Pernod Ricard India, that sells a range of alcoholic beverages such as 100 Pipers, Blenders Pride, Chivas Regal and Ballantine’s whiskies, Absolut vodka and Beefeater and Money 47 gin, among others, is rolling out several brands in the country. On the cards is a new homegrown whisky brand Longitude 77 as well as new gin and wine brands from its international portfolio.
Although the liquor firm’s licence to do business in Delhi has been cancelled owing to an ongoing investigation over alleged violation of the state’s liquor policy, it’s Blenders Pride Reserve Collection sold one million cases between June 2022 and July 2023. Kartik Mohindra, chief marketing officer, speaks to Storyboard18 on emerging consumer trends and why whisky remains the country’s staple alcoholic drink.
Edited excerpts
Pernod Ricard acquired Seagram’s India business 20 years ago with brands like Imperial Blue, Royal Stag, 100 Pipers and Blenders Pride. With Blenders Pride Reserve Collection selling a million cases a year, is it true that only the whiskies portfolio has scaled?
The best way I can describe this is that on a flavour palate preference basis, India remains an out and out whisky market. Easily 65 percent of all alcobev sold in the country is whisky.
This emanates largely from two aspects. One is, the historical palate preference of the Indian consumer. Also, whisky, in general, offers many expressions, caters to different price points and consumers. You have also had virtually every player investing in the category because that’s where the bulk of the businesses is. As a result, whisky in India has been continuously brought to life by the competitive forces.
So, yes, whisky continues to be strong and in large part a leader in volume and value. Though we also have categories like gin which has seen recent revival but that would mean it’s pretty much at the top end.
Which is your best-selling brand?
Going from the bottom to the top, all my brands are growing very strongly, whether it’s Imperial Blue, Royal Stag, Blenders Pride, Ballantine’s or Chivas. Chivas has outpaced virtually every brand in terms of growth over the years.
The alcobev industry in India, considers the one million cases as a very important milestone that determines the success of brands. Blenders Pride Reserve Collection is at the top-end of the pile in a short 12-year horizon. This could have been probably achieved earlier but for three years of Covid-led disruptions and its economic fallout.
Which whisky segment is growing the fastest – top or bottom end?
I think there have been many consumer-led changes which are defining or changing historical trends. Earlier, growth would be determined in a fairly linear fashion, but I don’t think that exists anymore. So one cannot call out if bottom-up growth is the fastest or the top-down growth is the fastest.
Recent trends show that higher the price point, the greater the growth albeit on a smaller base compared to the low-priced brands. But there’s an explicit breaking down of social taboos and barriers pertaining to alcohol. Earlier, consumers used to be very reluctant in a certain way but today they are comfortable. I think Covid broke the barriers. People no longer want to have alcohol as a functional thing, but they want to savour what they are having.
The younger audiences entering the legal drinking age will start pretty much in the middle and the premium whisky segment also gets a lot of new entrants. These consumers are very confident and experimentative.
Where does rum stand today in the brown spirits segment?
Like I said, these are interesting times because the younger consumers are more affluent, aspirational and more in tune with global trends. You’ve seeing a fair bit of a revival of gin. You’re also seeing tequila being consumed depending on the occasions of consumption. Rum is making a bit of a comeback and we got Havana Club a couple of year ago. But the top-end remains very small. The major part of the volume is at the bottom end. Significant proportion of rum is consumed in the southern parts of the country and parts of the east like Orissa and West Bengal.
You launched wine with zero alcohol last year. Are there any other low alcohol products in the pipeline?
While “no alcohol” drinks are fine, the prevailing laws do not actually permit low alcohol whiskies etc. It gets determined by excise law. Equally, a lot of these category are under a phase of development. I think there is a requirement of passage of time for this category to truly develop and then we can think of greater participation.
Do you feel some habits formed during covid are permanent such as home consumption of alcohol which may be affecting on-premise and institutional sales?
During Covid-19 of course there was a huge gap but I would imagine now or the better part of the last 12 months gone by, it’s back with a bang. People are revenge partying in pubs and night clubs. I think with the upcoming wedding and the festive season we will see a lot of things bouncing back. So, to me, the on-premise or institutional sales is doing pretty well.
However, since barriers crashed during covid and people entertained at home, our consumer research shows that couples now sit at home after work, enjoying the Blenders Pride Reserve Collection, which, perhaps, earlier used to be out-of-home or in separate sort of social groups.
Would you agree that people continue to drink at home as drinking on-premise is expensive in India?
That’s a very broad questions because there are many factors which determine the balance between home and out-of-home consumption. And it could differ from market to market. First, of course is cultural – how comfortable are you drinking at home where there are parents, kids, spouse. Then there are aspects like housing. If residences are small, as they are in most parts of the country, then entertaining at home becomes a challenge and consumption shifts out of home.
Of course, price is very important and it really depends on the price of alcohol in a particular market, the level of, let’s say, the proliferation of outlets, the taxation, the margin, the competitiveness. So I don’t think there is a standard answer.
Which new brands are you bringing into the country?
In the last 12 months we have launched a few brands – one of them being Malfy Italian gin. We’ve also launched KI NO BI which is a Japanese super premium gin. We recently introduced a premium wine brand by the name of Saint Hugo which is just in the process of rolling out.
We are going to be launching a couple more brands in the coming months as well gearing up for the festive season. Last but not the least, we have launched our very own Indian single malt by the name of Longitude 77. But more on that when we announce it.
Where does the probe against Pernod Ricard currently stand and how much of a revenue loss is it since your licence for Delhi remains cancelled?
Well, the only thing that I would say on this is, firstly, the matter is subjudice. So, we will await the outcome of the process. Of course, we are committed to remaining totally as per the laws of the state and the country. We will respect the outcome as it happens. But yes, Delhi remains an important state and that we would love to initiate business as and when our licences are back.
Which is your biggest market in India?
Our strength emanates from the fact that we have a presence across most markets. But Maharashtra, Telangana, Andhra Pradesh and Haryana, these will be our top four markets
Has the model for home delivery of alcohol allowed by some states scaled?
No, not particularly. It’s been attempted and experimented with by a few states but has it been a game changer in terms of the revenue model or collections of the state? Not necessarily. But let’s put it this way, at least the consumers now have a choice. So it cannot be bad.
With surrogate advertising for liquor being strictly monitored, how is the liquor industry coping?
As an organisation we are committed to following the laws in the country. Yes, recently there has been a tightening of the operating rules and regulations pertaining to brand extensions and we are absolutely in respect and in compliance towards that. We do have several brand extensions and in fact we are significantly ahead of the prescribed turnover or distribution of those products.