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Diageo goes premium in India

News, 02 November 2015
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MUMBAI: United Spirits, the Indian arm of drinks giant Diageo, is planning to reduce the number of brands in its portfolio and to focus marketing and promotion efforts on around 15 top brands.

"Awareness, certainly, for premium brands is going up and affordability is going up," chief executive Anand Kripalu told Reuters.

"We are focusing on select brands, which we believe are the critical ones, big drivers of growth," he said, adding that only those brands would receive strategic investment.

Currently, there are more than 150 brands in its roster, including local whiskies like McDowell's No. 1 and Bagpiper as well as global names like Johnnie Walker, which is the leading imported Scotch with a 56% market share and established in urban Indian culture as a symbol of luxury, status and success.

Over the next five years, it is the upper end of the market that is expected to grow. Kripalu indicated that this would account for 60% of total spirits volumes, up from 40% today, with the remaining share being taken by brands costing less than Rs 400 ($6.15) a bottle.

Grabbing a slice of that is crucial to his aim of growing United Spirits faster than Diageo itself. "I do see us becoming a significant growth driver to Diageo globally," he said.

India's spirits market is relatively small, at $17bn, but per capita consumption is forecast to rise from 1.4 litres in 2010 to 1.8 litres in 2019, thanks to several factors, including urbanisation, a young population and a fast-growing middle class.

Marketers face some problems in reaching this group, however, given that there are tight restrictions on the communication of alcohol brands.

The approach of Chivas Regal, the Pernod Ricard-owned whisky , was to create the 'Chivas Studio' experience, a multi-city event that invited artists in the fields of music, fashion, dance and Bollywood to collaborate on key projects; this content then became the source of a massive PR push on print and television.

Johnnie Walker fought back with The Journey, a multi-media "social experience" designed to make Johnnie Walker a symbol of sharing and inspiration for young whisky drinkers.

Data sourced from Reuters; additional content by Warc staff

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