Financial Daily from THE HINDU group of publications
Saturday, Jan 10, 2004
New Products & Services
Radico uncorks Royale Oak in TN, Pondy
Bangalore , Jan. 9
RADICO Khaitan Ltd has uncorked one more new Indian Made Foreign Liquor (IMFL) brand in the southern markets. It has rolled out Royale Oak, a premium brandy, in Kerala and Pondicherry, making it the fourth major brand launch in the last 18 months.
Royale Oak is priced at Rs 242 per quart in Kerala and is pegged on par with the leading brand in the brandy flavour, Honey Bee.
The company has tasted success in the southern market with the launch of Old Admiral VSOP Brandy in 2002, which is poised to emerge as a million cases brand in the current financial year.
Radico subsequently extended its flagship 8 PM Whisky into the rum flavour late last year even though the market stint of the latter is not yet reassuring.
Meanwhile, the company had also uncorked a prestige whisky, Special Appointment, in the national market, which is slugging it out in a competitive segment with established brands such as Royal Stag, No.1 McDowell and Director's Special Black.
Radico's latest move to come out with Royale Oak has baffled many industry observers for the reason that premium brandy category has hardly seen impressive growth in the recent past.
The brandy flavour along with gin has remained a laggard in the domestic spirits market with the former losing out to rum the share of consumption in its southern strongholds, including Kerala.
However, the company is buoyed by the success of Old Admiral Brandy, which was positioned as an offering with premium trappings delivered in a mid-priced band. It claimed that Old Admiral was selling about 80,000 cases monthly in the southern markets putting it on the way to emerge as the a `millionaire' brand from its stable after 8 PM Whisky and Contessa Rum.
Meanwhile, Radico confirmed that it has inked a manufacturing tie-up with Midas Golden distillery in Chennai paving way for its entry into Tamil Nadu, the second largest IMFL market in the country.
It has firmed up plans to take Old Admiral into the new market priced at Rs 60 per nip (180 ml). The entry into Tamil Nadu is significant, as many domestic and transnational players have failed to access it as the State insists on local manufacturing as a condition for allowing new entrants.
This stance of the State Government has traditionally given the six local distilleries an upper hand in deciding on manufacturing alliances with outside players, the industry observers said.
Radico is expected to close the current financial year with IMFL sales in the vicinity of seven million cases.
The company, which till two years ago mopped up most of its sales from the northern markets, has claimed average monthly sales of over 1.5 lakh cases in the South, up from 15,000 cases in the year 2000.
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