Diageo’s Indian unit United Spirits is planning to cut down around 150 of its brands to focus on better performing brands and strengthen its business in a market that is seemingly dominated by local, cheaper brands.
The British drinks company intends to focus on promotion and marketing of its top 15 brands, while consolidating or downplaying other brands.
India is lately being seen as an emerging market for global drinks makers as business in the developed part of the world is seen becoming sluggish. The country is now considered to be Diageo's second-largest market in terms of sales, reported The Financial Express.
Diageo India chief executive Anand Kripalu was quoted by the publication as saying: "We are focussing on select brands, which we believe are the critical ones, big drivers of growth."
He said that the top brands would receive special importance with strategic investments.
Kripalu said that over the next few years Diageo expects growth in the top-end spirits business outdoing the mass market with the young professional class demanding better quality of liquor.
Compared with other large economies such as the US and China, India is a small market but drink makers are hopeful of growth in this emerging market with rapid urbanization, fast-growing middle class and young population.
According to Kripalu, the share of higher-end spirits in terms of total volume is likely to go up from 40% to 60%.
The Indian portfolio of Diageo includes Ciroc vodka, while United Spirits owns whisky brands namely McDowell's No. 1 and Bagpiper.
Last month, it was reported that Diageo may stand to lose more than 10 million shares of United Spirits Ltd (USL) worth over Rs 32.35bn ($487m) at current market price, in case of an unfavorable ruling on the several petitions filed against United Breweries Holdings Ltd (UBHL), from which it had acquired these shares.
Image: Diageo's Johnnie Walker among Indian portfolio brands. Photo: Courtesy of Diageo.
