“The Indian business increased sales by 6% last fiscal year and we are the leader in net sales, contributing 12% to Pernod Ricard “India has remained relatively resilient despite consumer pressures, including high inflation that has weighed on consumer spending. Even amid this global slowdown, India’s resilience was evident in our trade performance,” Touboul told ET.
With sales in 2022-23 at Rs 25,028 crore, a 6% increase works out to Rs 26,527 crore for 2023-24. In comparison, Diageo’s net sales fell 7% to Rs 25,724 crore in 2023-24 from Rs 27,652 crore in the previous year. Two years ago, Diageo sold 32 lower-priced brands, including Haywards, Old Tavern and White Mischief, which together accounted for nearly a fifth of its sales, leading to a decline in its revenue. Excluding the divested business, Diageo’s business revenue rose 11%.
France’s Pernod Ricard sees India as one of the three countries it must conquer globally, along with the United States and China. For the first time, India overtook China to become the second-largest market in terms of sales for the company during its financial year ending in June. The country also became the second-largest market in the world for Jameson and Glenlivet. It is one of the fastest-growing markets thanks to a favourable macroeconomy, a demographic dividend and 25 million seniors entering the pool of potential consumers, Touboul said.
“India has a young population with a significant demographic dividend, and the growing workforce brings considerable dynamism,” he said. “In addition, substantial investments are being made in infrastructure development and economic growth, which further contributes to the country’s dynamism. It is no wonder that macroeconomic reports consistently highlight India as one of the most dynamic economies today.”
The world’s second-largest spirits company controls about a quarter of India’s whisky market despite having a negligible presence in the mass market segment. It derives most of its sales from premium and semi-premium brands such as Blenders Pride, Royal Stag and Imperial Blue. The company controls half of India’s premium whisky market and 42% of the imported spirits market. For Diageo, the world’s largest spirits company with brands such as Johnnie Walker, Tanqueray and Smirnoff, the premium portfolio now accounts for about 87% of its total sales, up from 72% in 2021. “USL (Spirits united) has been premiumising its portfolio and growing faster than Pernod, likely bridging the value gap by 1-2% for the June quarter. During the last quarter, USL’s prestige and premium segment grew by 10.1%, while Pernod India’s growth stood at around 8-9% year-on-year,” said Abneesh Roy, CEO, Nuvama Institutional Equities. India’s thirst for spirits is rising at a record pace, fuelled by a thriving middle-class population and its long-standing passion for whisky.
Incremental annual sales in India since 2020-21 dwarfed the combined spirits consumption of the UK, France and Spain, even though market growth slowed to a third, at 4%, in 2023-24 compared with the previous two fiscal years.
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