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Bengaluru shows the recovery path, alcohol consumption on the rise

Let’s say cheers to the ‘Pub capital’ and ‘Microbrewery capital ‘of India, Bengaluru. It is showing the way to the country that the pandemic should not upset social life with alcohol being an intrinsic part of social life. Consumption of alcohol is on the rise in Bengaluru and other parts of Karnataka and mind you there is considerable amount of ‘responsible drinking’ happening, with a few exceptions here and there.

The city which introduced pub, microbrewery and nightlife culture is slowly bouncing back, negotiating all the restrictions, ambiguous and unambiguous ones, placed by the government in its bid to check the spread of Covid-19. Though the bars and restaurants are tottering their way back into business, the end-consumer has found ways to keep the spirit going. This is good for the business. The end-consumer is infusing confidence in the liquor business as we witness increased liquor offtake.

Beer and IML offtake up

Consumption of beer has gone up by 38.98 % and Indian Made Liquor (IML) by 31.54% in the first five months of 2021, compared to the corresponding period in 2020 and the Karnataka Excise Department is laughing all the way to the bank. Liquor has been a money spinner for many governments and Karnataka is among the leading states to register good excise revenue. These are the first signs of recovery of the industry which like almost all other sectors was battered by the pandemic.

Karnataka hoping to touch `25,000 in Excise Revenues

Between April and August of 2021, Karnataka had sales of 87.56 lakh cartons of beer, up from 63 lakh cartons of beer in 2020. The trend was similar with regard to IML – 2.61 crore cartons in 2021, up from 1.98 crore cartons last year. Thanks to the end-consumer, the Karnataka Excise Department was able to cross the `10,000 crore revenue mark for the 5 months’ period, an increase from `7,755 crores during the corresponding period in 2020. In these five months, the Department has already registered 41.49% of its annual target and is hoping to surpass the target of `24,580 by the end of the financial year. In 2020, the Department had earned `23,332 crores, getting past the target of `22,700 crores.

Home-drinking gives a push

Thanks to the end-consumers, who quickly adapted themselves to the pandemic situation, and found ways to get their supplies and to drink at home. The Covid-19 pandemic and its associated government measures to limit mobility impacted patterns and places of alcohol consumption. Home became central for survival, for hope, for businesses to have some continuity. Work from home; online shopping; online classes; drink at home; work-out at home and the like have become the new normal, even as businesses are slowly opening up, depending upon what restrictions each State Government keeps announcing on a frequent basis. Remember Lockdown 3.0 last year and when liquor shops reopened? It was crazy queues, not just in Bengaluru, but across the country. The Karnataka Excise Department recorded liquor sales of `45 crores on the first day of reopening, even before the shutters were pulled down at 7 pm. Around 3.9 lakh litres of beer and 8.5 lakh litres of IML was sold on just one day. And one store – Tonique which boasts to be Asia’s largest liquor boutique, made a whopping business of `4 crores on its first day of reopening.

Seek lifting of restrictions

Bengaluru has become a highly vibrant city in the recent past and restaurant and bars are open till 1 a.m, though at the time of writing all restaurants, bars, clubs and wine stores have to close by 9.30 p.m. The Bengaluru Hoteliers Association President, P.C.Rao who recently met the Chief Minister, Basavaraj Bommai tried to convince the government on lifting the ‘unscientific restrictions’. He asked ‘Does the virus come only at night or on weekends?’ Presently, the liquor business is driven by retail vends with night curfew in place and restrictions of seating in bars and restaurants. There is no online sale of liquor in Bengaluru, but people can buy at wine stores, in mega super markets which have a separate liquor outlet and boutique stores.

Mumbai doubles liquor revenue

It is not just Bengaluru or Karnataka which is witnessing growth in sales of liquor, it is happening across the country, though dampened by the pandemic. In Mumbai, liquor revenue doubled from `264.85 crores to `512 crores with the lockdown turning out to a blessing in disguise. The Excise Department here has set a target of `19,500 crores for 2021-2022.

Pune has the most drinkers

According to a 2020 survey by Statista, Pune topped all the cities with 39.02% people consuming alcohol, followed by Mumbai (37.87%), Lucknow (37.5%), Bhubaneswar (37.3%), Hyderabad (37.24%), Delhi (35.54%), Bengaluru (33.39%), Indore (33.33%), Jaipur (32.18%), Chandigarh (28.33%), Chennai (28.16%) and Kolkata (23.5%).

FY21 sees decline in IMFL sales

However, In FY 21, there has been a 12% decline in sales of Indian Made Foreign Liquor (IMFL) compared to FY20, according to the Confederation of Indian Alcoholic Beverage Companies (CIABC). For the entire fiscal year, the total sales of IMFL was 305 million cases of nine litres each.

Positive trend in third and fourth quarters expected

The Confederation Director General Vinod Giri said that many states have showed a positive trend through the quarters and added that strong performance in the third and fourth quarters of FY21 ‘reflects the fundamental strength’ in the business. “It also confirms that there is no lasting shift against alcoholic beverages in consumption baskets.” The Confederation listed five states that helped recovery in liquor sales – Maharashtra, Goa, Haryana, Himachal Pradesh and Uttarakhand. Some states such as West Bengal, Rajasthan and Chhattisgarh witnessed large decline in sales compared to the previous financial year. There is some interesting statistics when it comes to West Bengal. According to economic research agency ICRIER and law consulting firm PLR Chambers, West Bengal ranks second after Uttar Pradesh in terms of absolute number of people who consume alcohol – 1.4 crore. The five southern states of Andhra Pradesh, Karnataka, Telangana, Tamil Nadu and Kerala together consume as much as 45% of all liquor sold in the country.

