Category Archives: profiles

Unibev targets premium spirits market

After spending decades as the leader of India’s biggest spirit company, Vijay Rekhi is ready for a new innings with an investment in a new company Unibev, a joint venture with Globus Spirits Limited.

 

How was Unibev born and what is the equity structure of the company? Unibev was born out of the striking gap in the premium Indian whiskies market in India that was deluged with me-too products with cosmetic packaging differentiators. Every now and then international research throws up the premiumisation silver lining for the industry that has mostly grown at its belly. But no player including international players in India took up the challenge to create a highly differentiated and aspirational blend. We spotted this opportunity and conceived Unibev Limited as a platform for Premium Spirits offerings. Unibev is a start up in collaboration with Globus Spirits Limited where I have a stake of 10% in the venture.

What kind of investment you are making to develop these brands? And what is the expected gestation period? Investments to meet brand needs for development, placement and promotions are planned for different phases of launch. In Phase -1, Unibev is focused on the Southern Indian States for its whisky and brandy portfolio. We have identified high throughput outlets to ensure quick placement and movement of stocks. Southern Indian launch operations are funded through internal accruals. We hope to sell 100,000 cases by the end of year 1 in the market.

What synergies do you expect to attain from Globus Spirits? Globus Spirits is led by a highly experienced team in the beverage alcohol industry. The company has the largest grain based distillery in India which augurs well for Unibev’s premium brands portfolio. Globus is growing 25% year on year. The company is cash positive. Unibev will draw from Globus financial stability.

Which are the brands that you have launched and do you have more in the pipeline? Also what are the price points of your brands?  In Phase -1 we have launched two Premium Whiskies and one Premium Brandy. Governor’s Reserve infused with 12 YO Scotch in Semi Premium whisky category is priced cross lined to Royal Challenge and Royal Stag Barrel Select. Oakton Barrel Aged whisky infused with 18 YO scotch is priced cross lined to Blenders Pride and Signature Premier. L’Affaire Napoleon Premium Grape Brandy infused with 3 YO French Grape Spirit is priced cross lined to Morpheus and Kyron brands. We will also be launching whiskies with higher aged Scotch shortly. Premium Rum and Premium Vodkas are in the pipeline.

The market is crowded in all the segments, how are your brands different from those in the market place?  IMFL whiskies blended with 12 YO and 18 YO aged Scotch have never before in the history of Indian alcohol industry been offered to the consumers. IMFL Brandy with aged grape spirit is an equally rare phenomena for connoisseurs in India. We have had very encouraging response from retail and consumers wherever we have launched the products.

What is the distribution plan for your brands and when are you likely to be pan India? In Phase -2 we plan expansion in North, East and Western markets in a gradual and calibrated manner. We will look at 2020 window for national distribution.

What are the key objectives/targets for the company? Our vision is to offer aspirational Super Premium and Premium blends and brands cross lined to price and brand leaders in the market place to evolved and responsible consumers. To this end, we will continue to innovate and explore ramping up our portfolio with different IMFL and imported spirits categories

The market is highly regulated as well as competitive, what kind of challenges you are likely to face to push these products? Having insights of the spirits market and regulations, we will be compliant with all that is needed. As far as competition is concerned, in a growing market of Premium Spirits there is enough room for additional premium brands where consumers have a choice. Therefore, we will be in a position to meet challenges from competitors.

Accord Group emerges as one of the most Elite companies in Tamil Nadu

Quality is the name of the game for the Accord Group.

With its sales in beer and brandy growing by leaps and bounds, the Chennai based Accord Group of Companies has been bolstering its presence in the alcobev industry in Tamil Nadu. Valued at `10,000 crore (2 billion USD), the group had made its advent with stainless steel and leather, and is expanding its horizons by delving in to education, information technology, reality, health care and hospitality and alcoholic beverages.

Elite Distilleries Private Limited, the company’s foray into the liquor industry, has recorded sales of 7.4 lakh cases per month, along with a 16% market share. “The success of our brands is mainly because of quality,” says PK Das, Group CEO of Chennai based Accord Group. “It has been always the endeavor of the company to give value for money to its consumer. Company has stringent policy and practices to maintain the consistency in the quality of blends, Company believe in spending more money on the blends, (which is actually consumed) than on lavish packing and packaging.

