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“Nowhere else is the industry so regulated like in India”
Monday, 22 May, 2023, 08 : 00 AM [IST]
NeuWorld Spirits is a new alco-bev company in India and has launched two whiskies - Downing Street and Royal Tribe in the premium and semi-premium segments, respectively. The company will be launching craft gin, premium brandy and vodka and rum.

Poonam Chandel, MD – NeuWorld Spirits, talks about the alco-bev industry and more in an email interaction with Aanchal Chaudhary. Excerpts:

How has the alco-bev industry evolved over the years?
The business of alcohol has evolved to a new level in the last decade both from the standpoint of the way of doing business as well as from the consumer’s perspective. Liquor has always been a very dynamic industry but in the last decade, the business has become even more consumer-centric and the stakeholders in the industry realise it as well so there has been a lot of change in their approach towards doing business.

What are the emerging trends in this industry recently?
The consumer has become far more adventurous and is open to trying newer brands and categories. With the rising per capita income, there is an increased spending capacity of the consumer and is willing to spend a lot more as long as they are getting a better-quality product both in terms of quality and looks. Most of the international brands are now easily available in India and the best part is that we as Indians are producing some of the finest quality spirits now in India which are as good as if not better than most of the international brands.

How would you describe the current state of the alco-bev industry?
The Indian market has tremendous potential. Though the market might look cluttered, actually there is room for more brands to enter the market. However, it is important to remember that at the end of the day, quality differentiation, product differentiation and relevant communication that establishes an emotional connect with the brand, will ensure survival of a product. We are confident that Downing Street and Royal Tribe that we have introduced and new products that we will introduce in the future will appeal to the consumers’ palate as we have developed our products keeping the consumer in mind.

What are the biggest challenges facing the alco-bev industry? How is the Indian alco-bev industry different from other countries?  
The Excise laws are a labyrinth. Every state has varying laws, rules, and regulations which becomes a major impediment for the industry. Nowhere else in the world is the industry so regulated like it is regulated in India. In a normal FMCG business, you decide on a name, you file for a trademark application, the trademark is granted and then you go manufacture and start selling the product. You just pay the GST. In the liquor business, one first needs to apply for a trademark registration and develop packaging once it is received.

Label of the product is different in every state. If in one you have to write ‘for sale in this state only’, another will say there has to be a barcode, or maybe a dummy barcode. Some states require the brand to put ‘drink responsibly’ on the label, while some want the label in the local language. It involves a huge amount of expenditure. Plus, for every state, you have to take a tremendous number of licences, which is highly expensive, and apply for label registrations.

Differential pricing is another huge roadblock. In some states, they say you should have an MRP, in others MRSP — which is the minimum retail selling price. Government controls the price, so the government will tell me what price to sell at and what price the consumer will get it at. Hence, the same product becomes profitable for me in some states, and is loss-making in others.

Central Government should take cognisance of these issues and push to make liquor a Centre subject, it will not just be beneficial for the industry but also consumers, who will get the product at the same price across the country.

Explain the process of making a specific alcoholic beverage?
Well, it depends from alcohol to alcohol. We use the finest grains for Downing Street and Royal Tribe. We extract alcohol by boiling the fermented grains. The distillation process gives a neutral spirit with around 95% alcohol and this forms the base. To this base we add a combination of Scotches and Indian matured malt spirit which is aged between 3-5 years. The end products are unique blends that we have created for the discerning consumers – Downing Street, a premium whisky and Royal Tribe, a semi-premium whisky.

Tell us about the R&D that goes into making alcohol?
Typically, the R&D process would entail market research, consumer research and consumer preference in a given category. Based on the inputs, blends are formulated. We have gone to great lengths to create products that will stand out. Be it our Blends – we undertook extensive blend tasting & blend study before we finalised our blends in the relevant categories; Packaging - which is world class as all the brand names have an international flavour associated to them.

Any plans for collaboration or partnership in future?
As the latest entrant in the alco-bev industry, we are not resting with the introduction of Downing Street and Royal Tribe. While the two brands have already started making their mark, we are working on product development for the next set of launches. In the months to come, we will be introducing a premium vodka, craft gin, a premium brandy and rum. Our product development team is working on creating a blend that will appeal to whisky consumers who reside in the segment between Royal Tribe and Downing Street. As for collaborations and partnerships in future, it is too early to comment as we have our hands full at the moment. But certainly, if we see an opportunity that aligns with our ethos and business strategy, we shall not shy away from taking forward such a partnership.
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