BEERBU

DELHI BEER MARKET & ALTERNATIVE WAYS FOR PROMOTION OF LIQUOR PRODUCTS
1.1 INDUSTRY PROFILE

Indian liquor and beer industry share common characteristics arising from
a similar policy framework. Country Liquor, Indian Made Foreign Liquor
(IFML and beer are state sub!ects, with each state controlling the duty
structure and distribution. Incidence of inters state mo"ement, which has
resulted in each state ha"ing attributes of a separate market.
#he country liquor segment at more than $%&'mm cases per annum has
distinct characters of its own and forms the largest component of the
industry. #his unbranded highly potent alcohol drink is produced by
distilleries though sold through separate distribution channels. #here is a
thri"ing market for illicitly made country liquor. ( ma!or portion of state
liquor re"enues accrues from the country liquor segment. Lately bowing
to pressure from women)s organisations se"eral state go"ernments ha"e
banned country liquor while effecting hefty increases in the e*cise duty for
IMFL and beer.
IMFL INDUSTRY
#he +s.,& bn IMFL industry can be broadly classified into products based
on -*tra .eutral (lcohol (-.( and +ectified /pirit (+/. #he better
quality -.( based products, spanning across a number of market
segment, is the operating area main players like 01 group and /haw
2allace.
#he industry has been witnessing a compounded annual growth rate $%3
o"er the past three years. ( slow maturation and sophistication of the
MANOJ / EMPI / APRIL 99
market ha"e accompanied the growth. #he current market si4e of the
IMFL industry is estimated at %5 mn cases ($6 bottles containing ,%& ml
liquor each. #he IMFL market could be categorised into 2hisky
(accounting for %73, +um (68.%3, 1randy ($%3.
Manufacture of IMFL is sub!ect to go"ernment licensing while le"ies on
sales are a state sub!ect. #he state earns a significant portion of the
re"enues from liquor. /uch duties (including special le"ies at inter state
sales, ha"e resulted in a distributed manufacturing base and unique
market characteristics of each state.
#he go"ernment of India has in principle, decided not to allow new
capacity for molasses a by'products of sugar mill and currently the
predominant raw material for alcohol production in the country based
potable alcohol. 9owe"er potable alcohol production in the country has
been increasing with the state allowing enhancement of capacities of
e*isting distilleries certain international manufactures like I:I ha"e been
gi"en the permission to manufacture using molasses as raw material.
;rains, which can be used to substitute molasses, pro"ide higher yield of
alcohol and better quality -.( but require higher capital in"estment.
2hile cost of grain based -.( is higher than -.( produced through
molasses route. For <otable alcohol manufacturers raw material forms a
small part of total cost (ma!or portion being e*cise duty and increase in
cost are passed on to relati"ely price in elastic consumers.
MODE OF DISTRIBUTION
IMFL sales in different states classified on the basic of the distribution
channel accessible to the manufacturer is gi"en below= '
TYPE OF MARKET STATES
>pen Market Maharashtra, 2est 1engal, ?@A, ;oa, >rrisa,
(ssam, Meghalaya, #ripura, (runachal <radesh
(uction market 0<, +a!asthan, M<, 1ihar, <un!ab, Chandigarh.
;o"ernment Controlled :elhi, #amilnadu, Aarnataka, Aerla.
<rohibition /tate ;u!arat, Manipur, Mi4oram, .agaland.
In case of distribution through go"ernment channels and distribution rights
through the auction mechanism, strong distributors e*ert influence on the
margins of the IMFL manufacturer. 9owe"er brand pull from the
consumer plays an important role forcing companies to spend efforts on
surrogate ad"ertising and promotional efforts.
MARKET DYNAMICS
#he estimated market share of different players in the IMFL industry are
as follows= '
01 ;roup ' 7B3
/haw 2allace ' $B3
?agat!it Industries ' $&3
Mohan Meakins ' 83
>thers ' 7%3
#he 01 group (Comprising MC :owell @ Co, 9erbertsons and 0nited
1reweries is the undisputed leader, with four brand with one $ mn case
sales, 1agpiper whiskey, alone selling near B mn cases, /haw 2allace
and Mohan Meakin also ha"e strong brand such as :irector)s /pecial
(regular whisky segment and >ld Monk (rum segment respecti"ely.
Last couple of years witnessed the entry of international ma!ors like united
:istillers, /eagram and I:I into the Indian market. /eagram entered on
its own, while united :istilleries and I:I ha"e tie'up with 01 group and
<olychem respecti"ely. -ntry of the foreign companies was initially in the
high premium high margin segment (for e*ample, /cotch 2hisky,
demand for which is currently met through imports.
#he /cotch whisky market initially pro!ected at $ mn cases has been
disappointing with sales of around ,&,&&& cases. International player with
deep pockets ha"e already mo"ed into low priced segment of the market
I:I has introduced ;ilbey)s in the regular segment, which is the main
market of liquor ma!ors 01 and /haw 2allace, while /eagram has
introduced +oyal /tag in the prestige segment. Industry leaders like 01
and /haw 2allace could find it increasingly difficult to retain market
shares against new competition.
;o"ernment policy plays a critical role in determining the fortunes of the
industry. #he spectre of prohibition continues to haunt the industry. #he
imposition of prohibition in (ndra <radesh and 9aryana resulting in
sudden shrinkage of a si4eable market is a good e*ample. 9owe"er,
poor state finances, coupled with the high contribution of the potable
alcohol industry to the state e*chequer, usually result in a situation where
the industry is allowed to operate. Aerla and >rissa banned country
liquor while substantially increasing (upto 6&&3 the e*cise duty on IMFL
and beer. Maharashtra, one of the biggest markets, has also increased
the e*cise duty on IMFL and beer. (d"ertising is also prohibited in key
markets much as Maharashtra and :elhi.
BEER INDUSTRY
#he Indian beer industry is quite large at around ,% mn cases ($6 bottles
of ,%& ml each and in the last 7 years has grown at $B3 annum is the
unrestricted markets. #he per capita consumption stands at a low &.%
litre. 1eer manufacturing requires a license from the centre, which is
ratified by the respecti"e state. #ill $C5C licensing was restricted, in $C5C,
the central go"ernment rela*ed the policy and accepted B,& applications
for new pro!ects. >nly a few were cleared and fewer still ha"e actually
come on ground, on account of the low and uneconomical capacity of
%,&&& kilolitres per annum licensed by the go"ernment. 9owe"er the
capacity is released to $%,&&& kilolitres per annum for .+I proposals with
$&&3 foreign equity, of which minimum %$3 has to be on a
non repatriable basis.
01, Mohan Meakins and /haw 2allace are the only companies with a
national presence. Companies such as (ssociated 1reweries ha"e built
up strong regional brands while operating only in the beer business 01)s
Aingfisher is the market leader followed by 9ayward %&&&, which has
emerged as the second largest selling brand in the market share of the
"arious player are as follows =
01 ;roup 'B&3 /haw 2allace '$B3
Mohan Meakin '6&3 >thers '6,3
MANUFACTURING PROCESS (THE TECHNICAL ASPECT)
Malt @ :ry
Ingredients
1oiling Malt /ugar /oluble
:e*trin
2ork Aettle 1eiling
(dding (dding
hops en4ymes
C>6 Charging /econd Fermentation Finding @ <riming
#he market for beer in India is estimated at about ,% mn cases of $6
bottles each (equi"alent of a little o"er %.& mn hectolitres, worth about +s.
66 bn (D%&& mn. It is estimated to be growing at $B3 and may soon
catch up with $%3 rate. (nother estimate of future growth puts it at $B3.
<er capita consumption of beer in the country is as low as halfEaElitre as
against $65 litres in ;ermany, $6C litres in .ew Fealand and $$, litres in
:enmark. -"en China has a per capita consumption of 6& litres. (gainst
India)s % mn 9L, China)s market is $,% mn 9L. #he Indian industry has a
capacity of a little short of 8 mn 9L.
1eer producers, other than Carlsberg, ha"e either set up operations in
India or are e*pected to do so soon. /troh 1rewing Co of the 0/ and
9enninger 1rua (; of ;ermany ha"e already launched their products and
include Fosters 1rewing ;roup of (ustralia, /an Miguel Corp of the
<hilippines, (nheuser'1usch Cos. Inc of the 0/(, /outh (frican
1reweries and Airin 1rewery Co of ?apan, 2insome 1reweries tied up
with 9enninger 1rau for the brand of 9enninger Aiser <ilsner.
9aake 1eck, entered India through a technical tie'up between 1rauerei
1eck @ Company of ;ermany and Indian 9im .eel 1reweries <ri"ate Ltd,
through a &.$% mn 9L plant at 9imachal <radesh (at an in"estment of +s
%%& mn. 9aake 1eck is selling in nonEreturnable, lightweight, takeaway
,% ml and 77& ml glass bottles, an inno"ation where recycled bottles has
been the norm.
#he :anish brewer, Carlsberg (G/, planned to enter the beer market in
India in March $CC5 in association with its !oint "enture partner, 0nited
1reweries (01, on a %&=%& basis. 01ECarlsberg was only marketing
company and the in"estment would be raised. #he initial in"estment is of
the order of +s. ,& mn. Carlsberg is planning to come in only 77&'ml
bottles and later in cans. It would be interesting to witness how it copes
with the industry)s preference for the ,%&'ml bottles, which account for
close to 5%3 of the entire beer sales in the country. Cans, which account
negligible "olumes might howe"er, come sooner than later. /haw 2allace
is launching its +oyal Challenge beer in cans. Aingfisher beer from 01 is
already a"ailable in cans. (ssociated 1reweries is also planning cans for
its London <ilsner brand.
