Love it or hate it, but you can’t ignore it! Such is the love for alcohol-beverage brands in India. In fact, as per a report by Statista, alcohol consumption in India amounted to about five billion litres in 2020 and is estimated to reach about 6.21 billion litres by 2024. In the last few years, home-grown Indian company Radico Khaitan has managed to diverse its portfolios and include brands such as Rampur Indian Single Malt, Rampur Asava Indian Single Malt, Rampur Double Cask Indian Single Malt Whisky, and Rampur Jugalbandi Series.
The company’s total income rose 28.77% to Rs 277 crore in Q2, FY24 from Rs 215.1 crore during the same quarter in the corresponding year. The profit after tax increased 27.93% in Q2, FY24 to Rs 71.9 crore from Rs 56.2 crore in Q2, FY23. In a conversation with BrandWagon Online, Sanjeev Banga, president-international business, Radico Khaitan talks about its luxury alcohol portfolio, international business besides changes in consumer behaviour post-Covid. (Edited Excerpts)
Beyond the successful performance in the Middle East and Africa, which markets do Radico Khaitan aim to tap into? What is the brand’s market share and performance in these regions?
Our portfolio spans over 100 countries, with a clear distinction between regular Indian-made foreign liquor (IMFL) brands and the luxury portfolio. The Middle East and Africa are crucial for regular IMFL brands like 8PM, Magic Moment, Morpheus, and a couple of other brands which are exclusive to the international market. The luxury portfolio, including Rampur, holds significance in the US, UK, Europe, Australia, Singapore, and Hong Kong. Despite potential sales in other markets, Rampur’s allocation is strictly restricted due to the lengthy maturation process. Of the 100 markets, Rampur is available only in around 39-40 countries. We have not even expanded in existing markets. In India, its presence is limited to only four or five states to manage global demand. Fortunately, we have tripled malt capacity and it ensures more aged malt for bottling, starting a couple of months from now. By 2024, increased malt availability will lead to expanded allocation in the Indian domestic market.
Internationally, Rampur offers seven expressions, but domestically, only one is available. However, we plan to introduce additional expressions in India, expanding the presence of Rampur Double Cask across India. Jaisalmer which is available in about 50 countries, is undergoing global and domestic expansion. Despite no ageing process, enhanced distillation and bottling capacity have facilitated increased availability.The new Gold Edition of Jaisalmer is currently exclusively available internationally.
Are you considering employing a strategy similar to major FMCG corporations, where they offer products at various price points to cater to diverse consumer segments, by introducing both Rampur and Ranthambhore variants?
Absolutely not, at Radico, we take pride in being the largest Indian beverage company with a significant global presence in distillation. Our extensive portfolio is carefully curated to cater to diverse consumer preferences across various price segments.
For instance, in the whiskey category, we offer a range that includes 8pm, After Dark, and Royal Ranthambore. Transitioning to vodka, our offerings encompass Magic Moment, Magic Moment Verve, and Magic Moment Dazzle, each targeting distinct price points. In the brandy category, consumers can choose from Morpheus, Morpheus Blue, and Old Admiral, ensuring coverage across different segments.
Even within rum, we have options like Contessa Rum and 1965. In the gin category, our portfolio boasts Jaisalmer for a touch of luxury and ultra-premium experience, alongside the recent addition, ‘Happiness in a Bottle’, catering to a wider audience within the gin market.
With this comprehensive product range, we believe there’s no necessity to introduce an economic version of Rampur. Our commitment remains to meet and exceed consumer expectations across categories and geographical locations.
How does Radico handle marketing differently between India, with its strict alcohol brand restrictions, and international markets where regulations are not that hard?
Fortunately, in international markets, there are no such rules applied, so we don’t have to follow the surrogate route. However, when it comes to different price categories, we adopt diverse marketing approaches as well. Speaking specifically about our luxury portfolio, it’s not heavily reliant on print or TV advertisements. Instead, our emphasis is on tasting sessions and master classes because there’s a need to educate consumers. Many people outside India may not be fully aware that India produces world-class spirits, so it’s crucial to provide educational experiences, allowing them to taste our products and participate in trade events.
In the international arena, social and digital media play a significant role since they help bridge the gap of awareness. Additionally, on-trade activities are much more substantial than in India, so we focus on that aspect to expand our presence in the international markets.
In India, our marketing approach is primarily focused on social and digital platforms. We also complement these efforts with various on-ground activations, such as events for Ranthambore, golf tournaments, and music festivals for Magic Moment. Additionally, we engage in strategic movie placements to enhance our brand presence.
Within the international market, which specific markets does Radico plan to focus on for expanding its market share, given the initial strategy of first catering to existing markets?
In the luxury segment, we’ve only just scraped the surface. As more malt becomes available, we will expand and; there will be more. My whole vision is to take India to the world. So, we proudly say Rampur is the only single malt that is 100% Indian. Everything that goes inside the bottle is 100% Indian, and we believe India has so much to offer to the world. That’s our objective if you look at all the expressions of Rampur that we have. Whether it’s Rampur Asava, the first single malt in history finished in Indian red wine casks, or another expression like Rampur Jugalbandi, a very Indian musical term. We’ve also recently launched the Sangam World Malt whiskey. Even the names are very Indian. So that’s what our aim is, to take India to the world.
To what extent has social media played a role for Radico, especially during the pandemic when many brands capitalised on online platforms?
Certainly, during the pandemic , social media played a very significant role. In fact, it helped in changing the drinking and consumption habits of consumers as well. As a result of Covid when people were confined to their houses, they were more on social media and the Internet, getting abreast with what was happening in the rest of the world. Also, with bars and everything closed, people began drinking at home, resulting in two noteworthy changes.
Firstly, the rest of the family realised drinking is not such a bad thing when done at home and in moderation. Secondly, people started drinking better because they were drinking less and not paying that kind of a price in a bar or a pub. They could afford to drink much superior, much better at home. It also bonded the family because you would have your drink when having dinner or whatever together as a family. So, those taboos and the negativity surrounding alcohol were reduced substantially. Also, with limited outings, people started experimenting with cocktails at home.
How has the launch of pre-mixes been received by consumers, and what has been the uptake in the market for these products?
Currently, our ready-to-drink (RTD) pre-mixes are available in only one or two markets, specifically Karnataka, Jammu and Kashmir, and Rajasthan. In these regions, the response has been overwhelmingly positive.