Liquor Industry

In: Business and Management

Submitted By hardikthkkr
Words 486
Pages 2
Alcohol Industry In India
Indian Spirits Sector - OverviewIndian Liquor Industry with estimated market value of INR 340 bn is growing at 12-15% over the last two years. The industry is estimated to have sold 115 mn cases of IMFL last year. Thesector is expected to maintain its CAGR of ~15% while the premium segment Wine and Vodkais expected to grow at a higher rate. With consolidation and foreign acquisitions gaining steamthe sector is about to witness next phase with realization rising in line with that of their foreigncounterparts.

There are 325 distilleries in India, with an installed capacity of about 3.58 billion litres of liquor.However, production rate is about 40% of total licensed capacity as total requirement of liquor stands at 1.3 billion liters.

Major National Players

United spirits with about 60 % of market share in IMFL is the undisputed leader. Radico Khaitanwho entered the IMFL space some 8 years back has already cornered 12 % market share andgaining. Other players include Mohan Meakin (9%), Jagatjit (8.5%), etc.

International players

The major international players are Pernod Richard, Remy Cointreau, and Diageo (Diageo hastied up with Radico for entering Indian markets in brown spirits)

Investment Rationale

Inherent Potential, Deregulation, western cultural influence and high entry barriers has helpedthe industry in notching up higher sales growth. Alcohol sale is driven by the high GDP growthand more people entering the drinking club with newly obtained prosperity or from up tradingfrom the existing brand.

Inherent Potential:

Since liberalization, the economy has been growing at steady pace with per capita income risingfrom INR 23,222 in 2005 to INR 6,012 in 1991.Shift from country liquor to IMFL is expected with rising per capita income and limiting the saleof country liquor by states due to hygiene factor.Industry has…...

Similar Documents

Indian Liquor Industry

...Due to strong entry barriers and numerous taxes, existing liquor manufacturers are likely to enjoy undiminished strength over the medium to long term. Brands with a strong sub-segmentation strategy (expansion of product categories by leveraging brand strength) are expected to gain market share as, due to the ban on liquor ads, there are few ways to build new brands. However, pricing power in the face of volatile raw material costs is a concern, as state governments allow price hikes only once a year. Top picks: Tilaknagar & Globus Spirits.  Strong entry barriers protect incumbents. Several entry barriers exist for new companies and new brands. These include the ban on liquor ads, limited potential for stock-keeping units (SKUs), ‘import’ duties on interstate transfer of molasses and liquor, limited distribution networks due to the various licenses required and stringent government controls.  Sub-segmentation to offset limited brand-building and volatile income trends. With limits on brand creation, companies are leveraging their existing brands with a sub-segmentation strategy. This also caters to consumers who are likely to change products to match volatile per capita income growth. We expect brands that have products at all price points and segments to do well.  Pricing power hit by volatile raw material cost & government curbs. Pricing power is a concern for the sector. Most state governments permit price hikes only once a year. The sector also faces...

Words: 294 - Pages: 2

Wine Industry Secretary Rajesh Jadhav Cell. 9422271528 1 Strictly Private and Confidential Indian Wine Industry current scenario & Proposed corrective measures 2 Strictly Private and Confidential Introduction / Background           3 Agro-based industry. Value addition to Agri.- produce. Food Processing Industry. Converts highly perishable grapes in to non-perishable with value addition. Major rural employment generating tool for unskilled labours. Food based (part of food) alcoholic beverage. Tiny Industry. Encourage first generation entrepreneurs amongst the farmers. Promote agro-tourism. Overall rural development Strictly Private and Confidential Key statistics Statistic Wine consumption Industry size (revenues) Land under cultivation Farmer families dependent on grape cultivation Families employed by the wineries Grape dues of 2009 and 2010 (Maharashtra) Present 1.1 crore litres Rs 1,050 crore 10,000 acres 10,000 6,750 Rs 208 crore Year 2020 estimate 7.2 crore litres > Rs 10,000 crore 21,000 acres 21,000 13,500 NA In addition to the above, the wine industry over the years has contributed substantial revenue to the State and Central exchequer Source: Industry association estimates 4 World wine scenario  Largest fruit processing industry in the world  Aggregate wine consumption is 26 billion Litres .  Per capita consumption of wine in major countries varies from 1 to......