All the premium brands of the company are blended with cognac and imported special spirits.” “In Tamil Nadu, companies get orders each month based on an average of the last three months sales,” Das points out. The company, known for its penchant for brandy, manufactures Indian made foreign spirit near Kanchipuram, with a capacity to manufacture one million cases per month. The company’s forte is its premium brandy brand, Hollandas, which is reportedly a market leader in the economy, coupled with being one of the top brands in Tamil Nadu. Das, who has been in the alcoholic beverages industry for more than two decades, has been instrumental in expanding the business to the union territories of Pondicherry and Goa, besides overseas markets. The company is now set to expand its brands to the neighbouring states of Kerala, Andhra Pradesh and Telengana. It is his concerted efforts that has catapulted Hollandas and the company’s other premium product, Royal Accord, as some of the most sought after liquor brands in Tamil Nadu. The company’s other brands include Age de Oak (Premium), Missionary Monk, Royal Accord Gold, Blender Magic, King Nap, Accord French, Wonderland, Accord No. 1, and Evening Walker. This liquor unit’s turnover is about `18 billion (USD 280 millions), reportedly one of the most profitable liquor units of Tamil Nadu. The distillery is valued at `700 crore (USD 1.1 million). The group has also recently purchased a liquor unit styled Fortune Distillers and Vintners Private Limited in Goa in order to sell liquor to Kerala, Puducherry, Andhra, Telengana, Orissa, besides the local sales. This unit is exporting liquor and is also licensed to manufacture wine, which will be taken up shortly. Tamil Nadu marks a sale of 45 lakh cases every month, marking its presence as one of the major markets for liquor companies. The sales volume for these companies, according to sources in TASMAC, have gone up by eight per cent as against last year. However, overall market has remained flat for most of the companies except Elite, SNJ and KALS. The growth by TASMAC is due to increase in prices and increase in rental of the shops. While most companies have capacity constraints, especially older distilleries, Elite, SNJ and KALS are underutilized. After taking over the Imperial of Coimbatore, KALS has excess capacity in beer as well as liquor. TASMAC procures Indian made foreign spirits, beer and wine from 11 IMFS manufacturing units, seven beer making plants, and one winery functioning across the state. Currently, TASMAC has 5700 retail vending shops depending on these breweries and distilleries. The beer industry in Chennai has shown a growth of almost 60% in sales in 2018 as against 2017, from 19.5 lakh cases to a whopping 30.8 lakh cases. Of this, strong beer constitutes 88%, and 12% of light beer is available across the 5,700-odd outlets in the state. So, it only follows that the company’s ripples in sales are not limited to brandy alone. AM Breweries, also owned by the group, is a 300 HL automatic brewery, complete with modern technology that has been installed from Meura of Belgium. It was further integrated into a full process house primarily with Ziemann Technology of Germany, and modified to Indian requirements by Praj Industries of India. Armed with a market share of 11% in Tamil Nadu, it has been growing at 20% rate year on year. Out of AM Breweries’ market share of 11% in Beer in Tamil Nadu, 6% is its own beer and the rest 5% is of Elephant, the brand owned by Carlsberg for which the group has been bottling in Tamil Nadu. Of late, they have started producing Tuborg and it has also applied license for the export. The unit can produce million cases per month and has an exclusive tie-up with Carlsberg of Denmark, to produce and sell their brands like Tuborg and Elephant in Tamil Nadu and to export them to other states of India. “Nearly one lakh cases of Carlsberg products are sold each month. We have only started marketing last month and the response has been very good,” says Das. AM Breweries’ brands include 10,000 Volts in the Super Strong category with about 6% market share, and Royal Accord Super with two per cent market share. The unit is currently capable of producing 1 million hectolitres per annum, which translates to 1 million cases per month. With the addition of further Mash Vessels and Unitanks for fermentation, the unit can reach 1.50 million HL per annum, which is 1.5 million cases per month. However, beer capacities in Tamil Nadu are underutilised by around 40% and the government has now permitted companies to export beer to other states, Das points out. Das has been the key factor in setting up the group’s one Million Hectolitres PA Brewery with modern technology and achieving exclusive tie ups with Carlsberg, Denmark, to produce and sell products in Tamil Nadu, apart from exporting them to the other states of India. The Bottling Hall has been equipped with machineries from German Principals like KHS, Krones, harmonised with an imported conveying system and Indian Pasteurisation system with auto PU controls. The unit is currently valued at around 500 crore, equivalent to USD 75 million. Apart from its investment in the alcobev industry, the group has carved a niche in education, and it also owns medical and engineering colleges, hospitals and the like. They have also diversified into software, print and broadcast media. Plans to undertake several projects of pharmaceuticals, thermal power and hospitality industry are also underway.

The Spirits of India

The earliest mention of alcohol is found in records made about the Harappan Civilisation in 3000 B.C. Interestingly, alcohol says as much about Indian culture and customs as Indian costumes, food or rituals. It is found that drinking was a vital feature of the cultural landscape and that locally brewed rice beer; palm wine and distilled country liquor were the so-called Indian Made Foreign Liquor (IMFL) in those days. So lets trace the local spirits of India over time.

   

Each spirit is identified with particular segments of society and setting in the various communities in India. In a world dominated by Western and urban studies, research clarifies features of alcohol availability, use and acceptance in a neglected rural area of India. Alcohol use is, in large measure, a culturally patterned feature of both secular and sacred life in most societies. India is a large country with diverse socio-cultural and historical patterns of drinking. There are special alcoholic drinks brewed by the locals, which can scintillate your senses. Here are 10 of them:

Apong

Rice beer made by tribes in Assam (alcohol content- 18-25%) It is a locally fermented rice beer famous in the states of Assam and Arunachal Pradesh. This rice beer is famed to have been made of a fairy’s breast milk. This rice is roasted until it turns black, then it is allowed to ferment. It takes about 3 months to prepare Apong and the process includes drying the rice, smoking it, fermenting and filtering and then finally pouring it into a tall bamboo shoot. This rice beer is made of almost 30 different kinds of tree leaves, creepers, and grass. Ashes of bamboo and banana leaf are also used in the process along with rice. It is preserved with Bhoot Jolokia peppers, one of the hottest chilies in the world. Apong is served at room temperature, and it is sweet, malty, spicy and quite potent. It is sort of the party alcohol for the tribes and batches of Apong are especially made during annual festivals, weddings and happy occasions. Folklores have said that the people of the ‘Mising’ tribe came together to drink the ceremonial beer to put an end to all their communal conflicts and restore peace and harmony. Apong is considered a cultural heritage of the indigenous tribes of North- East India. The alcohol content believed to be 18-25% ABV, however, it is said to be pretty intoxicating.

