Radico Khaitan plans two new premium brands in brown spirits

Radico Khaitan, the makers of mass-selling 8 PM whisky, is planning to launch atleast two more brands in the premium category in the brown spirits segment over the next two years, said Abhishek Khaitan, Managing Director, Radico Khaitan Ltd.

“We already have a command in the entry-level. We have started the premiumisation initiative a few years back and this will continue for two more years,” he said.

The company has already increased revenue from the premium brands from a mere 8% in fiscal year 2009 to 16% till the first half of the current fiscal year.

Magic Moments, which was the first semi-premium vodka brand of Radico Khaitan, has already captured about 30 per cent market share.

The company, which is currently test-marketing its premium vodka brand — Verve, under Magic Moments, is planning to roll out Verve nationally from April, he said. Verve will compete with established brands like Smirnoff, Gorbatschow, Ersitoff and Vladivar, in terms of pricing. These brands are sold at a price ranging between Rs 550 and Rs 700, depending on different the duty structures in different states.

“We target a about 25% share in the premium vodka segment within the first two years,” said Khaitan.

Premium brands, certainly, have better profitability than the entry-level ones. “The focus will be on the premium brands going forward,” he added.

The vodka market in India is close to 10 million cases per annum with an annual growth rate of more than 20 per cent. Of this, the premium vodka category would be about 700,000 cases.

“Though consumption of white spirits has gone up in recent years, India is a tradional brown spirits market. Keeping this in mind, we will bring in some premium products in the brown spirits segment,” said Khaitan.

Radico Khaitan has also introduced a premium brand in brandy. Besides Morpheus, which already has a big presence in south India with sales of about half a million cases, has rolled out Florence brandy in Tamil Nadu. “We will launch Florence in all south Indian states over the next eight months,” he said. South India is the primary brandy market in India.

The brandy market in India is growing at about 22% annually for the past five years, but total consumption of brandy is very low, the company has said.

However, brandy is the third largest consumed spirit in India, with almost 99% being consumed in south India. The total volume consumed across India is estimated at about 450 million litres during 2012.