Big players bet on recovery in fiscal 2022

Carlsberg’s global chief executive Cees’t Hart said, “Our business had another very volatile year with frequent changes in restrictions. In Asia, the situation is uncertain in a number of markets such as Laos, Vietnam, Cambodia, India and also Malaysia due to the low level of vaccinations. In India, it’s a bit better. Infection rates are in decline. And there we see the off-trade more or less open to 90-95% and 70% in on-trade.” Beer sales in India grew in double digits in the quarter to June compared to the year-ago figure, but were still nearly half the sales in the pre-Covid corresponding period of 2019. However, Carlsberg’s India business grew 40% year-on-year in the quarter ended June. Similarly, Pernod Ricard, the world’s second largest distiller after Diageo, said it expects some recovery in India in fiscal year 2022. “For this year, we expect a gradual recovery. India was up 9% and was very resilient given the environment, while the underlying consumer-driven trends are clearly there,” said the Chairman of Pernod Ricard, Alexandre Ricard. The ICRIER report shows promise with India among the fastest growing markets for alcoholic beverages globally, with an estimated market size of USD52.5 billion in 2020. The market is expected to grow at a CAGR of 6.8% between 2020 and 2023. This indeed is music to the ears and we would like to hear from companies on how they are promoting ‘responsible drinking’.

AIDA races to meet blending 20% of petroleum products by 2025

After the Prime Minister’s call to blend 20% of blending of petroleum with ethanol from 2030 there is an urgent rush to ramp up the capacity and increase the type of feedstock required to boost production to meet the required amount of ethanol needed to blend up to 20% of ethanol. In an interview with Ambrosia V. Raina, Director General, AIDA outlines the roadmap to achieve this along with the newer distilleries planned in the next few years.

What is the current production capacity of ethanol in India?

The total ethanol production capacity is 473 crore litres that includes grain-based ethanol, molasses based and others sources. Alcohol production capacity out of molasses is 693 crore litres whereas grain based capacity is 258 crore litres. This production capacity is expected to increase further with nearly 15-20 new distilleries coming in the next few years with the help of the Indian Government. In order to boost the growth the govt. has provided financial assistance on interest subvention.

Can you tell us more on the new Distilleries that are upcoming in the next few years?

The new distilleries are grain based only with 15-20 new ones coming into the market and approximately 25-30 existing distilleries expanding their capacities. Also with the change in the guidelines you can now put up a new distillery with more ease. Earlier it would take longer time to get permissions and clearances. But now the Government has allowed all permissions, all guarantees up to the capacity of 200 KLPD for grain based and 100 KLPD for molasses based can be given by the State Governments. Since ethanol and high alcohol (above 95%) comes under the purview of the Central Government putting up an ethanol distillery doesn’t have any challenges unless liquor is produced.

Where are the new distilleries now being focussed in UP and Maharashtra or elsewhere also?

There is no grain distillery in the state of UP. Primarily it is in Punjab but now they are coming up. The grain is there. Other distilleries are resisting. UP will come over, Bihar will come over new one. Even Odisha has a new distillery.

Beside grain what other sources are being experimented on?

Apart from grain Maize and Rice are being experimented upon since these are considered as damaged food grains which are not edible for human beings. However, these are currently in short supply. We have introduced good rice also because you have to purchase it from Food Corporation of India (FCI). The basis of these purchases are on rates that are already determined/fixed based on the feedstock. For instance the rates are fixed at Rs. 20 per kg. or Rs. 2000 per quintal by the Food Corporation of India (FCI). If you purchase it from sugar cane juice the rate is Rs.62.65 per litre of ethanol. If it is molasses because sugar supply is in surplus it is Rs. 57.61. The rates for General Molasses is Rs.45.69 whereas damaged food grain that includes rice, maize, jowar, bajra etc are priced at Rs.51.55.

What are the benefits of manufacturing Ethanol?

The benefits of manufacturing ethanol is that there is no limit to the supply. The more you can supply the better it is. For instance if you can supply 1000 litres or 1 crore litres the government welcomes that. The rates are fixed for purchase by petroleum companies, which includes – Bharat Petroleum, Hindustan Petroleum and Indian Oil. Also your payments are assured to be given in 15 days, which has reduced from the earlier timeline of 30 days.

Will this short supply affect the liquor industry?

The ENA prices have also gone up with the availability at Rs.50-52 per litre from where you produce alcohol. The prices have already increased by more than 5%. ENA is Extra Neutral Alcohol which is used for the production of better quality of alcohol and normally not used in the production of country liquor. The total requirement of alcohol by the year 2025 is 1350 crore litres. Out of these for liquor and other purposes we need about 334 crore litres. For liquor and industrial purposes like chemicals etc. and the balance 1016 crore litres will be for ethanol. Out of the total estimated requirement of 1016 crore litres the sugar industry will give 684 crore litres and ethanol from grain will be 666 crore litres by 2025.

What are the challenges that distilleries face for increasing the targeted alcohol production?

The biggest challenge is to achieve the target of 20% by 2025 since originally that plan was to achieve it by 2030 which was upped to 2025. The only downside is that if we achieve these numbers then there might be a shortage of feedstock.

