July 04: India's largest alcoholic beverage conglomerate getting into the wine business is a good idea, but Subhash Arora finds it difficult to digest the idea of drinking a wine named after Kingfisher, the country's top-selling beer brand
The king of beer has decided to conquer the world of wine. And how! As anticipated, UB Group Chairman Vijay Mallya announced at his company's AGM on Tuesday that UB's wine portfolio will hit the market by next year. Mr Kingfisher also said that riding on the brand value of its beer and the airline, the wines may be named after Kingfisher.
The idea of a wine marketing push from this powerful 'domaine' is welcome. It will help expand the wine industry in a big way. UB has the financial and distribution muscle to make it to the top. It has acquired the French winery from Loire, Bouvet Ladubey, and we are hearing about impending American, South African and Australian acquisitions.
But the idea of using a beer brand for wine seems to be off-putting and it needs looking into. Wine is not the same thing as beer. Beer is not the same thing as sharaab (liquor). True, both beer and wine are low alcohol beverages and they ought to be encouraged against hard liquor, but the similarity ends there.
Wine is a 'beverage of romance' and a food drink that plays with food ingredients on the palate. It delivers pleasure in a manner that 1+1 is greater than 2, unlike beer, which can at best ride with it. It is also a drink of mental perception and programming. One thinks of the aromas and fruit, acidity and tannins, while drinking wine, but not of hops or the froth. It also pairs differently with different dishes and cooking styles, giving unique, enjoyable experiences.
The thought of beer while taking a sip of wine has never been found appealing by any wine lover and may put one off wine altogether.
UB's strength lies in its financial and distribution muscle. Nothing can stop Kingfisher Airline from splashing a 'Buy One Get One Free' offer. Buying a flight ticket and getting a bottle of Kingfisher Wine free alone will accelerate the growth of the consumption rate. But does it make any sense naming a wine brand after a beer label?
Pernod Ricard Seagram India, the official purveyor of the premium Scotch Chivas Regal, is reported to bundle offers of complimentary cases of Jacob's Creek to sell Chivas, but it doesn't call its wine brand Chivas.
And though Jacob's Creek, 14,000 cases of which were sold last year, is the largest single imported wine brand in India, the company wisely decided to call its Indian wine, whose first vintage is now maturing in Nashik, by another name. They don't want to confuse issues.
It will be interesting to see how UB uses its distribution muscle. At least two of its major distributors have very successful wine distribution channels and it will be interesting to see if the company can use them to promote their wines as well. Wine marketing is not necessarily the same as beer marketing, after all.
For one thing, the target groups are different. Women, who are driving a substantial part of the wine market's growth, aren't likely to be impressed with a name associated with a beer label. It has been proved by various studies in Europe and the US that wine drinkers are generally more sophisticated and are likely to be impressed more with the marketing strategy than a name that reminds them of beer.
It is also pertinent to mention here that this is not their first outing with wine. Until four years ago, they had an expanding portfolio of imported wines. One even noticed them at a stand at a wine show in Delhi where the staff talked of gaining a commanding position in the imported wine market. But the wine portfolio disappeared before the take-off. One often hears in the cocktail circuit how the group has been using its influence in keeping the import duties high to discourage people shifting from beer to wine.
If that's true, the real beneficiaries of the high tax regime have been the Indian producers, who have been growing at 35% and have sold practically anything in a wine bottle. Of course, we shouldn't forget the hotels, which have also benefited from the high import duties, using them to argue their case for customs duty exemption. They went on to pocket the profits, without doing anything to deliver their promise to reduce prices.
The truth appears to have dawned on the Mighty M, who has joined forces with the wine industry at the right time when the market is at the take-off stage. The consistent growth of over 25-30% annually during the last four years may not sound much with the current low consumption of over 700,000 cases, but at this sustainable rate, wine sales may cross 8 million cases or more in 10 years.
There are no known beer companies using the same brand name for wines. Foster's is famous for its beer in India (as we reported some time back, it has sold its Indian brewing operations to SABMiller), but it is one of the biggest wine companies in the world. It has over 40 different wine brands, but none is named Foster's.
Another parallel closer to home is the Cobra Beer, one of the largest selling beers in UK, owned by Karan Billimoria. He, too, made his millions from the lager business and then decided to diversify into wines ten years back. When he launched his wines, he did not call them Cobra. He chose his father's name and called his wines General Billimoria. What if UB names its wines after Mallya, or Vithal in honour of his late father? An interesting possibility?
We welcome wines from the Kingfisher stable, but no, I wouldn't drink a wine named Kingfisher.
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