reviving kerala toddy | iimc | mtci
TRANSCRIPT
Indian Liquor Market
India is the 3rd largest liquor market in the world.
One of the fastest growing markets in the world, on the back of demographics & economy.
Strong MNC presence with Diageo, Beam Global, Pernod Ricard, Heineken, SAB Miller, Carlsberg and more.
There are 3 broad categories – IMFL (Indian Manufactured Foreign Liquor which includes whiskey, rum, brandy, vodka & gin), Beer and Country Liquor (cheaper, spiced liquor).
The overall retail market size of liquor is $35
billion per annum.
Overall growth of the market is 8% per annum, mainly driven by IMFL and beer.
Country liquor is a slow growth market. Beer has been consistently growing at over 15% per annum over the last few years.
Indian Liquor Market
IMIL industry has been growing at more than 10 per cent CAGR since 2010 while the IMFL industry has grown by 6 per cent CAGR with flat growth in the last two years
Liquor consumption in India
• Indian choice of liquor influenced by colonial past• Whisky and brandy introduced by British
colonized India• Rum, favourite of naval merchant ships
between India & West indies
• While India has its own traditional alcoholic drinks, the general population now regards them as primitive and reserved only for the poorest of the rural population.
• While the majority of the whiskey consumed in India is domestically produced, the branding remains distinctly Western
• Indian whiskey is representative of the status of the new Indian middle class and their disposable wealth, foreign liquor brands are a symbol for the elite.
• IMFL - 42.8% alcohol content
• IMIL – 30-36% alcohol content
• Still consumers feel that country liquor(Indian made Indian Liquor) gives instant kick and has higher alcohol content
• Southern India has totally banned country liquor
Coconut production in India
India stands first in productivity & production and third in area under coconut
Contributes more than Rs 8000 crores annually to GDP
Foreign exchange of more than Rs 2000 crore by export of coconut products.
Kerala has largest area(8.2 lakh HA under coconut tree cultivation in India.
Also No 1 in production
Source: http://www.newindianexpress.com/states/andhra_pradesh/World-Coconut-Day-Celebrations-Today/2015/09/02/article3005688.ece
Kerala Toddy Kerala – India’s highest per-capita consumption of toddy, wine, hard liquor and other
varieties of booze
The wine got from the coconut palm in Kerala is more popularly known as kallu, palm toddy or simply toddy.
Not only a popular drink in Kerala but also across the globe including Asia and Africa known by different names like emu and oguro in Nigeria; nsamba in the Democratic Republic of the Congo; nsafufuo in Ghana; kallu in South India; matango in Cameroon; tuak in North Sumatra, Indonesia; mnazi in Mijikenda, Kenya; goribon (Rungus) in Sabah, Borneo; and tuba in the Philippines, Borneo and Mexico.
Kerala toddy is also referred by the foreigners as coconut vodka.
Coconut tree used for getting toddy more economically worth than value of timber
Alcoholic content in toddy is about 8.1%
Many consider toddy a healthy drink; Even preferred by women in central Kerala.
“I have been drinking fresh toddy for the past three decades from the coconut or palm trees in my home. This is no taboo at all and in fact it's a real refreshing drink," said a 65-year-old housewife in Kottayam.
50,000 workers employed under the labor department with the welfare board;Kerala Samsthana Chethu Thozhilali Union
The state has 5,200 shops that sell toddy
Kerala Toddy – Income and Revenue ModelFor coconut tree owners An annual amount paid by tapper by
negotiation or daily toddy quantity based
Different price for tree farmers in different parts of Kerala
Rs 150-350 per month for a high yielding tree
Rs 20-30 per litre if the final price to drinkers is fixed at Rs 100 per litre
For tappers Excise Department claims Kerala produces
around 8.35 lakh litres of toddy a day and consumes 7.21 lakh litres
Toddy is worth Rs. 1.20 crore a day given the average price of Rs. 60 a litre.
Source: http://www.thehindu.com/news/cities/Kochi/in-toddy-numbers-dont-match/article4928785.ece
ChallengesLack of toddy tappers The younger generation is not interested in learning
the art of extracting toddy, nor do they climb coconut
trees to pluck
Hygiene factorNot so clean toddy shop
(“Kallu shaap”)
Serious question over quality
Past death tragedies caused due to adulterated toddy
Drinkers migrating to other alcoholic beverages
Pungent smellThe number of toddy shops
in the state have shrunk from 4850 in 2010-11 to
4122 in 2013-14.
