The Hindu Business Line : Liquor companies bet big on premium range

New Delhi, Oct. 17 Despite rising material prices and ban on advertisements, liquor companies are looking to increase their sales this festival season. The companies are devising strategies to maximise revenues through promotional activities, introducing premium products and improving on packaging to heighten visibility.

“Prices of high-end Indian Made Foreign Liquor have risen by nearly 30 per cent in certain States such as Maharashtra due to revised excise duty structure. Input costs such as molasses prices too are witnessing a spike at Rs 4,200 a tonne. This is a dampener while introducing new products and converting consumers to buy premium range,” Mr Amrit Kiran Singh, Chairman, International Spirits and Wines Association of India, Vice-President and Area Director, Brown-Forman Worldwide, told Business Line. He said the festival period from October to January accounts for as much as 50-60 per cent of sales for any manufacturer.

“There has been tremendous pressure on liquor companies to keep prices down even while introducing premium variants. The Government should rationalise tax structures to ensure that festival seasons become profitable by helping consumers to buy good quality products,” Mr Singh added.

United Spirits, a part of the UB Group, too is raising a toast to the growth in young consumers opting for premium brands. The company, which recently introduced multi-grain, multi-distilled vodka Romanov Red, is hopeful of notching up at least 20 per cent market share by the end of this fiscal.

“The premium segment in vodka has not been well represented unlike other liquor segment. There is a huge demand from the segment and we are looking to bridge the gap by introducing newer variants,” Mr Debashish Shyam, Assistant Vice-President (Marketing), United Spirits.

Mr Shyam had earlier said the company is hiking its marketing budget by 25 per cent to leverage on this emerging segment besides ramping up its vodka segment.

It has also introduced a shrink sleeve packaging to heighten its visibility.

PROMOS & EVENTS

Most companies are trying to reach out to consumers through various promotional activities and event-based campaigns in the face of a ban on surrogate advertisements.

“We believe there will be a 20-25 per cent spurt in sales during the forthcoming festival seasons. Our strategy is to create brand awareness through club promotions and corporate gifting. Freebies, too, will be given to consumers in the premium end category which is the fastest growing segment for us,” Mr Harish Moolchandani, CEO, Indian Subcontinent, Beam Global Spirits and Wines, said.

SECOND RUNG CITIES

Besides metro cities, liquor companies are also wooing consumers in the tier-II cities such as Ludhiana, Patiala and Coimbatore with their offerings.

Singapore-based Asia Pacific Breweries and the makers of popular beer brands such as Tiger Beer is also going aggressive in promoting beer as an all-time drink for youngsters and also women.

“All premium beer is mild and therefore suitable as a refreshing drink. Our marketing activities will be intensified during the festival time and we are looking to have a pan-India presence by the end of this year,” Mr Aniq Khan, Business Manager, Asia Pacific Breweries, said.