Zawlaidi

The love potion from Mizoram (alcohol content- 13-18%) Commonly known as ‘Love Potion’ in the state of Mizoram, it is a premium variety of Lubrusca grape wine. Zawlaidi is believed to possess the power to enable anyone who used it to make another person fall in love with him/her. The winery is present in a small village Hnahlan in Champhai district of Mizoram. Zawlaidi ranges in strength from 13-18% alcohol content by concentration. After the prohibition on alcohol and spirits was partially lifted, this intoxicant hit Tripura with a thunder.

Feni

A drink made from cashew apples in Goa (alcohol content- 43-45%) This drought is made of cashew nut apples and coconut sap, which tells us the story of the Goan ingenuity. Feni is strong smelling liquor from Goa. The Portuguese brought the Cashew nut trees to Goa, and the folks discovered a way of converting the fruit into spirit. The juice produced through the extraction process is known as ‘neero’ and is refreshing to drink, however it is not used in the fermentation process generally for making Feni. It is classified as ‘country liquor’ and thus only sold in Goa, where it is produced. One can drink Feni straight, or use it as a flavoring agent in cocktails, or with soda; it is fruity and nutty, and pale yellow in colour. Those with low-tolerance are suggested sticking to the fruit. The double-distilled alcoholic drink has about 43- 45% alcohol content.

Bangla

The intoxicant offered to Goddess Kaali (alcohol content- 60-75%) Bangla is traditional spirit from West Bengal. It is the intoxicant offered to Goddess Kaali. This alcohol can prove to be a little dangerous to consume because of the spurious contents. Country liquor is made in a distillery from low-grade molasses, which is often used as cattle feed. Yeast is added to the molasses and fermented, and the brew is then distilled in a covered pot. Water or Soda maybe added to reduce the alcohol concentration from 60-75% to 40- 50%. Bangla is sold in bottles or by the glass in polythene sachets. The heavy drinkers typically take Bangla also known as Chullu regularly, but others choose to drink it only on special occasions. Chullu, country liquor also serves as a currency in social rituals and as a payment in transactions.

Sekmai Yu

A drink of rice from Manipur (alcohol content- 5-15%) In Manipur from time immemorial, both fermented and distilled beverages are being prepared by fermenting different kinds of rice. The local liquor Sekmai Yu is prepared in different communities of Manipur, but restricted to the Scheduled Castes and Scheduled Tribes. In the preparation of the local liquor the quality and quantity are major factors. It is controlled by the use of tasty rice, which produces good quality Sekmai Yu. On completion of the arduous task of processing this rice wine, it tastes as smooth as vodka. The amount of alcohol content produced increases with the increase in the quality of Hamei, up to a certain limit. Hamei is a major ingredient in the making of the spirit. The poor health condition of women due to irregular menstrual flow, infertility factors, obesity, loss of appetite, low nourishment of foods is regulated through this beverage. Often compared to the Japanese Saki, this drink has 5-15% percent alcohol level.

Arak

The fiery, much-coveted Ladakhi whisky (alcohol content- 50-70%) Arak/ Araq is an alcoholic spirit. It is a clear, colourless, unsweetened anise-flavoured distilled alcoholic drink. The Persian version of Arak does not contain anise, as it is usually produced from raisins, dates and/or sugarcane. Arak is the traditional alcoholic beverage in Ladakh. Arak can also be distilled from coconut palm sap, sugarcane, coconut and red rice. Arak ranges in strength from 50-70% alcohol content. Because many varieties of Arak are completely unregulated, they often end up being the strongest and cheapest drinks available in an area. Distillation begins with the vineyards, and the quality grapevines are the key to making good arak. For a quality arak, the finished spirit is aged in clay amphorae to allow the angel’s share to evaporate and thus the remaining liquid is the most suitable for consumption.

Kiad

A local Spirit in Meghalaya (alcohol content- 70%) Kiad is another rice based alcoholic drink that tastes sweet. This popular local beer is an integral part of the social and cultural life of the ‘Pnar’ tribe of Jaintia hill district. Meghalaya’s own take on this local beer contains 70% of alcohol and is triple distilled. It is served in tall bamboo tumblers with a charcoal piece at the bottom to preserve its tart. It was introduced around the 1800s as a medicinal remedy for cuts and wounds. Due to its medicinal properties, the alcohol liquor is considered to be a powerful magical potent. The people in Meghalaya drink Kiad during naming ceremonies and babies are feed few drops too. The ritual comes out of the belief that by doing so, the infant grows to be healthy and strong.

Chuwarak

Versatile Tripuri Whiskey (alcohol content- Langi 6-8%) Chuwarak is a distilled and versatile whiskey from the state of Tripura. This intoxicant is produced through an elaborate process. Its versatile nature allows for a variety of raw materials to be used like rice, pineapple, jackfruit and local ingredients like ‘tokhiseleng’ leaves and ‘thakotor’ leaves. It is said that Tripuri alcohol is the safest in the world, as no death due to its consumption has been recorded or reported. The preparation of Chuwarak is a tedious process, and it takes almost 24 hours for preparation. One has to be very sincere and attentive during the process. There are several taboos that must be observed. Langi a variety of Chuwarak has the least alcohol content of 6-8%. It is usually drunk on social occasions of any Tripuri ceremony as a ritual.

Raksi

Important part in Sikkimese marriages (alcohol content- 5-7%) Raksi is Sikkimese liquor and has a very important part in marriages. Limoo priests consume this concoction before participating in the process of possession of souls. Drinking of locally fermented beverages and distilled alcoholic drinks is the social provision among many ethnic Himalayan people. It is clear distilled liquor made after fermenting and distilling cereals. Raksi is a stimulator alcoholic drink, which has both social and medicinal importance in the food culture of the people from the Himalayan region.

