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E-Malt.com News article: India: Leading brewers to limit new product launches this year
Brewery news

Product launches by India’s leading breweries will happen at a slower pace this year, tamped down by subdued discretionary spending and naturally longer lead-times in creating new products, Livemint reported on January 3.

Firms such as United Breweries Ltd (UB), Amrut Distilleries Ltd and Allied Blenders & Distillers Pvt. Ltd (ABD) have all lined up launches of some new brews and blends for 2017, a year when growth in the sector is expected to remain slow.

Beer maker UB launched a new alcoholic beverage, Kingfisher Buzz, early last year in berry and lychee flavours and plans to add variants this year. UB, which currently sells Buzz in cities such as Mumbai, Pune, Goa, Delhi, Bengaluru and Mysuru, also plans to take it to states such as Haryana and West Bengal.

“We’re looking at launching new flavours in Buzz and new (beer) brands over the year,” said Samar Singh Sheikhawat, the company’s senior vice-president, marketing.

Family-run Amrut Distilleries Ltd, known for its single-malt whiskies, plans to introduce two premium rums. The company already sells a pale rum called Two Indies and is planning to launch a dark rum this year under the same brand name, most likely in April.

“We have been distilling a rum from jaggery for the past year or two. And we are contemplating introducing (that as) India’s first 100% matured natural rum. That will be at the end of 2017 and will be for the international market,” executive director Rakshit Jagdale said.

Allied Blenders & Distillers Pvt Ltd, maker of Officer’s Choice whisky, is also expected to add to its premium whisky portfolio in early 2017. Currently, ABD has Officer’s Choice Blue in the premium segment.

“We are doing extremely well in the regular segment and there’s always a good scope at the higher levels. There’s a lot of capacity there and it’s a good approach with better profitability,” said Allied Blenders’ executive director Jeetendra Hemdev.

Coming up with new variants of existing products, re-branding existing brands or introducing new brands altogether is a crucial exercise in marketing for alcoholic beverage companies since they cannot advertise their products directly. Product launches also give these firms an ideal opportunity to tweak pricing strategies, said analysts.

However, the launch process does typically have a much longer lead-time at these companies than other consumer firms. And that pace has been even slower recently due to an overall dent in demand.

Only last month, Diageo Plc-controlled United Spirits launched a new original rum variant under its Captain Morgan brand in Kolkata. The company plans to take the new rum to other geographies in the first three months of this year starting with the priority markets of Karnataka, Odisha and Maharashtra, said Nitesh Chhapru, vice-president-marketing, premium and luxury brands for United Spirits.

While United Spirits Ltd declined to comment about its pipeline for 2017, India’s largest liquor company is expected to have new products in store for the year.

“Every type of discretionary consumption in the last one year, even pre-demonetisation, has been quite down. Liquor is also part of discretionary consumption. It can’t escape that and liquor is anyway a higher ticket item,” said Abneesh Roy, senior vice-president at Edelweiss Securities.

Roy also pointed to subdued numbers at companies ranging from Dominos Pizza Inc to Titan Co Ltd to Shoppers Stop Ltd. “Obviously because of demonetisation things have slowed down dramatically which should ease off over the next two-three months. There will be one or two launches happening based on seasonality but I think after March only it should start gradually.”

“United Spirits has got 10-12 power brands that they have identified. They have done (launches or re-launches for) three – rest of the nine also they will do gradually,” said Roy.

The company re-launched Signature whisky and introduced a new whisky variant under its McDowell’s no. 1 brand called McDowell’s No. 1 Silk last year.

This year will see a variety of launches spread across the entire product portfolio including whiskies, wine, vodkas and single malts, said a spokesperson at Pernod Ricard India.

04 January, 2017

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