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Oct, 29 2015

Diageo\'s India to focus on high-end brands growth

The group is planning to focus and promote around top 15 top brands and will de-emphasise or consolidate others.

United Spirits Ltd is planning to scale back its more than 150 brands and focus on the faster-growing top end, hoping to bolster its fortunes in a market dominated by cheaper, local names.

“The maker of Johnnie Walker whisky expects growth in top-end spirits to outpace the mass market over the next few years, as a growing class of wealthy young professionals demands better quality,” shared Anand Kripalu, chief executive of the unit of Britain's Diageo Plc, reported Reuters.

The group is planning to focus and promote around top 15 top brands and will de-emphasise or consolidate others.

Whisky-swigging India, where alcohol was frowned on until only recently for religious and cultural reasons, is now a battleground for global drinks makers, as groups like Diageo and rival Pernod Ricard SA tap emerging markets to offset sluggish growth in the developed world.

It is now Diageo's second-largest market by sales.

"Awareness, certainly, for premium brands is going up and affordability is going up," Kripalu told Reuters.

"We are focussing on select brands, which we believe are the critical ones, big drivers of growth," he said, adding only those brands would receive strategic investment.

India's alcoholic beverages market remains small compared with other large economies such as China and the United States. But drinks makers are betting on rapid urbanisation, a young population and a fast-growing middle class.

As India grows, Kripalu, a consumer goods industry veteran who joined the company two years ago, expects his company's contribution to Diageo's revenue going up in the coming years from about 9 percent now, but did not give a target.

"Our aim is certainly to grow faster than Diageo is growing globally, therefore our contribution will keep going up," he said. "I do see us becoming a significant growth driver to Diageo globally."

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