New Delhi: The world’s fourth largest liquor firm, Beam Global Spirits and Wine Inc.—it sees a big market here for one of its top whisky brands Teacher’s—plans to move beyond the metropolitan cities. The company, which claims to be growing faster than its rivals in India (at about 20% a year), hopes to continue growing at that pace. Beam Global’s president and chief executive officer Matthew J. Shattock spoke on his company’s plans for India. Edited excerpts:
Teacher’s target: Beam Global Spirits’ Shattock says India is one of the top 10 markets for the company, and is going up rapidly on that list.
You have been here for a week now. What is your sense of what is happening here? What kind of growth do you see?
Since India is a very strategic market for us, we have brought our international executives and they all have been looking at the market here to learn how we can help the local team to unlock the potential. In the last two-three years, we have been growing at a rate faster than the competition, so that is very encouraging. The market is growing at 11% and we are growing at 20%, with an annual turnover of $40 million (Rs188 crore). India is one of the top 10 markets for us and is going up rapidly on that list.
Where do you see the growth coming from?
For growth, we will have to make sure that we tap into broader opportunities that are offered by the Indian economy such as a large population base and growing GDP (gross domestic product) and income levels. There is a very high correlation between?the consumption of liquor and the growth of GDP. The foundation stone of our business in India is the Teacher’s brand and we will continue to focus on it. Besides focusing on the brand, the target would be to look at smaller cities. Today we are very much focused on large cities.
Are you expanding the brand portfolio of the Teacher’s brand?
Yes. In the Teacher’s portfolio we have Teacher’s 50, which is a 12-year-old premium scotch, and we are just launching Teacher’s Origin, which is a very unique innovation. Origin has been developed by the team in India and our global team. Upon its success here, we will take it to other markets.
Do you have plans for brands other than Teacher’s?
We will have to make sure that we do not get distracted away from Teacher’s because there is a significant growth opportunity for the brand in India. We are very pleased with the success of the brand here. We do, however, have other brands in the portfolio that we have introduced. For example, in the high-end, we have Ardmore (whisky).
Then we have Jim Beam Bourbon, which has a very small market at the moment, but offers good opportunity. Likewise, in tequila we have Sauza brand here. So these brands are our our future growth ambition. But in the short term, our investment will continue to be on Teacher’s.
What kind of investments are you making in India?
We do two things. One, we build our brands by connecting with consumers. For example, (through) the Teacher’s Achievement Awards and building the equity of the brands. The other areas is expanding distribution and availability because they are the key drivers of the business. So, making sure that the brands are available in appropriate markets and are merchandised in the right way at the right price points. We are definitely in the tier-I cities with a fair presence across the country, but (in) tier-II (cities) we still have to make a lot of efforts.
Which brands do you manufacture here? Do you have any plans to expand manufacturing capacity?
We have a unit in Rajasthan where we bottle Teacher’s and manufacture semi-premium DYC Whisky. Currently, we have enough capacity at the plant. We do not plan to make any other product here as of now and will continue to focus on the two.
What is your take on the laws regulating the industry?
India has a very high tax regime. Consumers pay two-thirds the price of a bottle as tax. But that is the reality we all have been dealing with for a long time. We would like to see it change, but the fact of the matter is that we have to respect it and see if there is any opportunity of reform, which would give consumers an easier access to our brands.
Are you looking to acquire any brands in India?
I cannot comment on future acquisitions. But we are always open to an opportunity. For example, we acquired a vodka and a rum brand in the Unites States, recently.
But, as I said, we have a global portfolio of strong brands, so there is an opportunity to bring these brands here and there is plenty to do with the current portfolio. I am sure that there will be a lot of opportunities for acquisition here, and though that is not the focus point of the strategy, I will never say no to an opportunity.