Words: 1700 - Pages: 7

Indian Liquor Industry

...Product Synopsis A detailed market research report on the India beer industry. Researched and published by Canadean. Introduction and Landscape Why was the report written? This report comprises of high level market research data on the India beer industry, published by Canadean. The report covers total market (on- and off-premise) and includes valuable insight and analysis on beer market trends, brands, brewers, packaging, distribution channels, market valuation and pricing. What is the current market landscape and what is changing? After high growth in 2010, the beer market slumped in early 2011, with some revival in the second half of the year What are the key drivers behind recent market changes? Steep tax increases across all Indian states in early summer 2011 decreased demand in the hot summer months and, as the overall level of alcohol has not significantly declined, it can be surmised that beer drinkers are moving back to spirits What makes this report unique and essential to read? The India Beer Market Insight report is designed for clients needing a quality in-depth understanding of the dynamics and structure of the Beer market. The report provides a much more granular and detailed data set than our competitors. All data has been researched, brand upwards, by an experienced ''on-the-ground'' industry analyst who conducts face-to-face interviews with key producers, leading companies in allied industries, distributors and retailers. Key Features and Benefits This......

Words: 1242 - Pages: 5


...Below is a listing of potential Industries and a few examples of businesses and jobs that can be group under each industry. I will take one or two examples and try to explain how it will all work. The Fishing Industry as an example: The old ways of fishing cannot compete in the Global industry today, hence a need for a new and improve means of doing business. Communities will have to designate a portion of the water body to build a fishing port. A fishing harbor will provide a means of docking and undocking, building of boats and other marine lives. Fishing Boats with more sophisticated navigational systems to locate fishes and the ones that can venture into open waters should be built; Canoes just cannot do the job today. Fish Farming must be considered to ensure a year round supply of fish to fuel the industry. Inland fishing should also be looked at. Research Centers must be established to keep the industry at par with new technologies. Students of Universities can engage in Marine Biology and/or Aquarium Science in studying the ocean and its inhabitants and how to protect the environment. Fish Centers with packaging and preservation capabilities should also be built to help control the prices better. A constant source of market must be available to further enhance the industry. Small private businesses that can support this industry are: Restaurants, Grocery Stores, Barbering Shops, Auto mechanics, Law Firms, Communication Centers, Accounting......

Words: 1278 - Pages: 6

Indian Liquor Industry Moves Towards Spirits

...The smell of Desmondji's Pure Cane is heavy, sweet and slightly rancid, like the deteriorating debris of a sugar-cane juice vendor's stall. Which is pretty accurate since this colourless spirit is distilled from fermented sugarcane juice. It is not rum, which is made from molasses, but like Brazilian cachaca or Caribbean rhum agricole, both fiery spirits made straight from sugarcane. For a country that grows so much sugarcane, this is strangely the first spirit made directly from it - legal and above board, that it is.Pure Cane, which has just been launched by the Goa-based Desmondji, is also an example of a new trend in the Indian spirits industry - the move towards spirits made from authentic source materials, in traditional ways. This is counter to the way the oddly named Indian Made Foreign Liquor (IMFL) category was conceived in the past. These were made by flavouring and colouring extra neutral alcohol that was derived from molasses, cheaply available as a by-product of sugar manufacture. Nearly all Indian versions of whisky, brandy, gin, vodka were originally made from molasses. Second After Agave Spirit Which meant that by international standards, Indian whisky was not really whisky, since real whisky had to be made from malted grains. It was, at best, a strange kind of rum, which is the one spirit really made from molasses. Pure Cane is, in fact, the second authentic spirit that the company has launched, after it started with Agave Spirit, made from the......

Words: 796 - Pages: 4

Market Structure of Liquor

...India Equities 18 April 2012 India Consumer - Alcoholic Beverages – Holding the fort Snapshot of liquor industry in India Liquor industry break-up Imported 3% Beer 13% Indian-made foreign liquor (IMFL) industry break-up Rum 20% Beer industry break-up Premium 1% Country liquor 48% Brandy 16% IMFL 36% Whisky 59% Standard 45% Strong 54% White spirits 5% Per-capita consumption: IMFL (ltr/p.a./person) 120 100 80 Per-capita consumption: beer (ltr/p.a./person) 140 120 80 Market share: IMFL and country liquor (%) 100 100 80 60 40 20 0 Brazil South Africa Hong Kong Philippines Indonesia Mexico Malaysia China Australia Taiwan Russia India Argentina Thailand Vietnam Egypt 60 40 20 60 40 20 0 New Zealand Denmark India Germany China 0 FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY11 IMFL Country liquor Market share of IMFL companies Others 13% Mohan Meakins 9% Tilak Nagar 4% Jagatjit 9% Radico 12% Source: Companies, Anand Rathi Research Market share of beer companies Others 13% Mohan Meakins 6% UB 50% SAB Miler 31% Region-wise market structure: IMFL North 12% East 9% South 49% United Spirits 53% West 30% Anand Rathi Research Consumer India I Equities Sector Report 18 April 2012 India Consumer – Alcoholic Beverages Holding the fort Due to strong entry barriers and numerous taxes, existing liquor manufacturers are likely to enjoy undiminished strength over the medium to long term. Brands with a strong......

