Three global spirits giants – Beam Suntory, Brown-Forman and Bacardi – are collectively introducing more than a dozen new brands in the premium whiskey segment in India, world’s largest whiskey consuming nation.
While these three companies are among the biggest distillers globally, their offerings are mostly limited to premium products or imports. Diageo-controlled United Spirits, which sells local whiskey McDowells as well as Johnnie Walker, is the biggest player in the spirits market and holds 33.4% of the Indian scotch and whiskey market by volume.
French rival Pernod Ricard commands 24% of the market with brands such as Royal Stag and Glenlivet, according to International Wine and Spirits Research (IWSR). Even within the premium segment, Diageo and Pernod Ricard control more than 70% of the whiskey segment.
“The whisky category is large and in growth. Consumers are increasingly opting for quality over quantity and prefer blends that appeal to the Indian palate,” said Neeraj Kumar, managing director, Beam Suntory India, which recently launched Yamazaki, Hibiki, Oaksmith Indian whisky and Roku gin.
Suntory, the world’s third largest spirits producer, said these new brands will benefit from the distribution and customer partnerships serviced by Teacher’s and Jim Beam for the past many years.
While India consumed 212.7 million cases of whiskey in 2018, imported whiskey accounted for about 2% of the overall consumption by volume as Indian-made foreign liquor dominates the segment with relatively low price-tags.
India’s alcoholic beverages industry is heavily regulated, with high excise and taxes imposed in most states, making it an important source of revenue. Additionally, import duties on foreign wines and spirits exceeds 150%, making them three to five times pricier than elsewhere in the world.As a result, many companies launch their products at duty free to gauge consumer responses. For instance, Brown-Forman recently launched Woodford Reserve Baccarat Edition, Woodford Reserve Double Oak, BenRiach scotch and Jack Daniel’s Bottled-in-Bond Tennessee whiskey at Indian duty free before introducing them at retail shelves and bars.
“It is more like an extension of domestic consumption. So it makes sense to seed some of the products to the duty free route where it is more affordable. And therefore as we see responses building up there, we take calls of judgment if it’s mature to come back and look at our domestic launches,” Siddharth Wadia, who was recently elevated as general manager of India, Middle East and North Africa, at Brown-Forman Corporation.
Despite slowdown in the overall spirits segment, companies, especially selling either imported or the pricier bottled in India (BII) spirits, said their business has remained insulated in the country where 19 million people are becoming eligible for drinking every year. And newer launches are not just restricted to whiskey.
Bacardi, maker of the eponymous white rum and the world’s largest privately held spirits company, said consumers are trading up to premium liquor across categories. “India is a huge market and is significantly shifting towards premiumisation. Given the whisky market in India, our premium and super premium portfolio gives us a competitive edge to win with this audience,” said Bacardi, that will launch single malt and Aultmore 12, Bacardi Reserva range – Anejo Cuatro aged 4 years, Diez 10 year aged rum and four new variants for Martini sparkling wines and vermouths in India.