Oaksmith contributed 25% sales of Beam Suntory in 2021
Premium- The demand for Oaksmith brand is coming from big cities like Mumbai, Delhi and Hyderabad
NEW DELHI : Beam Suntory, a subsidiary of Japan’s Suntory Holdings Limited said 50% of its growth in India in 2021 has come from its Indian made foreign liquor (IMFL) portfolio, primarily, Oaksmith whisky.
"The strongest growth incrementally has come from IMFL as a category and it has already become about 25% of our (business) mix from about zero percent two years ago," said Neeraj Kumar, managing director, India, Beam Suntory.
The demand for Oaksmith brand is coming from big cities like Mumbai, Delhi and Hyderabad. The company started producing this India-made whisky, which includes bourbon, scotch and Indian whisky, in 2019 and said its IMFL portfolio, which started off as a pilot project in Telangana and Maharashtra, has now expanded to 16 states. In most states, on an average, it has garnered about 5% market share, the company said.
Last year, the company expanded its bottling capacity. It has a plant in Rajasthan and added Goa last year. Next, it is looking at Maharashtra and Madhya Pradesh. "We made an effort to be consumer centric in the development of this whisky. It has created a strong affinity with some customers and the brand is seen quite clearly as a high-quality whisky. By the end of this year, the brand will go national," he added.
Kumar said that the company saw 60% growth in the last one year despite lockdowns and about 50% of that growth came from its IMFL category. For Suntory, its Teacher’s whisky is also popular in India though it is only bottled in India.
"This (Oaksmith) is our vehicle to get Teacher's and other brands into new towns. In the past, we were more focused on big cities," said Kumar.
Nearly 25 million consumers enter the legal drinking age each year in India and these consumers will either start with beer or IMFL drinks and that the company will capitalise on this audience.
According to the Confederation of Indian Alcoholic Beverage Companies (CIABC), though sales of Indian made foreign liquor (IMFL) recovered significantly over the previous year, they were yet to reach pre-covid sales volume. Sales are still 13% less than in the period prior to the pandemic, it said in a report it released in December.
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Vikram Achanta, co-founder and CEO of Tulleeho, a drinks’ training and consulting firm, said, the prestige and premium segments of the IMFL whisky market are a sweet spot, marked by considerable size of about 45 million cases as per IWSR 2018 data and have a robust double digit growth.
"These segments have been the preserve of Pernod Ricard and Diageo, but the last few years has seen a flurry of new brands like Sterling Reserve B7 and B10, Royal Green, Golfer’s Shot and a few others launch with impressive blend quality and premium packaging from companies like Allied Blenders, Oasis and Alcobrew respectively. With Oaksmith Reserve and Oaksmith Gold, the market has been shaken up again, as it represents a quality blend created by their master blender Shinji Fukuyo, with some bourbon whisky in the blend too," he said.
With Teacher’s Highland Cream and the rest of the Teacher’s portfolio also at hand, the Oaksmith brand gives the company a way to catch the consumer young and then migrate them to the rest of their portfolio, he added.
The company said it will also look at bringing in or creating opportunities within the ready-to-drink alcoholic beverage category. "We are market leaders for RTD in Australia, with Canadian Club whiskey and soda; and in Japan with a lemon sour based RTD," Kumar said.
The company also launched its premium portfolio with brands such as Yamazaki 55YO, Hibiki 21, Bowmore 28 and Roku gin over the past couple of years.
"There is a strong push for premiumisation. We intend to be a $1 billion market here by 2030. India is one of the top priority markets for growth," Kumar said.
According to its registrar of companies data filings to the Ministry of Corporate Affairs accessed via business intelligence platform Tofler, company’s India entity, Beam Global Spirits & Wine (India) reported an annual revenue of ₹531.66 crore for the year ended March 2021, up from ₹506.21 crore the year prior. However, the company’s net loss after tax widened to ₹201.12 crore from 162.87 crore.
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