Group No.1Team Members

o Kiran Ambekar o Keyul Joshi o Asiha Gujar o Ashwin Satra o Shraddha Rawool

(01) (13) (25) (37) (49)

Industry-Distillery

Presented to : Prof. Shirish Bhakare

Market size

Market : 58 million cases Past growth 15 % CAGR per annum Brown spirits - particularly whisky, rum & brandy account for over 75 % of this market South and North share 60% of market

SegmentBeverage and Distilled (US $ 1907 million)IMFL (US $ 1395 million) BrownSpirits

Country Liquor

White Spirits

LicensedAlchohol produced by distilleries and sold to state govt. marketed as licensed country liquor

Illicit

Whisky

Gin

Brandy

Vodka

Large scale production of illicit brew in unorganised sector

Rum

Growth Rate

Key Players

Company Herbert sons McDowell & Co. Shaw Wallace UDV Bacardi Seagram

Market Size (Million cases) 8 17 9 Over 3 0.1 0.8

Brands Bagpiper McDowell no.1, Diplomat Directors Special Green Label, Smirn Off Bacardi Rum Royal Stag

Value Chain

Competitors Analysis

Source : www.moneycontrol.com

Customer Key Buying factors Demographic Factors - Sex, Age etc. Rising income levels. Changing age profile. Changing lifestyles. Reduction in spirits prices. Motives Perception Ability and Knowledge Attitudes Culture and Sub-culture. Roles and Family Influences.

Personal

Psychological

Social

Entry Barriers

Exit Barriers

Supplier Analysis

IntroductionUNITED SPIRITS LTD

IntroductionCorporate Structure

Marketing AspectsBrand Building Community

Tying up with large department stores like Food world for retailing its spirits. In association with number of Very Classy, Up market & Stylish bars & lounges. Aggressive Advertising at Outlets & Pubs. Better Retailing outlets to be opened under United Spirits Brand. Venturing into other Business with same Brand name, hence increasing Brand Name & Publicity.

Marketing AspectsFighting Competition

Presently distributing brands of spirits in India. 1. Bacardi Limited 2. Diageo plc 3. Pernod Ricard SA 4. Republic Tequila

Marketing Aspects4 P s of Marketing

Product No.1 selling product in its segment. Good quality raw material is used to maintain the quality standards. Consistency of product quality is high. Always tastes fresh due to good quality and well developed distribution network.

Place It is available throughout India, and is dominant particularly in south and west India. United Spirits also has a presence in 60 countries. It has some sixteen hundred shops apart from pubs and bars. Better retailing outlets are also to be opened under the Kingfisher Brand.

Marketing Aspects4 P s of Marketing

Price UNITED SPIRITS LTD Golden Grape Brandy Honey Bee Brandy No.1 Mc Dowell Brandy Bagpiper Whisky No.1 Mc Dowell Whisky 750 ml 250 285 285 295 295 375 ml 125 145 145 150 150 180 ml 65 75 75 75 75

Marketing Aspects4 P s of Marketing

Promotion Brand Ambassador MS Dhoni, Ajay Devgan, Farhan Akthar etc Celebration come alive at Pizza hut with Four Seasons Wine. Swimsuit Calendar. Organizing various sports.

Products & Brands21 Millionaire Brands Wisky Bagpiper McDowell s No 1 Director s Special Old Tavern Haywards McDowell s Green Label Gold Riband Royal Challenge DSP Black Signature Brandy McDowell s No 1 Honey Bee John Ex - Shaw Rum Celebrations Rum Old Cask Rum Old Adventure Rum Vodka & Gin White Mischief Romanov Blue Riband

PRODUCTS & BRANDSBlack Dog Largest selling premium scotch with 45% market share. USP: 123 year brand heritage Authenticity Consistent quality.

Antiquity Blue Rare Premium Whisky Finest & most expensive Indian whisky Won several blend awards. Several international awards for superior packaging including Ultra-premium variant of Antiquity Rare, has established itself as a new bench mark in the super premium whisky segment. USP: Finest Indian whisky with world class credentials, specially imported blue bottle in line with brand s super premium image.

PRODUCTSMcDowell s No. 1

continue..

