...ME PROJECT REPORT | | ON INDIAN LIQUOR INDUSTRY Table of Contents 1. INTRODUCTION…………………………………………………………………….4 2. INDUSTRY OVERVIEW…………………………………………………………..5 3. EVOLUTION OF MARKET STRUCTURE…………………………………..8 4. MARKET PLAYERS AND STRATEGIES…………………………………….10 5. NATURE OF COMPETITION……………………………………………………16 6. ENTRY BARRIERS FOR POTENTIAL ENTRANTS…………………….19 7. CONCLUSION………………………………………………………………………… 21 LIQUOR INDUSTRY IN INDIA INTRODUCTION The Indian alcoholic beverages market is gradually opening up as quantitative restrictions are being lifted, import duties are being lowered and domestic regulations are being simplified. These developments are attracting the attention of foreign players, who are faced with a slowdown in developed markets. According to some recent reports, by 2005, the total supply of liquor in the world will be close to 282 hl but consumption will be only about 198 hl. In such a scenario, India would be an attractive market for international players. An estimated 10 million people consume alcohol in India, out of a population of about 1.2 billion. The liquor industry in India is highly government regulated in terms of constraints on manufacturing, storage as well as distribution. The industry faces threat of prohibition in several states, high taxes, restrictions on advertising, restrictions on inter-state movement, etc. However, the deep-rooted social conditioning against alcohol consumption is gradually starting to...
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...Due to strong entry barriers and numerous taxes, existing liquor manufacturers are likely to enjoy undiminished strength over the medium to long term. Brands with a strong sub-segmentation strategy (expansion of product categories by leveraging brand strength) are expected to gain market share as, due to the ban on liquor ads, there are few ways to build new brands. However, pricing power in the face of volatile raw material costs is a concern, as state governments allow price hikes only once a year. Top picks: Tilaknagar & Globus Spirits. Strong entry barriers protect incumbents. Several entry barriers exist for new companies and new brands. These include the ban on liquor ads, limited potential for stock-keeping units (SKUs), ‘import’ duties on interstate transfer of molasses and liquor, limited distribution networks due to the various licenses required and stringent government controls. Sub-segmentation to offset limited brand-building and volatile income trends. With limits on brand creation, companies are leveraging their existing brands with a sub-segmentation strategy. This also caters to consumers who are likely to change products to match volatile per capita income growth. We expect brands that have products at all price points and segments to do well. Pricing power hit by volatile raw material cost & government curbs. Pricing power is a concern for the sector. Most state governments permit price hikes only once a year. The sector also faces...
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...Liquor industry-In 2013… * India is the 3rd largest liquor market in the world. * One of the fastest growing markets in the world, on the back of demographics & economy. * The overall retail market size of liquor is ~$35 billion per annum. * Strong MNC presence with Diageo, Beam Global, Pernod Ricard, Heineken, SAB Miller, Carlsberg and more. * There are 3 broad categories – IMFL (Indian Manufactured Foreign Liquor which includes whiskey, rum, brandy, vodka & gin), Beer and Country Liquor (cheaper, spiced liquor). * Each of these segments has a volume of between 230-260 million cases per annum. Hence, the market is divided almost equally by volume. * Overall growth of the market is ~8% per annum, mainly driven by IMFL and beer, Country liquor is a slow growth market. * Beer has been consistently growing at over 15% per annum over the last few years. * However, the IMFL market is much larger in terms of value – by the sheer difference in price per bottle. Hence, the IMFL market would be over 65% by value and beer would be ~15% by value. * FDI – 100% FDI is permitted in the alcoholic beverages sector. * Taxation is high, Price is controlled – Excise duties, sales tax, VAT and various intermediary margins contribute bulk of the retail price. * In most states, the government tightly controls the retail price of liquor; a tender process is used to determine prices and volumes that will be bought by the distributors. * It...
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...accurate since this colourless spirit is distilled from fermented sugarcane juice. It is not rum, which is made from molasses, but like Brazilian cachaca or Caribbean rhum agricole, both fiery spirits made straight from sugarcane. For a country that grows so much sugarcane, this is strangely the first spirit made directly from it - legal and above board, that it is.Pure Cane, which has just been launched by the Goa-based Desmondji, is also an example of a new trend in the Indian spirits industry - the move towards spirits made from authentic source materials, in traditional ways. This is counter to the way the oddly named Indian Made Foreign Liquor (IMFL) category was conceived in the past. These were made by flavouring and colouring extra neutral alcohol that was derived from molasses, cheaply available as a by-product of sugar manufacture. Nearly all Indian versions of whisky, brandy, gin, vodka were originally made from molasses. Second After Agave Spirit Which meant that by international standards, Indian whisky was not really whisky, since real whisky had to be made from malted grains. It was, at best, a strange kind of rum, which is the one spirit really made from molasses. Pure Cane is, in fact, the second authentic spirit that the company has launched, after it started with Agave Spirit, made from the same base of a cactus-like succulent that is used to make Mexican tequila. The company cannot call its spirit tequila since that term is exclusive to the spirit made...