How much of this target can be achieved realistically?

We can achieve about 75% – 80% of the target. There won’t be any short supply for liquor production because the governments are strict. Nowadays’ the government is not giving molasses which is under State Governments. The moment molasses is produced they will make a reservation and allot it for the country liquor. Even if there is shortage of total supply I don’t see any difficulty for the liquor production because the State Governments are taking care of that thing.

Glenmorangie and Ardbeg Single Malt Whiskies crowned as the Best Whiskies of the 2021

The 2021 edition of the International Whisky Competition was held from May 12- May 16 in Colorado, USA where a professional tasting panel comprising of whisky, wine and beer connoisseurs came together to determine the top whiskies of 2021. The Ardbeg Uigadail emerged as the “Best Whisky of the Year”, while Glenmorangie Vintage 1997 claimed second position. Dr Bill Lumsden of The Glenmorangie Company won the distinguished “Master Distiller of the Year” title, as a testimony of his vast experience, consistency and mastery in the art of distilling and creating remarkable whiskies.

As six out of top 15 whiskies were awarded to different expressions of Ardbeg and Glenmorangie, it truly demonstrates the craftsmanship and deliciousness of these whiskies. The variants that clinched these top positions include Ardbeg Traigh Bhan 19 Year Old, Glenmorangie Signet, Ardbeg An Oa and Glenmorangie Quinta Ruban that ranked 9th, 10th, 13th and 15th respectively.

Judged via blind tasting, each whisky was scored using a comprehensive 100-point scale system through an 8 minutes tasting session. The whiskies were rated on factors such as visual appeal, intensity and complexity, distinctiveness of aromas and flavours, and quality of finish, with three medals being awarded for each category. Thus, each win is unique and not duplicated with generic awards.

The noteworthy wins for Moët Hennessy at the 2021 International Whisky Competition establishes its brands’ expressions as favourites not only amongst the experts, but spirit aficionados and consumers across the world.

Allied Blenders & Distillers appoints Mr. Shekhar Ramamurthy as Executive Deputy Chairman

Allied Blenders & Distillers Private Limited recently announced the appointment of Shekhar Ramamurthy as the Executive Deputy Chairman of the company with effect from the 1st of July 2021. He replaces Nick Blasquez, who has left ABD Private Limited to pursue other professional interests. Mr. Kishore Chhabria, Chairman has expressed his gratitude to Nick Blasquez for his contributions and the transformation journey that he had guided during his tenure.

Shekhar Ramamurthy, has spent over three decades with the UB Group in various leadership roles, the last of which was as the Managing Director of United Breweries Limited. He is well recognised within the alcobev industry for his leadership skills, ability to identify opportunities and drive growth and value. As the country and the industry unlocks from the effects of the Covid 19 pandemic, ABD is poised to continue its growth through building successful brands, winning with consumers and creating value for all stakeholders. Shekhar Ramamurthy will spearhead this journey.

Chivas Brothers appoints new Chief Executive

Dumbarton-based distiller Chivas Brothers has a new Chief Executive and Chairman. Chivas Brothers which is part of the Pernod Ricard drinks empire, has recently appointed Jean-Etienne Gourgues as its new chief. Mr Gourgues replaces Jean-Christophe Coutures, who left the company in July after three years in the role. Mr Gourgues was most recently managing director of Pernod Ricard China.

The company said in a statement: “Chivas Brothers, the Scotch whisky business of Pernod Ricard, can confirm the appointment of Jean-Etienne Gourgues as chairman and CEO from July 1, 2021.

“Jean-Etienne joined Chivas Brothers from Pernod Ricard China, where he served as managing director. Previously, he was president and CEO of Pernod Ricard Japan, and he has also held senior positions at Martell Mumm Perrier-Jouët and Allied Domecq.“Jean-Etienne succeeded Jean-Christophe Coutures who will be returning to France after serving as Chivas Brothers Chairman and CEO for three years.“Jean-Etienne will be part of Pernod Ricard’s executive committee and will be based at Chivas Brothers London HQ, after relocating from Shanghai.”

Mr Coutures held senior roles with Pernod in Asia, Australia and Ireland before succeeding Laurent Lacassagne as chief executive of Chivas Brothers in February 2018. He arrived as Chivas was preparing to switch its Scottish bottling operation from Paisley to Dumbarton.

Radico Khaitan to launch 3 Premium Whiskies in the next two years

Liquor manufacturer Radico Khaitan’s performance has been exemplary in these difficult times, highlighted by record sales and earnings. With the expectations of continued earnings and growth, the company is on course to better its performance in these difficult times. The Chief Operating Officer of Radico Khaitan Limited, Mr. Amar Sinha gives an overview of the company’s performance in these Covid times.

Is Radico focusing on premium brown spirits for growth?

Amar Sinha (Sinha): Yes. Radico Khaitan offers a wide array of products – 15 organically-grown brands including 5 millionaire brands – hence, we have something for every age group and in each category. The company, while enhancing the products in the white spirit category, is also focusing on the premium brown spirits while identifying India-specific consumer preferences in the category. In fact, among our successful premium offerings in the brown spirits category, we have 8PM Premium Black Whisky which is a master’s selection for the true connoisseurs of fine taste. 8PM is the flagship brand of Radico Khaitan and 8 PM Premium Black Whisky is a notch above offering which reflects the true essence of quality drinking.

