Bullish on Indian market

Introducing new products into hitherto untapped markets has been Guirec Danno’s forte. He did it in West Africa for Pernod Ricard and now he is doing it for Distell in the Asia Pacific region with a specific focus on the burgeoning India market.

As Managing Director for Distell, Asia Pacific, not only is he working in the Taiwan domestic market, but he is also expanding the company’s market reach in the entire region.

Guirec Danno’s first mission at Distell in 2018 was to develop a route to market strategy for its Scotch whisky portfolio. This included a strategic review and prioritisation of the most attractive markets for Distell’s Scotch whisky and blended Scotch portfolio. The whiskies he had to sell included the blends Scottish Leader and Black Bottles and single malt brands Bunnahabhain, Deanston and Tobermory.

“Our brands have been in Taiwan for almost 30 years now. And Distell has established a very strong position in Taiwan’s market. Scottish Leader is the second largest brand of blended Scotch in Taiwan. Building on this success, two years ago we launched Deanston, our highland single malt, in the Taiwanese domestic market,” Danno told Spiritz.

The brand became a hit with local consumers. From a sale of only a few cases in 2020, the brand will be going over 20,000 cases this year, in Taiwan’s market.

India is an Attractive Scotch Market

Coming with such strong credentials and with such a remarkable marketin history, it is a given that Danno’s India campaign for Distell will be equally spectacular.

While talking about Distell’s market in India, he said, “When I first joined Distell and conducted our route to market analysis, it became evident that India was a very attractive Scotch whisky market.”

“All macro-economic indicators in India are positive – there is a strong growth of the economy, there is a thriving middle class and in India consumers have increased disposable income,” he explained. These indicators have led whisky consumers in India to explore more and trade up to imported Scotch.

The Scotch category in India is already significant, with more than 5 million cases of Scotch sold in India last year (IWSR 2021).

“All our research points that this growth trajectory for Scotch will continue in India, in the foreseeable future,” Danno observed.

India falls in the developing market category for Scotch whisky, even though whisky is a well-established market in India where IMFL dominates and where Scotch whisky sales is less than 2 percent of the market share of total whisky volume. “Across the globe, Scotch whisky is attracting more and more consumers. The category grew by 16 percent last year globally. The main difference between a more matured whisky market and a developing one is that developing markets are growing even faster,” Danno explained.

Last year, the volume of Scotch sold in India grew by over 40 percent.

The Scotch Story Sells

Danno feels that Scotch can build on this trend with the right kind of marketing and storytelling. “Scotch whisky needs to continue telling its rich and unique story: our ingredients, the distillation process, and the maturation of the liquid that, by law, must stay a minimum of three years in casks in Scotland. This gives Scotch whisky its unique characteristics and taste profile,” he explains.

More Women Falling for Scotch Appeal

The Distell research has shown that the Indian Scotch whisky consumers are younger than before, they come mainly from urban areas and more women are falling for its appeal. Scotch consumption in India has evolved. It is no longer only a gentleman’s drink. Younger adults are discovering blended Scotch and single malts. They are not afraid to experiment with new ways of drinking in bars or developing their own cocktails at home. The enforced lockdowns during COVID played a role in accelerating this trend.

This time was also used by consumers to educate themselves by watching and participating in on-line tastings that are now widely available.

“Of course, we need to adapt to local regulatory requirements, but fundamentally consumer needs and aspirations in mature and developing markets are quite similar,” he said.

BIO to BII

Scottish Leader was launched in India in 2017 as a Bottled in Origin (BIO) product and was subsequently reintroduced in a new avatar Bottled in India (BII). “BIO was a simple and effective way to test the market. Following our early success in selected states and the positive feedback from consumers, we decided to jointly develop Scottish Leader BII. This is the same Scotch whisky, distilled, blended, and aged for a minimum of 3 years in casks in Scotland, but we package it in India.

“Since we launched 18 months ago, we have seen a marked acceleration of Scottish Leader’s performance in the selected markets where we are there. As mentioned, we have increased our sales 10-fold in this short amount of time,” said Danno.

Premiumisation Trend

Danno also pointed out that there was a very perceptible shift towards premiumisation in India’s alcobev industry and as consumers across the world are looking for better quality drinks.

“The numbers illustrate this. The growth rate is faster as we go up the price ladder. In 2021, the IMFL whisky segment grew at 16 percent, the Scotch whisky segment at 40 percent and the single malt Scotch at an even faster pace of 55 percent,” he said.

This trend can be seen everywhere, starting with the change in retail, for example. “More liquor outlets are upgrading and transforming into modern stores where the consumer can navigate the shelves and discover a wider range of imported products. Retailers are adapting to what younger, more affluent, urban consumers are asking for - an experience that goes beyond just a transaction.

“Consumers want to experience the products on offer, educate themselves on different flavours and don’t hesitate to spend a bit more to satisfy their curiosity. Scotch whisky, with its diversity, rich taste and complexity is well-positioned to  meet what these new consumers are looking for,” he added.

However, the picture is not that rosy. For the market to grow to its full potential, certain impediments need to be ironed out of the way. “High import duties have always been a barrier in making Scotch more affordable for Indian consumers. The current free trade deal negotiation between India and the UK offers a unique opportunity to overcome this. We hope this agreement will soon be finalised,” Danno said.