BUSINESS LINE's CATALYST
From THE HINDU group of publications
Thursday, December 20, 2001

CATALYST
RESOURCES
BRAND QUEST
HOME
 

8 PM and after


Neha Kaushik

IT wasn't too long ago that Radico Khaitan found itself in the record books for notching up sales of one million cases in one year for a newly-launched brand. Small beer for the company, as it's not resting on its laurels and is actively looking at growth through more new ventures. Testimony to the fact is Radico Khaitan's phenomenal growth in the liquor market. If it's some indication, the company is expecting to close this year with a turnover of Rs 550 crore, a 116 per cent increase over last year.

Apart from expanding its portfolio of brands and extending its distribution reach, Radico Khaitan is now also aiming to be a leading distribution house. The company has recently acquired Whitefield, a whisky and brandy brand strong in southern India, from Alembic (which has decided to exit the liquor business altogether). Says Lalit Khaitan, Managing Director, Radico Khaitan, ``We will now be taking the brand national. Earlier, Whitefield was only sold at defence stores. Apart from this, we will be improving the packaging and giving it a new look. It will be targeted at the regular segment (Rs 150-170).''

This segment with sales of 13 million cases is worth almost 33 per cent of the 41 million cases a year whisky market in India. The company is also planning to launch a new brand of whisky in the deluxe segment (priced between Rs 220 and Rs 270 for a 750 ml bottle). Although refusing to divulge the name of the brand, Khaitan reveals that the launch is likely to happen in March next year. These launches are likely to strengthen Radico's position in the whisky market by ensuring that the company has an offering in almost every price segment.

The company already has its leading brand, 8PM, present in the competitive upper-regular segment (Rs 170-220 for 750 ml). Keeping the brand's current growth in mind, Radico Khaitan is expecting to notch sales of 2.5 million cases of 8PM this year. ``8PM, launched in 1999, was a runaway success and had sales of around one million cases in the first year alone, which was a record for any Indian or foreign brand operating in India,'' says Khaitan. The main factors responsible for making 8PM a success, he says, were the quality of packaging and the liquor, the marketing and an advertising campaign which struck a chord instantly with the audience. The brand is already said to have an almost 50 per cent market share in the upper-regular segment.

Recently, the company diversified into food products with the launch of 8PM apple juice, keeping in mind the current ban on liquor advertising on television. Meanwhile, for its other flagship product, Contessa Rum, Radico is looking to expand the distribution network for the brand. The company will also be undertaking a whole new range of marketing activities in a bid to push the brand in the market. ``We are aiming to sell two million cases of Contessa this year," says Khaitan. Contessa Rum currently has a 23-24 per cent market share in the Indian rum market. In the country liquor category, Radico's brands, Masti and Jhoom, launched in Uttar Pradesh last year, have notched up a solid performance, with a combined sales of 3.5 million cases.

Meanwhile, to expand its distribution reach in the country, Radico Khaitan has decided to take the contract manufacturing route. The company currently has around 10 contract manufacturing tie-ups across the country, and is aiming to ink 3-4 similar deals in the coming months.

Apart from expanding its current portfolio of brands, Radico Khaitan is now aiming to be present in the premium segment, through a marketing and distribution tie-up with several foreign liquor companies. Radico is already the country business partner of Ernest & Julio Gallo (manufacturers of the world's largest selling wine, Carlo Rossi). ``The brands will be launched in major markets in April next year," says Khaitan.

Although the current wine consumption in the country is only around four lakh cases a year, consumption is picking up mainly on account of new segments such as women and the younger generation. In addition, the company is hoping that its wines will perform well keeping in mind the high recall value the Ernest & Julio Gallo wines have.

Apart from wines, Radico has also tied up with several other foreign players to launch products such as beer and Scotch whisky in the market next year.

Meanwhile, in addition to distributing foreign liquor in India, Radico has also been steadily exporting its liquor outside the country, principally under the 8PM and Contessa brands. The total exports last year were approximately 75,000 cases with the bulk of exports to the West Asian region.

However, industry sources reveal that the company may be actively looking to enter a few key international markets and even set up bottling plants outside India.

With its plans firmly in place, Radico Khaitan certainly seems all set to break a new record. Surely, reason enough to stay in high spirits!

 
• Catalyst • Resources • Brand Quest • Home • 
Copyright © 2001 Business Line

Republication or redissemination of the contents of this screen are expressly prohibited without the written consent of Business Line