Liquor makers move to premium brands for higher margins

Balaji Narasimhan Bangalore | Updated on August 02, 2012

Faced with stagnation in the regular liquor category, many manufacturers are moving to premium segments to get better margins.

“While premium and semi-premium segments are growing at 20 per cent and 15 per cent respectively, the regular segment is growing at only 5 per cent,” Ahmed Rahimtoola, Vice-President, Marketing, Allied Blenders and Distillers, said.

In fact, the country’s largest liquor maker, United Spirits’ results for the first quarter this fiscal reveal that regular liquor declined 6 per cent to 19.6 million cases for the same period last fiscal while prestige, premium and scotch categories grew nearly three times to 7.96 million cases. For the same period, Radico Khaitan’s premium brands’ volume grew 21 per cent.

Rahimtoola said that his company will launch a new premium brandy next month to cash in on the growing market for such products.

Amit Dahanukar, Chairman and managing director, Tilaknagar Industries, said that premiumisation has helped his company to grow in the last few years. “We have grown at a CAGR of around 40 per cent in the last five years because of our focus on the semi-premium and premium segment. In fact, around 60 per cent to 70 per cent of our turnover comes from this segment.” He attributed this to the fact that liquor is an aspirational category.

V Ravindran, Vice-president for sales and marketing, Amrut Distillers’, said that the company cannot even meet 10 per cent of the total demand for single malts, a premium product.

Published on August 02, 2012

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