India: Diageo invests ₹200 crore in its craft spirits project

Diageo India has invested ₹200 crore in its craft spirits project and expects it to be one of the largest contributors to its premium portfolio in the next five years, The Hindu Business Line reported on March 23.

Vikram Damodaran, Chief Innovation Officer, Diageo Ventures India, and Shweta Jain, Chief Business Development Officer, Luxury, Reserve & Craft - India & South Asia for Diageo, told BusinessLine that the business vertical would add a couple of craft spirits brands every year. It currently has two limited editions that were launched last year.

The first to kick off this year is the craft single malt whisky, Godawan, which has been named after the Great Indian Bustard. The artisanal desert whisky is made from six-row barley grains that are unique to Rajasthan. The company will initially roll out 3,000 bottles of the single malt whisky and will continue the production thereafter . The company has invested about ₹40 crore in the new brand of craft whisky.

The excessive protein content of Rajasthani six-row barley imparts a rich flavour to the whisky, while 55-65 hours of fermentation ensures that the malt is extracted well from the barley. Maturation in Rajasthan’s extreme heat helps create a depth of flavour and enhances the richness of the flavour. Furthermore, finishing the whisky in casks that are previously steeped in Rasna and Jatamansi adds spice notes to Godawan, Damodaran said. He added that the company is looking at market creation as opposed to just playing in existing markets. “That’s not really what we want to do. What we really want to do is put Indian craft spirits on the global map,” he said.

He pointed out that over the last seven to eight years, ever since Diageo’s acquisition of United Spirits Ltd, one of its primary vectors for repositioning its portfolio was focused on premiumisation. “Premiumisation is one of the largest strategic interventions that we have taken on as a company and, therefore, all actions that we have taken across our portfolio, including craft, has always been about driving premiumisation of the alcobev segment and our portfolio in terms of what we offer,” he said. “Over the last seven years, we have been through a series of transformations, in terms of what we are doing with our portfolio, in terms of the kind of consumers that we are beginning to interact with, and transformation in terms of how we want to look at what our future consumer basis just to give you an idea.” A majority of our portfolio fundamentally is consumed from an average age of 30 upwards. With India being one of the youngest economies in the world, the company will start looking at reshaping its portfolio, he said.

Shweta Jain said there is an organic overlap between these younger people and the affluent and the very definition of affluence is actually not just about having the money, but the whole desire to drink better.

Jain said Diageo was committed to launching craft spirits on a long-term basis and work on this specific vertical was carried out during the last four years. So we have had a significant amount of liquid credentials, the whole creation of the craft team vertical that we have within the teams. We are practically like the co-founders equivalent within the Diageo system,” she pointed out. On a mid to long term basis, the company expects double-digit growth in this segment, she added.

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