Diageo India sees double-digit growth from scotches; steps up premiumisation

Spirits major Diageo India, which controls United Spirits Ltd, is stepping up premiumisation in the company's portfolio and expects a high double-digit growth from scotches, said its managing director & CEO Hina Nagarajan.

Besides, Diageo India is also working on sustainability initiatives through brands and expects to be plastic waste positive. It is taking solar initiatives, working on afforestation and also aims to be a water positive company, she added.

The company is working on a premiumisation strategy and reshaping its portfolio with renovations and innovations of brands such as Signature and Royal Challenge and scaling it up after getting the momentum.

The move is aimed at strengthening Diageo's participation in prestige and accelerating growth rates which are visible in the results, she said.

"We have a very good presence in scotches. And with the activations, which we have done around Johny Walker, the renovation of Black Dog scotch and launch of Talisker and Singleton, which are malt brands, we are seeing a very high double-digit growth in scotches and that is helping our premiumisation journey massively," Nagarajan told PTI.

Diageo India will be focusing on accelerating luxury and premium portfolio of scotch whisky, strengthening participation in upper prestige.

Read | Diageo to sell 32 Indian brands to Inbrew for $106 million

The company manufactures, sells and distributes an outstanding portfolio of premium brands such as Johnnie Walker, Black Dog, Black & White, VAT 69, Antiquity, Signature, Royal Challenge, McDowell's No. 1, Smirnoff and Captain Morgan.

Besides, it has also introduced Royal Challenge American Pride, an American bourbon whiskey, and that is helping the company to address the young customers, who want accessible drinks.

"It is bringing more women into the fold. It's a really inclusive launch. That is strengthening our participation in upper prestige," she said.

Diageo India aspires to be the "top-performing" consumer products company with a double-digit topline growth in the country.

"Our mission is to be the top CPG company in India delivering a sustained double-digit topline growth with mid to high teen margins and also giving a long term value to our stakeholders," said Nagarajan

The company is also working towards ESG (Environmental, Social and Governance) goals and its brands are participating in sustainability initiatives.

Read | Diageo aims to be top consumer product company in India, expands play in premium segment

Diageo India, a unit of British spirits maker Diageo Plc, also aims to be a water positive company and is working on conservation projects and trying to replenish more water than it uses.

"Under Extended Producer Responsibility (EPR), we have collected 41,000 metric tonnes of plastic waste by March and we have recycles it. By end of June, we will be plastic waste positive. We will be collecting and recycling more plastic than we are putting out," she said.

It is also working towards net zero carbon by 2025 on Scope I & II operations and 2030 on Scope III operations.

"Greenhouse gas emission from our own operations has reduced from 26,000 to 6,000 metric tonnes... We are continuing zero fossil fuel at our distilleries," she said, adding that the company is also working on afforestation drive and double solar capacity from 1.3 to 2.6 MW

Diageo India is taking packaging initiatives on the sustainability side. The company has introduced the Hipster format, a portable scotch whisky in a pocket-sized format in a PET bottle.

"Now Black & White is using 100 per cent biodegradable and recyclable Hipster pack and all other brands which are on Hipster format will move to this 100 per cent biodegradable and recyclable pack over next few months," she added.

Diageo India has also renovated Signature, which is a core brand in the upper prestige side, with sustainability propositions.

"We have renovated it with sustainability propositions. The glass bottles in which it is sold are 40 per cent recycled glass. The carton, which is on the bottle, is made from sustainability sourced paper, which is certified by Forest Stewardship Council. It is 100 per cent natural ingredients," she said, adding, it has gone down well with the consumers.

Diageo is now seeing a "strong upwards trajectory" on growth in shares in the market, where it has relaunched. It has also renovated its popular brand Royal Challenge in three states and is in good momentum, and would continue to roll out across the country now, Nagarajan added.

Last month, USL had announced the sale and franchising of over 30 popular brands to Singapore-based Inbrew Beverages for an estimated consideration of Rs 820 crore

USL's popular portfolio comprised around 30 entry-level lower-priced liquor brands, with an average price of less than Rs 400 for a 750-ml bottle, and straddle whisky, rum, brandy, vodka and gin.

The company expects to complete the transaction, which includes brands such as Haywards, Old Tavern, White-Mischief, Honey Bee, Green Label and Romanov, by the end of the September quarter.