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‘Recession cocktails’ in a can trained on aspiring Indian urbanites

By Ben Bouckley , 01-Mar-2012

‘Recession cocktails’ in a can trained on aspiring Indian urbanites

After Rexam announced yesterday that it would produce cans intended for India’s first RTD whisky-based premix products, one industry analyst told BeverageDaily.com that the category there had the ‘potential to be massive’.

Beam’s ready-to-drink (RTD) products comprise two varieties of Teacher’s Scotch whisky, premixed with either a soda or cocktail, and Rexam said it had worked with the company (a division of the world’s fourth-largest spirits firm MNC Beam) to conceive and commercialise products.

Launched in Mumbai last December, the Teacher’s branded cans (visible in the picture) will be rolled-out across other major Indian markets this quarter, and Satish Kaul, VP of operations for Beam Global India, said the target market was premium beer consumers.

He said: “The cans have allowed us to introduce consumers to our Teacher’s whisky, while maintaining the easy and refreshing drinking experience of canned beer.”

Category transformation

Spiros Malandrakis, alcoholic drinks industry analyst, Euromonitor International, told BeverageDaily.com that the launch reflected Western European market trends in RTD alcoholic beverages, which had effectively become a whole new category in the last two or three years.

He said: “In the West we’ve seen a transformation of the RTD category into cocktails for drinking at home: very basic Coke and whisky and established brand names (Absolut, Captain Morgan, etc.) cocktails you can get in any on-trade establishment.

“Since people didn’t have the money to go out anymore, or didn’t necessarily have time to prepare cocktails, this is how RTDs became ‘recession cocktails’, so to speak," Malandrakis added.

“They’ve taken this idea in India and are using as an affordable introduction to brands – even trading at a premium to local products, and not really marketed as a trading-down or convenience product, as in Europe. RTD cocktails have potential to do pretty well in India with adequate promotional support.”

Whisky in general was taking off in India, Malandrakis said, but mainly ‘other whisky’ (60% of overall spirits volume sales, according to Euromonitor’s November 2011): cheap, lower-end introductory products (favoured by middle class urbanites) as a “stepping stone” to more premium, imported whiskies.

Exploiting 'brand halo' effect

RTD canned spirits generated high profit margins, but also created a ‘brand halo’ that producers hoped would feed flagship brands in such emerging markets, Malandrakis said.

Explaining the development of the RTD spirits category in Western Europe, he added: “In the 1990s and the 2000s, we had all those Bacardi Breezer-type, artificial, colourful, weird products that dropped like a stone for a couple of years, when they lost touch with the younger generations that had constituted their main consumer base.”

“After the transformation, over the past two or three years, they’ve just hit the right spot, especially in the UK. Now they’re growing again, but are a different category altogether now.”

Asked why he thought Beam was targeting Indian drinkers of premium beer, Malandrakis said: “The Indian alcoholic drinks market is very spirits oriented, and in general high ABV [alcohol by volume], even their beers tend to be much stronger (because they like spirits).

“So whisky has an advantage to start with. On top of that you can add the westernisation trend, aspirational consumption and other sub trends."

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