Brown-Forman set to give India Tequila market a shot

NEW DELHI: Brown-Forman, the maker of Jack Daniel’s whisky, plans to give the minuscule but high-potential Indian tequila market a shot by introducing a range of premium tequilas here. Tequila brands Herradura and El Jimador, owned by Mexican major Casa Herradura, which Brown-Forman acquired as part of a $776-million global buyout in January this year, will be brought to India by the fourth quarter of the current year. To begin with, these brands will be rolled out in Delhi, Mumbai and Bangalore.

Commenting on the prospects of the tequila market in India, Brown-Forman’s area director & vice-president (South-Asia) Amrit Kiran Singh said: “Tequila is a small but growing market in India. It is picking up, especially in places such as premium night clubs.”

India’s tequila consumption is estimated at just around 10,000 cases annually, but is registering a volume growth of over 50% year-on-year. Diageo’s Jose Cuervo and Jim Beam’s Sauza are the leading players. Camino has made some noise of late with a relatively low-priced entry. Tequila is seen as an evolving category in India driven mainly by on-premise consumption.

The $2.4-billion Brown-Forman is also fine-tuning strategies to introduce another tequila brand, Don Eduardo, and give additional thrust to its existing value-for-money tequila brand in India, Pepe Lopez. “The premium tequila market in India is almost non-existent. We will create the category with consistent marketing efforts,” Mr Singh said.

Domestic tequila consumption has been growing on the back of the increasing popularity of cocktails, but has seen a trend towards intake through ‘shots’ — especially at night clubs and youth parties. “It is still an evolving trend, and it would be wrong to slot it into cocktails or shots,” industry observers said.

Brown-Forman had acquired the 136-year-old Grupo Industrial Herradura, SA de CV (Casa Herradura) earlier this year, which gave it access to Herradura and El Jimador and tequila-based ready-to-drink brand New Mix. As part of the deal, the American spirits company also acquired the production facilities of tequila and Casa Herradura’s sales and distribution network in Mexico. Casa Herradura is the world’s second largest tequila maker with net sales of over $200 million.

Besides flagship brand Jack Daniel’s, Brown-Forman markets Finlandia Vodka, Southern Comfort liqueur, organic wine Bonterra and Fetzer Wines in India. Each of these brands occupies the premium end of the spirits market. Jack Daniel’s, for example, is priced at Rs 2,800-3,000 per litre. Mr Singh ruled out the possibility of the company tapping the Indian made foreign liquor market.

Both Herradura and El Jimador, among Mexico’s top-selling tequilas, have been posting strong double-digit growth in the US. Herradura and El Jimador are priced at $40 and $20 each for 750 ml bottles, respectively. In Mexico, tequila is the largest spirits category with a share of over 42%, followed by brandy (24%) and rum (17%).

Source: The Economic Times / India Times