01 is India)s largest liquor group and two of its beer brands, Aingfisher
and Aalyani 1lack Label, en!oy one E third of the market. Aingfisher alone
commands 6%3 of the market. 01 has captured a B&3 share. Mohan
Meakins, the ne*t player claims half that share. /haw 2allace is a close
third at around $%3. Mysore 1reweries has a ,.%3 share followed by
Interia Industries and (ssociated 1reweries.
Interia Industries had suffered wing to the prohibition in 9aryana, being
located at ;urgoan. /andpiper was "irtually absent on shel"es today.
2ith the lifting of prohibition, Intertia should well be out of its temporary
setback.
:raught beer (fresh, unpateruised, on tap continues to be an urban
phenomenon, being ser"ed from 68& E odd pubs concentrated in cities. It
accounts for less than %3 of the o"erall beer market.
>f the foreign brands (ssociated 1reweries @ :istilleries <"t. Ltd. ((1:
is in negotiations with the <hilippines E based /an Miguel to bring in /an
Miguel beer. Mohan Meakins is to launch Canadian ?udge beerH Foster
1rewing ;roup, with its famous Fosters beer, is in a tie E up with Chennai
based Aothari Industrial Corp. Ltd. (nheuser 1usch)s with /2C for
1udweiser. /outh (frican 1reweries Castle and Lion lagers and Carling
beer, in a tieEup with /om :utt 1reweries, are yet to get off the ground.
Demand : Past &
Future
Year th Als
1990-91 6&$
1991-92
1992-93
1993-94
1994-95
1995-96
1996-97
6&5
66B
7&%
686
7,,
B$&
1997-98
1998-99
1999-00
2000-01
2001-02
B,&
%6&
,&&
,5&
8C&
2006-07 $B&&
Market Growth Rates
1990-91 1996-97
12.6%
1996-97 2001-02
14.0%
2001- 02 2006 07
12.1%
MNCS IN BEER INDUSTRY IN INDIA
S. No. Company Brands Collaora!"ons
1. Foster)s 1rewing ;roup
((ustralia
Iictoria 1itter, Foster)s Ice,
Foster)s Light Ice, Carlton,
/trong 1eer, Foster)s -*tra
Aothari
Industries
Corporation Ltd.
(Chennai based
2. 1rauerei 1eck @ Co.
(;ermany
9aake 1eck 9im.il 1reweries
<"t. Ltd.
(9imanchal
<radesh
3. Carlsberg '' ?oint "enture
with 0.1
( 1angalore
4. /an Miguel (<hillipines ''' Collaboration
with (1:
(Mumbai based
5. (nheuser E 1usch)s 1udweiser /haw 2allace @
Co. (#alks are
going on
6. /outh (frican 1reweries
Castle and Lion Leger
and Carling beer
#ieEup with /om
:utt 1reweries
7. 9eineken and Miller 9eineken '''
8. <hillip Morris Inc. ''' '''
9. ?udge 1eer(Canada ''' Mohan Meakin
Ltd.
10. 9ofbrau (;ermany,
Munich
''' Cool 1reweries
(9aryana,
:aruhera
1. CONSUMPTION PATTERN OF IFML
Iodka
&.7
;in
6
2hisky
7$
1randy
5.8%
+um
$,.6
(Mn cases
2. REGION WISE SALES OF BEER
.orth
$&.B
2est
$C.,
-ast
B.%
/outh
6$.&
(Mn cases
/ource = I+I/
3. STATE WISE MARKET SHARE OF IMFL
Maharashtra 6,3
#amil .adu $53
:elhi $&3
Calcutta 53
+a!asthan 83
(Mn cases
4. MARKET SHARE OF MAJOR PLAYERS
/haw 2allace
$B3
?agat!it
$&3
Mohan Meakins
83
>thers
7%3
(Mn cases
/ource = -*press In"estment 2eek
1.2 CURRENT SCENARIO
2ith the ad"ent of liberalisation and globalisation in $CC$ the Indian liquor
and beer market is flooded with foreign brands. #he ultimate benefit
reaches to the consumer, he is getting choice in terms of brands, quality,
price, taste etc. Indian beer market is ha"ing a huge potential e"ery
company as trying to encash it.
#hough foreign brewers ha"e not yet piled into the country with reckless
abandon, as has happened in the China market, the prospect of a huge,
thirsty Indian beer market is not being ignored by them. .or by Indian
brewers. (t ,% million cases ($6 bottles of ,%& ml or B.8 million
hectolitres (9L, growing at close to $B per cent per annum, the frothy
promise looks unbelie"ably alluring.
<er capita consumption, at half'a'litre per year, can only go up, with
growing acceptance for all kinds of beer'lagers, draught, strong and ice'
beer. Maharashtra state go"ernment)s e*cise policy for Indian Made
Foreign Liquor (IMFL and beer is not in fa"our of companies.
#he implications of this structure go beyond basic pricing= its impact,
simply, is e*cise duty parity between mild and strong beer. 2ith margins
much higher on the latter, it)s little wonder that it has been growing at
almost four times the mild beer segment)s growth.
#hough capacity (at ,.8% million 9L is not constraint, its quality certainly
is. 1eing consolidated at a few, scattered, big breweries, it does not lend
itself to the cost'and'freight dynamics within a set'up where each state
has its own myriad policyGe*cise structures.
2hat the industry need is micro'si4ed'%&, &&& to 8%,&&&'9L capacity
breweries spread out geographically. #his also hedges risks in a scenario
where state go"ernments call for prohibition at the drop of a hat. Inertia
Industries would agree with this. Its most promising brand, /andpiper, felt
"ictim to the one location brewing system. Following May $CC,, its
;urgaon, 9aryana plant had suffered the tribulations of prohibition.
/andpiper is "irtually absent on shel"es today.
9owe"er, for now, the sunshine, and optimism runs high. Jet another
foreign beer brand (after /troh)s in $CCB, 9aake 1eck, touched indian
shores through a technical tie'up between ;erman 1rauerei 1eck and
Company, and Indian 9im .eel 1reweries <ri"ate Ltd. ( $.% lakh 9L plant
at 9imachal <radesh, with a +s. %% crore in"estment, introduced 9aake
1eck to Indian throats simply as, K#he ;ermans are hereL. <lans include
bringing in top'of'the'line 1eck)s in the ne*t si* months.
9aake 1eck is selling in nonreturnable, lightweight, takeaway ,%&ml and
77& ml glass bottles, a first in beers where recycled bottles has been the
norm. 9aake 1eck is also a"ailable in 77& ml and %&& ml cans.
#here are a number of foreign brands launched, the Mumbai'based
(ssociated 1reweries @ :istilleries <"t. Ltd. ((1: is in tie'up with the
<hilippines'based /an Miguel bring in /an Miguel beer. Mohan Meakins
Ltd. is set to launch Canadian ?udge beerH Foster)s 1rewing ;roupH its
famous Foster)s beer, in a tie'up with Chennai'based Aothari Industrial
Corp. Ltd.
1ut for each of the launches, there are many that came unstuck
Carlsberg, in a %&=%& !oint "enture with 0nited 1reweries Ltd. (01, is
showing no signs of lifeH (nheuser'1usch)s M>0 with /2C for 1udweiser
is waiting for ?I statusH /outh (frican 1reweries) Castle and Lion lagers
and Carling beer, in a tie'up with /om :utt 1reweries are yet to see the
light of day. (dd to this list 9eineken and Miller, from 9eineken and <hilip
Morris Inc.)s stables respecti"ely E these companies are still not through
with market assessment.
2hy the delaysM (t B.8 million 9L, the market is !ust not big enough to
e*cite beer behemoths Carlsberg, (nheuser, 1usch, 9eineken and <hilip
Morris E China, at $%% million 9L a year, is 7& times a big. 1esides, the
myriad state'le"el policies and !urisdictional ambiguities o"er beer
capacityGlicensing between the federal go"ernment and the state
go"ernments has only worsened an already confused picture.
Meanwhile, the current action is in the strong beer segment, growing at
close to 6B per cent per annum. Largely because Indians look at beer as
something to gi"e them a high, and not as a light, working'meal drink, as it
is globally. #he ad "alorem duty structure adopted by Maharashtra
accounting for the highest (76 per cent share of total beer sales E has
further skewed the scales in fa"our of strong beer, this time the impetus
being better margins for the marketer.
Feenia Lawyer, director, (1:, comments, K-"er since M+< linked e*cise
duty structure was introduced in Maharashtra, strong beers ha"e gained
fa"our. -arlier, strong beers had to pay higher e*cise than mild beerL.
(1:)s London /uper /trong 6&&$ plus and London /uper strong %&&$
<lus ha"e grown faster at o"er $B to $, per cent that the total brand
portfolio, which grew at 5 per cent in $CC8'C5. ( growth mainly fuelled by
rural Maharashtra. (1: will be shortly launching another NNN -*tra
/uper /trong, with alcoholic strength abo"e 5.8% "G".
