Elevating the Indian brandy ecosystem to a luxury level

Amit Dahanukar, Chairman and Managing Director, Tilaknagar Industries Ltd., tells Shalini Kumar, brandy is a remarkable spirit with depth and nuance, and yet it often doesn’t get the attention or appreciation that reflects its true potential. That realisation led the company on a journey into the luxury segment. And so was born the Monarch Legacy Edition, which is slated to be a game-changer in the brandy segment.

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Congratulations on two remarkable achievements— becoming a debt-free company and venturing into the luxury brandy segment! What do these milestones signify for the company and you personally? Would you say it’s the realisation of a long- cherished dream?

Both milestones hold immense significance for us as a company and for me personally. Becoming debt-free reflects the tremendous growth we have achieved in the recent years. It’s especially rewarding given that we already have two of the top three Indian brandies in our portfolio and continue to see fantastic performance across our diverse range of products beyond brandy. Stepping into the luxury spirits space with Monarch Legacy Edition marks a defining moment for Tilaknagar Industries Ltd. (TI).

After four decades of innovating and leading the Indian brandy market, we felt it was time to channel our expertise into a luxury offering that redefines perceptions of the category. For us at TI, there’s a deep sense of responsibility to rejuvenate the brandy segment in India. Despite being the second most consumed spirit in the country with more than a 20 percent market share, brandy still carries a certain perception that doesn’t fully do justice to its potential.

We saw an opportunity to lead by example—to disrupt the category once again and show that brandy can hold its own in the luxury space. With Indian homegrown spirits increasingly gaining recognition, both domestically and internationally, I am confident that Monarch Legacy Edition will inspire a renewed appreciation for the art of brandy from India.

Could you share your plans for utilising the additional funds now at the company’s disposal, both short and long-term? 

Given the asset-light model adopted by the company, we expect good free cash flow generation over the next couple of years. Our primary focus towards the utilisation of funds is towards growth, both organic and inorganic. As a part of our vision to increase brandy’s ‘share of voice’, we will be looking at increasing our A&P reinvestment rates. The recent launch of our luxury and whisky portfolio, though tactical, will also require marketing investments. In addition, we have a strong pipeline of launches across the luxury and craft space as well as profitable, highvolume segments, which will require investments.

TI has also been active on the strategic investments’ front. We have recently announced our follow-on investment in Spaceman Spirits Lab (P) Ltd., the makers of Samsara Gin and Sitara Rum, taking our stake to 20 percent on a fully diluted basis. We have also invested in Bartisans, a premium ‘ready to pour’ cocktail mixers brand, wherein we have acquired 36.2 percent stakes in the company. And we continue to evaluate strategic investments in businesses which are coming out with innovative and disruptive alcohol beverage and related offerings

Could you tell our readers when and how the idea of Monarch Legacy Edition was conceived and where did the initial testing and tweaking happen before the desired liquid was created?

Who are the main people behind the creation of the brand? As mentioned earlier, we recognised the need to elevate the brandy category and align it with the sophistication it deserves. Brandy is a remarkable spirit with depth and nuance, yet it often doesn’t get the appreciation that reflects its true potential. That realisation led us on our journey into the luxury segment. The idea of Monarch Legacy Edition had been making rounds within our team for quite some time. We wanted a name that captured a sense of grandeur and refinement, qualities synonymous with royalty, and Monarch felt like the perfect fit.

Adding Legacy Edition to the name was a deliberate choice to honour TI’s storied history, which dates back to its origins as a sugar mill in 1933 and its evolution into India’s leading brandy producer. The initial phases of testing and refinement were an extensive process, involving a collaborative effort across various teams—from our master blenders to marketing and design, the latter of which was helmed by our Chief Marketing Officer, Ahmed Rahimtoola, along with my daughter Sanaya Dahanukar who is the Assistant Marketing Manager. Every element, from the liquid’s profile to the presentation, was crafted to reflect the quality and heritage we stand for. Monarch Legacy Edition is a product born out of the collective vision and hard work of our entire team.

What unique qualities has the blend of French and Indian grape spirits brought to Monarch Legacy Edition, and how do you see it competing with established luxury brandy labels in India?

Monarch Legacy Edition is the world’s only 100 percent pure grape spirit that blends French and Indian grape spirits. This unique combination allowed our master blenders to create a highly distinctive character, marrying the finest qualities and nuances from both regions. We have also honoured traditional Cognac-making methods, distilling in coal-fired copper pot stills and maturing the liquid in ex-wine French oak casks.