Another essential driver of Radico’s growth in the brown spirits category is Morpheus Brandy (only brandy in the premium and super premium segment) which commands over 65% of the market share in the country. In the rum category, 1965 Spirit of Victory has been doing phenomenally well in the premium rum segment. Our most recent offering, Rampur Indian Single Malt Whisky, which was launched in the Indian market in February 2019 was rated amongst the top 5 world whiskies by “Whiskey Cask Magazine” US even before it was launched in the domestic market.

Which are the new products in brown spirits you are planning to launch?

Sinha: As a country, India has majorly been a brown spirits market. Though people are now open to experimenting more and showing an inclination towards white spirits, the brown spirits segment is continuing to dominate the world over. Of late, there has been a significant shift in people’s consumption pattern with many switching to more premium liquor because they have been mostly home-bound for over a year now which boosted savings to a large extent and that allowed them to move towards premiumisation. To cater to the consumer demands, Radico Khaitan is on course for the launch of more brands in the premium brown spirits space during FY2022 across categories. There are at least 3 Premium Whiskies in the brown spirits category that are currently on the drawing board which would be launched over the next 2 years. These are one segment above each other and with very high contributions in terms of price positioning. Radico has a history of launching at least 12 successful brands in the last decade and half.

What are the plans for 8PM this fiscal?

Sinha: RadicoKhaitan’s primary focus for the brand will be to take 8PM Premium Black Whisky pan India as it is currently available in 16 States. An extension of 8 PM Whisky – a flagship brand of Radico Khaitan – 8PM Premium Black Whisky successfully touched 1 million cases in March 2021, within just 2 years of its launch in the Indian retail market. This brand has been on the growth trajectory paved by its parent brand 8PM Whisky, which itself was a runaway success. It has been named the 5th Best Indian Whisky by the Spirits Business Brand Champion. We have introduced a pocket pack for 8PM Premium Black Whisky in West Bengal, Rajasthan, Telangana, Assam and Uttar Pradesh, which will soon be launched in other markets across the country. This is the first hipster pack in a glass bottle in this segment. 8PM Pocket pack is an innovative 90 ml pack size in look and feel and gives the feeling of a hip flask in glass bottle. The pack is launched to lure the consumer with its modern style and promote trial amongst new consumers.

In this digital age, what is your campaign strategy?

Sinha: While focusing heavily on brand expansion, we will also be launching campaigns with the brand ambassador Tiger Shroff to promote and celebrate the positioning of the brand. The Bollywood actor is extremely popular among the youth and is full of energy and vigour – traits that completely sync with the brand; hence we believe that the launch of the campaigns will further strengthen 8PM Premium Black’s positioning and take it to the next level. We are actively eyeing the digital medium for engaging with the brand loyalists and curating exciting digital campaigns across all social media platforms in order to enhance brand visibility.

Goa, the Gin Capital of India

No, we are not saying move on Feni which is unique to Goa and mind you growing in its own way. Suddenly, in the last two years, despite the pandemic, about 15 brands of Gin have been crafted and launched across the country and 11 of them, yes a full team of brands, have their oriGin s in Goa. What is brewing over here in this beautiful coastal state? A lot ! And what warms the cockles of the heart is that young entrepreneurs, in their 20s and 30s, are the craftspeople. Cheers to this young brigade.

And it was a Goan – Cedric Vaz, it’s in his genes, right, to launch the first truly crafted Indian Gin by the name ‘Black Jewel’ and believe you me crafted Gin has turned out to be a connoisseur’s delight, irrespective of the brand.

There has been a resurgence of sorts for Gin . No, the pandemic has got nothing to do with it. Though the British East India company created the drink in the 1700s, it was a military cocktail, devoured by the troops to stay healthy. The British residents in India added Gin , sugar, ice and citrus and thus was born the Gin and Tonic. The witty statesman Winston Churchill words remain for eternity “The Gin and tonic drink has saved more Englishmen’s lives and minds, than all the doctors in the Empire.” Somewhere along the way, Gin lost favour and it was perceived as a ‘ladies drink’ and everyone with some knowledge has some reasoning for that. Around the same time, vodka and tequila captured the imaGin ation of the world and these spirits kind of drowned Gin. It was circa 2016 that in the United Kingdom there was growing interest in Gin which reportedly grew 44% year on year with about 100 home grown brands hitting the market. India is the fifth largest consumer of Gin after the UK, USA, Germany and Spain, but within the country Gin accounts for just about 1% of spirits consumed.

Young entrepreneurs driving craft Gin segment

But it is growing. In the recent past, it has caught the attention of the Indian spirit maker and consumer. The young co-founder and director of Stranger & Sons, Sakshi Saigal says “Though its presence in its current form is limited to the main metro cities, Gin is going through an extremely exciting phase and still transcending into the mainstream. There aren’t just new consumers every day but new Gin s too! As people travel, they have slowly started to understand India’s rich history when it comes to Gin and agricultural bounty when it comes to ingredients, so it has become an obvious choice for Gin makers alike.”

There are several reasons for this resurgence, one of which certainly is the drinking culture which is getting nuanced, thanks to the new generation which likes to explore, experiment and be expressive. The Chief Operating Officer of Radico Khaitan, Amar Sinha states “The Gin market appears very promising in the country as over the years people have been open to move beyond the regular brown spirits. They have started developing and appreciating the fine taste of the white spirit for the botanical infusions. There are many factors behind the popularity of this category such as increased exposure to global culture, the growing trend of cocktail culture, and Generation Z’s inclination towards experimentation with white spirits.”

