Radico Khaitan bets big on brand-led growth

Radico Khaitan bets big on brand-led growth

Author | Source: The Economic Times | Tuesday, Jan 10,2006 7:51 AM

Radico Khaitan bets big on brand-led growth

Radico Khaitan is betting big on brand led growth. The Rs 1,000-crore liquor major, having made a transition from distillery and bottling operations to brand marketing, is now scouting for an overseas brand for acquisition.

The company has set up its wholly-owned subsidiary, Radico International based in Dubai, to spearhead its global foray. “We are open to any kind of JV, acquiring distilleries and brands in the international market,” Abhishek Khaitan, MD told ET.

He sees all future growth for the company coming from inorganic route, primarily acquiring brands and bottling units. Recently, Radico had given a mandate to Rabo India Securities as strategic adviser to identify international and domestic spirits brands for acquisition. Considering the company is eager to enter the premium whisky segment where it has no presence, sources say, the next acquisition could happen in the space. “We shall be ready to launch a product in the premium whisky segment by year end,” Khaitan said, without pointing out the brands Radico is eyeing in the premium segment.

In September, Radico made a Rs 35 crore acquisition - IMFL brands of Brihans Maharashtra Sugar Syndicate, adding eight new brands to its portfolio. These included some bestsellers in the south such as, Brihans Napolean Brandy, Brihans Premium Whisky and Lord Nelson Rum, among others.

“The acquisition has given us a straight entry into south and 40% share in regular whisky segment in Delhi apart from a big thrust in the canteen stores department,” Khaitan said. From a modest brand portfolio of seven brands, Radico has built an ominous line-up of 34 brands today. And it is hungry for more.

While the company is open to acquiring more brands, it has also entered a new segment with the launch of Magic Moments Vodka and plans to go national by the end of February. At Rs 270 a bottle, Magic Moment is placed between the regular and premium vodka brands.

The company is bullish that its new offering would replicate the success of its maiden brand effort - 8 PM that crossed the one-million cases mark within a year of launch. Today, the flagship brand sells more than 3.2 million cases a year. Radico grew over 58% last fiscal and has three millionaire club brands in its stable.

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