With millennials leaning towards fresher and lighter tipple, Heineken recently launched their Heineken Silver Draught beer in Maharashtra with the aim to make it available in other States soon. In an effort to educate the industry and the consumer, they also hosted a Star Serve programme that teaches the five steps on how their fresh draught beer should be served. Jacqueline Van Faassen, Head of International Premium Portfolio, Heineken India spoke to Bhavya Desai and Vincent Fernandes about the launch and plans moving forward. Excerpts:
The launch of the Heineken Silver Draught beer marks an important milestone for both, Heineken and United Breweries, who’ve been in India together since 2019. But while Heineken is a popular premium beer amongst the consumers, Van Fassen felt that the company was still missing on the draught experience, considering the trend where younger consumers are looking for a more fresher and lighter beer.
Heineken’s Global Draught Master, Frank Evers demonstrating the Five Star Serve Experience
The beer is already popular and available in the global markets and gets its freshness from utilizing natural ingredients like its A-yeast and 100% malt. And the brand is hoping to have similar success with the product in India as well.
Hence they launched the new Heineken Silver Draught beer with the initial launch market as Mumbai, Thane and Pune, which will be supplied from their Taloja factory with an aim to expand to the other States soon, most likely Karnataka once the draught is started brewing there. Apart from Taloja where most of the Heineken beer is manufactured, the company also has brewing plants in Telangana with development underway for another brewery in Mysore, Karnataka.
But what’s interesting is that Heineken is not only looking to capitalise on their new product but also are making efforts to educate the bartenders on how to serve the beer, thereby hoping to educate the consumer touchpoints and the industry as a whole. “This week we educate 400 bartenders on how to pour Heineken draft beer. This includes 200 today in Mumbai and another 200 bartenders in Pune later this week. They are important stakeholders for us since they make sure that bring it to consumers in the best way,” says Jacqueline.
The training programme was led by Heineken’s Global Draught Master, Frank Evers, which includes the five step serve process to give the consumers the best experience of the tipple. The steps include cleaning the glass with cold water, pouring it at a 45-degree angle with the right amount of foam and finally skimming the extra foam off. The foam protects the CO2 keeping the oxygen out making the beer fresh for a longer time says Evers. What’s also unique to the beer is its brewing process, which is horizontally fermented as compared to the other lager beers which are brewed vertically.
But while serving the beer at the right temperature and with the steps seem interesting, whether the end consumer on-trade is really partaking at these points remains to be seen. But Van Fassen is confident that with the programme and efforts to educate the bartenders, once the consumers are served the beer correctly, they will identify with the quality and freshness of the product. Jacqueline is also aware of the potential of the draught beer category as a whole with a huge market that can be tapped on. She also states that the plans are that unleash the draught beer across India as soon as possible. And to do that they are focusing on activities like partnering with popular sports events like Champions League football. Recently the brand also hosted the F1 races across bars in Mumbai to further build on that social recall.
As the industry moves towards sustainability, efforts are being made by global giants to get Carbon Neutral. While majority of this push is still focussed on packaging, SOURCE Global, a Bill Gates funded Public Benefit Corporation is harnessing the energy from the Sun and converting it into premium drinking water. SOURCE has already worked with Diageo on their product Godawan Whisky. In an interview with Ambrosia, Manu Karan, Sr. Vice President, Business Development, Middle East & South Asia, SOURCE Global, PBC speaks about the technology, the products in the industry and more. Excerpts:
What is the SOURCE Hydropanel technology and how does it work?
Access to safe, clean drinking water is a fundamental human right. That’s why SOURCE is on a mission to perfect drinking water for every person, every place, regardless of their location or socio-economic status.
Rather than extracting water from the earth’s water table, SOURCE Global’s technology – called the Hydropanel – uses the sun to draw pure, endlessly renewable water vapour from the air and transform it into premium drinking water. Solar photovoltaic-powered fans draw air into the Hydropanel, where a proprietary material absorbs pure H20 molecules and then releases them as water vapour. The off-the-grid technology creates optimal conditions inside the panel to condense water vapour into liquid, which is collected in an onboard reservoir, mineralised with calcium and magnesium, and delivered to homes, businesses, and bottling operations using flexible piping.
With this one technology, we are creating a renewable, sustainable source of drinking water – virtually anywhere in the world – for conscious consumers, communities that have no access to safe water, and companies looking for sustainable solutions. Here in India, SOURCE water will serve as an ingredient in Godawan, Diageo’s artisan whiskey. Godawan will be the world’s only whiskey made with water tapped from the sky and harvested using the sun, all in support of the Diageo’s commitment to sustainability and the Rajasthani ethos of “beauty in scarcity”.