01, of Aingfisher fame, has also turned to strong beer it launched 01
<remium Ice 1eer (mint'fla"oured. 1ut Aalyan ;anguly, president of its
breweries di"ision has another e*planation for this mo"e= K#he Indian beer
market is fairly un'interestingH a new product concept such as 01
<remium Ice 1eer will create e*citementL.
#he company)s other strong beer brands, Aalyani /uper /trong, 1ullet
and Charger ha"e had limited success, e"en as competing /2C)s
9ayward franchise has been growing at a compounded rate of 6% per cent
for the past three years. In comparison, the 01 strong beer brands,
according to ;angully, grew $6 per cent last year, upping its share in the
segment to fi"e per cent.
:efending 01)s emphasis on mild beers, ;anguly says, KIn fact, strong
beer and economy range IMFL is the mainstay at C/: canteens and with
socio'economic classes C and :. #here is a large population here,
therefore strong beer)s tremendous growth rateL.
9aake 1eck has been launched in the strong a"atar as well, apart from
the premium larger. #he challenge for any international brand is to
change the paradigm where it can, and for the rest, follow the con"ention,
if it wants to see itself succeeding. .on'returnable, lightweight glass
bottles may be an imperati"e for building brand salience, but what about
the hotel, restaurants and caterers (horeca market accounting for a third
of demand for which sale of used bottles, which can be recycled, is
paramount in deciding the brands they buyM
9aake 1eck)s new non'returnable, light bottles are $B mm shorter than the
con"entional beer bottles and therefore non'recyclable in India. For the
horeca trade, the company is planning the launch of con"entional
recyclable bottles, but 9aake 1eck itself would always sell in new bottles,
whether they are non'returnable or con"entional.
THE BEER CAULDRON
/i4e ,& million cases ($6 bottles of ,%& ml or B.8 million 9L
Ialue +s. 6,$,& crore
;rowth rate $B per cent (,3 for regular beer and 6B3 for strong
Installed
Capacity
,.8% million 9I $CC8'C5 estimated.
Interestingly, Carlsberg is planning to come in only in 77& ml bottles and
later in cans as well. It would be interesting to witness how it copes with
industry)s near infatuation with the ,%& ml bottles, which accounts for
close to 5% per cent of the entire beer sales in the country. Cans, which
account for !ust about one'to'two per cent of "olume sales, are finding
new takers with /2C launched its +oyal Challenge beer in Cans.
Aingfisher beer from the 01 stable is already a"ailable in cans. (nd later,
e"en (1: intends launching cans for its London <ilsner brand.
Important to note here is that the raison d) ere for cans would stay in
demonstration effect for E completing the band)s range E and establishing
brand salience, rather then any significant brand sale. May be due to fact
that India does not ha"e a can manufacturing facility and imported cans
simply do not lend themsel"es to the cost E price equations in our low
"alueEhigh "olume dri"en (for the marketer and "ery price sensiti"e (for
the consumer and beer market. K Con"ersion to single E use, high cost,
imported cans is currently impractical due to the resultant prohibiti"e endE
consumer prices. For e*ample, the 77& ml can is +s 6% in Mumbai, while
the ,%& ml bottle is +s. 7,, K e*plains <hilips (.1. /argunar, senior "ice'
president, /2C breweries.
(dds ;angualy, K #he 77& ml points and cans constitute less than two per
cent of the total market, and pack "ariants are the image dri"ers for the
segment. 2hile their salience is gradually increasing, it is unlikely that the
market will shift from ,%& ml to 77& ml, for quite a long time in India.L
:raught beer (fresh, unpasteurised, on tap continues to be an urban
phenomenon, being ser"ed from 68& E odd pubs concentrated in cities
such as Mumbai, 1angalore, :elhi, 9yderabad, Calcutta, ;oa and
Chandigarh. It accounts for not more than three E to E four per cent of
entire beer "olume sales, and it will say this way, gi"en the lack of enough
breweries in ser"iceable distance form such cities. >nly when microE
breweries clustered around big cities spring up, will there be any
significant rise in draught consumption. In fact, e"en speciality beersE ale,
stouts and bittersEcurrently, will find takers only when microEbreweries
come up.
Meanwhile, marketers are e*perimenting with other methods to boost
consumption. ( leading Indian beer company has reportedly taken the
cue from the fastEmo"ing consumer goods market and would be offering
its beer brands, in the south, in a consumer pack of four premiums or fi"e
strong or si* mild of 77& ml pint si4es, at +s $&&. -"en /2C is marketing
+oyal Challenge <remium Lager)s cans in an international standard pack
of $6 cans to a bo* for the takeEaway consumer segment. (nd 01
recently inaugurated the Aingfisher Cyber <ub in 1angalore, with Mumbai
being the ne*t destination.
Much like the entire beer industry, Cyber <ubs ' essentially for .et'surfing
while gu44ling beer'could be also !ust another way for Aingfisher to dabble
with Oparallel communication) in the absence of other topEofEline media
a"enues. 2hoe"er said beer marketing in the country could be
unE interesting.
1.3 PRODUCT PROFILE
#he first alcohol be"erages were fermented, scenes showing fermentation
appear as pottery made in Mesopotamia as early as B6&& 1.C. 1randy is
probably oldest distilled be"erage. It may ha"e been made as early as
(.:.$&&. #he $B&&)s ha"e distilled whisky distilled in Ireland and /cotland.
Flemish doctor first made gin in the $,&&)s.
#hrough out history, there ha"e been attempts to prohibit or limit the
drinking of alcoholic be"erages. <rohibition is normal in is Islamic states
where the religion forbids the consumption of alcohol. In many other
countries howe"er measures to limit alcohol use range from a legal ban
against drinking to hea"y ta*ation in all alcohol be"erages must of these
measure ha"e little or no effect.
( alcoholic be"erage is a drink that contains -thyl alcohol (C69%>9 also
known as ethanol. It has one 9ydro*yl group. (lcoholic be"erages are
made chiefly from grain as barley, mai4e and or from grapes or other
fruits. #here are two main groups of alcoholic be"erages, fermented drink.
Fermented drinks contain %3 or less to 6&3 ethyl alcohol. #he principal
fermented be"erages are beer and wine. :istilled be"erages also called
sprits or liquor contain from $63 to %%3 or more. -thyl alcohol e.g.
1randy, ;in, +um Iodka and 2hisky.
#he largest annual consumption of spirits per head ($%.B litres is in the
rum'producing west India. In the 0/, Canada, and 2estern -urope,
a"erage consumption is between 7.% litres and %., litres. #he countries
with the highest consumption of all types of alcohol (beer, wine and spirits
are ;ermany and :enmark. :istilled alcoholic be"erages are made
chiefly from fermented grain mash or fermented fruit !uice. In the
distillation process, the mash or !uice is heated gi"ing of "apours of
alcohol. :istillers collect the "apours and cool them to from a liquid. #he
fla"our of spirit depended largely on the kind and amount of grain, fruit and
yeast used, plus "ariation in the fermentation, distillation and ageing
process.
#he Indian liquor industry can be classified into there categories.
Country liquor
Indian Made Foreign liquor
Foreign liquor
COUNTRY LIQUOR
Country liquor is distilled sprit mi*ed or unmi*ed with spice or the other
ingredients in "ery small quantities to import taste and aroma. It occupies
8&3 of liquor market and responsible for a ma!or portion of re"enue for
state go"ernment. It is known under different name in different areas of
the country. /uch as=
#$CN%$& ' 2est 1engal
C'()$*$+ '#amilnadu and Aerla
,'$-)$N ' <un!ab
.-/$ ' (ssam
,$)0 ' M<
INDIAN MADE FOREIGN LIQUOR
#his category includes the products such as 2hisky, 1randy, +um, ;in
and Iodka. #he de"eloping countries like India where <etroleum
resources are in scarce, utilisation of agricultural waste products for
de"elopment of industries as of signification importance. /ugar industry
in this country is second biggest industry. #housands of tonnes of
molasses containing large quantity of sugar is a"ailable as the by'product.
FOREIGN LIQUOR
In India this category is used e*clusi"ely for liquor which are imported into
the country. #his may include "arious brands of /cotch, 2hisky, French
brandy, ;in, +um, Iodka, 1eer etc.
DIFFERENT ALCOHOLIC DRINKS
WHISKY= 2hisky is made chiefly from barley, mai4e or rye. Most whisky
is a blend of as many forty kinds of whiskies made from different grains.
2hisky may be aged si* years or more. (gain de"elops the fla"our and
gi"es the be"erages an amber colour. /cotch whisky is known for its
smoky fla"our. It is made from mash, a mash which consists primarily of
barley whiskies made in 0/ include bourbon and blended whisky.
1ourbon is produced from a most consisting chiefly of mai4e @ rye. In
Ireland, whisky is sometimes made from potatoes (<oteen. Most whisky
ranges from 5& to $&& proofs, whisky ser"ed straight or neat is ser"ed
unchilled. 2hisky may also be ser"ed Kon the rocks (with iceL or mi*ed
with water, carbonated water or be"erages. In addition it is used in many
kinds of cocktails. 1est whiskies of the world are supposed to be
produced in /cotland.
In India large quantities of IMFL are manufactured from restricted
molasses sprits distilled in continuous towers (-.( sprits are normally
coloured with carmel to produce the desire colour and are not generally
aged.
BRANDY = 1randy is distilled from grapes or other fermented fruit !uice.
