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A K M A Shamsuddin

President | 17 May 2003

"About 50 per cent of the better-known liquor brands in India belong to Shaw Wallace. In that respect, there is no change in the positioning of the company; we are consistently focused on offering powerful brands that set new yardsticks for the industry to match. Shaw Wallace is becoming much more of a marketing driven company and is increasingly taking the route of imaginative promotions, events and associations for building brands. "

This session of Brand Speak, A K M A Shamsuddin, President, Shaw Wallace shares valuable insight about Shaw Wallace brand positioning, key plans of expansion and consolidation with Ashish Sinha of exchange4media.

Q. What are the challenges of liquor advertising? How do you tackle them?

As a leading alcoholic beverage company in the country, we are always on a lookout for new and innovative ways to engage our consumers through right communication. In doing so, we are always guided by the code developed by the Confederation of Indian Alcoholic Beverages Companies (CIABC), the apex association of alco-bev companies of which Shaw Wallace is a member. So long as our communication meets the standards and conditions of the CIABC code, we are keen on evolving new avenues for brand expression. Shaw Wallace is becoming much more of a marketing driven company and is increasingly taking the route of imaginative promotions, events and associations for building brands. While above the line spend is slated to go up from the existing 30 per cent to 60 per cent, below the line spend will be gradually reduced from the current 70 per cent to 40 per cent by the end of current fiscal. This represents a marked shift in the marketing spend of the company and a conscious move from a brand push policy to a brand pull policy. Brand image, highlighted through association with relevant events and sponsorships, has been identified as the most important factor in fuelling consumers' demand. Accordingly, as a part of the overall marketing mix, Shaw Wallace is positioning its brands by associating with world-class events. The activities that are woven around brands need to embody respective brands' attributes. For instance an association with golf helps Shaw Wallace impart an aura of sophistication and premiumness, the attributes that Royal Challenge stands for. I would like to reiterate that Shaw Wallace focuses on genuine and logical brand extension rather than surrogate advertising and all our brand communication will reflect this bias.

Q. Which are the power brands for Shaw Wallace? What kind of market share do they command in their respective areas?

Shaw Wallace's key brands have shown encouraging performances in highly competitive market conditions. Antiquity Rare Premium Whisky and Royal Challenge Premium Whisky account for 85 per cent and 60 per cent of the super premium and premium whisky segments respectively. In case of Vodka, White Mischief Vodka accounts for 33 per cent market share. Vladivar Vodka from Kyndal's stable launched a few months ago in the premium segment has already garnered 15 per cent market share in that segment. Similarly in case of brandy, which mostly sells in the Southern states, Shaw Wallace's two brands John Exshaw Brandy and Golconda Brandy have a market share of 21 per cent and 12 per cent respectively in prestige segment. In the premium segment, Shaw Wallace's VSOP Brandy has a market share of 40 per cent. In the rum segment, Old Adventurer Rum from Shaw Wallace sells over one million cases in CSD alone.

Q. What has been the growth of Shaw Wallace liquor division in 2002-2003? Was it up to the satisfaction? How have you positioned your company in the Indian Liquor Industry? Has the positioning changed over the years?

Shaw Wallace has traditionally been known as a company which has unmatched capacities in building brands which stand apart on quality parameters. Antiquity Rare Premium Whisky and Royal Challenge Premium Whisky have been connoisseurs' choice for years for their blend and consistency despite the entry of internationally popular premium brands. If you carefully observe, about 50 per cent of the better-known liquor brands in India belong to Shaw Wallace. Besides Antiquity and Royal Challenge, Director's Special, Haywards and White Mischief are other brands, which have emerged as icons in the industry. In that respect, there is no change in the positioning of the company, we are consistently focused on offering powerful brands which set new yardsticks for the industry to match.

Q. Can advertising affect the sales of liquor? How important is advertising to the liquor industry?

Communication is very important to project the brand attributes. More than any thing else, consumers buy a product for what it stands for. This is all the more true in case of lifestyle products like liquor where positioning of one brand puts it apart from other similar brands. Advertising and right communication help in imparting that distinctive edge.

Q. You have been amongst the leaders in the white spirit market? What new offerings can we expect from you in the coming months?

Vodka is the fastest growing segment in IMFL in the country. Shaw Wallace is the leader in this segment with its brand White Mischief Vodka accounting for 33 per cent market share. The brand is growing at over 30 per cent per annum. Vladivar Vodka has created history by acquiring a substantial market share in a very short span of time.

Q. How many cases did you sell in the last year in various categories? How would you rate the potential of the Indian Liquor market in the coming one-year? Who is your nearest competitor?

Shaw Wallace is India's second largest marketer of liquor and enjoys 16 per cent market share. The UB Group accounts for approx. 25 per cent market share. The total IMFL business in India is estimated at 89 million cases valued at nearly Rs. 9000 crore. Shaw Wallace's total capacity is over 25 million cases per annum. In the current fiscal, Shaw Wallace's focus will be to bolster topline and bottomline through consumer focused activities in key brands like Royal Challenge Premium Whisky, Director's Special Whisky, John ExShaw Brandy, Golconda Brandy and VSOP and White Mischief Vodka. Shaw Wallace is also considering launch of new brands to fill in gaps in its portfolio that may exist in certain price and category segments.

Q. What kind of investments have you made in your distilleries in recent times? Are there any expansion plans in the coming six months?

Shaw Wallace has initiated an ambitious drive for modernisation and capacity expansion of the existing units and acquisitions of new distilleries. The expansion cum technological upgradation work at the Aurangabad unit is already complete. McKinsey & Company, management consultants of international repute, will assist in acquisitions of new units to strengthen and broadbase the existing network of manufacturing units of the company. The drive will entail an investment of Rs 100 crore.

Q. How do you view the Ready to Drink (RTD) segment? What is your offering in this segment? How has it done in the market so far?

Ready-to-drink is a segment, which holds immense potential for growth in India. In view of globalisation and media penetration, a large section of consumers particularly the urban youth are willing to experiment and savour different tastes and flavours. The RTD brands in view of low levels of alcohol also offer themselves as preferred drinks in party or social circles. All these factors make RTD a lucrative sector for a progressive company like Shaw Wallace We are looking at this segment seriously and plan to launch VEBA, the RTD brand from Kyndal's stable. Initially VEBA will be launched in three flavours.

Q. You have been sponsoring corporate events and sports in a big way. How much do you spend on below the line advertising? Would you be able to share some details on your latest TVC on Royal challenge (agency / creative line / director)? When will it be out in the market?

As I mentioned earlier, our above the line spending is increasing given the requirements of the market place. Our BTL spend will be about 40% of our overall marketing spend this year. We are constantly working to ensure that all our brands remain relevant and contemporary and any new commercials or campaigns made will be pursuant to that objective.

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