Ground water and borewells globally are not in a good condition and India is not different. What sets SOURCE apart?
While climate change and contamination challenge the world’s freshwater resources, we’re tapping premium drinking water from an abundant and endlessly renewable resource. SOURCE starts pure, stays pure, and is balanced with the perfect blend of minerals for health and taste. We make drinking water locally, for the people and places that need it most, ending the need to treat water, package it in single-use plastic bottles, and transport it from far away. With Diageo we are stewarding industrial water to be used in the production of the artisanal whiskey, all while, alleviating stress on the local ground water and borewell sources.
What is the estimated installation site for the panels? For instance, for the 27,000 litres that you have put up for Diageo in India?
The SOURCE system is infinitely scalable, from single homes to entire businesses and communities, and we design water farms and arrays to meet unique customer needs. The water farm (similar to a solar farm) that supports Diageo’s artisanal whiskey production will be in Alwar, Rajasthan. Initially, the installation is expected to generate 9,000 litres of water within the first six months and will further scale up to produce around 27,000 litres of water per month after a year; in around 2000 sqm area.
How cost effective is this process? Also tell us the sustainable aspect of the Hydropanel?
SOURCE is revolutionising everything we know about drinking water. The system is powered by the sun and taps into a constantly replenished resource, making it an efficient, entirely renewable technology. There are no pumps, pipes, electrical lines, treatments plants or processes like desalination, which requires 10-13 kilowatt hours of energy for every 1,000 gallons of water produced, creating significant costs and carbon emissions. This is truly renewable drinking water infrastructure that replenishes, rather than depletes, our natural resources, which is aligned to Diageo’s Society 2030: Spirit of Progress plan. The same infrastructure is used to offer a premium, great-tasting sustainable whisky.
Our internal studies from existing projects across the world have shown that a project of this size – 27,000 litres/month – would directly reduce over 19.4 million litres of water extraction over its lifetime, and indirectly displace the use of more than 4.8 million single-use plastic bottles over 15 years.
What happens when there are issues of sunlight?
The Hydropanel is based on solar technology, which means that it performs the best when the sun is shining, like in the sunny Alwar region – where Godawan whiskey is made. But the system is also designed to work across a wide variety of applications and climates, making it unlike any other drinking water technology.
What is the life of Hydropanels and what kind of maintenance do they require? Can the locals be trained in operating and maintaining?
We created our technology, and our business, to serve everyone who needs quality drinking water, whether they live in a water-stressed community or are looking for premium, renewable solutions. We offer a low-maintenance, long-lasting solution with a 15-year lifespan. Around the world, we hire and train local people to operate and maintain our water farms, creating not just a sustainable source of drinking water, but also local jobs.
In how many countries are you operational and are governments looking at this technology to address water needs in water-stressed geographies?
In 52 countries, we work with consumers, governments, national and international NGOs and businesses of all sizes.
SOURCE is incorporated as a Public Benefit Corporation and in India, on example is our installation at the Zilla Parishad Primary School Kolpimpri. This project was born out of the Village Social Transformation Foundation’s work to bring access to clean, drought-resistant drinking water to school children, and is part of the local government’s initiative to align villages in Maharashtra with the UN’s Sustainable Development Goals.
The company also creates drinking water for businesses looking to reduce their water extraction, or that work in places where clean water is scarce, must be trucked in, or is available only in single-use plastic bottles.
Does the water tapped through this technology elevate the ‘whisky’ per se?
To support, Diageo’s commitment to sustainable, luxury products and experiences, we’ve provided technical expertise that complements Diageo’s artisanal brand and serves as a powerful representation of Diageo’s deep commitment to sustainability.
Why did you think of using SOURCE as against the soft water that is traditionally used for making whisky?
At Diageo, we have a responsibility to grow our business sustainably from grain to glass. Our partnership with SOURCE Global, PBC will help produce premium water which reflects the unique terroir of the region while saving groundwater which is aligned with the craft philosophy of born good, made good and serve good.
How is SOURCE supporting you on the sustainability mission? Are there plans to implement SOURCE water in other brands.
‘Society 2030: Spirit of Progress’ is our 10-year ESG action plan to help create a more inclusive and sustainable world. We have set ambitious targets aligned with the United Nations’ Sustainable Development Goals including accelerating to a low-carbon world and preserving water.
Since SOURCE Hydropanels also operate off-grid and without electricity or traditional piped water infrastructure, it will help reduce the carbon emissions associated with treating and transporting potable water. In addition, it will help us take a step forward in our sustainability journey by saving groundwater and being a part of the solution in water-stressed geographies. Godawan will be the first beverage alcohol brand to use SOURCE water and we will explore brand synergies and consumer preferences.