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...http://topcompaniesindia.com/liquor-companies-in-india/ Liquor companies In India are not only doing well in the country but they have huge market share in the international market as well. Many renowned liquor brands across the globe are supplied by these Indian Companies. Here is the list of top liquor companies in India based on their market capitalization. United Spirits Limited USL is the leading players in the liquor industry and is not only the best in India but it is known as one of the best in the world. With more than 140 brands of liquors, the company is known globally for McDowell’s No.1, Royal Challenge, Black Dog, and Signature Antiquity. The company has 59% market share. * Owner- Vijay Mallya * Address- UB Tower, #24, Vittal Mallya Road Bangalore- 560 001, Phone no- 91-80-39856500, +91-80-39856959 * Website http://unitedspirits.in * Email: contactus@ubmail.com United Breweries The largest selling beer in India, Kingfisher is the flagship brand of United Breweries. The brand is won many awards and has been considered as one of the largest selling beers in the international market as well. This is one of the top 10 fastest growing brand in the UK. * Owner- Vijay Mallya * Address- Level 3, 4 & 5, UB Towers, UB City, 24 Vittal Mallya Road, Bangalore – 560 001, India. * Phone no- +91-80-22293333/22272807 * Website- http://unitedbreweries.com Email enquiries@ub-global.com Radico Khaitan One of the oldest and largest liquor manufacturers...
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...The Indian food and beverage industry (not including alcoholic beverages) was valued at approximately $200 billion in the year 2007, according to a FICCI-Technopak study, and is expected to grow to $300 billion by 2015. Of course, not all of this produce goes in for processing, and the food processing industry is therefore estimated at a smaller $70 billion. Beverages, primarily packaged tea and coffee, milk-based packaged drinks, carbonated drinks and fruit-based drinks account for a small proportion of the industry, a little more than $6 billion. The food and beverage industry is considered a priority sector by the government, since it has potential for generating employment in both urban and rural areas. According to the India Brand Equity Foundation (IBEF), the industry already employs over 1.6 million workers directly, besides its impact on other sectors such as agriculture, logistics and retailing. The food and beverage industry covers many sectors, and the Ministry of Food Processing has broadly divided into the following areas: Dairy processing, Fruits & Vegetable processing, Grain processing, Fish, meat & poultry processing and lastly, Packaged goods such as beverages, snacks, bakery products, convenience/ready-to-cook foods. Currently, many units in the food processing industry work in the unorganised sector, but the share of organised industry is expected to grow, gradually. The packaged food, industry is expected to be a significant contributor to this growth...
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...Indian Wine Industry January 2011 - Posts * ------------------------------------------------- S p e c i a l f e a t u r e AP market to grow by 10% After a total sale of 40 million cases of IMFL between 2009-2010, the Andhra Pradesh Beverages Corporation Limited (APBCL) is expecting a growth of 10 per cent in volume in the coming financial year. This is in keeping with the sales over the last three years which have been increasing consistently. Since April 2010 the monthy sales have fluctuated, with the highest sale months being July and August (refer to table). Last year (2009-2010) the total sales of the AP Beer market decreased to approximately 24.9 cases from 29.2 million cases in the previous year (2008-2009), however an estimate of the monthy sales this year show an increase from 2 million (2009- 2010) to 2.5 million (2010-2011). AP Beverages Corporation Limited (APBCL) is the sole wholesale distributor of Indian made foreign liquor (IMFL) and other alcoholic drinks in the state of Andhra Pradesh. Formed in 1986 with the objective of providing pure, clean and hygienically packed arrack, the Corporation also has the functions of setting up Arrack Bottling units for carrying arrack operations and controlling the IMFL Depots located in the state. The Corporation invites tenders from manufacturers all over the country by issuing an open tender notification in the press for supply of IMFL and Beer on Rate Contract basis. The Government constitutes a Subcommittee...