Craft Gin comes with a price and why not?

If one looks at the drinking profile, these crafted Gin s seemingly are not for the hoi polloi. Almost all of them (Stranger & Sons, Greater Than, Hapusa, Samsara, Jin Jiji, Pumori, Jaisalmer and a few others) are priced in a way attracting the upwardly mobile. This is the segment that these manufacturers are looking at and not for nothing most of them are produced in small batches. “Craft Gin can only ever be premium. A low-priced Gin , will not ever be a craft product. Even so, we aim to make our Gin s as accessible as possible,” states Anand Virmani, Founder and CEO of Nao Spirits and Beverages (creators of Greater Than and Hapusa).

However, Mac Vaz of Madame Rosa distillery and the founder president of the Goa Cashew Feni Distillers and Bottlers Association, has another take on it. The first craft Gin , Black Jewel, from Madame Rosa stable is reasonably priced as to make Gin drinking accessible and affordable. All of them in some way or the other are working in that direction, coming up with a distinct touch of their own. It makes sense in a market which is slowly opening up, thanks to the many bartenders who are peppered across the country and ever open to experimentation.

Botanicals are at the core of this revolution

Botanicals are coming into that experimentation while Juniper is the predominant botanical ingredient in Gin , there are other accompaniments, most of them sourced locally. States Sakshi Saigal “Our botanicals are crafted together, taking inspiration from India’s culinary heritage which is centred around spices. Spice boxes are commonly found in almost all Indian kitchens and for centuries, they have been manipulated in different ways to create flavour in food, liquid, sweets and scents. Our Gin goes beyond the customary juniper and highlights inherently Indian botanicals and spices that are indispensable to every Indian household and form the backbone of India’s culinary heritage.”

In an article in The Hindu, Anoothi Vishal cites Dr. Anne Brock, master distiller at Bombay Sapphire, “I believe it is important that juniper remains the core, but we may need to relax and encourage difference. Gin is a global spirit with different botanicals and styles, and consumers are interested in the people who make their Gin , its provenance and story.”

Goa, India’s watering hole has friendly policies

And it is all happening in Goa, India’s watering hole. That is good enough a reason for many of the distillers to descend upon Goa, an investment-friendly state in the hospitality industry. Mac Vaz emphasizes “Goa being the apex tourist destination of the country gives smaller players a cost-effective advantage due to the consumer watering hole ! Also unlike in most other parts of the country, in Goa there is no hypocrisy and taboo quotient connected to liquor consumption in moderation. Lastly, Goa has a brand, has a natural USP in perception. Everything that is produced within Goa has its exotic positioning – Feni is a classic example of this.”

Why Goa? And Sakshi Saigal has the perfect answer for that going beyond the friendly excise policies of the state which has been eulogized at various forums. “We often hear a lot being said about Goa having more liberal excise laws and so on, making it easier to start brands there but honestly, that undermines what Goa truly has to offer. A former colony, Goa adopted a lot of the Portugese way of life which adds to its own unique charm. The roads wind through green fields, the people speak Konkani with as much ease as they do Portuguese; colonial bungalows and local spice markets all co-exist with some of the most progressive hospitality and restaurant establishments. Further, the Goan way of living life to the fullest inspires us every day to strive for innovation and keep experimenting with various spirits and expressions of our Gin .”

She adds “A truly special place for most Indians where you’ll find the cuisine, architecture and culture of India & Portugal come together, Goa is home to Stranger & Sons. Tucked away in a corner of South Goa, you’ll find us, hunched over our still, throwing iconic Indian botanicals into our Gin , while the local women peel fragrant Indian citrus outside. Goa indeed has its own strange ties to Gin , having been the heart of spice trade for centuries. Our wonderfully strange roots in Goa where cultures, societies and spiritual beliefs stand united under a liberal approach to life translates into the invisible essence in our bottle. When we aren’t distilling, you’ll find us sitting on a porch sipping on some Gibsons made with our pickles! “

Strange it may sound, can you believe it, there are over 3,000 registered micro distilleries in the coastal state and they have enough capacity and more to allow for manufacturing of any spirit. If you have an idea, some capital and a good recipe, just head to Goa.

ASCI bans surrogate advertising in IPL

The Advertising Standards Council of India (ASCI) banned surrogate advertising of liquor during India’s showstopper event – Indian Premier League 2021 which however, got truncated, due to some players and franchise staff testing positive. Talks are on to hold the unfinished spectacle in the United Arab Emirates, like it did in 2020 without crowd attendance, to be viewed on a broadcast platform.

It was during 2020 IPL that surrogate advertising was active on television and digital medium, particularly OTT (over the top), the latter in the absence of clear guidelines. “The IPL broadcaster for TV has confirmed to the ASCI that all advertisements are checked for CBFC clearance so that they are not in violation of the Cable Television Networks (Regulation) Act, 1995 (CTNR). Keeping that in mind, the ASCI processed complaints on advertisements appearing in OTT, digital and print media,” ASCI said. The association suo motu took up 14 complaints and some of the advertisers withdrew the ads.

