Pernod Ricard intends to make premium brands in India
Pernod Ricard, the world's second-biggest distiller, is evaluating options to introduce India-made premium spirits, which include whisky, rum, and gin, to cash in on the increasing demand for pricier and craft liquor products across segments. The French committed recently introduced an Indian single malt currently being test-marketed in Mumbai and Goa, combining the league of companies such as Diageo and Radico Khaitan that launched high-end local brands such as Epitome Reserve and Rampur.
Kartik Mohindra, chief marketing officer and head of global business development, at Pernod Ricard India, said the Indian single malt, christened Seagram's Longitude 77, is going to be targeted at matured whisky consumers. The product is currently sold at Rs 5,500-Rs 6,000 per bottle, making it the most expensive Indian brand for them. "We are evaluating other categories for premium brands based on whether it will be profitable and have a sustained value. Some segments like top-end rum and tequila are unexploited markets right now in India," said Mohindra. He said the other products are still in the conceptual stage. Mohindra said the company would also explore opportunities to export these premium Indian brands to other countries, such as the Middle East, the UK and the US, where there is a sizable Indian diaspora.
This is also part of the company's strategy to take on the competition from Indian brands, including startups who are trying to premiumise their portfolio and also widen its presence in the premium segment across price points where it currently sells only imported products. Imported products have a far higher tax, such as Scotch whisky. Single malt attracts 150% duties. India is the third largest market for Pernod Ricard after the US and China and the country is identified as a "must-win".
The company is the largest whisky maker in the country and controls a fourth of the segment with Indian brands such as Royal Stag, Imperial Blue and Blenders Pride. The distiller also owns India’s highest-selling Scotch 100 Pipers, with sales of over 1.5 million cases annually. Ranjeet Oak, chief commercial officer of Pernod Ricard India, said the company will invest Rs 200-300 crore annually for the next few years in capex. It currently has two distilleries, 29 bottling partners and a winery in the country.
“The overall investment thesis for India is positive, and it will continue in the mid-to-long term,” he said. “We will continue to look for opportunities to make more in India and make the required investment for that,” Oak said. The company is targeting double-digit growth in India in the mid-to-long term. “India and China are neck and neck right now,” he said. While India has a population of nearly 1.2 billion, the drinking population is considerably smaller and nearly half can only afford cheap, unbranded liquor. Pernod has been increasingly facing competition from Diageo, Beam Suntory and homegrown companies such as Amrut and John Distillers in the pricier segment. For instance, market leader Diageo has shifted its focus in India to its prestige and above business, which now accounts for over 90% of its overall sales, up from 45-50% five years ago, indicating a strong focus on premium segments.
Kartik Mohindra, chief marketing officer and head of global business development, at Pernod Ricard India, said the Indian single malt, christened Seagram's Longitude 77, is going to be targeted at matured whisky consumers. The product is currently sold at Rs 5,500-Rs 6,000 per bottle, making it the most expensive Indian brand for them. "We are evaluating other categories for premium brands based on whether it will be profitable and have a sustained value. Some segments like top-end rum and tequila are unexploited markets right now in India," said Mohindra. He said the other products are still in the conceptual stage. Mohindra said the company would also explore opportunities to export these premium Indian brands to other countries, such as the Middle East, the UK and the US, where there is a sizable Indian diaspora.
This is also part of the company's strategy to take on the competition from Indian brands, including startups who are trying to premiumise their portfolio and also widen its presence in the premium segment across price points where it currently sells only imported products. Imported products have a far higher tax, such as Scotch whisky. Single malt attracts 150% duties. India is the third largest market for Pernod Ricard after the US and China and the country is identified as a "must-win".
The company is the largest whisky maker in the country and controls a fourth of the segment with Indian brands such as Royal Stag, Imperial Blue and Blenders Pride. The distiller also owns India’s highest-selling Scotch 100 Pipers, with sales of over 1.5 million cases annually. Ranjeet Oak, chief commercial officer of Pernod Ricard India, said the company will invest Rs 200-300 crore annually for the next few years in capex. It currently has two distilleries, 29 bottling partners and a winery in the country.
“The overall investment thesis for India is positive, and it will continue in the mid-to-long term,” he said. “We will continue to look for opportunities to make more in India and make the required investment for that,” Oak said. The company is targeting double-digit growth in India in the mid-to-long term. “India and China are neck and neck right now,” he said. While India has a population of nearly 1.2 billion, the drinking population is considerably smaller and nearly half can only afford cheap, unbranded liquor. Pernod has been increasingly facing competition from Diageo, Beam Suntory and homegrown companies such as Amrut and John Distillers in the pricier segment. For instance, market leader Diageo has shifted its focus in India to its prestige and above business, which now accounts for over 90% of its overall sales, up from 45-50% five years ago, indicating a strong focus on premium segments.