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...Indian Alcoholic Beverage Industry – Overview India is the third largest market for alcoholic beverages in the world. The demand for spirits and beer is estimated to be around 373 million cases. (Source: Annual Report, Government of India, Ministry of Food Processing Industries). The Alcohol Industry in India can be divided into the following five categories: - 1. Industrial Alcohol 2. Potable Alcohol 3. Mixed Distilleries (Industrial and Potable Alcohol) 4. Bottling Plants (purchasing alcohol and bottling alcoholic beverages) 5. Distilleries producing alcohol from substrates other than molasses. In India, majority of distilleries manufacture alcohol from Sugar Cane Molasses compared to international trend of grain based (rice, wheat, millet, Barley, corn and oat) alcohol. In India, since alcohol is largely produced from sugarcane molasses, the industry is cyclical in nature, as sugarcane production itself is affected every 3-4 years due to monsoon and other factors, resulting in low availability of molasses. Alcohol industry is the second largest source of revenue of the State Exchequer – Rs.25, 000 cores. The Industry turnover is ~Rs.54,000 core (Source: Euro monitor International 2009). It is the only Industry where inputs are decontrolled (free market price) and output is controlled (selling price is determined by State Excise in most States). The Indian spirits market has grown rapidly owing to rapid economic growth, rising disposable incomes, favourable...
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...Markets & Regulations Wine Industry in Maharashtra: An Analysis Sudipto Mitra Two of the countryʹs biggest grape-producing districts, Nasik and Sangli, are in Maharashtra; 20,000 hectares of vineyards here grow more than one lac tons of grapes a year. As much as 99 per cent of the grapes is used for making honey, crushes and jams, or consumed fresh or dry. The rest is used for making wine. Thus the opportunity in this sector is immense and given proper help and guidance this sector can be of great help for employment as well as for earnings. General rules for bar owners as framed and maintained by the local municipal corporation (as per schedule “e” or “fl3”for grant of licenses) are: • Silver plating of the utensils to be used in the bars compulsory. • Fire license to be procured before starting off with the operations. • Glass tumblers a must for all bars for serving wines etc. • Pest control to be done regularly. • The minimum size to be operational is 450 sq. feet. • Tiles compulsory for the floor. • Clean uniforms for the waiters in the bars. • Separate place for washing utensils. • Kitchen to be a minimum distance from the actual serving place. • Twice painting of the walls of the bars every year. • Restaurant/ bar to be cleaned twice per day. Before actually applying for the license, one is required to operate the bar /restaurant for six months. After applying for the license one is required to pay the fees which may vary between one and half lacs to two lacs...
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...abundant supply of fresh spring water there. The Kasauli brewery site was converted to a distillery which Mohan Meakin Ltd. still operates. Dyer set up more breweries at Shimla, Murree,Rawalpindi and Mandalay. Another entrepreneur, H G Meakin, moved to India and bought the old Shimla and Solan Breweries from Edward Dyer and added more at Ranikhet, Dalhousie, Chakrata, Darjeeling and Kirkee. In 1937, when Burma was separated from India, the company was restructured with its Indian assets as Dyer Meakin Breweries, a public company on the London Stock Exchange. Following independence, in 1949 N.N. Mohan took over management of the company and the name was changed to Mohan Meakin Ltd. The company continues to produce beer across India to this day and Lion is still available in northern India. Lion was changed from an IPA to a lagerin the 1960s, when due to East European influence, most brewers in India switched from brewing Ales to brewing lagers. Today no brewer in India makes India Pale Ale. All Indian beers are either lagers (4.8% alcohol — such as Australian lager) or strong lagers (15 % alcohol - such as Australian Max super strong beer). In various parts of north-eastern India, traditional rice beer is...
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...Alcohol Industry In India Indian Spirits Sector - Overview Indian Liquor Industry with estimated market value of INR 340 bn is growing at 12-15% over the last two years. The industry is estimated to have sold 115 mn cases of IMFL last year. The sector is expected to maintain its CAGR of ~15% while the premium segment Wine and Vodka is expected to grow at a higher rate. With consolidation and foreign acquisitions gaining steam the sector is about to witness next phase with realization rising in line with that of their foreign counterparts. There are 325 distilleries in India, with an installed capacity of about 3.58 billion litres of liquor. However, production rate is about 40% of total licensed capacity as total requirement of liquor stands at 1.3 billion liters. Major National Players United spirits with about 60 % of market share in IMFL is the undisputed leader. Radico Khaitan who entered the IMFL space some 8 years back has already cornered 12 % market share and gaining. Other players include Mohan Meakin (9%), Jagatjit (8.5%), etc. International players The major international players are Pernod Richard, Remy Cointreau, and Diageo (Diageo has tied up with Radico for entering Indian markets in brown spirits) Investment Rationale Inherent Potential, Deregulation, western cultural influence and high entry barriers has helped the industry in notching up higher sales growth. Alcohol sale is driven by the high GDP growth and more people entering the drinking club...