Words: 24051 - Pages: 97

Confectionery Industry

...The confectionery industry in the UK includes of selling of chocolate, cereal bar, gum, and sugar confectionery. The target of this report will focus on the Western Europe market which used in the data have been calculated using 2012, especially in the UK market . As the result of recent years, the UK confectionary industry has steady decreased in the value growth and marginal volume. It predicts to continue towards 2017. According to Marketline (2012) determined that "The UK confectionery market had total revenues of £6.9bn with a compound annual growth rate of 2.1% between 2008 and 2012. In comparison, the French and German markets grew with CAGRs of 2.2% and 1.7% respectively, over the same period, to reach respective values of £4.29bn and £6.9bn in 2012". Beside this, the mass of the market consumption was dropped with a compound rate of change -0.3% between 2008 and 2012 as the total of 867.5 million kg in 2012. This is forecast to fall to 857.2 million kg by the end of 2017 about -0.2% of a compound annual rate of change. In the segmentation of this market, the chocolate segment is the largest of confectionery in the UK, about 69.5% of the market total value. The sugar confectionery segment is in accounts about 16.3% of the market. And the cereal bars and gum have the same amount of total value about 7.1% Analyse The UK confectionery market is concentrated, with the top three players holding 70.5% of the total market value. The presence of large players such as......

Words: 609 - Pages: 3

Indian Liquor Industry- a Snap Shot

...Liquor industry-In 2013… * India is the 3rd largest liquor market in the world. * One of the fastest growing markets in the world, on the back of demographics & economy. * The overall retail market size of liquor is ~$35 billion per annum. * Strong MNC presence with Diageo, Beam Global, Pernod Ricard, Heineken, SAB Miller, Carlsberg and more. * There are 3 broad categories – IMFL (Indian Manufactured Foreign Liquor which includes whiskey, rum, brandy, vodka & gin), Beer and Country Liquor (cheaper, spiced liquor). * Each of these segments has a volume of between 230-260 million cases per annum. Hence, the market is divided almost equally by volume. * Overall growth of the market is ~8% per annum, mainly driven by IMFL and beer, Country liquor is a slow growth market. * Beer has been consistently growing at over 15% per annum over the last few years. * However, the IMFL market is much larger in terms of value – by the sheer difference in price per bottle. Hence, the IMFL market would be over 65% by value and beer would be ~15% by value. * FDI – 100% FDI is permitted in the alcoholic beverages sector. * Taxation is high, Price is controlled – Excise duties, sales tax, VAT and various intermediary margins contribute bulk of the retail price. * In most states, the government tightly controls the retail price of liquor; a tender process is used to determine prices and volumes that will be bought by the distributors. *......

Words: 535 - Pages: 3

Liquor Industry

...SUMMARY ON ENVIRONMENTAL IMPACT ASSESSMENT REPORT OF NSL SUGARS LIMITED Submitted To KARNATAKA STATE POLLUTION CONTROL BOARD BENGALURU. 1 EXECUTIVE SUMMARY 1.0 INTRODUCTION NSL Sugars Limited is operating 5000 TCD sugar plant, 26 MW Cogeneration power plant and a 45 KLPD Molasses based Distillery plant at Hurugalawadi & Chikkonahalli Villages, Maddur Taluk, Mandya District, Karnataka. The existing plant is having Consent to operate from KSPCB which is valid till 30 th June, 2011. The existing distillery plant is producing 45 KLPD of Rectified spirit/ ENA/ Ethanol with Molasses as raw material. We have obtained the Environmental Clearance earlier for expansion of Distillery plant from 45 KLPD Molasses based to a total capacity of 120 KLPD with installation of 75 KLPD of cane juice based or 37.5 KLPD of Grains based to manufacture RS/ENA/Ethanol from the Ministry of Environment & Forests, New Delhi wide Letter no. F.No.J11011/499/2006-IA II (I), dated 24th October, 2008. Now as a part of proposal of Change feed stock with Molasses based distillery production capacity to manufacture Rectified Spirit/Extra Neutral Alcohol/Ethanol from 45 KLPD to 60 KLPD without any major changes in the equipment with a provision to use cane juice to generate 60 KLPD and installation of a 60 KLPD grain based distillery so that the total production capacity of Rectified Spirit/Extra Neutral Alcohol/Ethanol will be 120 KLPD (No change in the total capacity as per EC obtained...