Gudamba

The local beverage of Hyderabad (alcohol content- unknown until experienced) Gudamba is a local beverage of Hyderabad. It is said to be illicit liquor made of sugarcane. It is important for one to exercise caution in procuring it because of the high chances of bogus and unauthentic content. The main ingredient in Gudamba is the infamous Black jaggery, which is a byproduct and the most impure form of jaggery. The alcohol content is quite high and one must be vigilant before its consumption.

Oasis group -The spirit of success

The Oasis Group has leveraged its experience in the alcobev busines to grow its IMFL business.

The Oasis Group of Companies started with a humble beginning by estabtishing its first distilleryry unit near Indore in the year 2001 and. since then, The Group has had a remarkable growth and. has emerged as one of the fastest growing liquor companies with five ‘State of Art’ grain based distilleies and. five bottling units of its own with a collective grain spirit productian of approximately 20 crores bulk litres per annum. The core strength of the Group is its international quality grain neutral spirit and its Indian Made Foreign Liquor Brands which have won a number of international accolades, recognitions and awards. Promoted by the Malhotra Group its founder Chairman Late Shri Omprakash Malhotraji was a visionary and an entrepreneur with a sound foresight and his only son and the present ‘Chairman Emeritus’- Mr. Deep Malhotra carries with him rich expeience coupled with sharp commercial acumen, aggression and in-depth understanding of the alcohol industry. Mr. Deep Malhotra takes keen interest in mentoring and guiding the Senior Management and it is his zest and zeal, which has helped the organisation to reach the dizzy heights. A popular entrepreneur from Punjab Mr. Deep Malhotra in his pursuit to contibute to his home town Faridkot, entered politics and was elected from the Faridkot Constituency as MLA from 2012 to 2O17. A number of welfare measures and corporate social responsibility activities were carried out during his tenure in his constituency. While Mr. Malhotra is the guiding spirit of the business, his two sons Gauravh Malhtora and Gautam Malhotra infuse fresh energy into the business and helps him in the day to day running of the company. Today the Oasis Group is a growing conglomerate having diversified business operations in the field of distilleries, hospitality, exports, government contracts and diamond jewellery.

Mr Gauravh Malhotra -The eldest son of Mr. Deep Malhotra assists his father in the Punjab retail, wholesale. and distillery operations, while his younger brother assists his father in the Delhi and Haryana operations. Both Gauravh Malhotra and Gautam Mathotra take active interest and participation in new product launches, developing new markets, marketing and advertising and social media.

Mr. Satish Sood, a childhood associate of Mr. Deep Malhotra and Mr. Trilochan Singh both Directors of the company take active participation in the day to day affairs of the company and helps the company reach its organisational goals and key result areas.

Mr. Anit Vanjani – Chief Executiue Officer of the Group is a Chartered Accountant, Cost Accountant and Company Secretary by profession with more than 29 years of financial and commercial expertise, contributes to explore new and innovative areas and is the key person in the turn around of the Group. Mr. Vanjani has been instrumental in carrying the organisation to a.’New High’.

Mr. C.S. Biju Vasudevan – Group President is a post graduate in Management (Frorn IIM) and Economics and carries with him more than 29 years of liquor experience. He has been with the Group since its inception and is a strong pillar of the Group. He has been instrumental in conceptualising, designing and introducing a. number of international quality brands. He has an in-depth understanding about the pan India IMFL markets and is in close pursuit in making All Seasons Whisky a national brand.

In recognition of the Group’s commitment for exports especially to the African region, the Association of Chamber of Commerce and Industry in India (ASSOCHAM) has recently recognised and awarded two prestigious awards for the most outstanding achievememt in food processing and the second award for the top performing SME in India – Africa food processing sector.

According to Mr. Deep Malhotra, the production of ENA will also form an important part of the business because of the Indian government’s initiative to blend petrol with ethanol for economic and eco friendly reasons. Frorn a target of 5% blending the government has raised the bar to 2O%. This underlines a huge demand for ethanol in future. Mr. Deep Mahotra also adds that while the government is giving a fair price to the ethanol manufacturers, it would also save and protect the sugar mills from financial distress. Oasis Group has also received permission to set-up an ethanol plant using molasses. We are awaiting the environmental clearance and shall immediately proceed to commission the plant at the earliest.

The Group has recently launched its flagship brand All Seasons Connoisseurs Collection Reserve Whisky, OPM Triple Distilled Luxury Spirited Russian Vodka and Oasis London High Triple Distilled Luxury English Vodka. OPM Triple Distilled Spirited Luxury Vodka has already won 19 international awards and is fast catching up to be a leader in its segment. All Seasons Whisky is blended out of Imported ‘Vatted Malt Scotch’ sourced from Scotland, and has been a run away hit in all the markets it has been launched. Presently these brands have been launched in Delhi, Punjab, Chandigarh, Haryana, Himachal, Rajasthan, Uttar Pradesh and is in the process of being launched in Madhya Pradesh, Chhatisgarh, Andhra Pradesh, Telangana and Kerala in the coming few months.

Within a short peiod of three years, the Oasis brands have established itself amongst the top three IMFL brands in Kerala and last year the company has achieved a sale of more than 1.2 million cases. Last year the Group started supplying whisky and rum to the prestigious Canteen Stores Department for supply to its esteemed Indian Armed Forces.

The group has a judicious mix of technocrats and management experts who steer the company professionally.

