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Brindco has been the biggest importer for a few years,
replacing Sonarys with Global Tax Free unable to slip past the runner
up. UB has been the new potential sprinter, much talked about like the
recent IPO of Reliance Power which is years away from producing the first
kilowatt but has been the toast-of-the town till recently when it fell
in from the sky. Pernod Ricard has been pushing its Jacob’s Creek
Australian label steadily. But Diageo may well turn out to be the dark
horse in marketing imported wines because of its inherent expertise and
strengths including financial and marketing muscles. It may be light years
away from displacing Sula or Indage from the premium or total market leadership
but it may carve out a respectable share in the domestic market with its
Nilaya label.
If one stops by the duty free shops at the Delhi airport to watch the
speed at which Black, Gold and Blue Labels vanish from the shelf, one
can wonder in awe how much Diageo is pushing the higher-ended spirits.
Dalwhinnie, Lagavulin, Talisker, Cragganmore, Oban and Glenkinchie are
the premium malts being aggressively promoted by the company.
The liquor giant is even creating a high-profile marketing team dressed
in Armani suits to push the top end reserve brands portfolio.
The company’s annualised advertising and promotional expenditure
could be touching Rs 1.4 billion this year. Almost a third of this will
be blown next week; it is unveiling the first Indian edition of Johnnie
Walker Classic golf tour to be played in the DLF Golf Club from February
28, with Gold Label being the sponsor. Diageo is expected to blow around
Rs 400 million, including Rs 100 million ($2.5 million) as the prize money.
Diageo also produces and markets wines of a wide - spectrum quality American
wines - Sterling Vineyards, Beaulieu Vineyard, Sterling Vintner's Collection,
the Chalone Wine Group brands, Solaris, and Blossom Hill, as well as the
French wines of B & G.
B & G has been the face of French wines in India in the eighties
and nineties and is still in existence. Popularly known as Bootlegged
& Ghatia (cheap) wine, it used to be the delight of bootleggers
because of the enormous profits it assured them. Slightly lower quality
than the entry level line that was sold in the gray market- the only existing
market, was earlier with Seagram’s and was the staple fare served
at parties offering wine. It was also available with free home delivery,
at a 400%+ distributor margins. Several 5-star hotels also carried it
proudly in their wine lists; this was in the pre-liberalisation era.
B & G label is the French Baron & Guestier, exported throughout
the world. It boasts of a wide range of premium award winning wines that
have been added to the portfolio over the years.
Besides the B&G, Diageo has also introduced Blossom Hill and Piat
d’Or in the market.
Diageo India Pvt. Ltd, the Indian subsidiary is reported to have also
finalized an arrangement with Reliance Fresh, to set up wine boutiques
at Reliance’s retail supermarkets throughout India. It plans to
set up initially in Mumbai and Pune and later extend to Delhi, Bangalore
and Chandigarh..
It has already signed wine making agreements with Renaissance and Mountain
View Wineries in Nashik, for producing the Indian labels. It launched
Nilaya label a couple of months ago in Goa and Mumbai, as already reported
in delWine.
The Blossom Hills and Piat d’Or ($8 retail price in the USA-source:
www.wine-searcher.com), are
high selling popular brands, a notch above the entry level and with the
high customs duty, are quite marketable, given the push being given by
the company.
The company had tried to buy a strategic share into Sula Wines last year,
but when Rajeev Samant politely but pointedly spurned the overture, it
managed to snatch away the long time national marketing manager, Adrian
Pinto. It also snapped up the regional marketing manager of Moet Hennessey,
Ray Martin to strengthen its marketing team. The company has an extensive
network of national distributors like the other new biggies in the game,
UB and Pernod Ricard.
If it uses the battery of Armani-types to promote and market the premium
brands like Sterling by re-enforcing the marketing set-up and use some
of its advertising budgets towards wine sales, it could give the existing
importers a run for the money.
It has already announced launching of some of the sterling, Sterling
labels costing up to $1000. Diageo expects reserve brands to account for
25% of sales by value and 40% of profits in India.
Perhaps, we will soon see an international Blossom Hills Golf Classic
for the blossoming young golfers debut in India.
Subhash Arora
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