Diageo’s regular scotch whisky brand, VAT 69, has been relaunched with a new package in India. With this, the UK-based premium drinks company has signalled intent to grab more market share over the next year.
Teacher’s from US-based Beam Global Spirits is the leader in the regular scotch whisky segment, with a share of 42 per cent. This is followed by 100 Pipers from France’s Pernod Ricard at 32 per cent and Diageo’s VAT 69 at 20 per cent. These shares have been disclosed by the three companies.
Diageo India operates in only two segments in India, scotch whisky and vodka. It is keen on increasing its share in regular scotch to 25 per cent from today’s 20 per cent, according to Abanti Sankaranarayanan, marketing & innovation director. This is likely to pit it against arch rival Pernod, say analysts, since the gap between the two is narrower as compared to the distance between Teacher’s and VAT.
A Pernod Ricard executive, on condition of anonymity, admits that VAT is a “challenger brand” and one they’d have to keep an eye on. “We will not react immediately,” he says. “But we are aware they (Diageo) are getting active in the marketplace.”
He says the company is working on plans to fortify its presence in the market. He declined to indicate how, citing competition reasons.
A mail to Pernod seeking formal replies on the company’s marketing plans for 100 Pipers remained unanswered till the time of going to press.
Pernod has reason to be wary of Diageo, say industry experts, since the latter is upping its distribution reach from 17,000 outlets now to 30,000 outlets in the next few months. It is also going for on-premise activation exercises at restaurants, hotels, clubs, etc to initiate trials. The distribution expansion will take its overall reach in the universe of 60,000 shops with the licence to sell spirits in India to 50 per cent from 28 per cent now.
“This distribution ramp-up, as well as engagement with consumers, should help us increase sales of VAT,” says Sankaranarayanan.
Pernod’s penetration in the universe of licensed spirit shops in India is close to 80 per cent. “This,” says the company executive, “is because of our presence in the larger volume-driven IMFL (Indian Made Foriegn Liquor) whisky market. This has actually helped us drive penetration for our scotch whisky brands.” Adding: “Which is why we do not see an immediate threat from Diageo.”
Of the total whisky market of 120 million cases in India, the scotch whisky segment is one per cent or 1.2 million cases. The balance constitutes the IMFL whisky segment, which is at 118.8 million cases. Pernod operates in IMFL whisky with brands such as Royal Stag, Blender’s Pride and Imperial Blue. It is ranked second in this market after United Spirits, with a share of 16 per cent.
