United Spirits reports 69% increase in net profit for Q2 FY19

Short Story—the latest from Goa-based Third Eye Distillery is now available in New Delhi.

The brand aim is to drive the conversation homewards when it comes to creating a benchmark for quality spirits.

At the helm of the brand is Pankaj Balachandran, Brand Director, Short Story—a highly acclaimed veteran of the beverage industry.

“There has been a general rise in interest towards cocktail culture and subsequently, a need for quality, true-to-style spirits that can be relied upon. I am excited to have had the chance to work on these spirits personally with the goal of delivering a great drink irrespective of the occasion. We hope to be the brand that bartenders and consumers invariably reach for a drink, be it for themselves or someone else,” he shared.

Short Story was created with a vision to provide the Indian spirits landscape with go-to spirits that are synonymous with quality and dependable across occasions.

“Having worked in the beverage industry for over ten years, I noticed the need for a go-to spirits brand in India, something that exists in most international markets. Over the years, this need-gap has propelled the dependency on imported brands for regular consumption. We, at Third Eye Distillery, wanted to offer the Indian spirits landscape with a portfolio of true-to-style essential spirits which set a standard for quality and are an effortless choice be it at home or a bar,” added Pankaj.

The Short Story portfolio currently includes a classic London dry gin with a juniper backbone, a triple distilled, charcoal-filtered grain vodka, and Indo-Caribbean white rum with a side of a geography lesson.  

With Short Story spirits, Third Eye Distillery is hoping to transcend the conventions of the spirits landscape by staying away from long-winding tales and the incessant romanticizing of ingredients and processes to justify the quality.

Short Story is set to hit bars and retail shelves across Bangalore, Mumbai, and Goa in September and subsequently in other parts of the country.

Short Story in Maharashtra, is available at the following prices: Vodka: 1650; Gin: 1850; and Rum: 1950. However, all three bottles can be purchased in Karnataka for INR 1950 and Goa for INR 1050, respectively. In the capital the brand is priced at; INR 1000 Vodka, INR 1100 Gin, INR 1200 Rum.

ecoSPIRITS has signed a Licensed Operator Agreement for India with Third Eye Distillery, a leading local craft spirits producer known for their award-winning Stranger & Sons Gin.

They are planning to launch the closed loop service progressively across the country in 2022, starting in Goa, Maharashtra and Karnataka in February.

The new partnership will bring low waste, low carbon spirits packaging technology to one of the world’s most populous countries and the third largest emitter of greenhouse gases after China and the United States.

“We believe ecoSPIRITS will be a game-changer in moving the Indian spirits market towards a zero net carbon trajectory and helping the country achieve its sustainability goals. We are thrilled to work with brands to make this closed-loop distribution model accessible to all,” shared Rahul Mehra, Co-founder, Third Eye Distillery

Stranger & Sons Gin, Third Eye Distillery’s flagship product, is India’s leading craft gin by volume. Launched in 2018 and produced in Goa, Stranger & Sons Gin was conceived to celebrate the agricultural diversity and abundance of India and its love affair with spices.

The launch of closed loop service in India will also make the market more accessible and sustainable for imported premium spirits, a well-known challenge in the industry.

ecoSPIRITS India will participate in the ecoSPIRITS Climate Partner Program, which grants a wide range of spirit brands and their importers, distributors and wholesalers with access to our global closed loop network. Plantation Rum, the world’s number one super premium rum brand and an ecoSPIRITS Climate Partner since 2019, will become the first imported spirit available in India in ecoTOTE™ format. This transition will make Plantation Rum the most sustainable premium rum offering in the Indian market.

“India is a market that is close to my heart, having lived there for two years earlier in my career. It is also one of the most challenging markets in the world for independent and imported spirits brands. To be able to bring the sustainability and commercial benefits of ecoSPIRITS in one of my favourite places is a highlight,” said Paul Gabie, CEO, ecoSPIRITS.

ecoPLANT No. 023 will be commissioned at Third Eye Distillery’s existing Goa facility, initially providing closed loop processing for the entire India channel network.

The Third Eye Distillery team will bring substantial Indian regulatory, licensing and spirits production expertise to the new Licensed Operator partnership. Like all ecoSPIRITS Licensed Operators, they will receive comprehensive support from the ecoSPIRITS closed loop engineering team.

Indian gin brand NAO Spirits & Beverages has now forayed into Hong Kong.

The expansion is in line with the company's consistent and steady global expansion planned for their two Gin brands – Greater Than and Hapusa – in 2021.

NAO Spirits has partnered with one of Hong Kong’s leading distributors and brand builders, Metabev Group, to build a strong presence in Hong Kong and beyond.

Apart from Hong Kong, NAO Spirits has quickly managed to make meaningful inroads in over 15 export countries like UK, USA, Italy, Norway, Russia, Sweden, Hungary, Singapore, Taiwan, Thailand

“Hong Kong is fast becoming the torchbearer of the bar industry for Asia and increasingly gaining prominence globally as well. With some of the best bars in the world operated by some of the most talented people in the industry, HK had long been on our wish list of destinations and all we were waiting for was the right distribution partner which we have now found in Metabev,” shared Anand Virmani, Co-founder, Distiller and CEO, NAO Spirits & Beverages.

NAO Spirits has recently raised $2 million as Series A investment from a boutique VC firm, existing investors, and family offices.

"Growing up in Asia, it’s an honor to partner with NAO Spirits in Hong Kong and across the region.  Hong Kong is a discerning F&B market, and we select our brands very carefully, but arguably more importantly the people behind the brands.  Given the authenticity of the ‘gin & tonic’ originating from India, we want to pay homage to this, along with sharing the beautiful unique balance of botanicals from the Himalayas in Hapusa and Greater Than.  We are humbled to work with the passionate pioneers behind NAO and are proud to further represent world-class Asian products,” added Roger Chan, Chairman, Metabev Group.

