The core business we have is in our imported brands (Johnnie Walker) and Smirnoff and Vat 69 bottled locally. This would be our priority and investment focus here. And this is where we see the biggest growth potential,” Diageo Asia Pacific president Gilbert Ghostine said in a conference call with analysts.
He said to scale up volumes in the domestic market the company will focus on the premium products and later on mass brands. “In India, we continue to believe that the long-term prospects for Scotch are extremely attractive, and that a ‘top-down’ strategy, leading with our reserve brands and Johnnie Walker, is the right one,” he pointed out.
Ghostine said the company has so far met with success in its top-down strategy here growing in various segments like duty-free, on-premise and reserve brands business.
“Anchored by Johnnie Walker that has an iconic status in this market, and at the same time and parallelly manage and grow significantly the bottled-in-India international brands, particularly like Smirnoff and Vat 69, (will be the aim),” Ghostine added.
Diageo is one of the leading players in the premium segment of the domestic spirits market, which is about 214 million cases per annum. However, the premium segment accounts for only about one per cent of the total market in volume terms.
After its failure to pick a stake in the Vijay Mallya-promoted United Spirits, Diageo is focusing on its ‘go it alone strategy in the country. “We continue to believe that there is significant potential in a ‘go-it-alone’ strategy here, although we don’t rule out partnerships in the future,” Diageo Asia Pacific president Gilbert Ghostine said.
Asked if future investments will be on its own or through its existing joint venture with Radico Khaitan, he said, “our core business is in our imported brands and Smirnoff and Vat 69 bottled locally. This will be our priority and investment focus in this market.”
He, however, did not rule out pumping more resources into the joint venture, which he described as complimentary to Diageo’s core business here, saying, “we are not ruling out investment with Radico Khaitan, with whom we have a joint venture established for the past few years.”