GROWTH DRIVERS: Expansion and constant modernisation with an eye on operational efficiencies, which has helped to reduce power and fuel consumption, improve fermentation and distillation efficiency, international quality grain neutral spirit and value for money grain based whisky, vodka, brandy, gin and rum.

CORE STRENGTHS: Pan India distribution network concentrating on high quality products, delivery and consistency. Export of grain neutral spirit worldwide, undivided focus on key business areas and has a judicious mix of short and long term business plans.

FUTURE PLANS: Foraying into untapped domestic and overseas markets, doubling production capacity with the addition of a new State of the Art distitlery in U.P. and expansions at its Punjab, Haryana and. Madhya Pradesh distillery units, thereby doubling its spirit capacity and production of country liquor and IMFL.

GOAL: Increase the market share of its IMFL brands and double its turnover in next three years. Introduction of a ‘Value Scotch bottled in origin’ for its connoisseurs, pan India. The Oasis Group is all confident in taking a giant leap forward and face the challenges with its in-depth understanding of the markets and its confidence on its world class Indian Made Foreign Liquor brands by offering its connoisseurs value for money both in terms of quatity, price, and delivery.

HipBar E-commerce Foray

Prasanna Natarajan, Founder, HipBar recounts his foray into Ecommerce after his stint of marketing his own brands in the IMFL segment.

How would you describe the Wallet for your drinks? HipBar is an RBI authorised mobile wallet that is intended for use by the legal permissible age consumer. Due to the nature of the digital currencies, it naturally lends itself to value additions in terms of remote identity and age verification, which are critical for the corollary payment and delivery services offered to liquor retailers. The fungibility of the digital currency, make it possible for HipBar to orchestrate a wide range of online collaborations and the opportunity for brands to participate in interesting consumer engagements in a digitally connected world.

What has been the progress made on the Hip Bar project till now? HipBar has made decent progress, since incorporation in 2015. After being in stealth mode for over two years, HipBar launched services in a small way in Bengaluru and Chennai. We have made advance developments in the non-consumer facing back-end technologies, and many of which is yet to hit mainstream. We are commercialising some of the solutions in the coming months.

What has been the response to Hip Bar from the industry and users? We have a fair share of the industry’s support by virtue of having over 75% of the relevant brands in the market being part of our platform. We are looking to engage and welcoming the remaining brands also. On the customers side, we have over 200,000 patrons who use HipBar in the markets we operate in and we are talking only about the pilot scale in which HipBar is functioning currently. On the fulfillment side, we have over 150 retailers who are part of our payment network. In addition, we have 200 riders delivering delight and drinks to customers in the city of Bengaluru.

What are the major problems faced from the State’s excise department? There are no major problems. Since the concept is new to India, it takes time for excise departments to process the information and start taking decisions. In any case, alcohol home delivery is not a priority area for them, but we present governments with a compelling use case. We believe in shaping their views to the reality of what’s going on around us in terms of digitisation and helping them to take the decision to support a concept like HipBar and make them feel reassured about it.

What is the nature of your tie-up with Diageo? Diageo India is an investor in HipBar and they hold 26% in the company. Diageo brands will be the first amongst equals on the platform. All brands which pay the platform fee will have access to the slots in the application and receive a bouquet of services from HipBar. Diageo India has committed to a certain volume of business independent of the investment, as an outcome of the volume commitment, they will be entitled to receive certain beneficial rates. Free market principles will apply for business conducted on HipBar. It is a platform of skill and not might. Every brand will have the same set of levers to drive business, and as such no unfair advantage is handed to Diageo India on the platform.

With Diageo’s involvement, will they be monopolising sale of their products Hip Bar? Not at all. There is no basis for such an apprehension. Diageo India understands technology, and have been gracious to understand our business and the need for it to be independent as a market place. They have world class brands, have a great franchise in India and don’t need to block anyone to win. All our brand partners who we work with us for over a year, know us to be fair and equidistant. We will continue to be just the same way.

Do you see the Hip Bar venture as the beginning of E-commerce in the alcobev space? E-commerce in the conventional sense is not possible for the category given the trade structure in India and that most governments are themselves a part of the food chain. As a business, the team at HipBar is building a healthy channel through which the industry (including the retailers) and consumers can come together for commerce and engagement in a safe and secure manner. We are creating the digital infrastructure for the industry to use for the last mile delivery and nothing more. We only want to bring in better efficiencies through technology and this enablement has a proven track record of bringing savings and dividends to those who adopt it.

How effective is the app likely to be in terms of actual sales on the ground? I don’t have a direct answer right now. In the technology world, ‘scale’ is the harbinger of all things good. After scale comes effectiveness and without it, there is no reason to exist. We are right now focussing on building scale, which is the logical first step. Effectiveness of the channel is yet to be quantified and can only come later.

How do you envisage the future of Hip Bar? We have taken the path of helping India drink wiser. We have said this before, and I say this again that our business interests will always be subservient to how HipBar is performing in the social sphere and if it is indeed bringing the intended benefits of technology to normalise the category and help people drink responsibly. It’s not good enough for us to see higher transactions bereft of positive social impact. We wish to grow carefully and diligently and hopefully play a meaningful part in the digital transformation of the beverage alcohol industry.

 

The taste of Scotch

Donald

Global Malts Ambassador for Diageo, Donald Colville, explains the nuances of Scotch and especially those of Diageo Malts.

Donald Colville, Diageo Global Scotch Ambassador – Malts, on his first visit to India is a man on a mission. Given the task of supporting the development of all of Diageo’s Single Malt Scotch Whiskies – The Singleton, Talisker, Cardhu, Lagavulin, Caol Ila and Oban, while managing the Global PR and Influencer strategy for Diageo Scotch Whiskies, he also overlooks the Diageo Scotch Whisky Education courses worldwide. He is an expert on all of Diageo’s 28 single malt distilleries and

related sites.