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...Alcohol Industry In India Indian Spirits Sector - OverviewIndian Liquor Industry with estimated market value of INR 340 bn is growing at 12-15% over the last two years. The industry is estimated to have sold 115 mn cases of IMFL last year. Thesector is expected to maintain its CAGR of ~15% while the premium segment Wine and Vodkais expected to grow at a higher rate. With consolidation and foreign acquisitions gaining steamthe sector is about to witness next phase with realization rising in line with that of their foreigncounterparts. There are 325 distilleries in India, with an installed capacity of about 3.58 billion litres of liquor.However, production rate is about 40% of total licensed capacity as total requirement of liquor stands at 1.3 billion liters. Major National Players United spirits with about 60 % of market share in IMFL is the undisputed leader. Radico Khaitanwho entered the IMFL space some 8 years back has already cornered 12 % market share andgaining. Other players include Mohan Meakin (9%), Jagatjit (8.5%), etc. International players The major international players are Pernod Richard, Remy Cointreau, and Diageo (Diageo hastied up with Radico for entering Indian markets in brown spirits) Investment Rationale Inherent Potential, Deregulation, western cultural influence and high entry barriers has helpedthe industry in notching up higher sales growth. Alcohol sale is driven by the high GDP growthand more people entering the drinking club with...
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...Industry Overview The Indian liquor industry is a highly competitive industry with strong brands, diversified portfolios and large operations to achieve market leadership positions. The key success factors for the leading players are the need to have operations across various states and also brand salience. While whiskey demand has been gradually declining in the western markets, the demand is rising in India and Asian countries. As per preliminary estimates from International Wine and Spirits Record, the sale of premium whisky has grown to 19.5% in 2010, beating the overall growth of the domestic liquor market by over 3%. This coupled with rising disposable income in the region has made India and other Asian countries an attractive market for MNCs with strong whiskey brands, leading to stiff competition between domestic companies like United Spirits, Radico Khaitan and Allied Blenders & Distillers and foreign manufacturers Diageo, Pernod Ricard and Bacardi for the top position. Royal Stag: Introduction Royal Stag is an Indian-made foreign liquor. It is a blended whisky and is a blend of imported Scotch Malts and selected Indian Grain Sprits. Seagram’s markets it in India. It is produced in several distilleries, some are company-owned and others bottler-owned. One of the key reasons for the brand’s success is its quality that is always same. Seagram has launched this brand especially for Indian market and it’s a big hit. Royal Stag is the leading whisky in the Indian...
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... info@allindiawine.com Secretary Rajesh Jadhav Cell. 9422271528 info@rajdheerwines.com 1 Strictly Private and Confidential Indian Wine Industry current scenario & Proposed corrective measures 2 Strictly Private and Confidential Introduction / Background 3 Agro-based industry. Value addition to Agri.- produce. Food Processing Industry. Converts highly perishable grapes in to non-perishable with value addition. Major rural employment generating tool for unskilled labours. Food based (part of food) alcoholic beverage. Tiny Industry. Encourage first generation entrepreneurs amongst the farmers. Promote agro-tourism. Overall rural development Strictly Private and Confidential Key statistics Statistic Wine consumption Industry size (revenues) Land under cultivation Farmer families dependent on grape cultivation Families employed by the wineries Grape dues of 2009 and 2010 (Maharashtra) Present 1.1 crore litres Rs 1,050 crore 10,000 acres 10,000 6,750 Rs 208 crore Year 2020 estimate 7.2 crore litres > Rs 10,000 crore 21,000 acres 21,000 13,500 NA In addition to the above, the wine industry over the years has contributed substantial revenue to the State and Central exchequer Source: Industry association estimates 4 World wine scenario Largest fruit processing industry in the world Aggregate wine consumption is 26 billion Litres . Per capita consumption of wine in major countries varies from 1 to 60...
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...involved in the production, distribution and sale of alcohol beverages across different regions in India. It is also involved in the exports of alcohol beverages to over 37 countries thus enjoying a global footprint as well. Besides Whyte & Mackay and Bouvet Ladubay being 100% subsidiaries of USL, the company has 22 millionaire brands (selling more than a million cases a year) in its portfolio and enjoys a strong 59% market share for its first line brands in India. Its brands include Dalmore, Black Dog Reserve Scotch Whisky(Scotch); Antiquity Blue, Signature(Indian whisky); Honey Bee(Brandy); Blue Ribbon( Gin); Romanov(vodka)etc. A brief introduction to the History of the company: The company was established in 1826 by McDowell & Co as a trading company with its headquarters in Madras, by an enterprising Scotsman Angus McDowell. McDowell’s rapidly became the preferred purveyors of fine imported liquors and cigars that gratified the rich souls in the British India. In 1951, Vittal Mallya acquired McDowell’s initiating a new era in the history of the company. Its first distillery was established in Cherthala in 1959 in Kerala and began bottling brandy. Its first product was launched in 1962 which was Golden Grape Brandy, created in-house. Over the years, itstarted acquiring different companies in the alcohol business which had distilleries across different states in the country. Following the launch of McDowell’s No.1 Whisky in 1968, its distillery was commissioned...
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