Kyndal India plans to enter the rum segment in 2014 and is also scouting for a deal with a Scotch whisky brand in India for a launch around the same time, as it plans a cautious strategy in the slowing Indian market and focuses on maintaining its profitability. The company which is presently present in South India, will also begin expanding into North India markets this month.
"We want to go very very slowly, move very cautiously. We are not interested in doing things that are rash. In five years, we have stuck to just one market and are moving very cautiously into the next. As a company we are not very ambitious, we look at doing things strategically and profitably," says Sidharth Banerji, Managing Director of the firm.
Banerji said, Kyndal is in the last stages of finalising the procedure of the sale of Bootz Rum, a BOLS brand. Kyndal India has a joint venture with Lucas Bols BV of Amsterdam and sells Bols brandy and whisky across South India.
Separately, the company is also looking at a deal with a premium Scotch whisky brand in India that will help Kyndal build its position in the market as it sets the stage for the 2018 launch of its own brand of Scotch produced in a distillery in Scotland - as part of a deal with partner John Fergus & Co Ltd.
"We are evaluating some brands to see if they fit in the regions they play in because we're regional players. We are looking at global Scotch brands in India that have been in India or have been sold in some regions but no longer sold because of the lack of stock or because the company got sold out."Banerji said. "We're looking for a deal, but have no idea if that will be a lease deal, a buyout or a franchise deal."
With the availability of whisky stock needed for production being very scarce, Kyndal has signed up with a stock dealer to provide the material needed to sell the brand it will acquire.
"Following that, we will have scotch from our own distillery in Scotland. We wanted to build the distillery so we can build our stock for our own IMFL and buy reasonable brands with which we can fuel our own Scotch brand," Banerji said.
Besides, building a distillery was more reasonable than buying one of the few distilleries in Scotland given that it takes the same time to get stock is the same time (minimum three years) in an existing distillery as in a new one, he added.
Back home, the company is moving into the state of Delhi this month and plans to expand its presence in North India with Rajasthan, Bihar, Orissa and then other government-controlled markets like Chhattisgarh and Jharkhand.
"In general, the premium segment in India has been hit the most. Our raw input is imported, our selling price is the highest and that pushes our consumption down the steepest," Banerji said. "Economy brands lose margins but increase the volume. but because of the high prices of molasses, production of economy brands is also not viable."
