1. Desi Liquor Cos Get a New High
COUNTRY LIQUOR SALES ON THE RISE Improved
quality and packaging help the `Indian made Indian
liquor' segment post a growth of over 10% CAGR
since 2010 against the 6% growth registered by the
`Indian-made foreign liquor' sector

2. Contd..
• Don't be misled by the fruity name. Santra that Milind
Warke -a driver in the suburbs of Mumbai -eagerly
gulps down straight from the bottle lets a burning
sensation raging down the throat to scorch his insides.
The firewater gives him what he wanted: an instant
high.But Warke's high pales in comparison with the
stock price of the makers of the country liquor he
drinks most days. The stock price of GM Breweries, an
India Made Indian Liquor (IMIL) maker has shot up
230% in the past three months. And it's not alone -
shares of nearly half a dozen `desidaru' makers,
including Globus Spirits, Associated Alcohols and IFB
Agro, have gained between 30% and 100% in a month.

3. Contd..
• Country liquor sales, which had slowed down five years ago
when tipplers upgraded to low-priced India made foreign
liquor (IMFL) brands, have been on the rise in recent times,
thanks to improved quality and packaging of IMIL brands as
well as rising prices of IMFL brands due to taxes.
• “IMIL segment has been the unsung hero of the alcoholic
beverages industry. Not a lot of investors that we interact
with are aware of the fact that IMIL growth rates are far
superior to the growth rates enjoyed by IMFL,“ said Nitin
Mathur, consumer goods analyst at Societe Generale. “IMFL
companies take all the opportunity to pass on price
increases, which leads to consumer downgrading to IMIL,“
he said.

5. Contd..
• IMIL industry has been growing at more than 10% CAGR since 2010
while the IMFL industry has grown by 6% CAGR with flat growth in
the last two years.
• Until five years ago, IMIL industry was largely operating as a
commoditised play . In a market which was growing at low single
digit, regulatory framework ensured high entry barriers with a
`single price point', and companies mostly survived with an
`undifferentiated' offering, with little incentive to invest in new
products or innovations.
• “Traditionally , the first thing that hit (about country liquor) was the
pungent smell that spread quite a distance down the road. This is
no longer the case as several country liquor producers now use
higher quality extra neutral alcohol (ENA), the same raw-material
used in IMFL products,“ said Ajay Swarup, managing director at
Globus Spritis, which sells IMIL brands such as Nimboo, Ghoomar
and Heer Ranjha.

6. Contd..
• Mostly sold in ge neric names such as Santra, Limbu, Saunf, the
alcohol content in IMIL ranges between 30% and 36%, lower than in
IMFL that contains a uniform 42.8% across the nation.
• “Yet, consumers feel that country liquor gives instant kick and has
higher alcohol content. But the fact is that our drinks are mostly
consumed without mixing water or soda, making it more potent,“
said a senior official at Picaddily Agro that commands a strong
position in Haryana with brands such as Malta and Sofia.
• Produced throughout the country , the content and production of
country liquor vary across regions and has long been the liquor of
choice for the price-sensitive, lower income group Indians with
prices ranging between ` . 150 and ` . 180 per bottle. In comparison,
most IMFL brands start from over ` . 300-350 on an average and
have seen at least 20% price hikes in the past two years.

7. Contd..
• The organised country liquor segment, with
annual sales of 300 million cases, is estimated to
be a third of IMFL segment size, but is largely
fragmented with a number of small players
focused on the high-consumption rural areas.
• Interestingly , the contribution of regular or
lowest-priced brands in overall sales of whisky -
the most popular IMFL segment -dropped from
79% five years ago to 68% now, with semi-
premium brands contributing almost one-third of
total sales.

8. Contd..
• “While companies are not focusing on regular segment
due to increase in taxation, lot of consumers are either
starting from semi-premium liquor or upgrading to the
higher priced segment, affecting mass-priced brands,“
said Ahmed Rahimtoola, marketing head at Allied
Blenders.
• “Steady inflation has led and reduced discretionary
spending leading to slowdown in regular and below
segments. Improvement in the quality of country liquor
has led to increase in its preference in a few markets,“
he said.

9. Parveen Kumar Chadha… THINK TANK
(Founder and C.E.O of Saxbee Consultants & Other-Mother
marketingandcommunicationconsultants.com)
Email :-saxbeeconsultants@gmail.com
Mobile No. +91-9818308353
Address:-First Floor G-20(A), Kirti Nagar, New Delhi India Postal Code-110015