In an interview with CNBC-TV18, Hina Nagarajan, CEO and MD of Diageo India, stated that the premium sector will be the most profitable for the alcohol industry in the future.
While sales at lower price points are slowing down, the premium market is booming, according to her. Spirit manufacturers are aware of this tendency toward premiumization, just like any other consumer goods company. People should drink more sensibly rather than more.
She predicts that over the next ten years, the premium category will rise by double digits, driven by shifting demographics and increasing ambitions.
According to Hina Nagarajan, the business can benefit from unlocked pricing and tax harmonization. With the government, “we will get to a place where we have some inflation-linked formula for pricing that will unlock the industry,” she said.
Online alcohol delivery, which has a big influence in West Bengal and Orissa, has a lot of room to grow, she continued.
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When discussing the effects of inflation, she noted that it was in the double digits last year and is now in the high single digits this year. These inflationary patterns won’t be going away any time soon. To preserve the profit margins they have attained in recent months, the company’s strategy is clear: intensify productivity and revenue methods.
According to Nagarajan, Bailey’s has a large market potential thanks to the addition of flavors like salted caramel and strawberries and cream. Within the next five years, she envisions Bailey’s developing into Diageo’s portfolio’s flagship brand.
She claimed that in the past they had distributed their money among 18–20 brands. The company now concentrates on a core of 6-7 well-known brands, including Signature, Royal Challenge, McDowell’s, & Johnny Walker. Beyond these 7-8 brands, there are no ambitions to grow, and all upcoming innovations will be focused on them, noted Nagarajan.
