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Published on: July 12, 2021, 3:07 p.m.
Kyndal sets trends in transition
  • Alcoholic beverages are considered a sunrise industry owing to their high-growth potential and increasing social acceptance

By Suman Tarafdar

One of the indelible images of the lockdowns over the past year and a half was the rush at liquor stores as soon as lockdowns were lifted! Whether as coping aids or more leisure time at hand, consuming alcohol at home has become a far more established trend than ever before – one of the many sideshows of Covid-19.

“The pandemic and subsequent lockdowns along with social distancing norms led to a 35-40 per cent fall in the business with a 15 per cent decline in consumption, globally," says Pushpanjali Banerji, brand director, Kyndal group. “Before Covid-19, only a third of people, who consume mixed drinks in pubs and bars, did so at home, but the national lockdown saw that figure rise to half, especially with young adults. Customers are looking up to brands, bar-tenders and influencers, to help them create personalised cocktails to impress friends and family and to have self-reward moments at home with available ingredients.” She points out that the alco-bev segment has seen a spike in-home delivery to ‘do-it-yourself’ (DIY) cocktail packs.  

However, the pandemic and subsequent lockdowns led to a 15 per cent decline in consumption globally, leading to a 35-40 per cent fall in revenues. In India, the lockdown in 2020 led to a 12 per cent fall in sales of Indian made foreign liquor (IMFL), industry body Confederation of Indian Alcoholic Beverage Companies (CIABC) said in May.

High on hope

Industry insiders are hoping it’s a blip. As liquor consumption in India has risen rapidly in recent years, many global brands are seeking a slice of this fast-growing pie with increased attention to growing the Indian market. From greater supplies to more attention-grabbing displays, creating awareness about different brands via appreciation sessions, bringing brand ambassadors to India, collaborating for events – Indians are being courted by brands as never before. India is the world’s ninth-largest consumer of all alcohol by volume, according to IWSR Drinks Market Analysis and the second largest consumer of ‘spirits’, which includes whiskey, vodka, gin, rum and tequila. The India alcohol market was valued at Rs2.8 billion in 2018 and anticipated to reach Rs5.4 billion by the end of 2027, growing at a CAGR of 7.8 per cent, according to Coherent Markets Insight report.

The rapid rise in urban population and disposable incomes of a sizable middle-class are significant reasons behind the increase in alcohol consumption in India, points out Banerji. “With exposure to global brands now more than ever, Indian customers represent an interesting segment for the alco-bev industry. Consumers’ ability to broaden their horizons, because of increased affluence, experimentation, and global visibility, has resulted in an increase in demand for spirits in categories of whiskeys and brandy wherein consumers are looking for more cultivated options.”

According to Banerji, the consumers are now being driven by a sense of exploration. “Tastes change increasingly in subtle shifts, which are reflective of different waves of categories becoming popular at certain periods. What helps in enveloping more people into trying out new products is effective communication with them via different marketing channels. Companies also need to understand the versatility of their audiences, to pre-empt and cater to their changing needs.”

  • Siddharth Banerji and Pushpanjali: consumers are driven by a sense of exploration

    Siddharth Banerji and Pushpanjali: consumers are driven by a sense of exploration

Alcoholic beverages are considered a sunrise industry owing to their high-growth potential and increasing social acceptance, says Banerji. “There will be more private celebrations going forward, as well as more moments to experiment with DIYs, which often leads to interesting consumer behaviour shifts. India is likely to see growth not only in the ‘Bottled in India’ (BII) segments but also in the Bottled in Country of Origin (BIO) segments as people are freely spending more on good quality products. She points out that growth is also being seen in segments like Indian Single Malts and craft spirits such as gin.

No note on liquor is India is complete without the mention of challenges thrown up by India’s unique liquor regulatory framework. Banerji too points to a plethora of direct and indirect taxes. “This results in big price variations for the same brands, thereby changing consumer demographics across the country. It makes each market/region unique, requiring a novel treatment as the alcobev segment is not a “one size fits all” category.

Accessibility and ease are also challenging wherein home deliveries aren’t allowed or the fact that in the majority of geographies, women may not be able to freely walk up to a retailer without the fear of judgment. The ban in the advertisement makes a huge difference too.”

While Banerji notes the relaxation in liquor laws, including several states permitting home delivery of liquor for the first time, she feels it would be “better to mobilise the revenue by liberalising the distribution structure and providing a safer and more premium experience. This is why more states are allowing mall shops and premium shopping experiences to create more dignified, transparent consumer experiences.

In this transitory phase, brands and consumers are trying to get closer and the state governments are trying to facilitate this. Many aspects indicate the growth in the market”.

Kyndal has been at the forefront of pushing the envelope of identifying lucrative opportunities and unmet market gaps and is equally focussed on both BIO and BII categories, Banerji says.

  • Brands and customers are getting closer

    Brands and customers are getting closer

Focus on growth

The Kyndal group, which was started by Pushpanjali’s father Siddharth Banerji in 2006, who led a management buyout of Kyndal from Whyte and Mackay. Kyndal then became an independent alco-bev company manufacturing, marketing and distributing premium to luxury segment brands in the Indian subcontinent, the Far East, and the Middle East.

Kyndal’s portfolio has some of the most sought-after brands globally; so, it is no surprise that iconic brands like The Macallan, Bootz Rum, Cutty Sark are all category leaders in their segments, she says. Pre-pandemic growth was impressive. IWSR 2020 noted The Macallan grew by 92.3 per cent and Cutty Sark saw growth of 80 per cent in India in 2018-19.

For Kyndal, the top markets are Delhi, Uttar Pradesh, Haryana and Maharashtra, though its brands are also present in Puducherry, Goa, Kerala, Rajasthan, Telangana, Andhra Pradesh, Odisha, Punjab, Chandigarh and Assam. Maharashtra and Haryana are its biggest markets for The Macallan and The Famous Grouse, while Uttar Pradesh is the largest market for Cutty Sark and Bootz Dark Jamaica Rum. As India emerges from another lockdown, what changes and trends will endure remains to be seen.

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