The gin brand has been growing exponentially since its launch. In FY19, it clocked a turnover of USD 450,000, FY20 witnessed a turnover of USD 1.2 million, and the projected turnover for FY21 is USD 3 million.

Hard liquor company Boutique Spirit Brands (BSB) which sells rum and brandy under the brand names of Gladius and Zeus respectively in Orissa and Andhra Pradesh has raised about Rs 6.8 crore ($1 million) from from institutional investors like Kae Capital.

BSB closed FY18 with over Rs 18 crore in revenues selling just across two markets and is targetting gross revenues of about Rs 80 crore by FY19 as it also looks to widen its playground and portfolio.

“We are now looking to launch a whiskey brand as also expand the sale of rum and brandy to eight and four states respectively. We want to have presence across all categories and hence will look at launching a vodka brand in the long term as well,” said Rahul Gagerna, Founder of BSB, formerly the head of marketing at distilleries firm Radico Khaitan.

The company sold 50,000 cases across rum and brandy in FY18 and is looking to sell over 2 lakh cases by FY19.

“Given that liquor is a matter of state jurisdictions and the operational complexity in business, we wanted to back a team that has navigated this in the past. The cofounding team has several decades of liquor experience coupled with strong traction of brands such as Gladius and Zeus made a compelling case for us to invest,” said Navin Honagudi, Managing Director at Kae Capital.

BSB is also planning to add multiple investors for Rs 14 crore in debt finance to establish a considerable retail presence across the hotel and restaurant segment for brand recognition.

United Spirits Ltd (USL) said it has received shareholders' nod to issue a guarantee to a bank for loan of up to Rs 100 crore to be a availed by its subsidiary Pioneer Distillers, reported PTI.

United Spirits said the resolution for consent approval of the shareholders to give guarantee and/or provide security for a bank loan of up to Rs 100 crore to be availed by its subsidiary Pioneer Distillers Ltd from Standard Chartered or such other banks and was passed with a majority, in a filing to NSE.

As many as 99.5 per cent of votes polled were in favour of the resolution, said the company.

Last month, Diageo-owned United Spirits sought approval from its shareholders to report sick to BIFR as its accumulated losses as on March 31 touched 86 per cent of peak net worth during the past four fiscal years.

As per the Sick Industrial Companies (Special Provisions) Act, 1985 (SICA), if the accumulated losses of a company, at the end of any financial year have resulted in erosion of 50 per cent or more of its peak net worth during the preceding four financial years, such firm is required to report to the Board for Industrial and Financial Reconstruction (BIFR).

United Spirits said in a notice to the shareholders for an EGM on January 22,  as per the audited annual accounts for the fiscal ended March 31, "the accumulated losses of the company as at March 31, 2015 is 86 per cent of its peak net worth during the four financial years preceding the financial year ended March 31, 2015".

"Accordingly, this extraordinary general meeting (EGM) is being convened to consider and approve the enclosed report of the Board of Directors on such erosion and its causes, and the measures being taken as per the relevant provisions of SICA, and also to approve the reporting of such erosion to BIFR in terms of Section 23 of SICA," it added.

The company said its accumulated losses as on March 31, at Rs 5,045.45 crore is greater than 50 per cent of the peak net worth in the immediately preceding four financial years at Rs 5,849.62 crore.

United Spirits, the largest Indian distiller controlled by Diageo Plc, is pulling back from the ready-to-drink (RTD) market barely a year after launching Smirnoff Ice in a head-on battle with Bacardi, reported TNN.

USL hinted at lack of scale in domestic RTD sales for the review while industry observers said the company, which is battling a debt burden, didn't want to support an unviable category for the time being.

USL has stopped production of Smirnoff Ice, a pre-mixed vodka drink, which it had launched in few markets starting with Karnataka and Goa, multiple said industry sources. The introduction of Ice, a blockbuster Smirnoff trademark globally, was pegged as a major move by USL following Diageo's $3 billion takeover.

"The latest initiatives of USL appear to prioritize leadership products. Indian RTD market continues to witness entry and exit of brands lured by high growth of 20-25% engaging youth. Yet most have not been able to match the focus and innovation of Bacardi Breezer, which continues to dominate and define the category," said Sanjay Jain, director, Taj Capital, a New Delhi-based investment advisory firm.

"Based on our learning’s, we are reviewing our product and pricing strategy around this important innovation platform to ensure that it has a 'scale' play in the RTD category in the near future. RTD is a big driver for Smirnoff's growth in its biggest markets, US and UK," said United Spirits spokesperson.

USL didn't specify a timeline for the re-launch of Smirnoff Ice stating the plans were still in the works.

United Spirits, one of the largest breweries in the world has reported a net profit of Rs 929 crore for the quarter ended September, against loss of Rs 26.9 crore a year ago, helped by exceptional gain from United Breweries stake sale. The company's profit rose 121 per cent to Rs189.4 crore without exceptional items, reported PTI.

India's largest liquor firm also reported 4.3 per cent year on year increase in total income at Rs 2,151 crore.

United Spirits, now controlled by the world's largest spirits maker Diageo, appointed Sanjeev Churiwala as its chief financial officer, effective 16th November 2015.

Sanjeev comes from Ambuja Cements where he was the CFO since four years and replaced by Vinod Rao, Finance Director at Asia Pacific at Diageo, who was serving as interim Head of Finance since the past few months.