NEW DELHI : After the success of its luxury liquor brands such as Rampur whiskey and Jaisalmer Indian craft gin, Indian spirits maker Radico Khaitan plans to expand its premium portfolio with several new brands in the next two years, in both, the white and brown spirit categories.
The company said it has seen good traction from the premium spirits category expanding Rampur whiskey to about 30 countries worldwide and Jaisalmer gin in about 25 countries. The spirits maker said in an effort to meet the rising demand for the premium whiskey Rampur, it had invested in expanding its plant infrastructure about four years ago. The company has since expanded its malt distillation and maturation capacity. This will further ramp up its output capacity by 2023 for premium spirits, Abhishek Khaitan, managing director of the firm told Mint. However, he did not share the amount that the company would be investing in this category.
The increase in its malt capacity was done within its Rampur distillery in Uttar Pradesh. There are three distilleries within this facility including malt, molasses and a grain distillery, and is spread over 100 acres with a production capacity of over 10k million litres per annum.
The company uses its master blender, Anup Barik, who has worked with them for over two decades and is the creator of all of its blends, including the luxury spirits. The company began naming its Indian single malt whisky Rampur as it was the location of its mother distillery. “It was our way of paying homage to the place where we started from. This concept matured further with Jaisalmer Indian Craft Gin and Royal Ranthambore Whiskey. Both places have considerable historic significance and resonate with values we want to closely associate our products with. With Ranthambore, power, valour and majesty, whereas with Jaisalmer, royalty, grace and exquisite craftsmanship,” Khaitan added.
In the second quarter ended September 30, this year, the company delivered a volume growth led by ‘prestige above’ category brands. It grew by 18% in this segment, with a turnover of 12.5% ( ₹708.83 crore) over the same fiscal year prior in this category. It had an Ebitda of ₹111.04 crore (+4.1%) at 15.7% margin. Khaitan added that new brand launches are expected to accentuate the premium volumes in the coming years for the firm.
Although the operating environment has improved significantly on a quarter-on-quarter basis, Radico Khaitan has seen an unprecedented input cost inflation which has impacted the profit margins, particularly for its non-IMFL (Indian Made Foreign Liquor) business.
“We strongly believe that this is a temporary phenomenon and given our focus on premiumisation, margins trajectory shall improve. During this period of uncertainty, we continue to focus on sustainable, premium volume growth and work alongside the supply chain to minimise the impact of input cost increases,” added Khaitan.
The company also sells brands like After Dark Whisky, Contessa Rum, Magic Moments Vodka, among others, and launched Royal Ranthambore Heritage Collection-Royal Crafted Whisky in October this year.
Several Indian mid-sized companies have made considerable attempts over the past few years to expand their portfolios. Rampur was one of the early movers to enter the Indian single malt space along with peers such as Amrut and Paul John.
Their move was followed by the launch of Jaisalmer, their craft gin. With both Rampur and Jaisalmer, a conscious attempt has been made to work on an outside-in strategy, with building the brand first in international markets and then bringing them to India, said a consultant.
Vikram Achanta, co-founder and CEO of Tulleeho, a drinks training and consulting firm said, strategy-wise, premiumisation makes complete sense in the Indian alcobev space. “We are definitely likely to see other companies that have so far not been very active, for instance, Allied Blenders and Distillers (makers of Jolly Roger rum) and Alcobrew (makers of Old Smuggler scotch), also aim to make a mark in premium spirits.”
From a luxury spirit’s perspective in India, Achanta added that across the Indian spirits landscape, companies are staking their claim. The category of super-premium spirits is heating up with some newer Indian players as well with older brands priced as high as ₹10,000 and above a bottle in some cases. Paul John and Amrut as well as Paul John’s XO Brandy are selling at around that price point.
In the white spirits space, he added, there are also Indian companies like NV Distilleries that has premiumised Smoke Vodka as well newer players like Nao Spirits that has launched the Hapusa gin. Similarly in rum, StillDistilling has led the charge with Maka Zai Rum. These are priced upwards of ₹2,000 a bottle.
The above news was originally posted on www.livemint.com