1randy made from grapes is at least 5& proof. ( grape brandy called
Cognac is distilled in the area of cognac, a town in France is known as
best brandy. 1randy is aged for two to eight years. Fla"oured brandies
made from such fruits as black berries, cherries or plums are at least 8&
proof. #hey are named after the fruit whose !uice is used in making them.
1randy is usually ser"ed neat mi*ed with another sprit such as liquor.
LIQEUEIR= (lso known as cardinals, are made by fla"ouring brandy, gin
or other spirits with "arious parts of the plants such as fla"ours, fruits and
lea"es. Liquors contain at least 6.%3 sugar. #he most popular fla"ours
include apricot, black berry, cherry, chocolate, orange, peach and
peppermint. Liquors range from 6% to $$& proof and ha"e a "ariety rocks
or as party of "arious cocktails.
RUM= +um is made from the !uice or syrup of sugar cane or molasses.
+um is at least 5& proof and may be white or amber depending largely on
the again process. It is usually mi*ed with coconut !uice, lime !uice,
pineapple !uice, cola or some other be"erages. 1est rum are known to
come from ?amaica, 2est Indies, Cuba, Mauritius, India etc.
GIN Frances La 1oe, a $8
th
century professor of medicine at London
0ni"ersity, 9olland is the originator of the ;in. It is a mi*ture of alcohol
and water, fla"oured with !uniper berries and other ingredients. ;in
"arious from 5& to CB proof. It can be mi*ed with wine called "ermouth to
make a martini, one of the popular cocktails. ;in can also be mi*ed with
lime!uice, tonic water or other be"erages.
!ODKA= >riginally a +ussian be"erage is made from barley, mai4e, or rye
or some times potatoes also. It "arious from 5& to $&& proof, is not aged
and has no colour. Iodka also has no taste or odour, and so it is often
mi*ed with orange !uice, tomato !uice, tonic water or some other
be"erages.
BEER= #he go"ernment classifies beer as a food item under the food
processing industry since $C5C. Infact beer is percei"ed as a thirst
quencher 1eer is made by fermentation of e*tract obtained from barely
and also made from millets, rice and e"en fermented rye bread also. 1eer
is the least harmful of all potable alcohol, as it has the least alcohol
content.
#his segment is growing at the rate of $B3 per annum. #he per capita
consumption of beer in India is about &.% litres. It is about 6& litres in
China and 0/ and ;ermany it is abo"e $&& litres. (ccording to the
content of the alcohol in the beer it is di"ided in their main kinds as
follows=
$. +0&1 = Content of (lcohol less than %3 IGI
6. (2,)$ S,)-N*= Content of (lcohol between %3 to ,3 IGI
7. S3#() S,)-N*= Content of (lcohol more than 53 IGI
1eer is belie"ed as thirst quenchers but in fact beer is a light working '
meal drink globally. Indians look at beer to gi"e them a high and not as a
light working ' meal drink, as it is globally.
#his has been brought under the urges of food processing ministry and
go"ernment classifies beer as a food item under the food processing
industry since $C5C.
( process called fermentation makes beer. #he e*tract obtained from
carbohydrates rich material barley, and hops millets, rice and rye bread is
fermented. #his process goes through "arious rigorous steps.
1eer is the least harmful of all potable alcohol. (s it has the least alcohol
contents. It is made from malt, barley, hops and water of all of, which are
considered healthy. Moreo"er, beer is pasteurised. (ll this makes beer an
e*tremely attracti"e be"erage, especially as more and more people
getting health conscious.
(4ropeans say 5 $ m46 a day 7eep do8!ors a9ay:
<roduction of beers by Indian brewers is ,& million cases ($6 bottles of
,%& ml. or (B.8 million, hecto litters, growing at close to $B 3 per annum.
<er capita consumption in India is half'a'litre per annum. India)s B.8
million'hecto'litres beer market may be small beer compared to China)s
$%%'million hecto'litres domain.
1.4 MARKET DESCRIPTION
Indian Market for liquor G1eer is di"ided into three of its type as follows=
>pen Market
(uction market
;o"ernment Controlled Market
OPEN MARKET In this market customer is supreme. Companies through
retailers follow the practice of high customer ser"ices, customer
satisfaction and delight is gi"en first preference. (ttention is gi"en on the
fact that the customer should get full "alue for money. Franchise is seen
engaged in the practice of rendering free home deli"ery ser"ice to the
customers.
(ny company when launches new product, its feasibility is tested through
open market. #hey get good return and reco"ery in open market and
complete security money.
-*cise department though strict in collecting its duty, is quite lenient in
allowing the company for ad"ertisement and adopt different promotional
acti"ities. -"ery shop owner has to pay some fi*ed amount in the form of
;o"ernment le"iesG license fee say, +s.$, &&,&&& per annum to e*cise
department as a result the e*cise department do not interfere in any of the
affairs which the retail shop carries in due course of one year. /tiff
competition among ma!or players is seen in open markets. /tates ha"ing
open market are= Maharashtra, 2est 1engal, ? @ A, ;oa, >rissa, (ssam,
Meghalaya, #ripura, (runachal <radesh.
AUCTION MARKET In this type of market people form a syndicate, upon
the shoulders of whose the responsibility of supplying the product rests.
#he syndicate is supreme in auction market, they bit the contract for the
supply of liquor in some small region say in 1hopal district. #o fetch the
contract, money, power and position plays a "ital role. #he auction is
done on yearly basis.
#he syndicate is supreme and no company without the permission of
syndicate can launch any of its products in auction market. #he e*cise
policy and auctions plays a crucial role in determining the price of the
products by the syndicate. <ayments are not secured in the auction
market. Following are the auction markets in India= 0<, +a!asthan, 1ihar,
<un!ab, Chandigarh, 9imachal <radesh and Madhya <radesh.
GO!ERNMENT CONTROLLED MARKET
Excise is supreme in government controlled market
government invites tenders from different parties
for the distribution of liquor in the city, there after
the government select the parties on some
condition. In Delhi the responsibility of supplying
the product is on four corporation.
#he four corporations are under the control of e*cise department. #hese
are=
$. :/I:C = :elhi /tate Industrial :e"elopment Corporation
6. :##:C = :elhi #ourism and #ransport :e"elopment
Corporation.
7. :/C/C = :elhi /tate Ci"il /upply Corporation
4 DCCWS : Delhi Consumer
Corporation Wholesale Store
They are having 73,55,41,16 shops respectively
accounting for 185 shops in Delhi. The weekly
reports of outlets go to their respective corporation
and from their demand schedule reaches to excise
department and L-1 licence holder of the company.
The L-1 licence holder seeks permission in the form
of transport permit from excise department, the
validity is only for four days i. e. (the goods has to
be supplied within the stipulated time else the
licence has to be send back to excise department
for renewal) goods are supplied directly to the
outlets from L-1 licence holder.
The bill is verified from shop in-charge and
consolidated revenue chart is send to the respective
corporation for the payment. The payment is
receive in the form of cheque and is deposited in
the companys account.
Every company has to receive the L-1 licence from
the excise dept. For the sale and purchase of
liquor / beer in the state. The life of which is only
one year and there after the company has to again
renew the licence by paying some amount as licence
fee.
The commissioner of excise announces the policies
every year about the trading of liquor beer in the
state. Price of product is fixed by excise dept. There
is strict control over seller and buyer by the excise.
There is maximum security of payment in this
market.
1.5 EXCISE POLICY
EXCISE POLICY IN DELHI
According to the companies point of view there is
host and parasite relationship between excise
department and company.
In Delhi market excise department has laid down
some set rules and procedures which need to be
followed by the companies.
Delhi manufacturers need to have a L-1 licence
issued by Delhi excise for sale of IMFL and beer in
Delhi. Clear trade mark and registration
certificates are required to enter into Delhi market.
Qualification of sale of any brand of liquor beer the
company need to follow the following conditions.
FOR BEER
The last year there was a rule that brand name has
to be registered with trademark association, this
year that to is abolished. Hence there is no rule for
beer as such.
FEE STRUCTURE
1. Licence : 50,000 per annum
2. Brand
registration fee
Whisky
Rum
Beer
:
:
4 Lacs per annum per Brand
2 Lacs per annum per Brand
1.25 per annum per Brand
3. Label registration
Whisky & Rum
Beer
:
:
10,000 per annum per Label
3,000 per annum per Label
Besides other rules & regulations the
manufacturers are allowed to launch maximum 5
brands.
SETTING UP OF PRICE IN DELHI
1. Minimum (last year ) ex distillery price
prevalent in any part of the country
Current Price in CSD .
(Which ever is less)
2. Export Duty
.
3. Import Duty
.
4. Freight Charges (Rs. 7.50/ km + 300)
.
5. Insurance Charges (6% of ex. dist. Price)
.
6. Handling Charges Rs. 1/- Case
.
Total
.
+5 % Profit Margin
.
+Rs. 2.50 Per Case
.
Whole Sale Price
.
To Whole Sale price add
.
Special duty
.
Assessment fee
.
Rent Fee .
Retailers Profit
.
Total
.
+ 12 % sales tax
.
Retailed price .
1." OBJECTI!ES OF THE PROJECT
#o study consumers brand preference of beer in :elhi.
#o study consumption pattern of beer.
#o study the factors affecting buying beha"iour of beer.
#o study alternati"e ways of product promotion.
