In a candid interaction with the Free Press Journal, Mr. Harlow dives deep into the growing Vodka segment across the globe and the potential of ‘’premiumisation’’ in India
A strong GDP growth, higher disposable income, and a significant young population is driving premiumisation at the retail point, which is picking up pace across the country, said Mr Sumedh Singh Mandla, CEO, VBev which is a young and dynamic company engaged in the import, marketing, sales and distribution of International Spirits, Wines and Beers.
1) How has the Indian market been further strolling through your group specifically?
Mr Harlow: India is a complex market and is very significant in terms of size and opportunity. While we are still getting established here, we are very excited about the progress that has been made with the introduction of not just Stoli Vodka, but also Stoli Gold Vodka.
With our partnership with VBev, we are making inroads in the market, but we are still relatively small.
2) How many cases do you sell in a vast market like India being in the premium category?
Mr Mandla: Our association with the Stoli Group is almost a decade old now and initially, we focussed on spreading the distribution of the brand. Today we are present in over 20 states and during this process, we have emerged among the top four imported vodka brands in the country and there is constant growth.
Now, we are eyeing to fuel that growth and go to a bigger volume level. We are looking at some strategic partnerships, and some activations, which are consumed forward to ensure that we can lead the brand forward.
When compared to Whisky, Vodka as a category is still very small. While whisky forms almost 60 per cent of alcohol consumed in the country, Vodka stands at a mere 2 percent
On the other hand, the growth in the white spirit segment is much faster as compared to the brown spirits segment like whisky, rum, or brandy.
Also, imported Vodka is only about 5 percent of the total vodka consumed owing to dual taxation, import duty, etc.
This is why we are looking forward to some relaxation or changes in the FTA barriers for stronger growth in this category. There needs to be more synergy between business and taxation at present.
3) Can you tell me something about the consumption pattern that you have noticed in India?
Mr Harlow: Talking about international trends, it is exciting to witness that the value of spirits in the US, which is the biggest market for international-style spirits, has overtaken the value of beer according to IWS data.
This has to do with people spending significant time at home during Covid-19 induced lockdowns. Today individuals are more likely to stock premium spirits at home to make cocktails and offer premium drinks.
This also plays into our strategy here in India, and while some of the trends in terms of size of categories and dynamics are different, I think this trend of people opting for better quality spirits is picking up.
Our campaign, ”liberate your martini” which we recently initiated is all about this because while Martini has been around for a while, it is still the number one-selling cocktail globally.
Leveraging our campaign we are just making the process of making different Martinis a bit more fun.
Mr Mandla: I think we have a similar trend happening in India as well. In recent years, individuals are moving towards better quality not just in the beverage segment but also in the food category.
A strong GDP growth, higher disposable income, and a significant young population are further fuelling this trend. We are also witnessing a surge in demand for imported liquor despite the price difference between domestic and imported liquor.
Furthermore, premiumisation at the retail point is picking up pace in the country. Today, unlike conventional counter sales, massive stores are coming up in places like Telangana and Karnataka boasting an area of 20,000 square feet and being one of the largest in Asia.
With this, consumers are getting a better experience and I think it is more satisfying for them, particularly for those who are paying a higher value for a bottle.
Another trend that is evolving is in the bartending category. For instance, earlier chefs used to be confined to the kitchen but today they are leading the brand name from the front.
I think that’s a trend, which is coming to the bartending community in India. There are a lot of cocktail weeks happening along with consumer-forward cocktail activities.
To bank on this trend, we brought the ”liberate your martini” concept to India to connect with the bartending community and address the consumers who are looking for something different.
4) Coming on to your partnership with Maserati, the event that recently happened in Hyderabad, can you tell me something about that?
Harlow: Stoli Group’s vision is to become the most powerful and sustainable ultra-premium spirits and wine business globally. And that’s quite an ambitious statement.
Besides the people and brand, it is also about partnerships. Initially, our partnership with Formula E was all about its purpose which involved supporting sustainability, challenging the way people think about cars, racing, technology, and much more.
We are really attracted to those elements of the sport because they are groundbreaking, provocative, and purpose-driven. When you add Maserati into the mix which is a phenomenal luxury brand, it becomes the kind of partnership that can enable Stoli to accomplish its ambition.
Stoli has been associated with Formula E for two years now, and this year the team changed to Maesarati racing which is a terrific innovation. Another exciting thing that happened this year was the confirmation of having a race in India for the first time in Hyderabad.
The recent racing event in Hyderabad witnessed unprecedented attendance and it’s a partnership that we will develop more in the future just to see the potential of what that has to offer.
Mr Mandla: That indeed was a big format event. And I think racing is growing as a new sport for India.
Formula E coming to India is a big thing. And we did witness the response in Hyderabad, it was phenomenal. We are very fortunate that we have Stoli as a band partner for us. And this association between Stoli and Maserati is for the experience of luxury.
Also, sustainability and responsibility (responsible drinking) are the key pillars that I think we can take it as a message across and we did leverage this opportunity to connect with the channel partners as well as consumers.
We activated promotion in almost 10 cities in India with the idea that anybody who patronages the Stoli brand could get access to the race.
On trade, we did it with liberate you martini as a concept and we had winners from all of the cities where we did this activation and that came out very well with a lot of excitement.
We did trade, hotels, and restaurants and at the same time, we did retail stores as well. The idea was not to push consumption but to build a connection with the brand.
With this, a lot of people flew down from places like Mumbai, Delhi, and Karnataka among others to witness this race. We were also fortunate to meet the drivers, interact with them, understand their strategy, and look at the actual garage and pit area as well.