Donald joined Diageo in 2008 and was appointed as Diageo’s Global Scotch Whisky Ambassador – Malts in December 2010.

Growing up in Scotland’s historical whisky capital, Campbeltown, Donald has deep roots in whisky distilling as his great-grandfather previously operated the Dalintober Distillery, a supplier to the

Johnnie Walker blends.

There are six Scotch regions Speyside, Highlands, Lowlands, Islands, Campbeltown and Islay. The Highlands is the largest of the whisky producing regions in Scotland and generally produces more

full-bodies whiskies with deeper notes of peat and smoke. Lowlands is located at the southernmost part of Scotland, and is a flat region with no mountains. Scotch from this region are generally considered

as the most light bodied of the Single Malts. Speyside, is the center for whisky in Scotland. More than half the distilleries in Scotland are located in Speyside. Although geographically part of the Highlands, its unique characteristics the waters of the river Spey, which distilleries use straight from the river Spey in their production process, make the Speyside scotch the country’s most complex, and known for their

sweetness and elegant flavors and aromas. Campbeltown was once the whisky capital of Scotland. The Scotch here is peaty, and has a salty hint and a briny character. Islay, pronunced “eye-luh”, scotch is considered to be the smokiest and strongest-flavored Scotch of the single malts. Their strong flavor is believed to be due to the region’s exposure to the high winds and seas of the west coast. Island – considered by all as a region of its own, produces Scotch that can be described as a milder version of

Islay whisky (sort of like a hybrid between Highland and Islay whiskies).

Malts, responsible f Talisker, Cardhu, Lagavulin, Caol Ila and Oban, to name a few. Some of the classic

single malts in the Diageo repertoire include:

Lagavulin 16 YO Aged in oak casks for at least sixteen years, this much sought-after that’s typical of southern Islay, but also has a beautiful complexity that offers hints of sweet and malty notes.

Oban 14 YO A combination of rich sweet orange notes with a gentle smoky dryness and appetising spice distinguishes this lovingly-matured Highland malt.

Caol Ila Malt 12 YO A smoky, sea-fresh aperitif, this one comes with beautiful notes of citrus and malt from remote Island of Islay.

Talisker 10 YO Made by the sea, this is the classic stalwart of the Talisker family. A rich dried-fruit sweetness, clouds of smoke, strong barley-malt flavours, warming and intense, this one.

Singleton of Glen Ord 12 YO A fruity, well-composed liquid that manages to be both light and smooth without compromising any depth of flavour or fullness of palate. Savour the good taste.

Many of the whiskies from Diageo’s repertoire are appropriately paired with Indian food. “There is Talisker which is from Scotland with a smoky flavour which combines well with the chillies in the Indian food. There is also Glenmore which is a complex whisky and goes well with richer, spicier food that is the norm in India. In India there is a wide variety of breads and Glenmore is apt for them too,”

says Colville.

He is also the judge at the Diageo Reserve World Class Comp part of the competition are the seminars

and the training sessions that are held to improve the skills in the industry.” He also adds that there has been an unbelievable improvement in the skills of the bartenders as compared to past years. “I can see that there is a staggering difference in the learning and understanding of flavours, in the use of new modern techniques and the use of spices among the bartenders in India now,” says Colville.

IMFL. In the first six months of 2016, India emerged as the third-biggest export market for Scotch, The average age of the whisky drinker too is coming down, says Colville. From being a drink of the middle age and elderly men, there is an expanding of the net. It has now become age neutral.” It has

also helped that whiskies now come in a number of flavours and a wide variety of cocktails can be concocted which appeal to a diverse audience.

Whisky, which Colville describes as age- and gender-neutral, accounts for almost 60% of the IMFL. While India remains the whisky capital of the world, Scotch remains the world’s favourite whisky,” says Colville.

“Using single malt in a long drink or a cocktail is another way to popularise the drink,” says Colville. The idea of using a Lagavulin, a Talisker or a Cardhu in a cocktail might sound incongruous to the

whisky connoisseur but Colville says it can be a platform for creating a wonderful drink. “If you taste a Talisker Old Fashioned and a generic Old Fashioned, there is a marked difference, and that could be a start of a journey.”

Colville shows a preference for blended Scotch whiskies because they are blend of many good single malts. Our biggest-selling brands in India are Black Dog and Johnnie Walker Black Label. In single malt, it would be Talisker.” People can try different things. One has to be open to experimentation. So, the best way to consume single malt — any way you want.”

Diageo operates 28 malt distilleries, accounting for nearly one-third of the industry’s total capacity, along with Scotland’s largest grain distillery at Cameronbridge. Of these 14 are for single malts and 14 are for blended Scotches. The company’s leading brand is Johnnie Walker; the best-selling blended Scotch in the world, but it boasts other high-ranking blended brands such as J&B and Bells, along with an array of respected single malts, including Cardhu, Talisker, Mortlach and The Singleton.

There are 118 licensed distilleries in Scotland. Ninety three percent are for blending and seven percent are for single malts.

Jagatjit Distilleries set to regain its glory days

Once a formidable Aristocrat in the liquor industry Jagatjit is now recovering its lost glory and is looking forward to a new beginning under the stewartship of Roshini Sanah Jaiswal, Promoter, Chief Restructuring Officer of Jagatjit Industries. The Jagatjit story began when Ladli Prasad Jaiswal was gramted 300 acres by Jagatjit Singh, the ruler at a small place called Hamira on the road to Amritsar. Jaiswal put up a distillery there and named it after the king: Jagatjit Industries.

