United Spirits not looking to exit popular segment of whisky: CEO Anand Kripalu
Bengaluru:United Spirits Ltd (USL) is not looking to exit the popular segment, a top company executive said, even as the country’s largest liquor maker increasingly uses franchises for that business in some states to focus more on premium brands.
Around 59% of volumes still come from the popular segment and franchising is a part of United Spirits’ strategy of selective participation in the category, not a way to get out of it, chief executive Anand Kripalu said in a conference call on Wednesday, a day after the company declared its March-quarter earnings. “The purpose of us doing this, and I want to make this very clear, is that we’re not exiting the popular business. We are creating, what we believe, is a fit-for-purpose business model that allows us to do two things,” Kripalu said.
Franchising helps extract the best value from popular brands and liberate the company’s management as much as possible so that they can focus on the bigger potential profit pools of the future, which are in the prestige and above segment, Kripalu said.
USL’s popular segment consists of mass or value brands like Bagpiper, Director’s Special and Haywards whiskies. With the Indian liquor market slowing over the past five years, many alcoholic beverage firms such as Amrut Distilleries Ltd and Allied Blenders & Distillers Pvt. Ltd that typically operate in the value segment have shifted focus to more premium brands to drive growth and profitability.