Brand extensions have some leeway

The CTNR rules prohibited the direct or indirect advertising of cigarettes, tobacco products, wine, alcohol, liquor or other intoxicants in 2009. The Information & Broadcasting Ministry, however, allowed advertisements of products even if they shared a brand name with a liquor or tobacco product so long as it wasn’t a manifestation of the prohibited product. Advertisement of brand extensions of liquor and tobacco products is permitted under CTNR, provided the product sold under the brand extension does not make direct or indirect references to the prohibited product, it is distributed in reasonable quantity and is available in a substantial number of outlets, and the proposed expenditure on the advertisement of the brand extension product is not disproportionate to the actual sales turnover of that product.

ASCI guidelines for brand extensions

The Advertising Standards Council has ‘Guidelines for qualification of brand extension product or service’ wherein for an advertisement to qualify as a genuine brand extension advertisement (by implication, not surrogate), the in-store availability of the product sold must be at least 10% of the leading brand in the product category or sales turnover of the product must exceed `5 crores annually or `1 crore in the state where the product is distributed.

Age-old question, whether to allow liquor advertising or not?

However, the question that keeps raking up is an age-old issue – whether to allow liquor advertising / surrogate advertising or not? And the topic is universal leading to unending debates. Across continents, there are countries where liquor advertising is allowed and then there are as many countries that have banned / restricted advertising of alcoholic beverages. In the United States, spirits advertising has self-regulatory bodies that create standards for the ethical advertising of alcohol. In the UK, advertising for alcoholic drinks follows a code enforced by the Advertising Standards Authority, while the packaging and branding of the products is subject to self-regulation. In Thailand, alcohol advertisements are allowed but with a warning message. In South Korea, public advertising is allowed only after 10 p.m. In the Philippines, alcohol advertising comes with a disclaimer ‘Drink Responsibly’. In India, liquor advertising was banned after the Ministry of Health found that cigarettes and liquor had adverse effects on a person’s health. However, advertisements for liquor brand extensions can run on television only if they have a certificate from the Central Board of Film Certification. That led to the companies (manufacturers and also advertising agencies) becoming innovative with ‘surrogate advertising’ wherein unrelated products with the same brand name is manufactured / advertised and sold, only to ensure that the liquor brand name stays right on top of consumers’ minds. Unrelated products include mineral water, music CDs, soda, sports accessories and anything that can be advertised.

Active on digital media

The question here is when liquor companies are active on social media which is a major influencer, an indisputable force and not to mention its enormous reach, the whole idea of banning on OTT and television smacks of hypocrisy. It is indeed paradoxical that excise which is one of the top revenue earners for most states, going up to 15 % of the overall revenues, is not allowed to be promoted. There is a school of thought that believes if a product is allowed to be manufactured and sold, it should be allowed to be advertised, but that is over simplification as it will certainly be like opening up the Pandora’s Box.Gokul Krishnamoorthy who worked with an agency that handled United Breweries in an opinionated article in the Financial Express says “While ASCI banning surrogate ads by liquor brands during the curtailed IPL 2021 was a welcome move, it prompted a question in many minds. What explains the existence of a team called ‘Royal Challengers Bangalore’? One can’t help but remember that the current captain of the team Virat Kohli is idolised by a young boy in a health beverage commercial, among many others. Royal Challenge is a brand of whisky owned by United Spirits, which also owns the Royal Challengers Bangalore cricket team. If scale of presence, volume of advertising, market share and the likes are the key metrics by which one decides whether or not an alcohol brand can advertise its extension, then Royal Challengers Bangalore has no problem at all.” He goes on to add “The only seeming solution then, albeit rather simplistic and overarching, is that if a brand is present in a category where promotion is banned, it should not be allowed to promote itself in any context. It should be denied the right to promotion, whether for its shared corporate brand, for its extension, for its event, for its cricket team or whatever else.” Since such conundrums exist, there are those who feel that we need to shed this hypocrisy and accept that people do drink and reaching them is a legitimate part of a company’s business plans. The companies should be allowed to promote safe, moderate and responsible drinking. In states where there is prohibition this issue does not crop up at all. With digital media coming into play, some players have been advertising brand extensions as the CTNR does not apply to advertisements over the internet. This is changing as we have seen the government bringing social media under control. The digital medium is pretty nascent and governments are grappling with policies to rein in the medium. Indian liquor companies have been using social media to promote their brands. The UB Group recently tied up with a digital content company which produced a web series titled ‘Pitchers’, a five-part series on four friends trying to launch a start-up. With over 10 million viewers, the show got a rating of 9.7 out of 10 on internet movie database website, making the new concept of advertising, going beyond surrogate advertising. As rules become stricter, liquor brands will look at different channels – events, experiential, branded content and in-film, like ‘Pitchers’. As manufacturers need to advertise, one way or the other as to get their products sold, they have been innovative in how to get the message across.

Canned alcoholic beverages market size worth $13.4 billion by 2028

The global canned alcoholic beverages market size is expected to reach USD 13.4 billion by 2028, according to a new report by Grand View Research, Inc. The market is expected to expand at a CAGR of 13.3% from 2021 to 2028. Canned alcoholic beverages are gaining popularity among consumers since cans are more convenient, portable, and travel-friendly. Moreover, these metal cans are less expensive as compared to glass bottles and have a considerably higher recycling rate than glass.