The erstwhile families of L P Jaiswal and NN Mohan, who acquired the Mohan Meakin from the British founders, used to rule over the Indian liquor industry before Vittal Mallya and Manohar Rajaram Chhabria took over during the 70s and 80s.

In the early 1990s, Jagatjit Industries formed a 50/50 venture with Hiram Walker and with Brown-Forman. that too met with the same fate. These partnerships were attempts by Jagatjit Industries to go premium. But as they ended the company was left with Aristocrat, with its many variants including ACP Neat and ACP Sexy, which catered to the mass market. Its volumes slid from 12.5 million cases in 2011 to 8.5 million last year and Roshini expects it to touch 9 million cases in 2016-17.

Roshini Jaiswal’s first venture was a lounge bar called 180 Proof in Bengaluru. Bars, lounges and pubs are a tough business. With the Supreme Court ruling of not permiting bars, restaurants, liquor vends 500 kms away from highways, her liquor business if feeling the heat. Demonetization qffected the business by 25 per cent and with 25 per cent of the vends along the highway this could impact the business in the short term. The ban does not address the problem of drunken driving. By restricting sale it does not mean consumers cannot get their drinks. Drunken driving is best stopped by creating highway patrols even to the tune of 100,000 by hiring people who can revoke licenses of people who break the law of drunken driving, she advocates. In places like Dubai and the US, people don’t drink and drive because they are scared of the law. No country has such restrictions. With patrols every 10 kms this could be a deterrent. The move to make Daman a part of Gujarat is also a bad move. It will kill tourism and the nation will also be seen as regressive and irrational.

At the moment, her priority is to get a full portfolio of products and brands at premium prices. Her company has taken some steps in that direction. Thus, it has come out with Royal Pride blended (Scotch with Indian) whiskey, King Henry VIII Scotch whiskey and Clan Sinclair Single Malt. While King Henry VIII is bottled in India, Clan Sinclair is bottled in Scotland. Jaiswal has also decided to make AC Black from grain instead of molasses in order to give it a premium spin. Even our country liquor in Punjab is made using grain spirits as the ENA is of good quality and molasses is not environment friendly, she emphasizes.

As part of the restructure, Jagatjit Industries also bought in international packaging house Sedley Place UK to refresh the packaging for its popular whisky brand AC Black and ACP. In addition, the Company worked with the Inver House Distillers from Scotland to improve the blends.

In the next 8 months she hopes to break even on EBITDA which is currently negative to around 35 lakhs. It would have been positive today, if there was no demonetization, she says. We have rationalized sales in markets like Kerala. The company is working on a royalty basis. Focus is on the northern markets and the distillery which is large and functional is being revamped to meet production needs. We have also built a strong team with new people, visible changes to the packaging giving the confidence to the sales teams to easily meet their targets. With diversification, reduction of costs, and the launch of new brands in the South we should meet our targets of 35 per cent and above. With 10 per cent growth we cannot reach our target of 12.5 million cases. Wiht our brands being well received this will be a critical year. Our March 2017 turnover should be around 900 crores. We hope to infuse funds to meet our last leg of growth.

Jagatjit Industries is now a household name in the IMFL sector with a particularly strong presence in Southern states of Andhra Pradesh and Kerala, in the East across Orissa, West Bengal and Jharkhand, and across India’s North and Northeastern states.

Dreaming Big

Dreaming Big

Romesh Pandita, Chairman and Managing Director, Alcobrew has always been a dynamic person and this is reflected in his ambitions. His goal continues to be among the top five by 2020.

Romesh Pandita’s prediction to be one of the top 5 companies by 2020 is on track. Althought the alcobev industry has been stung by two major policies, Demonetization and The Supreme Court verdict on highways, Pandita sees it just as a blip on his radar.

Says Romesh, Demonetization affected us for two months but now things are looking up. The Supreme Court verdict affected us late last year, but now the auction has taken place keeping in mind this policy and it is business as usual. The number of shops will come down but the demand will be the same.

In three years of its introduction to the Indian market, White and Blue Whisky has hit a sales volume of 1.5 million cases in 2015-16 but last year 2016-2017 the company touched 2.5 million cases and the coming year, Romesh Pandita predicts it will touch three million cases. We have doubled our revenue from 125 crore to 250 crore in 2015-16 and we plan to double it again to 500 crores in 2016-17. The next year we should touch 700 to 750 crores. Our commitment to produce and deliver quality world-class products has helped in earning brand loyalty from our consumers.

Gruppo Campari’s Regional Director for Asia, Brad Timbrellsaid, “It was an honor for Campari to share in Alcobrew’s “Millions and More” celebrations. Campari and Alcobrew have worked in close cooperation since 2006 and we are confident this mutually beneficial, successful relationship will continue for the years to come.”

Alcobrew’s brands are already present in more than 22 states across India and CSD. Tamil Nadu, Kerala and UP are the problem states. It’s state-of-the-art manufacturing facility located at Derabassi, Punjab was built to adhere to strict global standards provided by Gruppo Campari. This high performing manufacturing unit has significantly contributed towards creating and retaining Alcobrew’s strong presence in the domestic and international market.

Staff strength has also grown significantly to 200 employees with indirect employment at another 100 and another 200 in production and other activities.

