| Diageo may be famous in
India for its premium scotch brands like Johnnie Walker
but its plans to increase its portfolio of both Indian and
foreign wines may catapult it as one of the top wine importers
in India and an important player in the domestically produced
wine market too, feels Subhash Arora
Brindco has been the biggest importer for
a few years, replacing Sonarys with Global Tax Free unable
to slip past the runner up. UB has been the new potential
sprinter, much talked about like the recent IPO of Reliance
Power which is years away from producing the first kilowatt
but has been the toast-of-the town till recently when it
fell in from the sky. Pernod Ricard has been pushing its
Jacob’s Creek Australian label steadily. But Diageo
may well turn out to be the dark horse in marketing imported
wines because of its inherent expertise and strengths including
financial and marketing muscles. It may be light years away
from displacing Sula or Indage from the premium or total
market leadership but it may carve out a respectable share
in the domestic market with its Nilaya label.
If one stops by the duty free shops at
the Delhi airport to watch the speed at which Black, Gold
and Blue Labels vanish from the shelf, one can wonder in
awe how much Diageo is pushing the higher-ended spirits.
Dalwhinnie, Lagavulin, Talisker, Cragganmore, Oban and Glenkinchie
are the premium malts being aggressively promoted by the
company.
The liquor giant is even creating a high-profile
marketing team dressed in Armani suits to push the top end
reserve brands portfolio.
The company’s annualised advertising
and promotional expenditure could be touching Rs 1.4 billion
this year. Almost a third of this will be blown next week;
it is unveiling the first Indian edition of Johnnie Walker
Classic golf tour to be played in the DLF Golf Club from
February 28, with Gold Label being the sponsor. Diageo is
expected to blow around Rs 400 million, including Rs 100
million ($2.5 million) as the prize money.
Diageo also produces and markets wines
of a wide - spectrum quality American wines - Sterling Vineyards,
Beaulieu Vineyard, Sterling Vintner's Collection, the Chalone
Wine Group brands, Solaris, and Blossom Hill, as well as
the French wines of B & G.
B & G has been the face of French wines
in India in the eighties and nineties and is still in existence.
Popularly known as Bootlegged & Ghatia (cheap)
wine, it used to be the delight of bootleggers because of
the enormous profits it assured them. Slightly lower quality
than the entry level line that was sold in the gray market-
the only existing market, was earlier with Seagram’s
and was the staple fare served at parties offering wine.
It was also available with free home delivery, at a 400%+
distributor margins. Several 5-star hotels also carried
it proudly in their wine lists; this was in the pre-liberalisation
era.
B & G label is the French Baron &
Guestier, exported throughout the world. It boasts of a
wide range of premium award winning wines that have been
added to the portfolio over the years.
Besides the B&G, Diageo has also introduced
Blossom Hill and Piat d’Or in the market.
Diageo India Pvt. Ltd, the Indian subsidiary
is reported to have also finalized an arrangement with Reliance
Fresh, to set up wine boutiques at Reliance’s retail
supermarkets throughout India. It plans to set up initially
in Mumbai and Pune and later extend to Delhi, Bangalore
and Chandigarh..
It has already signed wine making agreements
with Renaissance and Mountain View Wineries in Nashik, for
producing the Indian labels. It launched Nilaya label a
couple of months ago in Goa and Mumbai, as already reported
in delWine.
The Blossom Hills and Piat d’Or ($8
retail price in the USA-source: www.wine-searcher.com),
are high selling popular brands, a notch above the entry
level and with the high customs duty, are quite marketable,
given the push being given by the company.
The company had tried to buy a strategic
share into Sula Wines last year, but when Rajeev Samant
politely but pointedly spurned the overture, it managed
to snatch away the long time national marketing manager,
Adrian Pinto. It also snapped up the regional marketing
manager of Moet Hennessey, Ray Martin to strengthen its
marketing team. The company has an extensive network of
national distributors like the other new biggies in the
game, UB and Pernod Ricard.
If it uses the battery of Armani-types
to promote and market the premium brands like Sterling by
re-enforcing the marketing set-up and use some of its advertising
budgets towards wine sales, it could give the existing importers
a run for the money.
It has already announced launching of some
of the sterling, Sterling labels costing up to $1000. Diageo
expects reserve brands to account for 25% of sales by value
and 40% of profits in India.
Perhaps, we will soon see an international
Blossom Hills Golf Classic for the blossoming young golfers
debut in India.
Subhash Arora
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