After testing premium waters, ABD ready to fight Royal Stag

Officer's Choice Black is more premium than the earlier Blue variant in the fast-growing semi-premium-plus whisky space

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In the last couple of decades, the Officer's Choice whisky brand has fuelled the fastest growth for Allied Blenders & Distilleries (ABD). The popular whisky from the Kishore Chabria-owned ABD has been termed as one among the five largest-selling whisky brands in the world, and of course, as the largest-selling whisky brand in India.

Realising the potential of Officer's Choice, that sells about 20 million cases annually, Chhabria has decided to extend the brand to more variants. It had tested premium waters with Officer's Choice Blue, that was at a premium to the regular brand that is available for as less as Rs 55 in some markets. Officer's Choice Black would reinforce ABD's move in the semi-premium-plus Indian whisky space and its leader - Pernod Ricard's Royal Stag.

Officer's Choice Black is a blend of Indian grain spirits and rare Scotch malts that have been matured in charred oak barrels. The new brand is expected to garner a sizeable share for the company in the semi-premium-plus whisky segment, which has been growing in excess of 20 per cent over the last five years, the company says.

Deepak Roy, executive vice-chairman and CEO, ABD, says, "With the launch of Officer's Choice Black, we intend to further expand the strong equity of the Officer's Choice brand, which is a part of our company's long-term premiumisation strategy."

So far, Officer's Choice Black has been launched in West Bengal and Delhi, where it is priced at Rs 410 for 750 ml, slightly higher than Royal Stag (Rs 360). The Blue variant is priced at Rs 290 for a 750ml bottle in Delhi.

In FY14, the semi-premium-plus whisky category saw sales of 14.7 million cases, out of which Royal Stag contributed about 13 million cases.

ABD is expecting to sell about half a million cases of Officer's Choice Black in 2014-15. "Establishing a brand is a time-consuming process with a huge financial investment. About Rs 25-30 crore will have to be spent in the first year just for advertising. However, we are hopeful to tap about 10-12 per cent in the first year of its launch," Roy says.

Santosh Kanekar, former marketing head at Diageo's India unit, says: "Whether Officer's Choice Black will dislodge Royal Stag is a different matter. Royal Stag was built on the grain-whisky story and the 'no artificial flavours' story. Later, the brand was positioned as premium and has got huge brand endorsements from cricket and Bollywood, which remain its key planks. It is very difficult to dislodge Royal Stag." Officer's Choice Black may take volumes from other players, including McDowell's, McDowell's, but Royal Stag would provide a tough fight, he says.

Royal Stag, which is an India-specific brand of Pernord, has an annual growth of 20 per cent over the last five years.

Royal Stag was created in 1995 from a blend of Indian spirits and imported Scottish malt. Aiming at strengthening its position, Pernod Ricard had introduced Royal Stag Barrel Select, a premium version of Royal Stag, in 2012.

Now, it is not just ABD that wants to tap the semi-premium-plus whisky segment. The largest liquor company, United Spirits, had already joined the race to grab a piece of the market with its McDowell's No 1 Platinum in 2010.

ABD had launched Officer's Choice Blue in 2012. The company claims that it is all set to cross 3 million cases this year, a target it had set at the time of launch. No other brand in the IMFL (Indian Made Foreign Liquor) industry has achieved this target within two years of its launch, says Roy. Officer's Choice Blue was launched to target McDowell's No 1 and Pernod Ricard's Imperial Blue.

"ABD under Deepak Roy has shown consistent execution skills. Hence, I have no doubt that the brand will get placed well and claim market share, given his aggressive selling skills and superior distribution strength," Kanekar says.

Besides Officer's Choice, ABD sells Class 21 Grain Vodka, Wodka Gorbatschow, Jolly Roger rum, Lord and Master and Kyron Brandy. ABD has achieved an annual growth of 24 per cent over the last five years, with sales of 20 million cases in 2012-13. In the current financial year (FY-14), ABD has grown at 26 per cent, while the IMFL industry has grown at the snail's pace of one per cent.