Active Stocks
Mon Mar 18 2024 15:55:53
  1. Tata Steel share price
  2. 149.60 5.69%
  1. Tata Motors share price
  2. 972.20 2.75%
  1. ITC share price
  2. 417.40 -0.51%
  1. State Bank Of India share price
  2. 730.70 -0.18%
  1. ICICI Bank share price
  2. 1,082.00 0.32%
Business News/ Industry / Retail/  Diageo looks at small towns to grow premium scotch portfolio
BackBack

Diageo looks at small towns to grow premium scotch portfolio

The India unit of Diageo has about a 45% volume share in the three million case per year scotch whisky market

Whisky accounts for more than 60% of the spirits market in India and is growing at a faster clip than the overall market.Premium
Whisky accounts for more than 60% of the spirits market in India and is growing at a faster clip than the overall market.

Mumbai: Diageo India, the makers of Johnnie Walker, Black & White and Black Dog whiskies, is eyeing Tier-II cities to fuel its growth in India, a top executive said.

“For the longest time, we have been focused on the top 5-6 cities for selling premium scotch and premium whisky brands," Abhishek Shahabadi, head of marketing for the luxury and premium portfolio of Diageo India, told Mint earlier this week. The company is in the midst of repurposing its advertising and marketing spends to focus on the top 25-26 cities as growth in the sector is coming from smaller towns like Indore and Guwahati. The rich farmer in Punjab and the small industrialist in Madhya Pradesh are people who have the money and are drinking premium scotch, said Shahabadi adding, “The penetration of smaller towns is driving the explosion."

The India unit of Diageo Plc has about a 45% volume share in the three million case per year scotch whisky market and is growing at a rate of 8-9%. The growth rate in non-metro towns, in early- mid double digits, is outpacing the overall market growth rate, said Shahabadi.

According to Shahabadi, penetration is also being driven by growing affluence and the younger consumer who is open to experimentation. Out-of-home consumption accounts for 64% of domestic sales, he said. The company is focused on driving this by presenting scotch whisky with a whole range of new experiences—like the Johnnie Walker Gourmet Experiences, a curated tasting session where food is paired with drink. “Earlier people only had Scotch straight up or on the rocks. We have shaken up the way we present scotch," said Shahabadi.

Whisky accounts for more than 60% of the spirits market in India and is growing at a faster clip than the overall market, according to research firm Euromonitor International. Single malt scotch whisky is growing at five times the overall market rate, albeit on a smaller base, it said.

The Tier-II consumer is changing. Earlier, people in the metros used to eat out nine times a month on an average and consumers in the small towns would eat out 3-4 times a month on an average. “Now the frequency of eating out in Tier-II towns has increased. Also the stigma around drinking socially has changed," said Riyaaz Amlani, chief executive officer and managing director, Impressario Group which owns café chain Mocha in 13 towns and resto-bar chain Social in five metros. According to Amlani, it is now acceptable to hold business meetings over drinks. The Impressario Group will open Social in 4-5 smaller towns like Indore, Nagpur and Chennai by end of the fiscal year.

Across India the number of people drinking out of home is on the rise. At chains like Indigo Deli, alcoholic beverages accounted for 15-16% of overall revenue in financial year 2017. “This has now gone up to 22% in the last month," said Anurag Katriar, executive director and chief executive officer of deGustibus Hospitality Pvt. Ltd—which runs Indigo Deli restaurants chain.

Unlock a world of Benefits! From insightful newsletters to real-time stock tracking, breaking news and a personalized newsfeed – it's all here, just a click away! Login Now!

Catch all the Industry News, Banking News and Updates on Live Mint. Download The Mint News App to get Daily Market Updates.
More Less
Published: 14 Sep 2018, 12:40 AM IST
Next Story footLogo
Recommended For You
Retail Stocks
₹3,934.41.89%
₹2.45-4.9%
₹0.891.12%
₹4,060.250.19%
₹1,870.758.14%
Switch to the Mint app for fast and personalized news - Get App