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AlcoBev sector looks ripe for disruption, says Tilaknagar Industries chief

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Tipplers in Covid-ravaged Kerala set another record during the just-concluded 10-day Onam season by gulping down a record ₹750 crore worth of liquor, according to statistics by monopoly public sector purchaser and distributor Kerala State Beverages Corporation (Bevco).

Bevco had a cumulative sale of around ₹565 crore during the comparable period last year. According to sources, the retail outlets accounted for as much as 70 per cent of the sales this year, equipped as they were by additional counters and an online and card payment system, while bars realised the rest.

Online sales pilot

The online pilot was introduced in three outlets in Kozhikode, Kochi and Thiruvananthapuram. Liquor needs to be collected from the specified outlet after users create accounts and make online orders. Once payment is done online, they get a message with a time slot to pick up the items.

Liquor has traditionally been the largest contributor to the State’s revenue, accounting for close to 24 per cent. But it fell by 14 per cent from a record ₹14,508 crore in 2018-19 to ₹12,298 crore in 2019-20. Covid-19 is thought may have hit 2020-21 revenues even more, final figures of which are awaited.

Highest liquor impost

The State government had imposed a 35 percent tax hike on IMFL and 10 percent hike on beer and wine last year and followed it by increasing it further by seven per cent this year. It has only reinforced its status as the State with the highest tax impost on liquor in the range of 247-257 per cent.

Analysing Onam sales, Amit Dahanukar, Chairman and Managing Director, Tilaknagar Industries, leading producer of consumable spirits, told BusinessLine that the AlcoBev industry, while having faced significant short-term challenges, looks ripe for disruption owing to rising disposable income, growing young population with aspirational needs and a much more inclusive drinking culture.

Growth is here to stay

“Within our brandy space, we are seeing an increasing trend of youngsters taking up brandy as a drink of choice; and we believe this will only grow further with new product offerings within the brandy space,” Dahanukar said.

“August has been one of our best months till date over the past many years; the growth has been steady on a year-on-year basis. While deriving trends even in today’s challenging times, we believe this growth is here to stay and Kerala will play a key role in helping us achieve our targets.”

Premium brandy segment

While Tilaknagar Industries already dominates the premium brandy segment with its Mansion House brand with a more than 65 per cent market share, it is also steadily growing market share in the super-premium brandy segment with Courrier Napoleon, Dahanukar said.

Also read: ISWAI urges AP Govt to permit national brands

“Within first 20 days of August, we have been able to sell more than one lakh cases, nearly matching the sales achieved in the month of whole of July as well as in August in the previous years. We have witnessed a 15 per cent compounded growth in August this year compared to August of 2019.”

Covid impact seen

Even though there is some impact of Covid being felt in Kerala even now in terms of number of consumers turning up at Bevco outlets, the situation is slowly and steadily improving. Given the festive period and the resultant growth in sales, it is difficult to gauge if the impact of Covid is behind.

“Except for months which have seen Covid-related lockdown disruptions, we are seeing sequential growth on a month-on-month basis and are nearing all-time high levels in terms of sales in Kerala.”

Loyal consumer base

While Onam has played a key role in ensuring high sales in August in Kerala, all regions (Kerala included) have been doing significantly better on account of sustained efforts in making Tilaknagar Industries products available to consumers and ensuring brand loyalty is maintained.

Answering a specific question, he said festive seasons are always the best performing months for any AlcoBev company and it is no different for his company. While the pandemic makes things extremely challenging, it has a loyal consumer base which helps it maintain, if not grow business.

The above news was originally posted on www.thehindubusinessline.com

Aabkari Times Editorial Teamhttps://aabkaritimes.com
Aabkari Times is a monthly news magazine on Liquor, Excise and Alcohol allied industry; being published since 2009 by the expertise of retired excise dept. associates and alco-bev industry professionals as our editorial team. Our magazine contains different new alco-bev strategic and new brand launch articles as well as news on recent govt. policies, trends on alcohol industry and other important data relevant to the distilleries and industry at the mass.

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