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Tuesday, August 9, 2022

How Diageo India is shaking it up

In the old days, aspiration was always a black-suited man in a very high-end looking home or bar enjoying a tipple, says Hina Nagarajan, the new MD and CEO of Diageo India, which retails the iconic Johnny Walker brand, among others. But today, she points out, that image may not work as “people are looking for authenticity, creating their own individual signature, and women are becoming a great growth cohort for the beverage industry.”

In keeping with the changed narrative and consumer expectations, Diageo has been reinventing how it markets its brands in India and reshaping its portfolio. For instance, to address the new millennial consumer, Johnnie Walker has been renovated — the image is now all about creating your own individual signature. And it’s based on nature. “People are wanting more sustainable products now. So, your signature comes with a 40 per cent recycled glass bottle,” explains Nagarajan.

She says the company’s new strategy is to look at “future back” instead of going from the present forward. “We are saying, okay, where is this market going to head in the future?”

Focus on craft

The company’s bet is that the market of the future will be big on craft. “Local pride has been growing in India for quite a few years. But during the pandemic, we saw this craft phenomenon break out more,” she says. So that was one of the reasons the spirits major made a foray into craft, launching Epitome Reserve. “We’ve now launched two editions of Epitome Reserve, both of which have done very well. One was a rice-based whiskey. And the other was malted, ” she says, describing how the company will play stronger in craft henceforth.

The market is also getting big on wellness. “The hard seltzers and low alcohol trend has taken off globally. But, we are still watching those trends in India. As we see traction building here, we’ll be ready to foray into those categories.”

Nagarajan describes how increasingly people are beginning to prefer gin because of the perception that it is a lighter, healthier drink. “Gin has also become really a fast growth category because of the experimentation with cocktails during the pandemic. We are playing very strongly with both Tanqueray and Gordon’s in gin,” she says.

Structural change

To meet the needs of the changing consumer and the evolving market, Diageo India has also done some structural changes. “We had recognized there are three Indias. We are one of the few companies in India that has structured ourselves around these three Indias – aspiring India, middle India and affluent India,” she explains.

For aspiring India, a strategic business unit (SBU) has been set up to look after the popular products and the value portfolio. “Then you have the middle India, which is looked after by the core of our organisation. And for affluent India, we’ve actually carved out a full structure around it and the luxury and premium brands that address this populace. So, organisationally, we have structured ourselves with capabilities in each of these SBUs to address the differential needs of today’s India,” she explains.

Nagarajan stresses that all three SBUs have built phenomenal execution skills to address their respective segments and are building the insights and the right marketing activations to address these different Indias.

Promotion

Marketing to millennials.

The marketing strategy is also now underpinned on the new consumer cohort that is becoming highly influential. “In the next five years, we’re going to have a hundred million new consumers coming of legal drinking age. And these all will be millennials who are going to be a significant growth cohort for us. So, all the capabilities we are building around digital engagement is really trying to understand millennials and be ready for them,” says Nagarajan. A case in point is the launch of the new portal ‘in.thebar.com’, which gives people ideas for celebrations, cocktail ideas, etc. and has been set up with the millennial consumer in mind.

“But I think the thing that will become critical for millennials is really what we are doing on Diageo and society, sustainability and inclusion, because millennials are very concerned about these things,” says Nagarajan, describing how the company is dialing up its initiatives very ambitiously in these areas. We are playing a leading role in inclusion and diversity, sustainability, packaging, and driving moderation, she says.

It’s an interesting cocktail of approaches that Diageo India is trying out – will it succeed in shaking up the market?

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

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