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A report in the ET yesterday quoted the example of a politician (by supposition today’s czar or a maharaja in India) from Punjab recently ordered 1,200 bottles (100 cases of 12 bottles each) of a 12-year old Single Malt Whisky for his son’s wedding> Logically, he did not appreciate the fact that it is a lifestyle product for discerning drinkers and is not to be drunk to get drunk as the vast majority of his guests might have been looking forward to on the joyous occasion.
The incident brings to memory the story of a shabbily dressed man from Ludhiana in the same State, walking in the then newly opened Louis Vuitton store at a 5-star hotel in Delhi, enquiring the price of a rather expensive LV handbag, costing around $2000. The sales lady was indifferent when she told him the price, mumbling it was perhaps too expensive for him. She was shell shocked when he took out the cash from a paper bag he was carrying and gave it to her in exchange for the bag.
The bottle of a single malt whisky costs upwards of $40 whereas the popular scotch whiskies like Chivas and Black Label cost around $35 in the duty free shops. For the drinkers in the latter category, it is simply a matter of upgrade to single malt that may cost $150-200. In the Indian retail market where these whiskies cost around Rs.3000, the single malt starts from Rs.4000 onwards and may cost as high as Rs.70,000 according to the report. To the affluent Indians who consume over 150 million cases of whisky (officially, unofficially the figures are much higher) and other hard liquor- Indian and imported, this indicated the affluent whisky drinkers moving up the scale in the favourite national drink.
Just like any whisky having a Glen with it spells single malt to a majority of the recent converts to this Scottish tipple in India, single malt category has also established a brand image, like Champagne or Barolo (or like the ultimate brand image in China of Lafite from Bordeaux). In India, majority perhaps still know of Jacobs Creek as a better brand than Lafite!
Import of single malt Scotch more than doubled in the first half of 2010, on a year-to-year basis. With the reported figure of consumption of 58,500 cases (naturally, all imported from Scotland) in 2009, the estimates for 2010 would swell to well over 100,000 cases and by the end of 2011, it could be more than 200,000 at today’s rate of growth, thus crossing the estimated number of cases of wine consumed during the same period.
The single malt market has been reportedly out-performing other whisky categories for the last 25 years globally. However in India it started making big strides only during the last 5-7 years, almost the same time as wine industry started growing. The customs duty on wines and single malts is the same at 150%.
Although as a lifestyle product, single malt whisky is a more natural evolution of palate through the fine wine consumption because of the similar desirable characteristics colour, bouquet, flavour, and after-taste. But the upgrade for a much bigger base of current whisky drinkers has made this market grow up much faster than the wine market, despite high costs due to the basic price as well as taxation.
It’s also important to understand the underlying Brand image of single malts. This indicated a positive factor in the long term potential growth of high quality wine market also. If it were perceived that Bordeaux top growths like Latour or Lafite are the best ‘Brands’ of the wine world, or that Barolos are the topmost wines of Italy (though in reality, the quality of Barolos varies widely by vintage, producer, terroir, weather and hosts of other factors), there would be enough politicians (and others categories of super-rich; not all politicians are affluent enough to order 100 cases of single malt) who would help expand the market of luxury Brands like Barolo, Barbaresco, Classified Growths of Bordeaux, top Burgundies and Champagnes etc.
The Brand image of such wines is already on the increase but obviously at a snail’s pace as compared to China where they may reportedly buy a just- released Lafite and consume it at a dinner over the weekend. Recently, delWine was approached by a minister’s office with a request to help locate him a few cases of Sassicaia- nothing else would do for the boss. I gave up trying to convince him that for a banquet party, it was not a wine to serve-but Sassicaia was the only Brand he was looking for!
While it is an absolute necessity to de-link wine from spirits including single malt whiskies from wine to make the wine drinking population base wider, creation of Brands as luxury labels –whether as a category like Champagne or an individual label like Lafite, will certainly play a key role in the demand for higher end wines. The aspirational value and recognition factor would be a major challenge to achieve the sort of growth being enjoyed by the single malts in the recent past.
Meanwhile, it may not be easy to estimate the growth of soda water bottles consumption with the increase in the sale of single malts- a situation created by the likes of the politician of Punjab, whose guests surely preferred soda to water in their whisky.
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