QualeMagni has been focused on introducing high-quality alcoholic beverages from around the world to India. Surya Phadke, managing director, QualeMagni, highlights the interesting new trends among the new age Indian consumers
What have been the key milestones for QualeMagni in the last five years ?
There have been quite a few in our young company; obviously securing our very first key account in late 2013 (i.e. DLF Emporio) is very special. Signing on the India Distribution agreement for Khortytsa (The Worlds #3 Vodka) from Global Spirits in 2016 is another, however the closest to our heart remains the time when we were able to get the contracts for manufacturing our wines in early 2018. This marks a huge shift and a first-step in our long-term strategy to be competitive and compete with the domestic liquor manufacturing companies.
Have you noticed any interesting new trends among the Indian consumers ?
The latest increase in gin consumption is well documented but we feel that this is more in line with global trends and not specifically a trend only in the Indian market. Over the last half decade since we have been studying the market, the Indian consumer has definitively become more adventurous and the increase in market share of all categories including vodka, beer and wine shows a shift from Brown Spirits to cocktails, different beer styles and straight drinks.
What percentage of your business is focused on the HoReCa sector ?
In the spirits category our revenue collection from both retail and HoReCa is 50/50. However, in the wine category HoReCa comprises a majority share with 80 per cent of the revenue coming in from this sales channel.
Which are your most popular products for the hospitality industry ?
Our premium wine portfolio from Spain and Chile that includes a Sparkling Cava continues to be popular in the wine category, whereas in the spirits category our vodka Khortytsa from Ukraine has had a fantastic response from the market. All seven products are cost leaders and hold between 9-23 per cent of market share in their categories.
We are all aware of the huge taxes on the import of alcoholic beverages, what are your other challenges ?
Yes, I agree the taxes on import and sale of liquor are quite significant. However, the key challenge in the sector is operational inefficiency. Due to the highly regulated nature of this industry we see a lack of product innovation, slower time to market and an increased time for inventory turnovers. While the first two impact long-term value generation across the value chain from manufacturer to consumer, the slower time in churning inventory due to regulatory red tape destroys value and increases cost to the industry.
Your perception of the future growth in this segment ?
We are very bullish on the premium and super premium BIO segment. As the disposable incomes of the Indian Middle class increase, we expect double-digit growth in the segment for the next decade. There will be small bumps in the growth story with policy changes at the central and state levels but the macro factors including a strong consumer demand and switch from BII products to BIO will drive the growth in the industry.
Which new products you will be launching soon ?
We will be launching quite a few product ranges. Under the umbrella brand “Don Pablo” there will be products primarily sourced from Mexico and will include a tequila, liqueur and mezcal. With our “Excalibur” range we are launching wines from France, Spain, Italy and Chile. This will be the first brand specifically designed to appeal to the Indian consumer. In addition we will be expanding our product offering from the Far East.
The beverage industry in India and allied industries, including hospitality in India, are still at a very nascent stage. As the consumer evolves, the industry will have to adapt to cater to a savvy buyer. This will definitely push the boundaries of product evolution and this bodes well for the industry at large.