Words: 3155 - Pages: 13

Identify the Industry

...stores ----Specialty retailer Industry 2. Commercial banking ----Commercial banks Industry 3. Pharmaceutical preparations ----Pharmaceuticals Industry 4. Commercial airline ----Aerospace and defense Industry 5. Computer software ----Network & other comm. Equip. Industry 6. IT service provider ----Internet services and retailing Industry 7. Liquor producer and distributor ----Beverages Industry 8. Integrated oil and gas ----Mining and oil production Industry 9. Mobile phone service provider ----Telecommunications Industry 10. Semiconductor manufacturer ----Motor vehicles and parts Industry The procedure to find the answers: (Just compare the data of the exhibit 4 in the ITI with the data on page 12 of the “An overview of financial statement analysis: the mechanics”) Industry 1 has the lowest Return on Sales, thus is Retail grocery stores. Industry 2 has the lowest Asset turnover rate, so it is Commercial bank. Industry 5 has the highest ROA, which Network & other comm. Equip usually has, thus it is Computer software. Industry 8 has the highest Return on Sales, so it is the Industry of Oil production. Industry 9’s Return on Sales, Return on Assets, Return on Equity, Asset turnover, and Leverage are all the same as the Telecommunications line’s data, thus it is Mobile phone service provider. Industry 10 has negative Return on Sales, Return on Assets, hence it is semiconductor manufacturer. We’ve figured out the industries of 1,2,5,8,9,and 10......

Words: 302 - Pages: 2

Liquor Industry in India

... Liquor companies In India are not only doing well in the country but they have huge market share in the international market as well. Many renowned liquor brands across the globe are supplied by these Indian Companies. Here is the list of top liquor companies in India based on their market capitalization. United Spirits Limited USL is the leading players in the liquor industry and is not only the best in India but it is known as one of the best in the world. With more than 140 brands of liquors, the company is known globally for McDowell’s No.1, Royal Challenge, Black Dog, and Signature Antiquity. The company has 59% market share. * Owner- Vijay Mallya * Address- UB  Tower,  #24, Vittal Mallya Road Bangalore- 560 001, Phone no-  91-80-39856500,  +91-80-39856959 * Website * Email: United Breweries The largest selling beer in India, Kingfisher is the flagship brand of United Breweries. The brand is won many awards and has been considered as one of the largest selling beers in the international market as well. This is one of the top 10 fastest growing brand in the UK. * Owner- Vijay Mallya * Address-  Level 3, 4 & 5, UB Towers, UB City, 24 Vittal Mallya Road, Bangalore – 560 001, India. * Phone no- +91-80-22293333/22272807 * Website- Email Radico Khaitan One of the oldest and......

Words: 4986 - Pages: 20

Indian Liquor Industry

...ME PROJECT REPORT | | ON INDIAN LIQUOR INDUSTRY Table of Contents 1. INTRODUCTION…………………………………………………………………….4 2. INDUSTRY OVERVIEW…………………………………………………………..5 3. EVOLUTION OF MARKET STRUCTURE…………………………………..8 4. MARKET PLAYERS AND STRATEGIES…………………………………….10 5. NATURE OF COMPETITION……………………………………………………16 6. ENTRY BARRIERS FOR POTENTIAL ENTRANTS…………………….19 7. CONCLUSION………………………………………………………………………… 21 LIQUOR INDUSTRY IN INDIA INTRODUCTION The Indian alcoholic beverages market is gradually opening up as quantitative restrictions are being lifted, import duties are being lowered and domestic regulations are being simplified. These developments are attracting the attention of foreign players, who are faced with a slowdown in developed markets. According to some recent reports, by 2005, the total supply of liquor in the world will be close to 282 hl but consumption will be only about 198 hl. In such a scenario, India would be an attractive market for international players. An estimated 10 million people consume alcohol in India, out of a population of about 1.2 billion. The liquor industry in India is highly government regulated in terms of constraints on manufacturing, storage as well as distribution. The industry faces threat of prohibition in several states, high taxes, restrictions on advertising, restrictions on inter-state movement, etc. However, the deep-rooted social conditioning against alcohol consumption is gradually starting......

