Diageo is treading carefully but determinedly in India. Diageo India, the subsidiary of the world's largest spirits company, has plenty planned to court the Indian liquor aficionado. Given the clamps on advertising alcohol in India, Diageo's brands are looking for innovative ways to reach the consumer.
"We really believe "" especially in our industry "" that the brand is dead," offers Santosh Kanekar, marketing director, Diageo India, "The consumer today is really buying experiences."
Johnnie Walker "" dead? Muffled, perhaps, even gasping for self-expressive breath, but... dead?
Whatever the assessment, Diageo would rather adopt a walk-on role for its brands in the larger public sphere, reserving its efforts to win the consumer over for live action on the ground.
"To enhance consumer experiences, we have a choice of either influence at the trade level or on-premise, and the latter is easier because there's only so much lobbying we can do," explains Kanekar.
Karnataka is currently the only state that allows liquor retailing through modern trade mechanisms, and Diageo seized the first-mover advantage earlier this month by getting shelf space at outlets of the Fortune group (formerly Pantaloon Retail).
Duty-free outlets still account for most sales of premium brands, but on-premise establishments (bars, lounges and so on) also have an increasing number of the young affluent who're positively disposed towards such brands.
Making the most of that trend, Diageo is planning a foray into self-run, signature lounges for Johnnie Walker whisky and Smirnoff vodka. "This distribution space will be all our own, so consumer interaction can be totally controlled by us," says Kanekar.
It sounds expensive, but the plan is to take on existing bars on lease-and-manage contracts, so "investment although sustained will be manageable".
This will also let Diageo showcase super-premium variants such as Johnnie Walker Blue Label which bars are hesitant to stock "" priced as it is at a heartstopping Rs 19,000 per litre. No matter. The company will fly in master blenders from Scotland and stage "blue" dinners for loyalists.
There's more. Diageo intends making a comeback in the Indian Made Foreign Liquor (IMFL) segment, which it exited in 2002, with the launch of new local blends. Expect a high-end whisky and a sub-premium vodka soon.
"The IMFL segment has seen a transition with increased demand for aspiration products," says Kanekar, hopeful of generating the sort of volumes that domestic players have.
Being a foreign player, though, Diageo must tread carefully "" as evident in the following clarification to its strategy. "At no point are we looking to convert non-drinkers to drinking," avers Kanekar, "we're just offering consumers the opportunity to upgrade their choices."