Kay Pillay, DISTELL-MD Asia Pacific and Middle East

Distell Group strengthens presence in India Kay Pillay, DISTELL-MD Asia Pacific and Middle East, Indian by origin born and raised in South Africa is in India for the first time to raise the profile of its brands distributed by Aspri Spirits. In an interview with Vincent Fernandes, Executive Editor, Ambrosia, he says India is a very exciting market with high growth prospects. Aspri Spirits Pvt Ltd, which distributes Amarula — a premium fruit based cream liquor brand from South Africa-based Distell Group, has launched the brand in 2009 and has been growing steadily. Amarula is in the cream liquor category. It can be drunk neat or is mixed with coffee and it can also be tasted over hundred different ways, and Amarula is seen as a cocktail brand. We would like to market it aggresively on trade and off trade, says Kay Pillay. The company would like to make their brands available in hotels, restaurants and especially in retail sector as retail in India is growing very big. India is going to be the largest market of Amarula in Asia-Pacific region and would like to double our revenues in the next three to five years, says Pillay because he believes the competition is exciting and dynamic. The demographic has the right consumers and we would like to be in the right channels, with the right outlets and with the right portfolio. India will also play a great role for the growth of the wine industry, especially for wine producing countries and the producers in general. Distell is a large producer of wines and is one of the only global companies with a very broad and deep portfolio of wines. Says Pillay. Nederburg wines were also launched in 2009. Distell portfolio that are currently distributed in India include Nederburg Wines, Two Oceans Wines and Amarula Cream Liqueur. Amarula is South Africa’s most widely distributed international alcoholic beverage brand. Our wines are sold on every continent with sales of over 1.3 million cases. In the spirits segment it is also strong in apertifs that appeal to consumers across occassions, who know what to drink, where to drink and why to drink. Today its top 15 Brands generate 71% of total revenue and the top 13 are growing at 10%. Ciders continue to dominate the category buoyed by dynamic, compelling communication and product and packaging innovation. The category achieved revenue growth of 8%. Says, Pillay, “In China, we have concluded a joint venture agreement to launch Savanna and Bernini with China Haisheng Juice Holdings Company Limited, a longstanding partner and provider of our apple juice concentrate. In addition, the joint venture will build a portfolio of locally produced Chinese cider brands in the future. This is a very important step in building our long-term cider aspirations around the world.” Revenue from wine increased by 11%, with gains achieved in all price categories and in key markets. Significant players in the portfolio were 4th Street, Nederburg and Drostdy-Hof. In South Africa, Durbanville Hills put in an excellent performance, growing revenue by double digits. Spirits delivered 12% revenue growth, with brandy, liqueurs and white spirits contributing to the result, along with excellent sales from Scottish Leader in the key markets of South Africa and Taiwan, and those of their single malts offered in the US. Sales volumes for the year 2015 increased by 2,8% , while sales value rose by 9,6%, thanks to ongoing investments in brand health, creative thinking, innovation and disciplined revenue management. Most of the Group’s revenue (71,6%) is generated in South Africa. Other prospective markets include S.E. Asia, UK, China, US and Germany. Nederburg is the flagship brand in Germany, says Pillay. We are looking at the size of the opportunity in brand building, producing locally and would like to invest in markets with a 3-5 years gestation period, he adds. Most of our efforts have been directed at the mainstream and affordable end of the alcoholic beverage spectrum in our core market and the company is now increasingly expanding its focus to capitalise on the growing potential offered at the premium end of the market. Consolidation in the global alcoholic beverage industry is expected to continue. Multinational companies are rapidly expanding into Africa and other emerging markets. Distell with a market cap of US$ 3 billion raised revenue by 14.6% and volumes by 13.3% for the period, largely due to Distell’s enhanced market penetration as well as improvements in its product mix. The power brands delivered 4% volume growth achieved across all three segments: ciders and RTDs, wines and spirits, with revenue rising by 10%. The Distell Group is Africa’s leading producer and marketer of spirits, fine wines, ciders and ready-to-drinks (RTDs). While the majority of their products are produced in South Africa, they have a worldwide distribution network with investments in countries that include Scotland, France, Angola, Ghana, Kenya, Mauritius, Namibia, Tanzania and Zimbabwe. Distell created in 2000 by the merger of Stellenbosch Farmers’ Winery (SFW) and Distillers Corporation has grown to become Africa’s leading producer and marketer of spirits, fine wines, ciders and ready-to-drinks. The company is currently the 2nd largest Cider Producer in the world. The cider category was created in South Africa and their cider brands, Hunter’s and Savanna, are now readily available in many parts of Africa. we remain the second-largest producer of ciders worldwide and would be a formidable Cider producer by 2020, says Pillay. Apart from the South African-conceived and produced brands, their portfolio includes a selection of international specialty spirits brands. After acquiring the House of Bisquit in 2009, they have re-established this fine heritage cognac brand. In 2013, Distell purchased Burn Stewart Distillers (BSD), expanding our portfolio with a selection of popular and connoisseur blended and single malt whiskies. Their luxury brands achieved growth in both wines and spirits, with value up 20%. Scottish Leader is growing in southern Africa and Asia Pacific, says Pillay. Bisquit is growing ahead of the global cognac sector.Bunnahabhain, was recently ranked Distillery of the Year at the San Francisco World Spirits Competition. Nederburg was one of the most admired brands for 2016. Distell’s wine portfolio includes Nederburg, Two Oceans and Fleur du Cap brands, while its spirits portfolio includes Scotch whisky Deanston, Ledaig, Bunnahabhain, and South African cream liqueur Amarula. Distell has over 5,300 employees; 11 Wineries; 6 Distilleries; 3 Single-Malt Distilleries; 19 SA Sales Offices and 8 International Sales Offices