Diageo India, the local arm of the world?s largest liquor company, is stepping up its sales and marketing push riding on 22% volume growth in the year ended June 2014. It has also benefited from a sales promotion agreement with United Spirits, the country’s biggest spirits firm, in which its parent has acquired 54.78%. With the recent launch of Smirnoff Black vodka and focus on driving core brands, Bhavesh Somaya, marketing and innovation director, Diageo India, tells Ajay Sukumaran that the aim is to grow in double digits again this year. Excerpts
It seems a lot is happening at Diageo India this year, from new launches like Smirnoff Black to a more aggressive sales focus. What has changed?
There is a definite focus on marketing and on ensuring that we are pursuing all the categories. We are also ensuring that we put enough and more resources and activities behind each of those. We have aligned our portfolio strategy.
Since November 2012, the public focus on Diageo has been in connection with USL. Does the change have to do with the fact that the USL acquisition is over and you have a better distribution agent?
To answer you honestly, that is not the case. Of course, the whole Diageo-USL piece is a different story. I have been here for six years and there was a substantial amount of work in terms of redefining and realigning our strategy, and we are now pursuing that.
Overall, we have driven the premiumisation of our portfolio, so, clearly, the kind of growth and market share we have seen in our Scotch brands is quite amazing. We have beaten competition. We are consolidating the investments behind our core brands and are clearly focused on ensuring that our brands are changing their focus. We are talking to consumers far more frequently than we used to. And all of this is helping us drive a much healthier business and a much more consistent performance year after year.
What are Diageo India?s core focus areas?
We have four flagship portfolios. Apart from Johnnie Walker and Smirnoff, we have a ?bottled in India? scotch portfolio led primarily by VAT 69, though we have a secondary brand, Black&White. But our focus is on the VAT 69 brand, and on building it to be a big recruiter in the category.
The fourth is the reserve category, which includes our malts, where we have three key brands ? Singleton (leading the malts agenda), Ciroc (ultra premium vodka) and Johnnie Walker Blue.
What?s your aim for the year
in terms of winning market share?
We operate literally in the top 1-2% of the market. It’s an established fact that Smirnoff as per the IWSR 2013 report is the leading brand
in the premium vodka category,
and the idea is to increase its share further. Within the regular scotch portfolio, which forms the belly of the scotch market, the idea is to leverage VAT 69 to gain share and drive growth. Johnnie Walker Red Label and Black Label are already leading brands in the deluxe and standard portfolio.
We will be looking at robust double-digit growth again.
How is premiumisation playing out in smaller towns?
Over the years, we have also been driving growth by expanding into tier-II and tier-IIi towns and building muscle there. Smirnoff, for example, is our most widely available brand today and that’s happened in a gradual manner. There’s still more opportunity to grow. We also tried and understood the SKUs that work in some markets. For example, the
North is a typical 750 ml market whereas the South is a small-serve market. Smirnoff is present across the range and has a 1-litre bottle as well. We have 750-millilitre, 375-ml, 180-ml and 60-ml bottles for VAT 69.