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Radico Khaitan, the second largest spirits producer in India, seems to have made the right bet by shifting from the crowded whisky market to premium segments of brandy and vodka. Radico, which sells popular whisky brands such as 8 PM and After Dark, has gained about eight per cent market share in the premium vodka segment since it launched Verve eight months ago.
Though vodka constitutes only four per cent of the 260 million cases (a case is nine litres) of the Indian-made foreign liquor (IMFL) market, its sales of vodka grew 14 per cent by volume and 20 per cent by value in the calendar year 2012. Whisky is 59 per cent of the IMFL market, rum 20 per cent, brandy 16 per cent and white spirits five per cent.
Abhishek Khaitan, managing director, said, “We realised there was a gap in the deluxe and super-premium categories, which promised huge untapped potential in the India vodka market. Radico stands to gain the most in future, as we expect the white spirits industry to grow at a faster pace.”
Of the eight million cases of vodka sold a year in India, the premium brands contribute 844,000 cases. Smirnoff, owned by Diageo, controls 80 per cent of the premium vodka market in India.
“For Verve, we are looking forward to achieve a sales target of 80,000 cases for the current year and after the pan-India roll-out of the brand, we are looking at a 20 per cent year-on-year growth,” he added. Verve is priced at Rs 540-570 for a 750ml bottle in Delhi, on par with other premium brands such as Eristoff, Gorba and Smirnoff.
Rahul Gagerna, president (sales and Marketing), said, “Whisky, one of the most popular segments in India, is crowded with brands. Hence, we looked at other segments that promised potential. Brandy and vodka emerged as the segments with gaps. Market research showed young drinkers and high networth individuals as the untapped target.” Radico expects major revenue contribution from Florence, a premium brandy that has been introduced in Tamil Nadu, which contributes 60 per cent to total brandy sales in India. “The product, with an MRP of Rs 640 for a 750ml bottle in Tamil Nadu, is targeted at men in the age group of 28- 40 years,” said Gagerna. While United Spirits controls 55 per cent of the IMFL market, Radico Khaitan has 15 per cent share.
