Liquor maker Radico Khaitan (RKL) will focus on premium brown spirits in FY22 to expand its profitability margins. Low per capita consumption, rising income, young population and reduced societal taboos support long-term growth for alcoholic beverage and India has majorly been a brown spirits market, it said.
Radico, the makers of 8PM Whisky, Magic Moments Vodka, Contessa XXX Rum and Old Admiral Brandy, plans to launch more brands in the premium brown spirits space during FY22 across categories.
“There are at least three premium whiskies in the brown spirits category currently on the drawing board which would be launched over the next two years,” Amar Sinha, COO, RKL, said. “These are one segment above each other and with very high contributions in terms of price positioning,” he added.
Despite the pandemic, the liquor maker reported a consolidated net profit of Rs 73.53 crore for the fourth quarter ended March 2021 and a year-on-year increase of 21% in net profits for the full fiscal 2020-21 to Rs 277.15 crore. RKL reported an Ebitda of Rs 408 crore for FY21 which represents an 11% growth over last year.
According to the Confederation of Indian Alcoholic Beverage Companies (CIABC),the representative body of leading Indian alcohol beverage companies, sales of Indian Made Foreign Liquor (IMFL) declined by 12% y-o-y during FY21 due to the pandemic-induced lockdown and increase in taxes.
Radico’s IMFL sales volume increased 7.8% y-o-y during Q4 to 6.27 million cases, while it was down 8% y-o-y for the full fiscal 2020-21 at 22.34 million cases.
Despite the pandemic, Radico’s 8PM Premium Black Whisky successfully touched 1 million cases in March 2021 within just two years of its launch in the Indian retail market.
Sinha said there has been a significant shift in people’s consumption pattern with many switching to more premium liquor because they have been mostly home-bound for over a year now. This boosted savings to a large extent and allowed Radico to move towards premiumisation.
Radico’s primary focus will be to take 8PM Premium Black Whisky pan-India as it is currently available in 16 states.
“We have introduced a pocket pack for 8PM Premium Black Whisky in West Bengal, Rajasthan, Telangana, Assam and Uttar Pradesh, which will soon be launched in other markets. This is the first hipster pack in a glass bottle in this segment. 8PM Pocket pack is an innovative 90 ml pack size in look and feel and gives the feeling of a hip flask in a glass bottle,” he added.