1.# LIMITATIONS OF THE PROJECT
$. ( large number of samples could not be co"ered due to lack of time
and other resources.
6. (ll retail shops being go"ernment controlled did not fully operate and
were unable to gi"e e*act data.
7. #here is a possibility that respondent may conceal the beer facts due
to some unknown reasons.
B. /ufficient secondary data is not a"ailable
%. Iery often people don)t admit that they drink, e"en while buying the
beer they said they bought it for their friends.
2.1 RESEARCH DESIGN
#he design of research pro!ect is the plan that ties the data collected to
questions or hypothesis posed, thereby linking the data to the conclusions
to be drawn.
Marketing research pro!ects are either e*ploratory or conclusi"e in nature
depending on the ob!ecti"es. In this e*ploratory research has been
conducted in finding the e*tent of acceptance of newly launched ;enius
<restige whisky, its strengths and weakness through customers and
retailers.
2.2 DATA COLLECTION SOURCES
#he data collection process has been completed by gathering the data
from primary as well as secondary sources.
PRIMARY SOURCES
<rimary data collection process was carried out by personally inter"iewing
the targeted consumers.
SECONDARY SOURCES
#he collection of secondary data on liquor is a "ery tedious. 9owe"er,
secondary data are collected through following sources=
E$TERNAL SOURCES
I. 1usiness Maga4ines (1usiness #oday, 1usiness India, 1usiness
2orld and (@M
II. .ewspapers (-conomics #imes, 1usiness /tandard, 1usiness
Line, Financial -*press, #he >bser"er of 1usiness and <olitics,
#he <ioneer.
III. CII Library
II. -*cise department
I. -mbrosia ' liquor !ournal
2.3 DATA COLLECTION METHOD
:ata collection has been done through a "ery useful @ popular sur"ey
method. #he sur"ey was conducted through personal inter"iews to record
the consumer)s perception, attitude towards beer.
#o understand each indi"idual response, the personal inter"iew method is
better than other methods like telephonic inter"iews, mailing questionnaire
etc. 1ecause this method gi"es the researcher enough fle*ibility to ask
any other question which is rele"ant for research.
2.4 DATA COLLECTION INSTRUMENT
#he sur"ey method was used for the research, the personal inter"iews
were conducted with the help of a structured questionnaire.
2.% SAMPLING PLAN
<lace = :elhi
#arget +espondents = Consumers
/ampling <rocedure = Con"enient sampling
/ample /i4e = $%& Consumers
2." ASSUMPTIONS OF THE PROJECT
$. #he sample si4e of $%& is for representati"e of the population.
6. +espondents ha"e no bias.
3.1 FINDINGS
Five top of the mind brands are Kingfisher,
Haywards, Kalyani Black Label, Royal Challenge
and Thunderbolt.
Popular existing brands of beer are
Mild Strong
Golden Eagle,
KingFisher,
Royal challenge,
Dansberg,
Kalyani Black Label
Haywards 5000, Thunder
bolt, Guru
Customer who demand beers belong to age - group
of 20 to 40 years.
Now a days people are diverting towards strong
beer.
In Delhi, people are quality conscious and seek for
their favourite brands.
Haake Beck is gaining the ground in Delhi market.
Availability of well-known brands like Kingfisher
and Kalyani Black Label is good but Royal
Challenge and Thunderbolt is less available.
There is a plethora of brands available in Delhi
market, which are inferior in quality and taste.
More often people do not get their favourite brand
from Delhis outlets consequently, they have to
accept source other brand reluctantly.
Now a days beer is commonly used in parties
celebrated in collages, professional institutions,
companies etc. due to westernization.
%. FI!E TOP OF MIND BRAND
". FA!OURITE BRAND OF BEER
$7B
5C
C8
,%
85
%6
%B
7,
,%
B7
&
6&
B&
,&
5&
$&&
$6&
$B&
Aingfisher 9aywards Aalyani 1lack
Label
+oyal
Challenge
#hunderbolt
Frequency 3 /hare
7C
6,
$B
C
6B
$,
65
$C
$,
$$
6C
$C
&
%
$&
$%
6&
6%
7&
7%
B&
Aingfisher 9aywards Aalyani
1lack Label
+oyal
Challenge
#hunderbolt >thers
Frequency 3 /hare
SOURCE : COMPILED
*Result According to Survey Conducted
#. SECOND PREFERENCE OF BEER BRAND
&. PACKAGING
PREFERENCE
%B
7,
6B
,
$6
5
C
,
$7
C
75
6%
&
$&
6&
7&
B&
%&
,&
Aingfisher 9aywards Aalyani
1lack Label
+oyal
Challenge
#hunderbolt >thers
Frequency 3 /hare
Can
673
1ottle
6$3
1oth
%,3
SOURCE : COMPILED
'.ATTRIBUTES EFFECT BRAND PREFERENCE
1(. SATISFACTION
LE!EL WITH PRESENT BRAND
SOURCE : COMPILED
$6
5
$75
C6
,7
B6
5
%
&
6&
B&
,&
5&
$&&
$6&
$B&
<rice #aste Puality ("ailability
Frequency 3 /hare
$&5
B6
86
65
&
6&
B&
,&
5&
$&&
$6&
Frequency 3 /hare
/atisfied 0nsatisfied
11. ATTRIBUTE RESULT IN SATISFACTION
11.DRINKING HABIT
SOURCE : COMPILED
%
7
$&5
86 86
B5
,
B
&
6&
B&
,&
5&
$&&
$6&
<rice #aste Puality ("ailability
Frequency 3 /hare
53
6B3
7,3
763
>nce in $% day >nce in a week More than once a week >ccassionally
13. REASON FOR DRINKING
14. FA!OURITE BRAND NEED IMPRO!EMENT IN THE FIELD
SOURCE : COMPILED
$5
$76
$6
55
&
6&
B&
,&
5&
$&&
$6&
$B&
Frequency 3 /hare
1oo4e -n!oyment
,
B
%
7
,
B
5B
%8
B5
76
&
$&
6&
7&
B&
%&
,&
8&
5&
C&
<rice #aste Puality ("ailability (wareness
Frequency 3 /hare
1%. FACTORS RATED AS NO.1 IN BUYING BEHA!IOUR
1". CONSUMPTION PATTERN OF BEER
SOURCE : COMPILED
Mild
B73
/uper /trong
763
-*tra /trong
6%3
#aste
B73
Puality
673
/trongness
$53
("ailability
C3
>thers
83
4.1 CONCLUSION
After the completion of market survey I would like
to say that to exist in liquor industry is not a childs
play. In India, liquor industry is very sensitive and
required expert supervision. There is strong brand
loyalty and any new entrepreneur is likely to
jeopardise his business. Every time there is a
danger of going any region Dry.
The sale of beer in Delhi market has been
escalating continuously. It is very likely to boom
this market in coming days due to various
economical, cultural and behavioural changes.
These changes are due to people of Delhi are more
penchant towards glamorous western way of living.
MNCs have started entering Indias beer market.
They are also a little bit responsible for changing
the style of Delhites.
In Delhi, liquor is sold through corporations, which
are under strict control of Excise Department. At
liquor outlets, the salesmen show apathy to dealing
with customers. In Delhi, retailers dont keep
chilled beers. For this reason many customers
dont prefer to wait for hours till the beers get
chilled. Many times they ignore buying beers.
In coming days there would be a need for open
market and a number of bars and pubs would be in
fashion. In these days only a few member of bars
are available which are being run in big hotels and
discotheques and are very costly.
In :elhi market a number of brands are a"ailable, although all are sold
out, but a few number of brands are liked by people which ha"e good
quality and taste. <eople here are "ery quality conscious. More often
people ha"e to go for other brands reluctantly due to non'a"ailability of
their fa"ourite brands. 9ere one thing we can conclude that in coming
days only those brands will e*ist which ha"e good quality and con"enient
packaging, like light weight bottles, pints and cans.
<resently, the bottleneck to prosper these industries and markets is the
myriad state le"el policies and !urisdictional ambiguities o"er beer capacity
licensing between federal ;o"ernment and /tate ;o"ernment.
%.1 ALTERNATI!E WAYS FOR PROMOTION OF
LIQUOR PRODUCTS
#he liquorGbeer business is not socially accepted in India. ;o"ernment
also do not pro"ide freedom to liquorGbeer companies, they are not seen
as the companies helping in de"elopment of country. (lthough the
ma*imum ta* re"enue comes from liquorGbeer business. #here are lot of
difficulties and hindrances created by go"ernment in the smooth operation
of business. #here are many problems e*ist in this industry starts from
production to marketing.
In this critical situation how do they promote their businessGproduct M
#here are following waysGchannels a"ailable for promotion of liquor
products
(d"ertising (surrogate ad"ertising
Consumer <romotion
#rade <romotion
/ponsorship
AD!ERTISING
#his is the most effecti"e tool in marketing. In liquor industry ad"ertising is
not allowed by the Indian ;o"ernment therefore they are indulged in
surrogate ad"ertising.
Products with similar brand name= ' #his is "ery common method used in
the liquor industry, here companies introduced a non'alcoholic product
with similar brand name and ad"ertise it in full swing. Financially sound
players use this.
K;"n6<"s=erL brand of mineral water launched by 01 group to promote the
Aingfisher brand of beer.
/imilarly Mohan Meakins launched K*olden (a6leL brand of mineral
water to promote the same brand of beer. K*en"4sL mineral water is
launched by />M :istilleries to promote K;eniusL whisky.