The French grape spirits have been aged for up to eight years, while the Indian grape spirits are matured in Maharashtra’s warm climate, leading to a richer flavour profile. I believe those who try Monarch Legacy Edition will be pleasantly surprised by its bold character balanced with fruity notes, making it equally appealing to seasoned whisky drinkers and those new to brown spirits.

Is India Ready for Luxury Brandy? 

When it comes to the launch of Monarch Legacy Edition, a luxury brandy, the confidence of Amit Dahanukar, Chairman and Managing Director, Tilaknagar Industries Ltd., is certainly overwhelming. He believes that brandy has so far not deserved the recognition it should have among high-end consumers and connoisseurs. Therefore, according to him, the timing couldn’t be more fitting. Having observed the brandy category for over four decades, the company has identified a perception gap. While brandy has strong offerings in the lower and premium segments, it’s yet to be fully associated with luxury. 

As leaders of this category in India, Tilaknagar Industries felt it was their responsibility to redefine these perceptions and demonstrate what brandy at its best can truly offer. Monarch Legacy Edition has been born out of that vision.The Indian market has seen remarkable growth in premium and luxury spirits, with double-digit growth since 2019 and a 49 percent market share today. Over the past couple of years, it’s become clear just how receptive Indian consumers are to high-quality, luxury offerings across categories.

Do you believe this is the right time to launch a luxury brandy in India, where the category remains relatively small? 

Why do you think Indian brandy enthusiasts will embrace the Monarch Legacy Edition? I believe the timing couldn’t be more fitting, and the answer lies within the question itself. Having observed the brandy category for over four decades, we have identified a perception gap. While brandy has strong offerings in the lower and premium segments, it’s yet to be fully associated with luxury. As leaders of this category in India, we felt it was our responsibility to redefine these perceptions and demonstrate what brandy at its best can truly offer. Monarch Legacy Edition has been born out of that vision.

The Indian market has seen remarkable growth in premium and luxury spirits, with doubledigit growth since 2019 and a 49 percent market share today. Over the past couple of years, it’s become clear just how receptive Indian consumers are to high-quality, luxury offerings across categories. Indian brandy enthusiasts might already be familiar with our beloved brands like Mansion House and Courrier Napoleon, and I am confident Monarch Legacy Edition will captively tap into the affluent and aspirational audience.

Andhra Pradesh is a key market for you. How will the privatisation of liquor shops affect your company’s market reach and performance in the state and overall profitability?

We are quite optimistic about the future growth of the overall IMFL industry in Andhra Pradesh. With the privatisation as well as increase in the number of liquor shops, we expect brands with strong brand equity, like our very own Mansion House Brandy and Courrier Napoleon Brandy to perform well.

Andhra Pradesh also has a high brandy saliency amongst overall IMFL, and we expect to grow at a similar rate as the industry. The growth of the industry in the state is expected to be in double digits and given that Andhra Pradesh is one of our largest states by volume, we expect the state to have a meaningful impact on our high growth trajectory in the years to come.

When we last spoke, you shared concerns about rising commodity prices and logistics costs. How are things now, and have margins improved compared to last year?

We have seen significant improvement in margins in the first half of FY25. Our EBITDA margins have increased from 13.3 percent in FY24 to 15+ percent in H1FY25. The reduction in glass prices, which forms a significant portion of our packing material costs, has complemented our premiumisation drive, expanding our margin profile. Other input commodities, excluding ENA, have been stable and we do not expect that to change meaningfully. On the ENA front, volatility persists, and we are cautiously monitoring the trends in grain and ENA pricing.

After investing in Samsara Gin and an RTD brand, are you considering any new strategic investments, especially given your current profitability?

We have always admired Indian brands that push boundaries in the spirits space, and investing in Spaceman Labs, the makers of Samsara Gin, and Bartisans, was a natural fit. Both are doing remarkable work in their respective categories, and we are proud to be a part of their journey as investors. Supporting initiatives that elevate the Indian spirits ecosystem aligns with our overall vision for Tilaknagar Industries Ltd., and we will continue to champion such efforts. As for future investments, while I can’t commit to anything specific at this stage, it’s certainly something we keep on our radar.

Looking ahead, what are some exciting releases that Indian consumers can look forward to in the near future from the house of Tilaknagar Industries?

With the launch of Monarch Legacy Edition, our first foray into the luxury market, we have set the stage for an exciting phase of growth for TI. Over the next six months, we plan to further expand our luxury portfolio and enter other popular spirit categories, with some promising developments already underway.