4th largest selling Whisky in the world. Market leader with 60% market share. USP: India s favorite whisky. Constant innovations in packaging, marketing, promotions and consumer events has helped maintain leadership. McDowell's No 1 Platinum sells 30 million bottles in first year of launch Sets a new world record in the spirits industry.

Signature One of the fastest growing in USL portfolio. Exquisite whiskies from Scotland have been combined perfectly with the finest age million malts. USP: World-class blend, Attractive & unique packaging, Sharply positioned on Success is Good Fun.

PRODUCTSBagpiper Worlds largest whisky. Market leader with 25% market share. USP: Popular, widely accepted, trustworthy, strong blend, Bollywood connection.

McDowell's Brandy Worlds largest selling Brandy. With 40% market share. USP: Popular and widely accepted, Mcdowell s lineage, Consistent Quality.

PRODUCTSRoyal Challenge Largest selling premium Whisky of India. 24 year heritage. Market leader with 33% market share. USP: Finest Indian Whisky, widely accepted over 2 decades.

Director s Special Whisky Second largest seller regular Whisky. With 7% market share. USP: Blend, Heritage, wide acceptability.

PRODUCTSWhite Mischief Market leader. Fastest growing vodka. 5 year CGAR of 34% USP: Brand name, Frosted bottle, Blue and White colour, sharp and edgy communication. Excellent for preparation of cocktails.

Romanov Re-launched the new blend in brandnew contemporary packaging. USP: World class Triple- distilled blend, Spanking new International Packaging

PRODUCTSBlue Riband Gin Market leader Has been delighting consumers for 45 years. Recently launched in new and contemporary packaging USP Blend, heritage, wide acceptability and brand loyalty.

McDowell s No.1 Celebration RUM 4TH largest rum in the world. Market leader. Unique blend that is widely accepted McDowell s lineage.

SWOT AnalysisSTRENGHTS Huge Finances backing from UB Group Strongest Worldwide Distribution System Oldest & Largest Player In India Worldwide known Brand WEAKNESSES Different Brands under Same Company. High Concentration on Strong Beer Market.

SWOTOPPORTUNITIES Spirits consumption is increasing Reduction in Taxes Brand Extension Benefits THREATS High Taxes & Regulations Prohibition on Advertising Indian Culture is a Major Hindrance Many International Player Entering In India

Products and Consumer SegmentationUSL Market(60 and above) 9% rum ,whisky

Age Group(45 60) 23% whisky (16 - 30) 36% vodka

16 30 45 60

30 45 60 above

(30 45) 32% whisky

SegmentationGeographical Segmentation

India Manufacturing, purchasing and selling of beverages. Including tie-up units /brand franchises within India.

Outside IndiaManufacturing, purchasing and selling of beverages. Including tie-up units /brand franchises outside India.

Acquisitions have played a huge role in this growth story.USL acquired its rival Shaw Wallace in 2005, gaining brands such as Royal Challenge whisky and White Mischief vodka. In 2007, it bought Scotch whisky distiller Whyte and Mackay, having brands such as W&M Scotch and Jura single-malt to add to USL s offerings that include Bagpiper whisky and Celebration rum.

TargetingWHYTE AND MACKEY This premium scotch interprets well for consumers who are swiftly evolving from premium Indian whiskies to scotch and looking for the traditional values and rich taste of a true scotch. United Spirits is targeting a 20% market share of the bottled-in-India market through Whyte & Mackay alone in the next 3 years. The launch of Whyte and Mackay Special marks an important milestone in further strengthening USL s presence in the blended scotch market which is pegged at 700,000 cases per annum, 600,000 lakh cases of which are locally bottled. Whyte & Mackay Special was made available at all premium retail outlets and on premise outlets across Maharashtra at Rs 1200 for a 750 ml bottle. The scotch was bottled at United Spirits facility in Nashik and post the Maharashtra launch would be launched across the country in a phased manner.

TargetingWHYTE AND MACKEY - 4TH LARGEST WHISKY PORDUCER IN THE WORLD CONSUMER BUYING BEHAVIOUR 1. 2. 3. 4. 5. Growing disposable income. Increasing spending sizeable capacity of income on lifestyle experiences. International exposure. Desire to make lifestyle statement. Retail revolution

For United Spirits, The luxury brands are going to be the leading edge of the sword in increasing the consumer share. It is one of the largest selling scotches in Scotland, and one of the fastest growing scotches in the UK. The acquisition of Whyte & Mackay signaled the entry of United Spirits into the super premium spirits market in India in line with its premiumization strategy.