T)*)+,-,./= ' Liberali4ation and globali4ation flooded Indian electronic
media i.e. tele"ision with foreign channel. 1an liquor ad"ertisements on
channels telecast from the India resulted in liquor ad"ertisement on
foreign channels. Large companies adopt this because it requires a huge
amount of money.
P0,/1 2)3,4= ' Importance of print media cannot be neglected. #he
common method of this is column sponsorship on the sport page on news
daily. 9ere the logo of the brand is printed in the centre of the news
article. 1agpiper and ;enius are using this method in #he #imes of India
and :ainik 1haskar.
H.403,/5= ' #his form of ad"ertising is used in open market and auction
market. In this hoarding of the brand is placed at the common place which
attracts people towards it. -"ery company uses this, cost is less in
comparison to others.
G*.6-,5/ B.403= ' #his is the method used by e"ery company in auction
and open market. In this glowsign board of a particular brand is gi"en to
the retail outlet, bars on which the name of the outlet is mentioned. It is
also a low cost method.
W4** P4,/1,/5= ' /ame as hoarding only difference is that wall is used
instead of hoarding. #his method is used in open ad auction market.
POP7-= ' #his method is only applicable in open and auction market. In
the bars and at the retail outlet posters can be seen this stimulate the sale
at the point of purchase. :anglers are also used at the retail outlet. <><s
are generally glamorous and are of "ery good quality.
W,/3.6 D,-8*49= ' #his is as same as used in any other industry say
FMC;. Company pays a fi* amount of money to the retailer to show their
product at the best position in the outlet. #he amount of money depends
on the location and class of the outlet.
SPORT SPONSORSHIPS
/ponsorships are widely used by the liquor ma!ors due to the ban on
ad"ertisement the companies are promoting their products by this method.
#his is money intensi"e method only used by the main players who are
financially sound. :oordarshan had (and still has a ban on liquor
ad"ertisements. /o the companies are concentrating on indirect
promotions such as e"ents, especially the :erby, by 0. 1. group for
building a brand image for all its brands. In $CC&s they decided to
combine all horse race under Aingfisher for sponsorship. #ill then 01
would sponsors horse races under its three well'known beer brands E
Aingfisher, Aalyani 1lack Label and 01 e*port.
In order to put more life and fun into this e"ent, the company decided to
include social e"ents such as fashion shows at :erbis. 2ater sport,
particularly sailing was also considered a good platform for Ainfisher.
/ince the sport is associated with youth and ad"enture. In order to carry
the brand)s image of fun and fashion further the company launched the
Aingfisher range of apparel in $CC%. #he association with cricket began
only in $CC,, during the 2orld Cup. (t this function, there was a need to
get into sponsorship of a sport that has mass appeal. In India ob"iously
this sport is cricket. (fter the company decided to !ump onto the band
wagon of cricket sponsorship it realised that there were already a great
number of companies associated with the sport. For instance, 2ills was
sponsoring the Indian Cricket team.
2ith the global identity in mind, 01 thought that sponsoring a foreign
cricket team would not only gi"e the brand more "isibility in the clutter, it
would also help to build a fa"ourable image in international markets. 01
decided to put its money on 2est Indies. #he team was chosen not so
much for their winning ways but for their attitude towards game. K#hey
play the sport with a flair and are full of fun and e*citement. #his gels with
our brands core "aluesL, says Chaudhari, I<'/ales @ Marketing, 01
group (1reweries :i"ision. Later on the company decided to team up
with the Indian Cricketers, /aura" ;anguly and (!ay ?ade!a, and OAing
some'two some campaign).
Last year, the company had included football for Aingfisher. #he sport
was hitherto associated with another 01 brand, Aalyani 1lack Label. 01
tied up with the -ast 1engal team for sponsorship.
Many other companies are also enclosing on this point. ?agat!it Industries
Ltd. sponsored ;olf tournament in )C% named KFortune ;old ;olf
#ournamentL to promote the Fortune ;old brand of whisky.
/haw 2allace is promoting their brand +oyal Challenge through the
sponsorship of ;olf.
/eagram is promoting the brand Chi"as +egal through Chi"as +egal <olo
Championship.
E+)/1 S8./-.0-:,8-= ' Companies are doing brand promotion through
e"ent sponsorship also. Companies are arranging parties, nights, fashion
shows, food festi"als etc to promote their brand.
0:I sponsored 1lack @ 2hite nights, parties in selected club and
restaurants in 1ombay to promote 1lack @ 2hite brand.
Macdonald Mohan sponsored happy hours, sweepstakes in selected bars
and discos they also sponsored beauty pageants, food festi"als, boat
races and bridge tournaments in .anital, Mussorie and Mountabu.
01 group sponsored Fashion /hows to promote their Aingfisher and other
bands.
/>M :istilleries ha"e sponsored fashion shows in 1hopal, 1ombay and
:elhi to promote the Legend brand.
CONSUMER PROMOTION
#his plays a "ery important role in the liquor industry. #here is cut throat
competition between the "arious companies, they are trying to attract the
consumers to try and adopt their products. #here is a wide range of
consumer promotion methods as follows.
S8.1 S)**,/5= ' #his is "ery common method used in liquor industry. #his
is used in open and auction market and there is no room for this in
go"ernment controlled market. In this method company)s salesmen are
present outside the outlet and at the spot they gi"e gifts whate"er is may
be generally QK<eg ;lassQL on the purchase of the product.
G,;1-= ' #his is done to initiate the trial of the productH the main aim of this
is to made consumers at least ha"e a trail, if the product satisfy them
definitely they will go for repurchase. #he most common gifts are key
chains, playing cards, <eg glass etc. -ffect of these are long lasting,
consumes ha"e these gifts with them for a long time.
D,-<.=/1 C.=8./= ' #his method initiate repurchase of the product. In the
method a discount coupon is gi"en with the first purchase and the
discount is gi"en on the second purchase of the product.
C4-: D,-<.=/1= ' #his is used when the product is new to initiate trail or
when the product is not doing well to increase the sales.
TRADE PROMOTION
Like any other industry trade promotion plays an important role in the
promotion of liquor products. #his is done in two ways wholesaler)s
schemes and retailer)s scheme.
In wholesaler)s schemes generally cash discount, price discounts are
gi"en.
+etailer) schemes are gi"en to them for pushing the sales of the particular
product. #hese include cash discountH price discountsH free gifts to the
staff of the retailer to moti"ate them to sell your product. #his has a long
lasting effect. Following are the gifts gi"en to the staff of retailers by the
different companies= '
COMPANY GIFT
Aedia 2ristwatch
/eagram /hirt, Cap
01 #easet
?agat!it 2ater ?ug, 1ag
/haw 2allace 2ater ?ug
I:I #'/hirt
/>M #'/hirt, Cap
#hese practices are not allowed in the go"ernment'controlled market.
%.2 AD!ERTISING LIMITATIONS IN LIQUOR
INDUSTRY
#here is sun and sea and miles of sand. #he coconut gro"e is ali"e with
music and young people ha"ing a good time. #hey prance about, rub hips
and add to their soaring spirits by sipping 1acardi +um. It)s a fun ad that
has feet tapping to a swinging beat.
1ut the go"ernment was not amused. #he ad, showing young men and
women gyrating to music and liquor, was seen as Ose*ually offensi"e) by
0nion I@1 ministry officials. #he ad, telecast o"er -/<. during the
triangular <epsi cricket series held in India, could not but help getting
noticed.
Matters were made worse with the pepsi series telecast being
interspersed with no less than 6& enticing ads of an assortment of liquor
products. #he issue has also thrown up the question of public morality in
liquor ad"ertising. Can youth, sports and liquor be linked M Furthermore,
how far can one go to titillate the instincts to sell products which could be
harmful to health M
#wo liquor ads demonstrate the two ends of the creati"e spectrum. #he
/an Miguel beer ad shows a young man fantasising the contours of a
woman while fondling a bottle. (nd then the in"iting barmaid appears
takes the /an Miguel order and retreats after enticingly askingH anything
more M /e*ual Oforeplay) to sell a beer brand M /eagram)s is right in front
on the Odecent) wnd. .o bottle or woman appears in the ad. ?ust two lines
flash on the screen= K(ll products with responsibility, (re handled with
responsibilityL. #his is followed by the /eagram)s logo without the bottle.
Following the <epsi Cup'hoopla, Former 0nion Information and
1roadcasting Minister, /ushma /wara!, led the charge. /he summoned
the "arious satellite channel heads and warned them to take the
ROob!ectionableR) stuff off the air or face go"ernment bans and sanctions. In
the absence of a comprehensi"e broadcasting law, there were doubts
whether the go"ernment had the powers to issue edicts on this score. 1ut
the broadcasters were not taking chances. #hey agreed to fall in line.
#he 1acardi ad was taken off for some time by /tar #I)s channels, and
later introduced only after prime time hours. More important, to pre'empt
a stringent go"ernment code on liquor ad"ertising, broadcasters offered to
de"elop a self'regulatory code in tandem with the go"ernment. /wara!
agreed and the :isco"ery chief, Airan Aarnik, considered sufficiently
neutral to the "arious interests in"ol"ed, was chosen to head the drafting
team.
#wo drafts down the line, and with inputs from the liquor industry ape*
body E the Confederation of Indian (lcoholic 1e"erage Companies
(CI1(C E the final product was presented to the go"ernment.