In Asia Pacific, the market is expected to witness a CAGR of 13.9% from 2021 to 2028. The major factor driving the market in the region is the presence of young consumers and rapidly growing economies.
The wine segment is projected to register the fastest CAGR of 13.7% from 2021 to 2028. The rising awareness among consumers for more eco-friendly alternatives to plastic bottles coupled with the growing taste for convenient products is propelling the demand for canned wine.


The online segment is expected to register the fastest CAGR of 13.6% from 2021 to 2028. The hassle-free shopping experience offered by various online platforms is expected to drive the growth of the segment.


The hand seltzers segment held the largest revenue share in 2020 and is expected to maintain its dominance over the forecast period. Hard seltzers are carbonated water-based drinks, which are usually infused with fruits and spirits. These have become quite popular among millennials due to their low alcohol content. Low prices of hard seltzer, easy availability across supermarkets and convenience stores are factors anticipated to boost their sales in the upcoming years.


The liquor stores segment contributed a majority of the share to become the largest division in the global revenue in 2020. These stores have been a widespread and well-established distribution channel for canned alcoholic beverages. The wide availability of both premium and private label brands at these stores attract consumers to purchase products through these channels.


In addition, a report published by Fior Markets claims the global functional beverages market is expected to grow from $125.39 billion in 2020 to $216.7 billion by 2028, growing at a CAGR of 7.08% during the forecast period 2021-2028.


Functional beverages are liquids that often contain a health claim and are used to hydrate the body and maintain nutritional balance. On the basis of type, the global functional beverages market is segmented into drinks, energy drinks, fruit and vegetable juices, herbal and fruit teas, fortified water, rehydration solutions, dairy beverages, non-dairy beverages and others.


The energy drinks segment dominated the market and held the largest market share of 20.9% in the year 2020. This growth is attributed to the rising adoption of energy drinks and the increase in reliance on them for instant energy amongst an increasingly busy population.


The market is booming and there’s already a large number of brands. Some popular drinks include Tequila Cazadores RTDs, Onda Sparkling Tequila, Miami Cocktail Co., Dogfish Head RTDs, St. Agrestis Spritz, and Lunar Tamarind & Rice Paddy Herb.

Tequila Cazadores RTDs
These ready-to-drink (RTD) tequila cocktails are available in Margarita, Spicy Margarita and Paloma flavours and continue the trend of tequila RTDs outshining almost all other canned drinks.


Onda Sparkling Tequila
The best designed of the tequila RTDs, this sparkling beverage (which features actress Shay Mitchell as the “Chief Brand Officer”) just launched two new flavours, Watermelon and an incredibly refreshing Blood Orange. Fizzy, light and citrusy.

Miami Cocktail Co.
While this RTD brand flashes a lot of healthy catchphrases (vegan, gluten-free, non-GMO, “clean calorie”) their organic spritzes should appeal to anyone. Ridiculously great in hot weather, the brand offers everything from Rosé Bellini Spritz to a Grapefruit & Hibiscus Paloma Spritz.

Dogfish Head RTDs
It turns out it takes a brewery (and distillery) to finally make a good vodka soda. The Blueberry Shrub RTD here is light but flavourful. And brown spirits fans: The Cherry Bergamot Whiskey Sour is the rare summer-ready whiskey drink.

 

St. Agrestis Spritz

The Spritz however, is a refreshing, herbal/citrus combo of the St. Agrestis Paradiso Aperitivo, sparkling Italian wine and sparkling water.

Lunar Tamarind & Rice Paddy Herb
Described as the “first and only Asian American craft hard seltzer made with real, premium fruits and ingredients from Asia,” the brand just launched a limited-edition “Heritage” line that pays tribute to well-known Asian foods and is co-developed with New York-based chefs and owners of popular local restaurants. The Tamarind & Rice Paddy Herb release will be unlike any canned drink you’ll try now … and portends a promising and innovative future for the category.


Beverage Cans Market size is estimated to reach $17.24bn by 2025, growing at a CAGR of 4.9% during the forecast period 2020-2025. Beverage cans are the metal containers that are used to store liquid drinks like alcoholic beverages, carbonated soft drinks, fruit and vegetable juices, energy or sports drinks and others. These cans are usually made of aluminum and steel. The increased demand for the alcohol beverage which is to be stored at low temperatures is driving the usage of this beverage cans as they help in storing the drinks at low temperatures which helps to hold the taste and properties of drinks. The rise in health concerns among the people to avoid plastic containers as they are harmful and non-bio-degradable is driving the usage of beverage cans market during the forecast period 2020-2025.


The global Beverage Cans Market based on Material type has Aluminum and Steel. The Aluminum segment registers for the highest market share in 2019 and is set to continue for the forecast period 2020-2025, owing to the increased usage of aluminum in making beverages cans. Overs 70% of beverage cans are made of aluminum globally. Aluminum cans are easily recycled with properties like lightweight and easy to manufacture, transport and are economical. Having many advantages over other materials is driving the market of aluminum beverage cans during the forecast period 2020-2025. The steel beverage cans are having below-average growth as they are heavy and is set to react with beverages in those cans, however, cans made with a composition of steel and other material are being introduced into the market to decrease the cost of beverage cans.
Based on geography the global Beverage Cans Market is segmented into North America, Europe, Asia-Pacific, and the Rest of the World. North America had a dominant share in terms of revenue in 2019 and it holds the largest market share during the forecast period 2020-2025, owing to the availability of the high number of consumers of aluminum can stored beverages. The Asia-Pacific region is also set to have healthy growth during the forecast period 2020-2025, owing to the availability of a large population and increased consumption of beverages. The availability of large raw materials like aluminum and steel are also factors that are supporting the growth of the market in the Asia-Pacific region.

