The liquor market in India is getting a smarter make-up with leading liquor brands making foray into retail industry and organised retailers showing interest in including liquor as one of the items in their merchandise, observing its rising demand in the market.
The largest liquor producer in the world, Diageo has unveiled its retail brand Johnnie Walker Select last year, United Spirits too has come up with its only retail outlet in Gurgaon. Also, the corporate promoters of hypermarkets and supermarkets, such as Spencer’s and Reliance Retail, are forging tie-ups with liquor producers to stock liquors at the store.
Analysing the popular sentiment around this product category and organised retail initiatives, Samar Singh Shekhawat, VP-Marketing, Spencer’s Retail opines, “Wine market in India is growing very fast. It has now become a lifestyle product. Indian liquor companies have worked a lot in terms of increasing brand awareness. All these factors showed us reasons to foray into wine retailing.” Recently, Spencer’s Retail made an entry into the bubbling Indian liquor market. This wine and beer shop-in-shop at its flagship store in Kolkata is spread on 450 sq. ft (approx) and boasts of 180 brands of imported wine.
Unique consumer experience
Encouraged by the growing number of connoisseurs of liquor, these new retail ventures are offering a new retail environment where the product awareness is chalked out in an innovative way to encourage greater customer participation in generating product awareness. Besides several customer-friendly services at the first outlet of Johnnie Walker Select at Wanowrie, Mumbai, which includes interactive kiosks; leaflets and brochures introducing several brands from the stable, tracing their history and origin, their distinct characteristics; exciting cocktail recipes and new ways to enjoy them; and special gifting and gift-wrapping options, Diageo has employed a on-floor host who will assist the customers in making a choice and also offer advice on nuances like cocktails and food pairing.
Shekhawat directs, “Liquor industry has become a part of FMCG industry, people purchase wine, just like they buy shampoo. Now a days liquor is purchased by both men and women. In a shop-in-shop format of stores, a customer gets more comfortable ambiance.
Business of modern wine retail: Shop-in-shop or exclusive stores
Shekhawat is of the opinion that “The overall experience is much better in shop-n shop than any other form of retail format. In a shop -n -shop wine retail format Rs. 2,000 investment is required on fixtures, flooring etc for per square feet area apart from the assortment of stocks. While Ajit Dhumal of Indage Group informs, “Irrespective of the store format, the buying experience of a customer is more important. If the environment is attractive, friendly, staffs are interactive; people would love to buy from you. But seeing the cosiness that can best be given in an exclusive retail format, it can be assessed that stand alone or exclusive format of stores are the best for liquor retailing. Because a stand alone or exclusive retail format is totally meant for specific product, so in that environment people will feel more comfortable to buy and interact. For a stand alone format of store, 25 lakh is the minimum investment.”
Say cheers to relaxed policy!
Traditionally an establishment could sell alcoholic beverages within a reservation only if both state and tribal law would allow it. Under this rule the wine shop owner had to pay certain amount as an excise duty to the Government of India. There ate different licenses for selling liquor, like Low Alcoholic Beverages (LAB), beer and wine, hard liquor licenses. The categories of licenses vary from State to State, as liquor is in State Government’s Jurisdiction.
Besides food and grocery, soon Spirits too will occupy considerable space at the departmental stores. In this respect some states are liberal enough to allow full-spectrum license to these stores. Karnataka is one such state. Maharashtra, followed by Haryana, had already implemented the policy to permit departmental stores to retail wine. Even Delhi allows retailing of RTD (Ready-to-Drink like Bacardi) and beer at departmental stores. The wines are available at the select outlets of the Indian Oil promoted In&Out outlets and Food Bazaar is having wine counter operated by Sula Wines at some of its outlets. In the same line Diageo had tied up with Reliance Fresh to retail its wine portfolio and Star Bazaar had an alliance with Globus Wine to set up wine and beer store at Star Bazaar’s premises.
To cheer the liquor lovers, Government of India had scrapped additional custom duties on imported liquor, including wine and beer in July 2007. The Indian Government had increased basic custom duty on wines from 100 per cent to 150 per cent, while all other foreign liquor brands attract a maximum custom duty of 150 per cent. This added buoyancy to the market, resulting in 15 to 20 per cent reduction in retail prices provided the state is refraining from levying any additional tax. The stage is now set for the consumers to take big gulp while liquor retailers are romping in joyous spirit.
Organised players are enlivening the spirit of liquor retailing
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