#he Aarnik code which draws hea"ily from the (d"ertising /tandards
Council of India)s ((/CI code of tobacco products, seeks to co"er
ad"ertising of all liquor products, including spirits (whisky, rum, "odka,
etal, wines and beer, on tele"ision ad "ideo channels.
Most channels already ha"e a fairly well'defined code for self regulation.
For the instance, M#I and :isco"ery worldwide do not accept spirits ads
in the , a.m. to C p.m. time band and liquor ads that targets youth.
:oordarshan and /ony will not face the contro"ersy as they don)t accept
either tobacco or liquor ad"ertising of any sort.
From a simple reading of the draft, it seems most of the current liquor ads
on #I may not be able to run the gauntlet. #he 1acardi 2hite +um and
the /an Miguel beer ads are probably out. -"en the 9aywards beer
ad"ertisement, which associates manliness and success on the dartboard
of a pub with beer'drinking, may find it difficult to pass muster.
For many of the re"enue star"ed satellite channels, there is a lot at stake.
(d spends on #I for the liquor category from May $CC8 to (pril $CC5 was
+s.,7.%5 crore (>+; #I audit. 1acardi alone accounted for +s. $5
croreS 2ill the stringent sounding code hit their business M
Aarnik does not think so. 9e feels that the proposed rules are basically
liberal, and Kfun'adsL like 1acardi should ha"e no problems in going
through. #hough the 1acardi ad is not on M#I, Lulla says he sees no
problem in running it after C p.m. 2hile the ad features young people,
their age is not decipherable, he argues. Aarnik)s "iew is that the self
regulatory code is essentially aimed at stopping only those ads that are
o"ertly crude and distasteful and designed to be enticing.
/tar #I)s senior "ice president and ad"ertising chief, <eter Mukher!ee,
finds the draft too tough. 9e wants some "ariations to ensure that too
many liquor ads, for which /tar is a ma!or platform, do not get stopped.
Mukher!ee)s contention is that news channels and cricket e"ents are
"iewed largely by adult audiences. #herefore, time 4oning restrictions for
spirits should not be applied to news and sports programmes.
;ill has his own "iews= K2hat good is a ban on spirits between ,.&& a.m.
and C p.m. when e"erybody knows that prime time e*tends to $&.7&
p.m.ML
Considering the wide spectrum of rules needing interpretation, there are
bound to be differences. /o, the drafting committee has proposed the
setting up of a high power body on the lines of the (/CI. #his body will
include representati"es of the liquor industry, broadcasters as well as
ad"ertising agencies and media planners, but will ha"e to play a critical
role in specifying which ads meet the minimum standards of propriety and
which fail test and thus ha"e to pre"ented from being aired.
:eepak +oy, managing director, International :istilleries India Ltd., which
markets well'known brands such as /mirnoff and ;ilbeys, does not thinks
so.
K2e ha"e been in the forefront of de"eloping such ad"ertising codes in
other countries too. Liquor can be ad"ertised creati"ely without relating it
to fictitious benefits such as increased se*ual prowessL, he says.
+eferring to the /mirnoff and ;ilbey)s ads, +oy says they are e*amples of
creati"ity without links to se* and women. #he ;ilbey)s ad shows a lemon
slice di"ing in slow motion off the di"ing board into a glass full of sparkling
drink and ice. #he /mirnoff ads are an FN'lo"er)s delight. (nd both ha"e
high retention "alue.
1rands like Anock'>ut beer, which shows a bo*er getting e*traordinary
strength with a woman in the wings, are sure to suffer if the code comes
into effect, +oy warns.
(ppro"ing of a self'regulatory code as good for the health of the industry,
the I:I chief re"eals that in fact, his company has contributed to
de"eloping the code along with other liquor ma!or such as /haw 2allace
and 0nited 1reweries. 9owe"er, the smaller Indian companies such as
?agat!it Industries and Ahoday)s were not part of the platform, and these
companies may not adhere to the code.
0nited 1reweries) chief of corporate communications, +am Mankekar,
also feels the self regulatory code would not be restricti"e and affect the
company)s campaigns, as feared. KIn fact, we look at the code as a win'
win situation= the go"ernment is happy, the ads are restricted to specific
timings, the tele"ision channels earn the re"enue that will keep them
goingH and the ad"ertisers get to air their commercials aimed at the right
kind of target audience. #here are the spin'offs too. Like the ad agencies
and production houses showing off their creati"ity here.
Media planners see more serious implications to the self regulatory code.
<ra"een #ripathy, associate regional director, media and strategic
planning, Chaitra Leo 1urnett, says one could alter the creati"e of the ads.
>r abandon the medium altogether. >r e*ploit loopholes like local cable
operators, which also deli"er the same audience.
#ripathy is of the "iew that the new code definitely restricts creati"e
options. <eople would rather change creati"e content than lose the reach
of a medium.
(nother fall out of the code could be that liquor ad"ertising will mo"e to
e"ents and promotional acti"ities, rather than #I. (n e*ample of a
forerunner is cigarette ad"ertising, which mo"ed onto e"ents after it was
banned on the electronic media, he points out.
K-"ents ha"e a "ery positi"e atmosphere. Mass media is a terrible waste.
#he incidence of non'mass'media ad"ertising is likely to go up since there
are no codes here. -laborating the point, #ripathy says the liquor
companies) ad'spends show that only B& per cent is on mass media, while
,& per cent goes into e"ents and promotions. >f the share of mass
media, the share of tele"ision ad"ertising accounted for a measley $., per
cent in $CC8'C5.
2hat are the ethical, economic and creati"e implications from the
ad"ertising agencies) perspecti"eM (sit Mehra, international client
director, C(M-, (< Lintas, which handles :/<)s playing cards surrogate
ad"ertising, says that in the 0A, the ban on lifestyle and people has
e*isted for cigarette ad"ertising since the last $5 years. It became a
creati"e opportunity for "arious brands, notably 1enson @ 9edges. #he
credit for Formula >ne car racing goes to this ban. It de"eloped
sponsorships and the e"ent was aired on the bo* too.
>b"iously, the code is going to be a blow to surrogate ad"ertising E those
sodas, with their famous brand names. (nd an ob"ious a*e for the
1agpipers, which ha"e celebrities playing to camers.
#he ad industry playing to camera. #he ad industry too would feel the
ad"erse impact, as this is a low year anyway with only $& to $6 per cent
growths. 9owe"er, the code will be a good opportunity for the agencies to
rework on total Obrand e*perience), and get more creati"e in their approach
to #I ad"ertising for liquor E beyond surrogate.
Airan Ahalap, C-> of 1ates Clarion, comes out strongly against the code.
(nything, which is mass'produced legally, should be mass ad"ertised
legally. Crocin can be ad"ertised since it is mass consumed, e"en though
it is pharma. K+estricting alcohol ad"ertising or consumption is counter
producti"e, hypocritical and parado*ical. 2ho ga"e licences to the
mushrooming bars and pubsM (nd who cleared the "arious !oint "entures
coming into the countryML he asks rhetorically. (fter all, manufacturing
acti"ity for liquor units is not being halted.
(gencies ob"iously see the code as an opportunity to be more creati"e as
well as ride other media. Consider (bsolute Iodka and its mind blowing
#I creati"es which don)t e"en use the bottle shot.
If the go"ernment makes the code any tougher or forces sanctions
through the 1roadcast Law, liquor companies, ad agencies and satellite
channels are bound to suffer. 1ut if the Aarnik code is accepted, boo4e
ad"ertising could be better regulated and more creati"e. >ne way or the
other, ad"ertising ingenuity will pre"ail.
2ill the go"ernment accept the codeM ;ill belie"es the go"ernment will
ne"er pass the code. KIf there has to be a code, it must be drawn up and
implemented by a go"ernment regulatorL. 9e feels that business interest
will not allow the pri"ate channels to implement any pro"isions that would
hurt their re"enues. K#hey are not concerned about human issues. For
pri"ate business interests, there can)t be any self'codes.
THE KARNIK CODE
A3+)01,-)2)/1- S:4** /.1= '
-ncourage minors, non'users to consume liquor productsH abstinence,
moderation not to be presented in a negati"e light.
/uggest liquor consumption leads to e*traordinary success in "arious
areas of human endea"our.
>"ertly seek to encourage increased consumption and buying large
stocks of liquor products.
+esort to surrogate ad"ertising to contra"ene the e*isting law, rules
and code.
1e aired between ,.&& a.m. and C.&& p.m. for spirits.
C=0>- ./ <./1)/1= '
Contents should not target youth below $5, and models should be in
the abo"e 6$ age group.
(ds should not suggest that liquor consumption is safe, healthy and
natural.
.o link to be established with manliness, "irility, courage or daring, or a
sign of female emancipation, or be associated with success in sports
or academics, or se*ual performance.
Celebrity endorsements to be a"oided.
("oid suggestions that liquor is a stimulant or a sedati"e, or that it
enhances mental or physical performance.
M)3,4 )?8.-=0)= '
.o liquor ad on programmes directed whollyGmainly at minorsGunder
$5s.
.o liquor ads between ,.&& a.m. and C.&& p.m. :isplay of logo or
mention of brand name to be permitted, pro"ided product G container G
likeness not shown.