With the industry and consumer moving towards a more eco-friendly and sustainable future, alcobev manufacturers have also initiated their move towards reducing their footprint. As one of the biggest stake holders in the industry, Pernod Ricard also recently announced its move towards the removal of mono cartons from its brands. But how does the company intend achieving this? Bhavya Desai spoke to Kartik Mohindra, Chief Marketing Officer, Pernod Ricard India about it and more. Excerpts:
What are the current trends in the Indian Alcobev market?
The alcobev industry is dynamic in nature and new trends emerge every six months, but 2022 witnessed disruption and innovation in more ways than one.
While premiumisation has consistently been a key trend over the past few years, it will continue in the coming years, but not in isolation. Consumers are slowly moving towards eco-conscious choices and are seeking brands and products that bolster a sustainable impact on the environment and planet. This has nudged the industry at large to evaluate its impact on the environment and integrate sustainable practices into their businesses.
Low-calorie drinks and lower alcohol by volume (ABV) spirits are likely to see a surge in demand, as we see this trend currently growing. To cater to the growing demand for low alcohol drinks, especially for our health-conscious consumers, we recently introduced a non-alcoholic wine ‘Jacob’s Creek UNVINED’ in two variants to further build the category. There is a palpable consumer attraction across India for these categories and Tier 2 cities represent an additional robust source of growth.
Digital disruption backed by new-age technological innovation will continue to enable and enhance consumer engagement. On-ground consumer experiences today have become more immersive, which enable brands to curate personalised and customised opportunities for consumer engagement. In the years to come, the metaverse will also dominate as a key trend for consumer engagement.
What is Pernod’s outlook for India in 2023? Any plans to expand product offerings etc.?
India is a winning market for Pernod Ricard, globally. Innovation is at the core of Pernod Ricard – across all functions and initiatives and we will continue to invest in insight-led innovation to enhance consumer experiences.
As part of an industry wide initiative, Pernod has also announced its sustainable approach recently. However there haven’t been specifics on the details. Can you tell us more about this initiative?
At Pernod Ricard India, we continue to strive towards a circular future, with people, planet, and community at the core of our business. Resources are finite and over the years, we have taken so much from the planet. We feel now it’s time for us to give back to the environment.
Keeping this in mind, we are aiming to lead by example in the industry with #OneForOurPlanet, which is a significant step in achieving our commitment towards zero waste to landfill contribution for permanent mono cartons by 2030. With this, we commit to remove 100% permanent mono cartons from our packaging across our brand portfolio.
We strive to be sustainable and responsible at every step, from grain to glass and are responding with agility to global ecological challenges with this major environment-first initiative.
We have introduced innovative ways to offer convenience to consumers as well as build awareness through recycled and recyclable neck tags along with QR codes in several markets, that will redirect consumers to a micro-site solely created around #OneForOurPlanet. Using an integrated approach through new-age channels of communication, we aim to raise awareness around the positive impact of this initiative.
We believe in ‘responsible hosting’ which entails ‘responsible retailing’ and ‘responsible consumption’ practices. Our customers are receptive to change and are helping us amplify this further. Together we can make a significant difference and we trust that our partners and customers will help us pave the way for a better future!
Are there specific products/category that will be focussed on initially? Could you give us a phased timeline on the same?
Since 2020, we have been working on pilot projects to test consumer acceptance on the removal of permanent mono cartons. In May 2022, we finally decided to integrate this into our business in a phased manner, starting with IMFL brands. The key challenge now is how to address the assumptions that exist with respect to packaging in the alcobev industry. Consumers typically would associate mono cartons with luxury and premiumness, which becomes a critical factor when deciding what alcohol to buy.
#OneForOurPlanet was a bold move for us, especially with regard to taking that extra effort in changing consumers’ mindsets towards responsible consumption. And, with the way and the kind of agility we are moving ahead, we are confident to complete the removal of mono cartons by June 2023 or before.
What is the current market share for your Strategic Local Brands? Could you give the percentage of growth in 2022 for the Strategic Local Brands and forecast for 2023?
Royal Stag is Pernod Ricard India’s leading brand and the group’s largest by volume. It has the largest market share in the deluxe whisky category with volumes sales of 25 million cases in 2022. Imperial Blue, one of the world’s best-selling whiskies, is our leading brand in the value segment at 24 million cases sold during the period Jul’21-Jun’22 (Market share: 34%, YTD Jun’22).
Could you share details of import of your international brands into India?
