs 70% of beverage cans are made of aluminum globally. Aluminum cans are easily recycled with properties like lightweight and easy to manufacture, transport and are economical. Having many advantages over other materials is driving the market of aluminum beverage cans during the forecast period 2020-2025. The steel beverage cans are having below-average growth as they are heavy and is set to react with beverages in those cans, however, cans made with a composition of steel and other material are being introduced into the market to decrease the cost of beverage cans.
Based on geography the global Beverage Cans Market is segmented into North America, Europe, Asia-Pacific, and the Rest of the World. North America had a dominant share in terms of revenue in 2019 and it holds the largest market share during the forecast period 2020-2025, owing to the availability of the high number of consumers of aluminum can stored beverages. The Asia-Pacific region is also set to have healthy growth during the forecast period 2020-2025, owing to the availability of a large population and increased consumption of beverages. The availability of large raw materials like aluminum and steel are also factors that are supporting the growth of the market in the Asia-Pacific region.

Beverage Cans Market Drivers
Increased consumption of beverages
The increase in the consumption of beverages globally is driving the demand for beverage cans. Increased promotional activities by different manufacturers of beverages to increase demand for drinks are driving the usage of beverage cans owing to increased sales of beverages. Beverage cans being eco-friendly, recyclable and lightweight are driving the market growth during the forecast period 2020-2025.

Beverage Cans Market Challenges
Fluctuation in the cost of raw materials
The fluctuations in the cost of raw material are challenging the production of the beverage cans. The defects in three-piece type cans, such as leaks, inability to withstand high pressures and temperatures are challenging the market during the forecast period 2020-2025.

Diageo posts Interim Results

Encouraging return to growth, good cash generation and increased dividend

Diageo posted its Interim Results, half year ended on the 31st December 2020 showing encouraging results, both in India and Globally which has prompted a rationalization of their portfolio and paring of debt. The Interim Results stated that the net sales (£6.9 billion) were down by 4.5%, as the organic growth of 1% was more than offset by unfavourable exchange. The operating profit (£2.2 billion) also declined by 8.3% due to the unfavourable exchange and a decline in organic operating profit.

Some of Diageo Products

However the organic net sales were up by 1%, despite a significant impact from Travel Retail and on-trade restrictions. The net sales in North America were also up by 12.3%, offsetting declines in other regions, except for Africa which was broadly flat. The growth in North America was driven by resilient consumer demand, share growth of total beverage alcohol, positive category mix and the replenishment of stock levels by distributors and retailers.

The report also stated that the organic operating profit was down by 3.4%, driven by the channel and category mix. The productivity benefits from everyday cost efficiencies largely offset cost of goods sold inflation. The Net Cash from the operating activities was up by £0.7 billion to £2 billion, and free cash flow was also up from £0.8 billion to £1.8 billion. 

This primarily reflected a lower tax payment and working capital benefit driven by reduced creditor balances at the end of fiscal 2020, as a result of reduced sales demand and cost control measures triggered in response to the Covid-19 pandemic. The Creditor balances also recovered to more normalised levels.

The Basic eps of 67.6 pence decreased 14.6%. Pre-exceptional eps declined 12.8% to 69.9 pence, driven primarily by unfavourable exchange and lower operating profit. However the interim dividend increased 2% to 27.96 pence per share.

The improvement comes from the strong sequential performance in all regions compared to the second half of fiscal 2020. However, the manufacturer expects continued impact in the second half of fiscal 21 from on-trade restrictions and disruption to Travel Retail.

Ivan Menezes, Chief Executive, Diageo

Speaking about the results Ivan Menezes, Chief Executive, Diageo said, “We delivered a strong performance in a challenging operating environment, returning to top line organic sales growth during the half. North America, our largest market, performed particularly strongly and ahead of our expectations. Consumer demand has been resilient and the spirits category continues to gain share of total beverage alcohol. Across other regions we delivered strong sequential improvement compared to the second half of fiscal 20. This reflects improved market share performance through excellent execution in the off-trade channel, and the partial re-opening of the on-trade channel in certain markets.”

Menezes expects the ongoing volatility and disruption in the second half of the year, particularly in the on-trade channel, which will make performance more challenging. However the medium and long-term growth drivers and opportunities for the business remain intact and he is confident in the strategy, the resilience of the business and Diageo’s ability to emerge stronger. The organic operating margin improved compared to the second half of fiscal 2020 increased driven by the operating leverage and tight control of discretionary expenditure. The decline compared to the first half of fiscal 2020 reflected an adverse channel and portfolio mix. Menezes expects the margins to improve as the on-trade and Travel Retail recover and with the continued benefit of everyday efficiency. 

Diageo India Results

In India, United Spirits reported strong numbers for the third quarter of 2020-21, even though the recovery was not as strong as expected. Despite the current operational challenges, the company was able to report Quarter-On-Quarter (QOQ) volume and revenue growth of 7% and 16% respectively and bring its third quarter revenues close to that of the same period last year. Though more than 85% of trade channels like bars, pubs, and clubs are now operational, they are operating at a low capacity which has impacted the results. Due to Covid protocols and muted celebrations, small gatherings are replacing large events. On the other hand, off trade channels like home consumption are in the upswing and home delivery is also gathering pace.

Some of Diageo India Products

The third quarter Net Profit also zoomed 79% QOQ, mostly because of the reduction in debt and fall in interest rates. There was a QOQ increase in margin and once volume recovers fully, margin is expected to improve further due to stable input costs and expected price hikes. Price hikes are muted currently due to tough market environments. There was a demand impact in Bengal, where United Spirits was forced to increase prices for its popular brands due to increase in excise rates by the state government.

Despite small improvement in the Covid situation, large celebrations and full capacity in trade channels are still a few quarters away and that explains why liquor companies have not been able to participate in the recent market rally. However, analysts say that these are short to medium term challenges and the long term story on liquor consumption in India is still intact. To increase its market share during these difficult times, United Spirits is focusing on off-trade channels. Home delivery is already showing good traction in states like Bengal and Maharashtra and similar trend is expected from other key states as well.

Diageo strategic Review of Selected Popular Brands

United Spirits Ltd. (“USL”) is also initiating a strategic review of selected Popular brands, continuing the strategy towards long-term profitable growth through premiumising the company’s portfolio. USL’s Popular portfolio comprises around 30 brands and the strategic review will focus on approximately half of this portfolio by volume. This review will not include the McDowell’s or Director’s Special trademarks.

Anand Kripalu, Managing Director & CEO, United Spirits Ltd

The strategic review is expected to be completed by the end of the 2021 calendar year. Anand Kripalu, Managing Director & CEO, United Spirits Ltd commented, “This review reinforces USL’s and Diageo’s commitment to deliver sustainable long-term growth and improved profitability, through a sharpened focus on core Popular, Prestige and above brands, including international brands. 

United Spirits management is also taking steps to reduce its debt further by selling non-core assets and by improving its working capital cycle. United Spirits is a company with strong free cash flows which will contribute towards its plans to become a debt-free company by 2022-23 he added.