TargetingPREMIUM AND SUPER PREMIUM BRANDS The spirits industry in India is at a point of vertical take off. Brown spirits consumers are increasingly moving towards premium brands. Main Target Consumers Youth Major growth segment Entry of unique flavours and blends in the Indian market place of both white and brown spirits. Innovative packaging, Innovative blends Compelling and unique way of communication. Most importantly a vast range to choose from.

PositioningPREMIUM AND SUPER PREMIUM BRANDS USL strategically positioned themselves mostly in the premium brand category and prices such as to gain maximum share in the market growing at almost 16%. USL has a portfolio that is difficult to replicate where advertising of beverage alcohol is banned. USL has a portfolio of Over 145 brands and 80 distilleries 30 of its own and 50 contract units, The growth has been driven by 1. Careful positioning and aggressive marketing strategies. 2. Brand refurbishment and innovation 3. Huge distribution network. The idea is to associate each brand as an extension of consumers lives.

PositioningPREMIUM AND SUPER PREMIUM BRANDS McDowell s No.1 whisky - friendship and bonding. McDowell s No. 1 Rum - the macho platform and sponsors hiking and motorcycling events. Royal Challenge whisky - was into golf before it became a part of cricket IPL team from Bangalore. Signature whisky - fashion platform. White Mischief vodka - Indian Premier League cheerleaders. Romanov Red - positioned on the music platform. Black Dog, its premium scotch whisky - used jazz events. The promotion has helped key brands like Black Dog whisky grow by 45 per cent this year followed by brands like Celebration Rum at 36 per cent and Director s Special and Romanov Vodka at 25 per cent. through the

PositioningPREMIUM AND SUPER PREMIUM BRANDS UNITED SPIRIT is the 2nd largest in the world after DIAGEO. Aim to position themselves in the numero Uno slot. Acquisition of Whyte and Mackay has got USL closer to number one position in global spirits industry. USL is growing at 20 % annually ahead of the Industry average of 18 %. With a strong research and development center its helps in continuously refining products. Acquisition being an integral part of USL s business strategy it will lead to emergence of new segments and new opportunities. The group is also getting into the business of importing wines form all over the world to give the consumer a wider choice to create sustained interest in the product category. USL is committed to give Indian consumers quality wines at affordable prices which has not happened in the Indian wine market

Operations

Michael Porter s Five Forces ModelOverall industry rating: Threat of new entrants. Bargaining power of buyers. Threat of substitutes. Bargaining power of suppliers. Intensity of rivalry among competitors. X X X X High Moderate Low X

Michael Porter s Five Forces ModelThreat of New Entrants Threat of new entrants is towards lower side. Economies of scale in manufacturing, distributing, and marketing create high barriers to the national and global markets. The capital needed to build spirit manufacturing facilities and the costs associated with operating business on a national scale are extensive. The costs associated with this highly controversial industry seek high levels of sales, thus making the industry more and more prohibitive for newcomers. Government regulations are largest factor in this force

Michael Porter s Five Forces ModelBargaining power of suppliers Barraging power of buyers is high. The quantity of alcoholic beverages that a nation consumes tends to be unaffected through recession and prosperity while the quality of the products purchased is directly related to the disposable income. A decline in disposable income shifts consumer preferences away from premium-priced brand-name products in favor of lower-priced brands i.e. switching cost is low.

Michael Porter s Five Forces ModelThreat of Substitutes & Bargaining Power of Suppliers Threat of Substitutes Threat of substitutes is low. Customer loyalty through brand awareness. The advertising restrictions placed on alcoholic beverage industry in recent years make it harder to achieve brand loyalty. Bargaining power of suppliers Supplier Power is low Products used to brew spirit are inexpensive and suppliers are numerous.

Michael Porter s Five Forces ModelIntensity of rivalry among competitors Moderate. Rise in legal and regulatory burdens, leads many manufacturers to merge in order to lower competition. Acting as oligopolies, they ensure high profit margins, cash flows, and investment returns. Though the competition is tough, The Kingfisher brand is the one of the largest supplier of beer, & the third largest producer of distilled spirits.

Financial Analysis

Supply Chain Analysis