Liquor market witnessing premiumisation: Adil
MUMBAI: Asif Adil, the managing director of Diageo India, the Indian subsidiary of the world's biggest liquor company, Diageo Plc, which owns big brands such as Smirnoff (vodka), Johnnie Walker (whiskey) and Guinness (beer), is a man who has worn my hats.
MUMBAI: Asif Adil, the managing director of Diageo India, the Indian subsidiary of the world's biggest liquor company, Diageo Plc, which owns big brands such as Smirnoff (vodka), Johnnie Walker (whiskey) and Guinness (beer), is a man who has worn my hats.
After graduating from Cornell's Johnson Business School in 1980, he started out with Frito-Lay in South East Asia. In 1989, he moved to New York as a consultant for McKinsey & Co and spent time between New York, New Jersey and Mumbai over eleven years.
During this time he got a chance to dabble in the alcohol business. When McKinsey was advising Shaw Wallace, he joined the company on its board. In 2000, he turned entrepreneur, co-founding Kaya Skin Clinic (along with Marico Industries which now owns the brand) and running the franchise for KFC. The latter is now handled by his wife after he made a switch to Diageo last July. Since he took over, Diageo has had a flurry of brand launches across most Indian made foreign liquor (IMFL) industry segments. Mr Adil recently shared with ET the trends that are shaping the Indian liquor market. Excerpts:
The IMFL segment has seen a series of brand launches of late, by both domestic and foreign players, especially Diageo. What's driving this launch flurry?
Our brand team has spotted two major trends. One of them is urbanisation, where people in smaller towns were showing similar aspirations to those in big cities,. The other is premiumisation. Aspiration is driving young people, who would otherwise go for rum, opt for vodka and whiskies today. There are more than 20 million new consumers who turn 25 and join drinking age group every year. A lot of these consumers are at different aspirational levels. Thus a price segmentation was required. There was a big gap between the prices of IMFL and premium alcohol. We have explored different price points.
We launched Haig to target aspirants. So, there are different segments - the takers for Haig, for existing brands like Black and White and VAT 69 and finally for Johnny Walker at the top-end. Haig is priced to address the new price-point that has emerged due the aspirants. They eventually would graduate to Johnny Walker. Similarly, in vodka, we have launched Shark Tooth which is mid-price, on a par with Fuel and Magic Moments and we have Smirnoff which is slightly more premium. We then also launched Smirnoff Black which is at the top-end. So we've created three segments there. Liquor's distribution system is similar to FMCG. How has the trade responded to these new launches?
Our marketing has followed a mix between the trade as well as using traditional mass communication. We were clear that the trade has to prosper and also has to have a deep association with the brands. We can't just remain a premium player and not build distribution. Our brand management team has been able to form some very good relationships with the trade and has worked hard to convince them about the quality of our product. As a result, Haig is now prominently displayed at a lot of stores. This is essential for any new liquor brand.
You can't advertise liquor brands on mass media. How do you then build/sustain a brand?
It certainly isn't easy and we have to tread a fine line and avoid using surrogate advertising. Mass communication is as important to us as the trade channel. We've worked on creating properties around events. In music, the Johnny Walker One Tree Festival has become a huge property. The Haig Vintage rally has also attracted a lot of attention. We also have promotions with our two brand ambassadors. Shiney Ahuja is the brand ambassador for Shark Tooth and Shah Rukh Khan is the brand ambassador for Master Stroke, the whisky brand we've set up together with Radico Khaitan.
Going forward, what more can we expect from the Diageo stable, particularly after the high-decibel launches of Haig and Capt. Morgan?
We'll be launching Bailey's Irish Liqueur in India and we'll also bring into India Diageo's range of wines. I believe that wines will be well received in India. We will also be bringing in more brands from the Reserve stable, the luxury drinks division of Diageo.
How would you differentiate these premium brands?
We want to be present in the last mile and make sure we're directly in contact with our consumer for the premium brands. We've got key account management teams and we now have tie-ups with Indigo in Mumbai and other places of fine dining. We want to sell the experience of a premium liquor. For instance, for Johnny Walker Gold. We created an elaborate ritual and served frozen Johnny Walkers to the diners and created an aura around it. We're also pushing the Moscow Mule (a vodka-based cocktail) in signature containers. Additionally, the experience around liquor isn't restricted to the high-end brands. For Capt Morgan rum, we're pushing the rum and cola cocktail experience.
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