Consumption of spirits is about aspiration & lifestyle statements

Written by Kakoly Chatterjee | Updated: Jan 30 2010, 05:55am hrs
Radico Khaitan chief operating officer (COO) Raju Vaziraney discusses growth plans, new initiatives around his brands and new launches with FEs Kakoly Chatterjee. Radico Khaitan, the second-largest spirits company, posted a profit of Rs 11.52 crore in Q3 of FY 09-10 compared with a loss of Rs 6.80 crore in the corresponding quarter of FY 08-09. Revenues grew by 29.03% during the third quarter with total sales of the company during Q3 of FY 09-10 were registered at Rs 316.26 crore compared with Rs 245.11 crore during the corresponding period of FY 08-09.

How is Radico Khaitan and its mainline brands doing

We are looking at a growth of 20% for both the topline and bottomline. Our mainline brands that include 8PM, Magic Moments, Morpheus, Old Admiral, Contessa are growing at 19%.

Are there any new investments in the offing

For the next two years we dont have any plans of any capex expenditure. We are done with major capex investments when the Rampur brewery came up.

At present, what is your focus

Our main focus at present is to build brands and strengthen them. Magic Moments vodka has reached the million mark during the last financial year and during the first three quarters of the current financial year we have already sold one million cases. While the vodka segment in India is growing at 14%, we are growing by 35% in the vodka segment at Radico Khaitan. So, we are driving the growth in this segment.

What is the initiative around your vodka brand Magic Moments

We are treating Magic Moments vodka and its flavoured remix version as separate verticals in terms of product placement. The remix has six flavours orange, green apple, lemon grass and ginger, lemon, raspberry and chocolate. When it comes to the consumption of spirits aspiration plays a key role and it is not just about drinking, it is also about making a lifestyle statement and the flavoured versions are priced slightly higher (around 20%). So, our target group is different for Magic Moments and Magic Moment Remix.

Can you chart the growth of Old Admiral brandy

While the brandy market in India is growing at 31%, Old Admiral, our flagship brandy is growing at 47%. It has reached the million mark in 2006 and by the end of this fiscal we will reach 2 million cases with this product. Tamil Nadu and Karnataka have been our traditional markets for Old Admiral. With new markets opening up for us like Andhra Pradesh it has provided a big boost to sales because this market currently drives 50% of volumes.

What is the sales target for your flagship whiskey brand 8PM

Back in 1999, we had already reached the million mark with this product and by the end of this fiscal we are going to reach 4 million cases with 8PM. By increasing the width of distribution by being present in most of on trade and off trade outlets we have increased sale of products.

What are the other measures you have used to boost sales of your products

We keep the MRP of our products slightly higher than our competition so that the retailers and distributors can take better margins. This is an incentive for them to keep our products as well as push them. It is also important for us that we are visible at the place of consumption. So, we go for signages on shop boards, logos and danglers both on trade and off trade.

What are the international brands you currently have in your portfolio

Currently we import Carlo Rossi from the E & J Gallo stable and sell it in India. There are five varieties of Carlo Rossi which include red, white, chardonnay, cabernet and red muscut. We have decided on Californian wine rather than French wine because it has a sweet, fruity flavour which the young consumer of our country appreciate. We have sold one lakh bottle of Carlo Rossi in the last fiscal and by the end of this fiscal we are planning to double its sale.

Any new brands you plan to launch in the near future

Early next fiscal we will launch a new whiskey in the premium segment.

Any new tie-ups or acquisitions on the anvil

We are looking at only organic growth at present.