Managing Director | 03 Jan 2004
“We are already witnessing mergers in the industry between MNCs and Indian brands. At the premium end, it’s the blend and brand image, which matters. Indian brands are poised well on both these parameters.”
Following stints with Becton Dickinson India and Whirlpool in finance positions, Harish Moolchandani took over as Managing Director, Allied Domecq Spirits and Wine India (ADSWI) in September 2003. In a dialogue with Jasmeen Dugal, Harish Moolchandani shares his views on the market size of Scotch consumption in India, how ADSWI keeps it’s commitment to developing it's core International brands in India, simultaneously catering to the needs of the Indian market, and the importance of point-of-purchase promotions for brands in the impulse purchase category.
Q. What is the market size of Scotch consumption in India? What is Teacher’s market share?
In the absence of a syndicated retail audit, the market estimation is dependent on how we dissect the market. The Indian Scotch market has seen a growth of 8-10% annually. Overall, the Scotch market is estimated to be 2% of the total whisky market. Teacher's Highland Cream and Teacher's 50 (premium twelve-year-old Scotch) enjoy market leadership in their respective segments in the civil market.
Q. What kind of growth have you seen in 2003? Do you see the liquor market growing in the next two years?
The Allied Domecq brand portfolio has been growing faster than the industry growth. We believe this trend will continue; I am very optimistic about the growth of the industry. People have been raising their consumption of and — aspirations for — premium brands with the increase in their disposable incomes. I see the scotch market growing more than 10% each year for the next few years at least.
In India, Allied is among the leading players in the scotch segment with brands like Teacher's, Teachers 50, Old Smuggler and Long John. Of course, Allied's International portfolio is available in the country through duty-free shops and in select hotels, clubs and restaurants. The company's core spirit brands include Teacher's, Ballantines Scotch, Kahlua liqueur, Beefeater premium gin, Tia Maria and Sauza tequila.
Q. What is the target group for ADSWI? Did the company conduct any consumer research before launching some of the International brands in India?
The core Scotch consumer is between the age group of 30-50 and is well travelled and affluent. The top ten Indian cities are the focus markets. Allied Domecq commissions consumer research regularly. The primary research objective is to get insights prior to any launch and validate our ongoing communication.
The research is aimed at understanding the respondents' attitude towards social life, their scotch brand preferences, consumption patterns, occasion of consumption as well as their disposition towards other alcoholic beverages. A fact reinforced by the research is that scotch drinkers in India lay greater emphasis on the imagery and brand values offered by their bottle of scotch.
Q. What is your strategy to promote ADSWI’s varied brands?
Teacher’s Highland Cream and Teacher’s 50 have been growing faster than the industry trend. We plan to keep up steam on both these brands. It is in this context that we have raised the stature of the ‘Teacher’s Achievement Awards.’
The Old Smuggler portfolio, on the other hand, has seen its share of ups and downs. Old Smuggler scotch and rum have a tremendous familiarity level in the Indian market. We see a lot of promise in the Old Smuggler portfolio and will be reviewing all elements of the marketing mix to grow this brand. We have a strong presence in western India with Long John Scotch whisky; this brand is positioned in the value-for-money scotch segment. Our portfolio strategy review is in the process of deciding the future course of action at the marketplace.
Q. What kind of distribution network does ADSWI have for its brands?
Allied Domecq brands are available in all major Indian markets. The distribution network consists of premium off-premise and on-premise outlets.
Q. How do you manage a fine balance between keeping your commitment to developing the core International brands in India as well as catering to the needs of the Indian market?
The International portfolio has its own loyal consumer base. A majority of Indian Scotch consumers prefer their drinks to be smooth. The Teacher's blend suits the Indian taste and is a preferred blend over other brands.
Q. What are the branding techniques that have been used in promoting your products?
We have been consistent in our branding effort. Our communication has been based on saluting and celebrating achievement. The Teacher's promise has been ‘Genuine Quality Speaks for itself.’ The increasing awareness and success of the ‘Teacher's Achievement Awards’ is an indication of the strong bonding between Teacher's and our consumers.
Q. What is the concept behind the ‘Teacher's Achievement Award?’
From the basic inputs from frequent research conducted by ADSWI to determine scotch drinking habits across the country and to determine the reason behind the preference for Teacher's, Allied Domecq identified ‘Achievement’ as a platform for the brand three years back. Now, achievement and celebration go hand in hand. This, coupled with the key consumer insight that there is an achiever in all of us, served as a base to institute the ‘Teacher's Achievement Award’ in 2001.
Q. Is the awards programme an attempt to strengthen Teacher’s share in the Indian market?
Our current focus is to position and grow the Teacher's 50 brand as a premium twelve-year-old Scotch whisky. Our marketing activity maintains a balance between ATL & BTL. Owing to the nature of the category, we have to rely heavily on BTL campaigns. The ‘Teacher's Achievers Awards’ held across all major cities is one such example.
Q. How important is point of purchase promotions for brands in the impulse purchase category?
Point Of Purchase promotions, when executed well and sparingly, can help gain incremental sales. However, in an evolved category such as Scotch, consumers are aware and decisive in their choice of brands.
Q. With major MNCs entering the Indian liquor sector, how do you see the local players coping with the onslaught?
Consolidation is bound to happen. We are already witnessing mergers in the industry between MNCs and Indian brands. At the premium end, it’s the blend and brand image, which matters. Indian brands are poised well on both these parameters. As such, there are successful brands already built by Indian corporates.
For the new MNC entrants, it will require a strong market presence and consistent brand building to garner share from the Indian brands. On the other hand, forging alliances and franchisee arrangements may well lead the way.
Q. Tell us about your scotch workshops. What are your other promotional activities?
The Allied Domecq ‘Sense Your Scotch’ appreciation campaign is an effort to spread knowledge about Scotch whisky. These sessions are targeted at an exclusive group of scotch consumers across Indian cities, and are conducted by Arun Seth, VP, International Trade, a qualified Master of Scotch Whisky. He takes you on a voyage of discovery to appreciate the definition, manufacturing process and tasting of various kinds of Scotch whisky.
The ‘Sense Your Scotch’ sessions have been held earlier to cater to key F&B personnel in the country. Apart from these sessions, Teacher's has also embarked on nightclub promotions where Sandeep Verma, a barman achiever in his own right, promotes Teacher's-based cocktails called ‘Teacher's Scotchtails.’
Q. What is the extent of your marketing activity? Do you rely heavily on below-the-line support? It is believed that at Allied Domecq, the approach to brand promotion is somewhere between above the line and below the line – the ‘through-the-line’ approach.
We maintain a balance between above the line and below the line, which explains our ‘through the line’ approach. We link the ground promotions to connect better with our consumers. The Teacher's Achievement Award and the Teacher’s Achievers Office Golf Championship are both successful examples of our ‘through-the-line’ strategy.
Q. Do you see India emerging as a focus market for Teachers Scotch Whisky?
Of Course, Teacher's enjoys a high preference with the Indian Consumer. The brand has seen consistent growth in the past and we are working hard to ensure that we further grow this franchise.
Q. With a ban on advertising, how is ADSWI continuing to spread awareness about its products?
We lay emphasis at the point of purchase, both off and on – premise.
Q. Why has ADSWI discontinued bottling Malibu?
Allied Domecq was never bottling Malibu in India. Post the global acquisition of this brand by Allied Domecq, the brand has been relaunched across markets in a phased manner.
Q. Are there any the new launches on the cards?
Our current focus is to position and grow the Teacher's 50 brand.