Words: 6372 - Pages: 26

Liquor Industry

...packaging and new blend. Its product campaign was called as “Live Bold….Game for Life”. It is also said that Royal Challenge has 8 percent foreign scotch while Royal Stag has 2 percent foreign scotch. So it can simply be concluded that Royal Challenge is better in terms of smoothness and taste. But it is actually not picking up the way it should be looking at the new pack and blend. In this paper we will talk about the growth trajectory of Royal Challenge in competition with Royal Stag Whisky in the selected liquor shops and permit rooms in Mumbai. We will also talk about the consumer perception and the blend composition of both the brands. In this paper we will be discussing about the BTL activities which have affected the sales growth both in a positive and negative way. We will be analyzing the current strategy and will also recommend major changes to be taken. Page | 3 RESEARCH PAPER II. Data Analysis A. Liquor Stores – A total of 15 liquor shops in Mumbai were analyzed in terms of its month wise sales figures and the on-going promotion activities. Off Trade Visibility Purchase Scheme (OTVP), gift promotion and suggestive selling are the only promotion activity done in wine shops in concern with Royal Challenge Whisky. The OTVP scheme helps in the visibility of the brand with window display, Planogramming etc. While the gift promotion is about free gift like glass, pen, bags etc on purchase of particular number or on particular SKU’s and......

Words: 4677 - Pages: 19

Liquor Mafia in India

...A Study on Liquor Mafia in India By Kadapa Naveen Chandra Prakash C0654403 2016W_BUS 1013_2 Date: 27th January 2016 Professor: Terry Peddlesden Executive Summery The study is to find the economic, political and social influence of liquor on society. We would discuss about the consequences of ban on liquor and its effects. What are the regulations made by the government to sell liquor by retailer, how they took advantage of loop holes present in the system. Discussion of ethical dilemma for government about liquor business, their industry and impact on society. To analyze the dilemma faced by organizations, economical situations and their social responsibility. How evil forces exploiting these conditions to benefit them, in which most of them are work for government officials, politicians and retailers. The society had adverse effects from persons addicted to alcohol. Alcohol is held responsible for a clichés of accidents and injuries in India, including road traffic trashes. The deaths caused by alcohol poisoning has been at alarming state. The regulations made by government of India inefficient. Prevention programs and treatment facilities are wholly insufficient to meet India's needs. It can be anticipated that alcohol use and related problems will grow in India in the future. Unless planned policy changes are designed and vigorously implemented these problems are likely to produce an excessive burden on this developing country's......

Words: 1586 - Pages: 7

Alcohol Industry

...Indian Alcoholic Beverage Industry – Overview India is the third largest market for alcoholic beverages in the world. The demand for spirits and beer is estimated to be around 373 million cases. (Source: Annual Report, Government of India, Ministry of Food Processing Industries). The Alcohol Industry in India can be divided into the following five categories: - 1. Industrial Alcohol 2. Potable Alcohol 3. Mixed Distilleries (Industrial and Potable Alcohol) 4. Bottling Plants (purchasing alcohol and bottling alcoholic beverages) 5. Distilleries producing alcohol from substrates other than molasses. In India, majority of distilleries manufacture alcohol from Sugar Cane Molasses compared to international trend of grain based (rice, wheat, millet, Barley, corn and oat) alcohol. In India, since alcohol is largely produced from sugarcane molasses, the industry is cyclical in nature, as sugarcane production itself is affected every 3-4 years due to monsoon and other factors, resulting in low availability of molasses. Alcohol industry is the second largest source of revenue of the State Exchequer – Rs.25, 000 cores. The Industry turnover is ~Rs.54,000 core (Source: Euro monitor International 2009). It is the only Industry where inputs are decontrolled (free market price) and output is controlled (selling price is determined by State Excise in most States). The Indian spirits market has grown rapidly owing to rapid economic growth, rising disposable incomes, favourable...

Words: 590 - Pages: 3