Alcobrew plans investment of Rs. 100 cr; expects three-fold growth in two years.

Alcobrew Distilleries, a mid-sized liquor company, plans to invest around Rs. 100 crore for marketing and setting up new manufacturing plants.

Alcobrew Distilleries Chairman and MD Romesh Pandita told BusinessLinethat new investments are expected to help the company grow its turnover nearly three times to around Rs. 1,000 crore in a couple of years.

The company has received a letter of intent from the Himachal Pradesh Government to set up a malt distillation and saturation plant. About 70 per cent of the malt production will be utilised for its own brands.

Out of Rs. 100 crore investment, Rs. 65 crore will be funded through debt and the rest from internal reserves.

Pandita said the company is open to discussions on investments and funding opportunities to help it grow much faster. Alcobrew commenced manufacturing and bottling of Old Smuggler in India for Gruppo Campari in 2006.

“The immense learning that the company gained from its association with Campari enabled Alcobrew to launch its own brands – White & Blue in the semi-premium, Golfer's Shot in the premium and White Hills in the regular whisky segment,” Pandita said. He said the company introduced several of the best practices of Gruppo Campari such as the annual manufacturing quality audits across all parameters.

“Our initial interaction with Campari gave us the focus on manufacturing standards and the subsequent confidence to deliver world-class manufacturing practices and products in terms of blend quality and packaging,” said Pandita.

Pandita said the company decided to launch brands only in the semi-premium and premium whisky segments, as they are the fastest in terms of growth.

This strategy helped the company to scale up its operations rapidly. “Moreover, we could see that both these segments had one dominating brand each and there was no other attractive option for the consumers. We felt that there would be a certain level of brand fatigue in the minds of trade and consumers and we could tap the opportunity. We never wanted to operate in the high-volume, low-margins cheap whisky segments, which we believed were not sustainable on a long-term basis,” he added.

The company will focus largely on the whisky segment as it constitutes 60 per cent of the 330 million cases liquor market.

Rum constitutes 40 million cases and brandy over 80 million cases. In the whisky segment, premium whisky constitutes 40 million cases and Scotch 30 lakh cases; the rest are of non-premium variety.

HBL