Rights On Time

Mallya is willing to pay Rs 250 crore for SWC's three prized brands, Royal Challenge, Director's Special and Haywards. The money he is ready to pay would then go towards meeting SWC's debts

AS Shaw Wallace and Co was continuing its humdrum battle with sundry creditors in court, Vijay Mallya stepped in with an offer which has stirred up the problems in which the Manohar Rajaram Chhabria company is mired.

Mallya's UB Group said that it was willing to pay Rs 250 crore for SWC's three prized brands - Royal Challenge, Director's Special and Haywards. UB was acting on behalf of SWC's creditors and the money it was ready to pay would then go towards meeting SWC's debts.

 

SWC responded by saying that the brands are priceless. But how were these brands built and what makes them worth so much to Mallya?

From SWC's point of view, it's not in the least surprising that rivals should be wanting to take over the three brands. SWC is the market leader in the super premium and premium whisky segments and has maintained its lead in these segments despite the entry of transnationals with their premium offerings. For instance, Antiquity dominates the super premium segment and stands alone at the top with an astounding 86 per cent share of the market.

Royal Challenge has dominated the premium whisky market with a formidable 70 per cent market share and, despite competitors' efforts, the position of Royal Challenge remains unassailable.

Director's Special is Shaw Wallace's flagship brand in the prestige whisky segment. It has attained a growth of 100 per cent in a span of five years, the largest in the world, by any spirit brand selling more than a million cases a year. Director's Special is also the largest exported IMFL brand from India.

Leveraging the popularity of Director's Special, DSP Black Whisky was launched last year and has been an instant success, garnering a share, of 20 per cent in the deluxe whisky segment.

Among beers, Haywards has a formidable presence. Says a SWC spokesperson:"Haywards 5000 strrong beer represents a display of brand clout where a single beer brand has led the rally in changing the preferences of beer consumers in the country."

Haywards 5000 is the largest selling strong beer brand in the country with sales of around 10 million cases in 1998-99, up from 0.9 million cases in 1993-94. Haywards 2000 is also the second largest selling beer brand in the country.

Shaw Wallace claims it has been the chief liquor brand builder in the country, with ownership of more than 50 per cent of vastly popular top selling brands with high brand recall in various segments.

The following strategies can be attributed to the success and mass popularity of Shaw Wallace's brands:

Nationwide distilling

In view of the large differential in excise duties from state to state, cross-border movement levies and other freight charges, it is incumbent on national players to widen the spread of manufacturing units. The last few years have seen Shaw Wallace acquire seven strategically located distilling units and five brewing units across the country. Currently, Shaw Wallace has 29 distilling ans seven brewing units. The comapny has also entered into manufacturing tieups with 10 more brewing units owned by top brewers in India and Nepal.

A national presence makes for competitive pricing because it means savings on freight: and local levies.

This apart, the strategic, of expanding its national presence has also helped the comapny withstand the vagaries of imposition of prohibition and discontinuation of operations in any state.

During the implementation of prohibition in Haryana and Andhra, the comapnies with a consolidated presence in either of the two stares wet e badly hit, with operations screeching to a halt.

Haywards 5000, the 10 million case beer brand, has emerged the largest selling strong beer brand in the country. In large measure, the growth is attributed to the availability of the brand nationally. SWC claims Haywards 5000 is the "most national" beer brand in the country, being manufactured at 16 breweries in India and Nepal.

Instant rollout of a brand

A large network has enabled the company to roll out a new national brand instantly. The launch of DSP Black is an instance.

This helps the company save on advertising and promotional expenditure. In view of the foot-prints of satellite channels across the country and airing of adversing messages nationally, it makes sense to roll out the brands nationally and not in steps to get the maximum mileage out of advertising campaigns.

Blending

According to Shaw Wallace, the company has taken pains to develop blending skills. "An intricate knowledge of the Indian palate is necessary and has helped the company develop Unmatched blends for different segments," says the SWC spokesperson.

Quality and consistency of the blends have been identified as vit