India is considered one of the fastest-growing alcohol markets in the world, and Lalit Khaitan, the country’s newest billionaire, is benefiting from these increasing trends in alcohol consumption. Khaitan serves as the Chairman of Radico Khaitan Limited, based in Delhi, and is one of India’s largest alcohol companies with revenues of $380 million. The company is well-known for its beverages such as 8 PM whiskey, Old Admiral brandy, Magic Moments vodka, and Rampur Single Malt, which are distilled in the foothills of the Himalayas.
Khaitan’s Long-Term Strategy Drives Success
Analysts say that Radico Khaitan’s long-term strategy to expand its portfolio of premium brands is driving success. According to a research report from Sharekhan, the Indian retail brokerage unit of BNP Paribas, the company has successfully built a strong and growing portfolio of premium products based on consumer preferences, launching more than 15 new brands in the past 15 years.
Premium Alcohol Sees a Boom in India
Indians are experiencing more costly consumption of alcoholic beverages, and as a result, the premium segment now accounts for one-third of total sales volume, compared to 26% in 2018. Today, Radico Khaitan is considered one of the largest producers of domestically made foreign alcohol and derives 80% of its revenues from this sector. Alcohol revenues in India are projected to reach $64 billion by 2027, compared to $52 billion in 2021, according to a report from the Indian Spirits and Alcoholic Beverages Association.
Competitive Challenges in the Indian Alcohol Market
Though Radico Khaitan is well-positioned to benefit from this growth, it faces significant competition. The largest market player is United Spirits, a subsidiary of Diageo, which was previously controlled by the notorious alcoholic businessman and former billionaire Vijay Mallya, who is now a fugitive in London. Other competitors include premium alcohol producers such as the renowned whiskey makers Officers’ Choice, rum manufacturers Macazai, and gin makers Stringer & Sons. Radico hopes to outpace competitors by adding new capacities and continuing to launch new brands.
A Promising Future for the Alcohol Industry in India
Radico Khaitan aims to capitalize on future growth in the alcohol industry in India by adding new capacities and continuing to launch new brands. In September, the company commissioned a new plant in the northern state of Uttar Pradesh. However, it must contend with the costs associated with capital expenditure which may impact future profits.
Khaitan’s History and Future
Khaitan’s company was established 80 years ago as a wholesale liquor packaging and manufacturing business before pivoting to branded beverages in 1997 when Khaitan’s marketing-savvy son, Abhishek, joined the business. According to the London data provider IWSR, alcohol volumes in India are expected to grow at a compound annual growth rate of 4% between 2022 and 2027, four times the global average. Radico hopes to overcome competitors by adding new capacities and continuing to launch new brands.
Khaitan inherited a small alcohol business in 1995 from his late father, G.N. Khaitan, who purchased Rampur Distillery and Chemicals in the 1970s. The company, whose current name is derived from that previous entity, is now run by his son Abhishek, a trained industrial engineer.
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