Diageo to hardsell core brands in India

Targets women with new offerings such as Baileys cream liqueur and Nilaya.

Liquor maker Diageo India is planning a big marketing push for its core brands such as Johnnie Walker, Smirnoff and newer offerings in India such as Baileys and Nilaya. The out-of-home consumption of liquor is rising in India with more women taking to bubbly.

OYE BUBBLY

Johnnie Walker and Smirnoff have nearly 90 per cent share in the premium segment of the scotch and vodka market

The company has already opened one outlet in Mumbai and will be associating with 20 stores in the next three months

Smirnoff grew 50 per cent in the country last year and this has contributed significantly to its global sales

Diageo has identified women's drinking as a growth avenue. It recently launched its wine varieties in the country and stepped up the distribution of Baileys liquor

Both Johnnie Walker and Smirnoff have nearly 90 per cent share in the premium segment of the scotch and vodka market.

While its competitor United Spirits is tying up with retail outlets for exclusive presence, Diageo is also associating with local retailers for Johnnie Walker Select outlets. The company has already opened one such outlet in Mumbai and will be associating with 20 more such stores in the next three months.

Santosh Kanekar, director (marketing), Diageo India, said, "A rise in disposable income has led to an increase in liquor consumption. Unlike earlier, when people beginning to drink would take time to graduate from lighter to stronger drinks, they have now begun to leapfrog through categories. This gives us a growth opportunity for some of our big brands."

Smirnoff grew 50 per cent last year in the country and its sales have become a significant contributor to its global sales. Diageo has taken the internet route to connect with its consumers better.

It recently launched an interactive website consisting of a vodka-based recipe database and a guide to drinking places around the city. This Website has received 150,000 hits since November last.

Diageo has also identified women's drinking as an avenue for growth. It recently launched its wine varieties here and stepped up distribution for Baileys liqueur.

This liqueur is prepared by combining cream with triple-distilled Irish whiskey using a technique that results in the cream being preserved using whiskey alone.

"Through consumer insight, we discovered that women love great tasting drinks. When we went through our portfolio, we realised our liqueur brand Baileys has the potential to become a preferred drink for women. The market for liqueur right now is very small, but we expect it to become 100,000 cases in three years. To achieve this, we would ensure Baileys' easy availability," said Kanekar.

Hence, the company is looking for tie-ups with fine-dine places to increase Baileys' availability. Diageo is also targeting the wine segment as it is often termed as ladies' drink. The company launched Nilaya wines in November.

It has already tied up with retail giants Reliance Fresh and Shoprite Hyper to distribute its wine portfolio in cities such as Mumbai and Pune. The company is also planning a tie-up with the Aditya Birla-promoted retail venture 'More' to sell its wines across the country.

The Euro9.9 billion Diageo's is focusing on organic growth. It is seeking growth for its priority brands such as Johnnie Walker, Smirnoff, Baileys and Guinness, in its most profitable markets and emerging markets such as India.

The Indian spirits market is the biggest in the world in terms of volume at 400 million cases. But in value terms, it is just $5 billion compared with the $30 billion US spirits market.

Kanekar added that though prices in the Indian market appeared depressed now, it might look up and compare with the US spirits market in the next 20 years, where 60-65 per cent of sales come through premium spirits. In India, the premium segment contributes just 20-25 per cent now.