Whyte & Mackay single malt whisky finds key mkt in India

“The opportunity is imminent now. India is a young market with a low average drinking age. We launched here in 2018, and far surpassed our pre-covid numbers. We saw a compound annual growth rate (CAGR) of 35% in our sales for the past three years. The Gen Z legal drinking age combined with millennials is a bigger possibility than markets like the US," Mike Southgate, director of developing markets (India, Australia, New Zealand, Africa, Middle East & CIS countries) for the company, said in an interview.

Currently ranked as the fifth-largest single malt producer globally, the firm had recently outshined industry giants like Bernard Arnault-owned LVMH Moët Hennessy and Beam Suntory. Its super-premium variant, Jura, has grown 22.5% to far surpass peers who recorded on average growth rates of 6.3%.

Similarly, the prestige and prestige-plus categories, represented by The Dalmore brand, posted growth rates of 14% and 23.5%, respectively, outperforming other malt producers (13% and 17.9%). Despite this, Whyte & Mackay’s base in India lags its competitors.

In India, the firm retails its products for ₹5,000 to ₹12,000 in Delhi and West Bengal, and is now looking to add two new variants in India with its local partner VBev, owned by Vinspri Distributors Pvt. Ltd, which posted revenue of ₹9.2 crore in FY22 from ₹6 crore in the previous fiscal year.

VBev’s profit after tax was at ₹96 lakh in FY22, from a loss of ₹1.8 crore in FY21, according to filings with the ministry of corporate affairs, and accessed via business intelligence platform Tofler.

According to drinks consultancy IWSR, over the next five years, the single malt category will grow ahead of all others at 5.5%, even surpassing the broader whisky industry that’s projected to grow at 3.7%. This could well be the driving force for India. “Projected double-digit growth in India for the entire single malt category as per industry estimates is at 18%, growing at almost double of imports of whisky, which as a whole has grown 9% in the last five years," Southgate added.

India’s whisky market is projected to more than double from $210 million in 2022 to $480 million in 2027, as the country is expected to deliver the highest level of absolute retail sales value in single malt whisky category growth over five years, said IWSR.

Globally, the growth of some businesses is tempered by price sensitivity, and inflation in Europe has impacted in the entire industry, including Whyte & Mackay.

“Everything is affected, from glass bottling plants, which were wiped out amid the Russia-Ukraine war, increasing cost of energy, closures and transportation. To add to the woes, entire UK has significant inflation rates, putting companies under pressure. Every single distillery has seen a cost of goods impact. We hear though that the pace of increase of the price rise has slowed down a bit now," he added.

The company produces about eight million litres of whisky in its distilleries in the UK. “Covid was a challenging time for everyone and the whole market was impacted. But we have more than made up for our pre-covid numbers here. India will be a big part of our growth story. The US and the UK have done well for us, too. For Jura, we have overtaken Glenfiddich in the UK in terms of both volumes and value."

The firm has a focused approach to each market, and while it doesn’t have a significant presence in several states yet, its priority states will be Delhi, Karnataka and Maharashtra.

It also sees premiumization as a trend continuing across India, despite waning of covid, and people stepping out of their homes to drink again.

“The Indian single malt category, the packaging is good and are a great success story. But we are carefully seeding our products here to understand the market better. Asia as a cluster will be its biggest in the coming days," he said.