S=00.541) <.3)= '
.o ad"ertising for non'liquor products bearing the same name as a
liquor products, which are not made a"ailable in reasonable quantities
with regard to the scale of the ad"ertising, media used, markets
targetted.
BIBLIOGRAPHY
Marketing Management
1y <hilip Aotler
Marketing Management
1y +amaswamy @ .amakumari
Marketing +esearch
1y C. +. Aothari
1usiness #oday
1usiness 2orld
1usiness India
Clippings from "arious .ews <apers like ='
1usiness /tandard
-conomic #imes
#he <ioneer
1usiness Line
Financial -*press
(mbrosia
ANNEXURE-1
QUESTIONNAIRE
$. :o you drink beer
Jes .o
6. .ame any fi"e brand of beer
$ TTTTTTTTTTTTTTTTTTTTTTTT 6 TTTTTTTTTTTTTTTTTTTTTTTT
7 TTTTTTTTTTTTTTTTTTTTTTTT B TTTTTTTTTTTTTTTTTTTTTTTT
% TTTTTTTTTTTTTTTTTTTTTTTT
7. Jou like beer
MildU /uper /trong -*tra /trong
B. Jou like beer in
Can 1ottle 1oth
%. Jou like beer
Chilled 2arm
,. 2hich is your fa"ourite brand
TTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTT
8. If not a"ailable then second choice
TTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTTT
5. Jou like the brand because of
<rice #aste
Puality ("ailability
C. Jour brand is superior to other brand because of
<rice #aste
$&. 2ould you like to switcho"er the brand
Jes .o
$$. If KJesL then why G If K.oL then why
<rice #aste
$6. Factors affecting buying beha"iour of beer
(;i"e rank from $ to 5
<rice #aste Puality
/trongness <ackaging (d"ertisement
("ailability 1rand .ame
$7. 9ow often do you drink
>nce in $% days >nce in a week
More than once a week >ccasionally
$B. Jou drink beer for
1oo4e -n!oyment
$%. Jour brand needs impro"ement in the field of
<rice #aste Puality
("ailability (wareness
DEMOGRAPHIC PROFILE OF RESPONDENT
.ame TTTTTTTTTTTTTTTTTTTTTTTTTT(ge TTTTTTTT/e* TTTTTTTT
Pualification 9/C ;raduation <;
<rofessional
<rofession /er"ice 1usiness <rofessional
/tudent
Income 0pto +s %&&& +s%&&&'8%&& +s8%&&'$&&&&
THANK YOU
Annexure - 2
SPONSORSHIPS
BRAND PROGRAMME
$&& <ipers
<assport
/mirnoff
;ordan)s London :ry ;in
:irector)s /pecial
9igh Command <restige
Malibu
Indian 1usiness 2eek
1aywatch
.J<: 1lue
/treet Legal
/uper /cenes
-ng. F.F.
Maliby !amin
Annexure - 3
PROMOTIONS AND SPONSORSHIP BY !ARIOUS
COMPANIES
Brand Product Company Activity Details
1lackdog
1lack @ white
/cotch 0:I -"ent
/ponsoring
1@2 nights, parties
lasted in select club
and restaurants in
1ombay
9ighland
Pueen
/cotch Macdonald
Mohan
-"ent
/ponsoring
/ponsored "arious
e"ents in the first 7
weeks of ?une C% in
.ainital, Mussorie @ Mt.
(A0 select bars and
discos had happy
hours, sweep stakes
beauty pageants, Food
Festi"als, boat rates @
bridge tournaments
Aingfisher 1eer 0nited
1reweries
(pparel
1rand
( shop selling the KAing
FisherL brand of
readymade garments in
1angalore
Aingfisher 1eer 0nited
1reweries
/ponsoring
2est Indies
Cricket #eam
>n a 7 year contract
the team will display the
Aingfisher insignia on
their Cricket
Fortune ;old 2hisky ?agat!it /ponsorship
of golf
tournament
C%
#he tournament was
named 5>or!4ne *old
*ol< ,o4rnamen!:
Annexure - 4
THE TOP 1( WHISKY BRANDS OF THE WORLD
R4/@ B04/3 C.=/109 S4*)-(2/. <4-)-)
1. ?ohnnie 2alker +ed Label 0A 8.C
2. ? @ 1 +are 0A ,.6
3. ?im 1eam 0/( %.7
4. ?ack :aniel #ennessee 0/( %.6
5. 1agpiper India %.$
6. 1attenline 0A %.&
7. 2illiam ;rant)s 0A B.&
8. Chi"as +egal 0A 7.%
9. ?ohnnie 2alker 1lack Label 0A 7.%
10. /e"en Crown 0/ 7.7
Annexure !
WORLD7S TOP FI!E FASTEST GROWING BRAND
Brand Category Brand Owner Volume
1993 1997
Growth
Directors Special Whisky Shaw Wallace, India 1.7 3.7 98.2
Kraks !odka "#ros$%ol&os, %oland 1.' 2.8 8(
)lan *ac#re+or Scotch
Whisky
Willia& ,rant - Sons,
Scotland
..( 1..1 (8
Wilthener ,oldkrone /randy 0arden1er#, ,er&any 1.( 2.'2 '8
*cDowells 3o.1 /randy 4/ ,rop, India 1.2 2.17 ''
EXECUTIVE SUMMERY
#he present study was conducted with a "iew to understand Beer
market in Delhi. 0ndoubtedly the markets are undergoing rapid and
wrenching transformations. Iarious studies conducted in the past ha"e
strengthened the abo"e'mentioned "iew.
#he change in the scenario of beer market is go"erned by two forces=' one
is ;lobalisation, the e*tensi"e growth of global trade and international
competition. In the present economic scenario of country, howsoe"er
de"eloped it may be it can e"er think of isolating itself form world
economy. If any country closes its market, its citi4en will pay for inferior
quality of goods. 1ut if it opens its market, it will ha"e to confront se"ere
competition and many of its internal business will suffer. #he other force is
changing life style of consumers in e"er'growing market like :elhi, this
force has a definite say. #he parado* is that the globalisation and
changing life style of consumers open up new opportunities e"en as the
threaten the status quo.
;lobalisation is made it possible for Fosters, 9aake 1eck, Carlesberg,
/an Miguel, 9eineken etc. to sell their beers all across the world.
Changing lifestyle pro"oked the /haw 2allace @ Company and 0nited
1reweries to come out with a number of brands (Aingfisher, +oyal
Challenge, 9ayward %&&&, Aalyani 1lack Label etc. to cater to the needs
of consumers ha"ing different life style.
#oday)s market is changing at an incredible pace. In addition to
globalisation and changing life style, we are witnessing new retail forms
(e.g. bars, bistros, pubs etc. and disconcerting erosion of brand loyalty.
#hese changes ha"e created confusion in the mind of companies
regarding use of strategies.
#his pro!ect report consists of fi"e chapters, well arranged in a coherent
manner. -ach chapter is self sufficient in itself and readers will ha"e
thorough insight of the matter therein. It is hoped that this sincere and
hard work done by me will be helpful in burgeoning some different
thoughts and ideas. Chapter first will gi"e idea about the industry and
current scenario, Chapter second includes research methodology,
Chapter third re"eals the findings and questionnaire analysis, Conclusion
is gi"en in Chapter four, finally the chapter fi"e gi"es idea about the
different promotional acti"ities conducted by "arious liquor ma!ors.
ACKNOWLEDGEMENT
I wish to express my appreciation to all those, with whom I worked,
interacted and whose thoughts and insights helped me in furthering
my knowledge and understanding of the subject.
I would specially like to thank Prof. Arvind Chaturvedi for timely
advise and guidance through out the project without which this
project would not have reached to completion.
MANOJ SINGH CHAUHAN
CONTENTS
S.No Contents Page No.
1. ACKNOW!"GM!N#
$. !%!CU#I&! SUMMA'(
). CHAP#!' ON! 1*)+
IN#'O"UC#ION
1.1 Industry Profile 1-11
1. !urrent "cenario 1-1#
1.$ Product Profile 1%-&
1.& 'arket (escription )-*
1.) +xcise Policy #-%
1., -bjectives of the project $.
1.* /imitations of the project $.
,. CHAP#!' #WO )1*))
'!S!A'CH M!#HO"OOG(
.1 0esearch design $1
. (ata !ollection "ources $1
.$ (ata !ollection 'ethods $
.& (ata !ollection Instruments $
.) "ampling Plan $$
., 1ssumptions of the project $$
-. CHAP#!' #H'!! ),*,+
.IN"INGS / ANA(SIS
$.1 2indings $&
$. 3uestionnaire 1nalysis $)-&.
0. CHAP#!' .OU' ,1*,$
&.1 !onclusion &1-&
1. CHAP#!' .I&! ,)*-2
I3UO' P'OMO#ION
).1 1lternative ways for Promotion of /i4uor
Products
&$-&%
). 1dvertising /imitations in /i4uor industry ).-)#
4I4IOG'APH( -5
ANN!%U'!S
I. !opy of 4uestionnaire5consumer6 ,.-,1
II. "ponsorships ,
III. +vent "ponsorships ,$
I7. 8orld9s :op 1. brand of whisky ,&
7. 8orld9s :op ) fastest growing brand ,)

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DELHI BEER MARKET & ALTERNATIVE WAYS FOR PROMOTION OF LIQUOR PRODUCTS

1.1 INDUSTRY PROFILE

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