Bacardi to step up production as rum, scotch fly off shelves
In India, the world’s largest privately held spirits company sells Dewar’s scotch whisky, William Lawson blended scotch whisky, and Aberfeldy single malts, apart from premium vodka and gin brands such as Grey Goose and Bombay Sapphire.
Bacardi, the eponymous rum brand owner, is planning to expand production in India over the next six to 12 months, as the country returns to normal after two waves of the covid pandemic.
In India, the world’s largest privately held spirits company sells Dewar’s scotch whisky, William Lawson blended scotch whisky, and Aberfeldy single malts, apart from premium vodka and gin brands such as Grey Goose and Bombay Sapphire.
“Business is coming back, and that is what is encouraging us to invest in manufacturing capacity. We are already talking about expanding our manufacturing capacity, opening up new plants in India in different states, or even upgrading our capacities at some of our plants," said Sanjit Singh Randhawa, managing director, Bacardi India Pvt. Ltd.
The local arm of the Bermuda-based firm plans to more than quadruple its India business revenue by 2030. Bacardi, which entered the Indian spirits market in 1996, works with several large contractors, with production spread across 10 plants.
The company plans to raise capacity through such third-party contractors in eastern India, Randhawa said, without disclosing details. He added that there is “demand" in that market, and Bacardi wants to be more “efficient" at meeting that demand.
“I can’t give you a number on the investment. We are now operating in about 10 plants across the country. We will probably add another plant by early next year. And then maybe in the middle or the end of next year, we will add another one," Randhawa said over the phone.
Capacity expansion is a continuous process for the spirits maker as the company drives efforts to be closer to states where demand is high.
“We consolidated and added capacity in Maharashtra, right through the pandemic. We were operating out of two small plants in Nagpur. We moved everything to a larger facility in Nashik. We commissioned a plant in Uttar Pradesh in early 2020. It’s already tracking at one-and-a-half times than what we had envisaged for us," he added.
India is a predominantly whisky-drinking country, led by companies such as Diageo and homegrown Allied Blenders and Distillers. Bacardi’s ambition for 2030 is to grow its business five times from what it was in 2020, he said.
Currently, India is among the top 10 markets for Bacardi globally, across emerging and developed markets. India ranks among the top five within emerging markets, along with Russia, Brazil, China and South Africa. “India would be up there as number one or number two, in terms of the priorities for the emerging markets’ business," he said.
Bacardi operates in the mid-to-premium spirits market, where it competes with larger rival Diageo, which sells Captain Morgan Rum, among others. Other mass-priced rums include Old Monk and Jolly Rogers. Randhawa said the company could bring new brands from the global portfolio into the country. For example, expanding flavoured rums could be one direction and selling more expensive dark rum would be another, he said.
In the past few quarters, the company introduced more pricey rums in the country— Bacardi Ocho, an eight-year-old rum, apart from Bacardi Cuatro and Bacardi Diez rum.
Limited edition Bombay Sapphire could soon hit the market after growing consumer interest in the white spirit category.
Randhawa said the last fiscal year was a “challenging" period for the country’s large alcoholic beverages market.
Consumption moved in-home as bars remained temporarily shut.
However, demand has bounced back in the current fiscal year.
“A lot of it is fuelled by our venture into whiskeys— Dewar’s and William Lawson. We are very happy with the way our bold bet on whiskey has panned out for us," he said.
Bacardi India’s net sales touched ₹972.7 crore in FY20, up 19% from the year earlier, according to data accessed by business intelligence platform Tofler.
Volumes grew 15% to touch 5.7 million cases.
Volume for Bacardi rums, including Bacardi Carta Blanca rum, Bacardi flavoured rum and Bacardi Black rum, grew by 45% over last year, with Bacardi Black rum alone crossing 1 million cases, it added. India is the No. 2 market for Bacardi rum globally.
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