USL Goes the Startup Way to Strengthen Brands

The ini­tia­tive, called Sig­na­ture Star­tups, will open up co’s re­sources to emerg­ing busi­nesses Power Brand Strat­egy

The Economic Times - - Business Of Brands -

Sa­gar Malviya & Neha Tyagi

Mum­bai: United Spir­its (USL), the country’s largest liquor com­pany, plans to fund and men­tor star­tups in In­dia as part of a strat­egy to strengthen its brands.

The Di­a­geo-con­trolled com­pany re­cently launched ‘Sig­na­ture Star­tups’, a mar­ket­ing ini­tia­tive that al­lows emerg­ing com­pa­nies to net­work and ideate us­ing USL’s re­sources.

“Through this, we will ac­tu­ally en­able and fa­cil­i­tate in­di­vid­u­als, pro­fes­sion­als and en­trepreneurs to con­vert their pas­sion into a busi­ness idea,” said Am­rit Thomas, chief mar­ket­ing of­fi­cer at USL. “It could be even get­ting into an­gel fund­ing or set­ting up an an­gel fund.”

USL’s Sig­na­ture Star­tups is sim­i­lar to its Bri­tish par­ent Di­a­geo’s ac­cel­er­a­tor pro­gramme, Di­a­geo Dis­till, which nur­tures and men­tors new and grow­ing spir­its brands. “The In­dian ven­ture, how­ever, will fo­cus on star­tups across sec­tors,” Thomas said.

In In­dia, the over­all spir­its mar­ket has been slow­ing down, but the pre­mium seg­ment has bucked the trend, grow­ing at 15-20% ev­ery year.

While French bev­er­ages gi­ant Pernod Ri­card’s port­fo­lio is ex­clu­sively fo­cused on the more prof­itable pre­mium In­dian whiskies, dom­i­nat­ing the seg­ment with about 48% mar­ket share, USL has his­tor­i­cally been in­cen­tivised on vol­ume growth with nearly 150 brands, and de­spite its over­all mar­ket dom­i­nance, it has fallen be­hind Pernod in the pre­mium seg­ment.

How­ever, ex­perts say this could now change. USL’s mix has im­proved sig­nif­i­cantly as share of rev­enue and vol­ume from the above pre­mium seg­ment has risen to over 50% com­pared with 38% in 2012-13. The com­pany has re­launched three core brands — McDow­ell’s No 1, Bag­piper and Sig­na­ture — which com­pete with Pernod’s Royal Stag, Im­pe­rial Blue and Blenders Pride.

But in­stead of us­ing tra­di­tional sur­ro­gate mar­ket­ing, the com­pany want to break the clut­ter. For in­stance, USL has cre­ated ‘Bag­piper Pro­duc­tions’ to work with pro­duc­tion houses that are mak­ing re­gional con­tent and are ty­ing up in in­vest­ing in movies. “In-film place­ment is be­ing done and dusted... That’s not a model that works. With Bag­piper Pro­duc­tion, we did the movie ‘Guru’ in Ma- rathi and we are do­ing an­other movie in Kan­nada,” Thomas said.

An­a­lysts feel USL’s big­gest task would be to grow its largest brand, McDow­ell's No.1 whisky, which ac­counts for 20% of its vol­umes and close to 70% of its above pres­tige port­fo­lio.

Over the past few years, McDow­ell's No.1 has lost mar­ket share to Pernod’s Im­pe­rial Blue, and more re­cently to ABD’s Of­fi­cer’s Choice Blue, which has gone from zero to six mil­lion cases in two years.

Edel­weiss Se­cu­ri­ties as­so­ciate di­rec­tor Ab­neesh Roy said, “Over the last few years, USL brands were very much ne­glected by their pre­vi­ous pro­moter. In the pre­mium end, you would need to build ex­cite­ment and the cus­tomer is look­ing for dif­fer­en­ti­ated prod­uct, ei­ther in terms of pack­ag­ing or ad­ver­tis­ing.”

In­dus­try ex­ec­u­tives, quot­ing Nielsen, said USL’s pre­mium scotch seg­ment has gained190 ba­sis points while pres­tige whiskey brands McDow­ell’s No 1 and Royal Chal­lenge gained 40 bps and 90 bps, re­spec­tively.

will fo­cus on star­tups across sec­tors

is part of strat­egy to strengthen its brands

com­pany cre­ated ‘Bag­piper Pro­duc­tions’ to work with pro­duc­tion houses mak­ing re­gional con­tent

a Marathi movie ‘Guru’ and is cur­rently work­ing on a Kan­nada movie

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