Beverage Cans Market Drivers
Increased consumption of beverages
The increase in the consumption of beverages globally is driving the demand for beverage cans. Increased promotional activities by different manufacturers of beverages to increase demand for drinks are driving the usage of beverage cans owing to increased sales of beverages. Beverage cans being eco-friendly, recyclable and lightweight are driving the market growth during the forecast period 2020-2025.

Beverage Cans Market Challenges
Fluctuation in the cost of raw materials
The fluctuations in the cost of raw material are challenging the production of the beverage cans. The defects in three-piece type cans, such as leaks, inability to withstand high pressures and temperatures are challenging the market during the forecast period 2020-2025.

India Glycols Ltd forays into IMFL

India Glycols is a leading company that manufactures green technology based bulk, specialty and performance chemicals and natural gums, spirits, industrial gases, sugar and nutraceuticals. After becoming a market leader in the Country Liquor segment with the famous brand Bunty and Bubly, the company is now ready to make their foray into the IMFL with their new launches, Amazing Vodka and Single Reserva Whisky. Ambrosia spoke to the Management Team of the brand in an exclusive interview.

With chemicals being the primary cornerstone of India Glycols Ltd business, the company continues to enjoy an undisputed leadership position in certain segments over two decades. And liquor being a by-product of the chemical distillation process, it was only natural to foray into this business.

While country liquor industry was the mainstay of the liquor division with their popular brand Bunty and Bubly selling 1.32 crore cases per month as against the next best-selling brand, which is less than 50%, the company will shortly launch their first 2 products in the Vodka and Semi Premium Whisky category, Amazing Vodka and Single Reserva Whisky.

The Chairmanof India Glycols Limited (IGL), Mr. U S Bhartia felt that IMFL Division should also be nurtured and brought up especially following the success of its country liquor. These sentiments are also echoed by Rupark Sarswat, CEO, India Glycols Ltd ‘the logical step for us when we started to explore consumer market was to look at country liquor and then much more market intensive areas like IMFL. We are looking to engage in the market, continue to take feedback but make sure that the way we build our business is slow, steady and solid.’

With the consumers constantly looking to upgrade and premiumisation being the focus for IGL ‘the vodka will be launched in three variants Amazing Plain Vodka, Amazing Green Apple Vodka and Amazing Orange Vodka for the time being while the Single Reserva Whisky will be launched in the semi-premium category with a unique blend and offering’ said Raju Vaziraney, Advising – President, IMFL for India Glycols Ltd.

Despite the flat growth in the vodka industry, the decision to foray into the vodka market stems from the fact that the consumer is moving towards flavours adds Vaziraney. “You will be happy to know the vodka market is 60% flavours and 40% plain and the consumer is looking to flirt. Flavours are the future of the vodka market and they will drive the growth of vodka.”

Although the precise price point for the Vodka isn’t known yet it is expected to be in the popular category where it will compete with the likes of the most popular brands by market share in the segment. However what’s interesting about the vodka is that it is five time distilled liquid which IGL feels will provide a very smooth and refined taste to the consumer.

When it comes to the Single Reserva Whisky, it will be a unique offering which is expected to be priced under Rs. 1000 depending on the State that you are in. The whisky is blended with Indian Single Malts making it a unique offering. This is a new concept of blending with Indian single malts which was done after doing extensive blend research with the help of the known blender Peter J. Warren.

Currently IGL plans to focus on these two brands and are looking to grow their portfolio stepwise following the success of these brands. ‘We are not going to take any shortcuts to success, put more money, gain volume and build stocks. We want the consumer to be delighted’ adds Vaziraney.

The IMFL brands are manufactured at the company’s Gorakhpur plant. S.K. Shukla, Head of Operations & Business Manager said that, “I have been at the Gorakhpur plant from where we started our IMFL journey since last year May 2020. Besides that global pandemic till date the achievement has been excellent and we hope that this new product Single Reserva Whisky and Amazing Vodka will be great success in the future with the help of Ambrosia’s support.”

B. P.Singhal, Procurement and Projects engineering, IGL adds that we have selected best of the packaging material, bottle design, which can create a stir in the market, mainly for the Vodka. We are looking to target the youth because vodka is typically consumed by the youth. Keeping these factors in mind we have selected the bottle and packaging for both the products.

With the overall market for Vodka estimated to be about 6 million cases, IGL is looking to grab 15% market share in the vodka segment. A success that T P Sharma, Sales Head(HOD), IGL is confident in replicating following their Bunty Vodka Green Apple Flavour Tetra Pack launch in UP, which has already cornered a market share of 42% in six months.

Both the products will be rolled out in the UP and Uttarakhand markets first with Delhi and few other States as the next options in four-five months time. By the festive period IGL is looking to have their products in more States. Both Amazing Vodka and Single Reserva Whisky will be sold via the on-trade channels with IGL looking at ATL and digital activities to promote them.

Shriharsha Bandaluppi, EA (Executive Assistant) to CMD and General Manager Strategy, said, “we are coming up full throttle by using the social media channels like Facebook, Instagram. We are also identifying the key influencers, all sorts of new age trends etc. specially strengthening the brand position with shoots, signage, posts etc.”