Launch pace at liquor firms to be slow this year
Bengaluru: New products will be launched at a relatively slow pace by alcoholic beverage (alcobev) companies this year, but there will be a sharp focus on the premium price segment.
Several top companies, from Diageo Plc-run United Spirits Ltd to French distiller Pernod Ricard SA and Allied Blenders & Distillers Pvt. Ltd (ABD), will predominantly look at launching products in two categories—whisky and rum.
Pernod, India’s second largest spirits company, plans to bring two new single malts to India from its global stable—Longmorn and Scapa. It is also launching Imperial Red, a new dark rum under its Seagram’s brand, in a phased manner across key markets.
“Consumers, especially the young middle class, continue to up-trade and they are more aware and confident of their choices. They are open to experimenting and infusions are being appreciated,” Pernod’s India head Guillaume Girard-Reydet said.
Market research firm Euromonitor International takes a similar view.
“Over 2015-2030, the median income per Indian household is expected to rise by nearly 90%. Additionally, rapid urbanisation is further resulting in the strong growth of the pub culture. Young adults aged 20-35 are driving demand for alcoholic drinks as socialising over a drink has become the norm,” analysts at Euromonitor wrote in their annual alcoholic drinks report on India last year.
Alcobev companies planned fewer product launches in 2017 too, the market tamped down by subdued discretionary spending and naturally longer lead-times in creating new products. This year, the slower pace is a result of companies choosing to focus on scaling products that were launched last year.
Single malt whisky maker Amrut Distilleries Pvt. Ltd is looking at only one new product this year—a dark rum variant under its Two Indies brand. It plans to expand the footprint for two of its whiskies this year—Amrut Amalgam and MaQintosh Silver Edition.
ABD, India’s fifth largest spirits firm, launched Sterling Reserve 10 and Sterling Reserve 7 whiskies and Officer’s Choice rum last year. The focus for 2018 will be on consolidating these brands since the task requires money and effort, ABD’s chairman Deepak Roy said.
Radico Khaitan Ltd, India’s third-largest spirits company, will look at consolidating brands that it has launched over the past couple of years, including Pluton Bay rum.
Liquor companies continue to launch new whiskies as whisky remains the most popular choice of tipple for Indian consumers and the category continues to grow.
The whisky market grew at a compounded annual growth rate (CAGR) of 4.3% in volume sales and 7.7% in value between 2011 and 2016, according to Euromonitor. In comparison, the rum market declined 1.7% in volume and grew at only 0.5% in terms of value during the same period. But the potential for growth in premium rum is large and that’s what companies are looking to capture with new launches.
In the beer market too new launches will be slow. Kingfisher maker United Breweries Ltd (UBL) has one or two product launches in the works but will focus more on expanding the footprint for five imported beer brands and a premium strong beer launched last year.