Wise companies follow a simple business rule. They do not look at the need gap in the market but look for the market in that need gap. Taking a cue, the world's fifth largest liquor manufacturer Groupe Pernod Ricard has launched its Santiago brand of dark rum in the Indian market.
Consider the facts that propelled the Santiago launch. Rum in India has been a low-priced drink, with nearly 70 per cent of the total bottled rum produced for supply to the army. In the 35 million litre retail market for the drink, most brands are priced around Rs 150 for 750 ml.
Bacardi's Carta Blanca is a white rum pegged as a cocktail drink, and does not quite qualify as a true dark rum. Reserva, though a quality dark rum, is priced way too high for the middle-class rum drinkers to switch to.
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So Santiago was launched to fill in the vacant slot for a better quality rum, which is not prohibitively priced. The product promises to be a rum of international quality produced in the Groupe's state-of-the-art plant at Kolhapur.
Unlike traditional Indian rums, Santiago is matured in cask for three to four weeks, and has a distinctly different taste. It is priced barely Rs 75 higher than brands such as Old Monk and Contessa. "The idea is to give the growing middle-class rum drinkers a better product at an affordable price," says Albert Elgrissy, president, Groupe Pernod Ricard, South Asia. "What the product also brings is the promise of a quality at par with our international standards," he adds.
Groupe has big expansion ideas for India. "It is a large country with a young population and a high growth economy. But to derive the benefits of such a market in the long run, we need to establish our brands first. Once we have done that we can introduce a host of other products," says Elgrissy.
The company plans to establish itself as a major player in the Indian made foreign liquor (IMFL) market of 64 million cases, which is growing by 25-30 per cent annually. It has plans to introduce products in every segment.
In keeping with Indian consumption pattern, Groupe Pernod Ricard has also introduced a whisky. The Indian whiskey market is about 39 million cases in India, which is roughly 65 per cent of the total IMFL market.
"The picture in whisky too was more or less the same as in rum," says Elgrissy. The company's newly launched Tilsbury, is a pure grain whisky, made under the supervision of Campbell Distillers, Scotland. The company's targets are moderate. "We are aiming at cornering 10 per cent of market share in both the segments within 5 years," says Elgrissy adding that the focus is to develop the brand equity.
The company will be spending heavily on its brands, and position its brands to catch the eye of the cream of the middle income group. In keeping with this strategy, Santiago is promoted as embodying the essence of Latin American culture, which has gained currency through icons like Ricky Martin and Jennifer Lopez. For the whisky, the idea is to reach young people moving up the social ladder.
Besides, Groupe Pernod Ricard has a host of internationally successful brands in a wide variety of segments lined up to be introduced in India through the permissible channels like airport duty free shops, restaurants, bars, hotels and diplomatic mission.