While the ready to drink segment (RTD) has not received the kind of welcome it was hoping for, McDowell’s remains optimistic. Apart from chalking out a number of marketing initiatives, it is hoping for friendlier government policies. The company seems ready for a marketing blitz with a number of senior executives being brought in.
“I think it’s a common notion that the performance of the RTD segment has been disappointing. In my perspective, while the performance has not been in line with the expectation, it’s not a section to be dismissed. A lot of responsibility would lie on marketers to develop the segment,” says Alok Gupta, Senior VP, UB Group Spirits Division. According to him, while the Indian consumer is ready to accept the sector, the product needs to be fashioned in a more accessible manner. Quoting the example of pizzas and burgers, he says that while these western products are being increasingly accepted, consumers still go for Indian flavours like chicken tikka and paneer. The secret lies in newer offerings that should be marketed with an insider insight and not based on the product doing well abroad. McDowell’s presence in the RTD sector is mainly through Vodka Cruisers and Romanov Shots.
Speaking on factors that restricted the growth of the RTD sector, Gupta says, “Pricing is one of the key challenges. Because the RTD sector is clubbed with hard liquor, by default the end consumer price goes up. Hopefully over time, a correction will happen, as the strength of an RTD is similar to that of beer and the duty structure should be that of beer. Besides, they have to compete in the same segment. An RTD is seen as light and refreshing, young and youthful.” He adds that a lot needs to be done on the policy front to ensure a smoother accessibility of RTDs. In fact, some states like Karnataka are yet to have an RTD policy, which has kept the entire Cruiser – Breezer category out of the market.
But Gupta expects the RTD sector to see immense growth over the next two years. According to him, early success signs are already present with the Q3 performance of RTDs showing a 25% increase over sales in the Q2 segment, when owing to the summer season, sales are expected to be at their highest. This optimism has found expression in the current revamping of the McDowell’s marketing team. As many as six senior level marketing/brand building executives have been brought in from various sectors like FMCG, advertising and consumer durables. Apart from the new-blood-brings-in-new-ideas concept, Gupta believes that the expertise these executives have picked up in different industries will prove to be an asset. “Our recruitment strategy this time has been to look outside the industry. Our perspective is that most of the industry players are traditional, they are looking at what has already been done while the need of the hour is to do something new,” he explains.
McDowell’s is looking at sales of 35 million cases this year, as against the 30 million last year. Incidentally, McDowell’s Signature, one of the biggest growth drivers for the company, has recently launched a second series of its Success Icon ad campaign. The campaign positions the brand as the “new sign of success”. The new campaign features prominent business personalities like Rajesh Mehta, Managing Director, Rajesh Exports Limited, Neeraj Roy, Managing Director & CEO, Virtual Marketing Limited (Hungama.com & Indiafm.com) and Shravan Shroff, Director, Shringar Films.