We are globally strong and locally relevant. Our focus has been on developing world-class whiskies, gins, vodka, rum and engrossing wine culture in India, by successfully bringing global products to India and catering to the evolved preferences of the new-age Indian consumer. New innovations for us cater to the market in terms of products and experiences that tap into key category trends. Some of the recent premium innovations that we’ve launched in India include Havana Club 7, a super-premium rum and Jacob’s Creek UNVINED range which is non-alcoholic range introduced in two varietals – Riesling and Shiraz, with 50% less calories than regular wine of the same varietal. We also introduced super-premium Japanese and Italian gins – KiNoBi and Malfy respectively. Another recent addition was the launch of Ballentine’s 7YO Bourbon Barrel Finish Scotch whisky.
There seems to be an uptake in consumption of international brands in India, despite high import duties. Thoughts?
The uptake in the Indian economy combined with a strong propensity towards drinking less, but better brands leads to a belief that FY23 will also be another positive year for both our IMFL (Indian Made Foreign Liquor/BII) and imported brands portfolio, which are well-positioned towards the premium end of their segments, in keeping with our long-standing focus on premiumisation. This trend has been further amplified by a few states adopting a progressive policy towards imported products leading to greater consumer affordability.
India is a ‘structured’ premiumisation story. The kind of and the quality of growth we are witnessing, is unlike anything we have seen before and it’s happening differently for different categories. We are focussing on deepening and enhancing consumer experience through our premium portfolio of products and initiatives.
What are the major challenges of operating in India, apart from taxation? What can the government do to ensure that ‘ease of business’ is a reality?
The alcobev industry is one of the biggest contributors to the government exchequer and requires policy and regulatory support to the same extent as other industries in the country. The industry operates under stringent regulations and arduous licensing process, which impacts the ease of doing business. Single-window clearance for all documents relating to alcobev production, updating IT infrastructure and streamlining various state-level bureaucratic processes are, therefore, the need of the hour. Furthermore, it would help if annual registration processes were further streamlined. For instance, if there are no changes in labels and pricing, they should be deemed approved after successful payment of fee. Further, a deeper and wider expansion of the retail universe to cater to emerging cities will lead to greater efficiencies and revenue growth for the state exchequer.
What products do you export out of India and to which countries? What is the growth like and the reasons for growth (besides Indian diaspora)? Also, could you let us know the markets that you are planning to enter?
Globally, our products are relished in over 50 countries with a volume of more than 2 million cases annually. We are looking to grow at a CAGR of 15% over the next three years. Strong growth is projected from Sub Saharan Africa and the South East Asia region. Our vision is to establish Pernod Ricard India’s Seagram’s portfolio as a world leader by creating the best brands and experiences for the middle-class and affluent consumers. The growth levers for our strategy are scaling up consumer base in existing markets, expanding portfolio via innovation, and targetting strategic whitespace expansion.
Our strong portfolio of Seagram’s brands includes Royal Stag, Blenders Pride and Imperial Blue.
There seems to be an emphasis on premiumisation, could you substantiate in the Indian context what that would mean?
The last few years have seen premiumisation as a dominant trend in the alcobev industry. Consumers today are seeking ‘value’ and ‘convenience’ more than ‘volume’ and this defines the shift in consumer behaviour as well as their enhanced expectation from brands. Besides this, the pandemic led to a rapid transformation in consumer behaviour by breaking down societal barriers and taboos. Today, consumers have gravitated towards self-indulgence leading to premiumisation and a boom for our higher end brands like Chivas Regal, The Glenlivet and Royal Salute. In fact, with house parties becoming the norm and the cocktail culture further gaining popularity during at-home consumption, our premium offerings such as Absolut and our Gin portfolio led by Monkey 47 and Beefeater have truly become at-home bar staples.
Premiumisation will continue to be a key trend as consumer preferences evolve in line with growing disposable incomes of the millennials and as they adopt global trends.
Tell us about your sustainability journey in India? Specifically, the W.A.L initiative on how it has impacted lives and your company?
Sustainability isn’t new to Pernod Ricard’s operations in India. As a responsible corporate citizen present in India for over 25 years, sustainability is the key to Pernod Ricard India’s operations. The company continuously works towards an enriched value chain that is committed to supporting the UN Sustainable Development Goals, ensuring that our business is aligned with the ‘World’s to-do list’ to help reach prosperity for the planet and its people.
The four pillars of our roadmap – Nurturing Terroir, Valuing People, Circular Making, and Responsible Hosting – address all aspects of our business from grain to glass. We are consistently working towards water stewardship to save, store and replenish water, especially in our plant locations, with a stakeholder inclusive approach. We are water positive in our operations with replenishment strategies at extremely high-water risk sites.
With our CSR Programmes on W.A.L (Water, Agriculture, Livelihoods) vertical, communities in water-stressed areas have adopted a circular approach and eventually have become more resilient in their approach to water use while increasing their disposable income.
