John Distilleries to launch first tipple from Sazerac stable in six months

Bengaluru: John Distilleries Pvt. Ltd plans to launch Fireball whiskey from its US partner Sazerac Co. Inc. in India in six months, and distribute its own single malts overseas through the latter's network, a top company executive said.

Louisiana-based Sazerac, a family-owned company, bought a minority stake in JDL for an undisclosed amount last October, securing a toehold in  one of the world’s fastest growing markets for alcoholic beverages.

“In the next six months or so, we should probably have the first launch of Fireball at least to start with. We’ve already started our work on that. They are a company that owns more than 150-200 brands; so, depending on what fits, we will start rolling out a whole series of products. India is still absolutely underpenetrated as far as alcohol is concerned; so, there is a lot of scope,” said Paul John, chairman of JDL.

Fireball, a popular whisky label in the US, is typically sold in shots. It will be priced aggressively in India to make it competitive, John said, adding it will operate at the bottom end of the premium segment. JDL is planning to chase volume sales with Fireball, and not just focus on value growth.

Fireball will be followed by another whisky from Sazerac’s portfolio—Southern Comfort. While JDL will initially import both Fireball and Southern Comfort, the longer term plan is to set up the infrastructure to manufacture both locally and take them pan-India, according to John.

During the test market phase, JDL will sell Fireball and Southern Comfort in states where it is already strong including Karnataka, Telangana, Andhra Pradesh and Goa, before entering Maharashtra and Delhi.

“Companies are all vying to target India, where the consumer adoption of spirits has significantly shot up in the past five years. Those with the capability to bring in more new brands, have a diverse portfolio quickly, can gain since today’s consumers are open to trying new brands,” said Sreedhar Prasad, partner and head of consumer markets at KPMG.

India’s whisky market grew at a compounded annual growth rate (CAGR) of 4.3% between 2011 and 2016 by volume sales, according to research firm Euromonitor International. It is expected to grow at a CAGR of 3.5% between 2016 and 2021.

At the high end, JDL sells whiskies under its Paul John label. While those whiskies currently account for an insignificant portion of sales—just Rs20 crore out of a total turnover of Rs707 crore net of taxes in 2016-17 – their contribution is expected to double in 2017-18.

“It (partnership with Sazerac) will help us in being able to push the Paul John brand faster and through a better distribution channel. In Australia, for example, we’ve now moved to a distributor that is distributing their brands,” JDL’s John said, adding that Sazerac has also invested in its own distribution networks in some countries.

Roughly 65% of JDL’s single malt sales happen overseas, although sales in the domestic market have started to pick up too.