Now, Amrut Distilleries mulls premium rum

Written by Ajay Sukumaran | Bangalore | Updated: Oct 6 2010, 15:44pm hrs
Amrut Distilleries chairman & MD Neelakanta Rao R Jagdale is planning new blends of luxury spirits aimed for the global market. Over the past six years, the second-generation entrepreneur has been selling in Europe the single malt whiskeys distilled and matured in Bangalore, something that was hardly known locally till a British expert last year rated his latest product Amrut Fusion as the third best whiskey of 2010.

The whiskey, which has Scottish barley and grain from Punjab, has since been introduced in the US, Japan, Taiwan, Australia and Singapore, where Jagdale expects to sell at least 7,000 cases this fiscal.

It was well appreciated in almost all the markets that we have launched, Jagdale said. We can easily double our capabilities in the next three years for sure. We can go to 15,000 cases. The company also expects to sell 1,000 cases of Amrut Fusion in Bangalore where it started retailing at Rs 2,000 a bottle this year.

Globally, single malts whiskey from a single distillery constitute a small percentage of total whiskey sales which is dominated by blended whiskey. In India, retail sales of the niche whiskey category would be less than 5,000 cases dominated by brands such as Glenfiddich, said Siddharth Bannerji, MD, Kyndal India, a liquor distributor.

Indian single malt is rather akin to the Japanese single malt. It is an experiment which is going on, Bannerji said, adding the Japanese whiskey as a segment had established itself over some 50 years.

It has taken us 30 years to come to where we are, said Jagdale, adding that Amrut began working on malt whiskeys since the 1980s. By the mid-1990s we knew we had a product which was fairly good for the international market. But still, we had to get through the marketing barriers and a psyche barrier. That was a bigger challenge. The company, which currently has five single malts in its portfolio, is looking at creating more varieties of the luxury drink by experimenting with different finishes.

We would be happy if it sustains itself as a segment which I think it should. It is heading towards it, he said, adding that it was very expensive to mature whiskey in India because of the warmer climate. "In the best of the climates like Bangalore, we have considerable losses reaching to 10% to 11% a year which doesn't make it cost effective to mature it beyond 3.5 to 4 years."

Meanwhile, he is toying with the idea of developing a premium rum aimed at the international market, probably even a fusion of Caribbean and Indian rum. We are working on it, but it will take time.

Still, sales from malt whiskeys will be just a minuscule fraction of the Rs 160 crore revenue Amrut Distilleries will achieve this year, a growth of around 10% over the past year that will be driven mostly by local sales of its Indian liquor brands such as Old Port Rum and Silver Cup brandy.

Currently, the company's biggest presence is in Kerala and Karnataka while some 20% of revenue comes from supplying to defence canteens. Jagdale, however, is banking on the luxury spirits to give the company an international presence while it grows revenues from its local brands by expanding into newer states. We would like to have a better civilian presence in other markets like Tamil Nadu which is a large market, Jagdale said.