The taboo of low cost local drink
Changing the concept of lower class people’s
drink
Beverage 2000-2001 (Revenue in Crore Rs)
2009-2010 (Revenue in Crore Rs)
Toddy 140Beer 28.93 85.19IMFL 72.19 188.03Source: http://www.ibnlive.com/news/india/sluggish-sale-at-toddy-shops-in-kerala-510238.html
Kerala Liquor Ban – An opportunity for Toddy state promoting low alcoholic drinks instead of hard drinks.
initial trends show that sales of beer have increased slightly and that of IMFL (Indian Made Foreign Liquor) have dropped
Reviving Toddy initiatives A Toddy Board, with a share capital of Rs.1 crore, is
being constituted by the State government as part of a move to revive the sinking toddy sector of the State. – June 2015
Reviving coconut sector through Neera
Toddy is tapped from the coconut bunches and collected in a mud pot. Due to the sediments in the pot, juice collected in four hours time gets fermented and turns into toddy, which has an alcohol content of 5 to 8 per cent.
A sap extracted from inflorescence of palm/coconut trees before sunrise it is known as neera. And, the same liquid if tapped in the noon it is called as kallu(toddy).
Neera – wine got from coconut prevented from fermenting
While Neera, a coconut water-based soft drink, is a non-alcoholic, mineral rich and nutritious health drink. In the past, this was one of the most popular traditional industry in the state, with an employment of more than a lakh.
Rising demand for Neera in cities and towns
Case Study #1 Neera Neera is the sweet, white-colored sap tapped from the coconut
tree. Health drink, rich in sugars, minerals and vitamins. Low glycemic index (GI is 35), an indicator of the extent of
sugar absorbed into the blood. Abundant source of minerals, 17 amino acids, Vitamin C etc raw material for many value-added products such as palm
syrup, palm jaggery and palm sugar which have high domestic and international demand owing to their high nutritional values.
A coconut palm yields on average two liters of neera daily, which may go even up to 4.5 to 5 liters based on the health of the tree.
Neera is an unfermented drink which does not contain alcohol. But on fermentation, neera becomes toddy.Ph Value 3.9 - 4.7
Sugar 14.4Citric Acid 0.60Alcohol 0Iron in mg 0.15Phosphorus 7.59Ascorbic Acid 16.30Protein 0.23 - 0.32
Case Study #2 Goan Feni Distilled directly from fresh juice without blending of spirits
In 2009, feni became the first and only Indian beverage to have obtain the GI (Geographical Indicator) status
It has gone from being predominantly the liquor of choice for the lower classes to a famous drink that tourists are keen to try out.
Similar to that of Scotch Whisky (originated in Scotland)
Feni is generally sold unbranded to retailers and consumers, but some brands have emerged owing to private concern. Around three-fourths of the distillers sell their produce to bars directly, and bottlers direct their sales through whole sellers.
Feni-making industry used to be largely unorganized, scattered, and family-owned.
IMFL (Indian-made Foreign Liquor) crowding out feni owing to its superior, more organized market structure and widespread marketing.
Case Study #3 Amrut• Amrut Distilleries was set up in 1948 ; first Indian single malt
brand in 2004• Cracking luxury market
• In Glasgow's famous Pot Still whisky pub, Amrut was given to a group of connoisseurs, without telling them where it was from. Each person named a different region of Scotland as the likely place of origin, but they were unanimous in their appreciation.
• Amrut has ten variants in its single malt portfolio and it sells in 22 countries across the world
• Target segment - luxury whisky market in Europe
Amrut speciality :• Unlike other Indian whiskies that used
molasses, Amrut was using barley. • Bangalore’s climate is much warmer
than frigid Scotland, which meant a higher rate of evaporation
• But because the maturation was accelerated it meant that one year of maturing in India would be equal to three in Scotland
Brand building activities• consumer tastings in the form of
prominent whisky exhibitions and tutored tastings across the world and endorsements -
• Amrut Fusion Single Malt, ranked by prominent whisky expert Jim Murray in the 2010 edition of the Whisky Bible.
• Whisky Advocate magazine has awarded back-to-back World Whisky Awards to Amrut Fusion and Amrut Two Continents.
Product Concept | Product & Competitive FrameworkProduct#1 Kallu (Light Alcohol Serving)
• Alcohol content ~8%• Served in long cylindrical bottles – White liquid• Competing against Beers(Indian & Foreign)• Served in All Hotel/Motel chains, House boats and shacks
around tourist spots – Kerala and primarily south India during introductory phase
• Promoted along with Kerala Cuisine • SKU – Bottle – 650 & 330 mL, Can – 500 mL
Product#2 Viridio (Strong Alcohol Serving)
• Alcohol content ~42.8%(Industrial Standard)• Served in wide bottomed bottles – Green liquid• Competing against IMFL(Whiskey)• Served across all premium beverage outlets, clubs and
bars across the country• Premium packaging• SKU – 750 mL glass case
Product Concept | Target AudienceProduct#1 Kallu (Light Alcohol Serving)
• Legal Drinking Population with emphasis on 22-40 segment
• People curious/interested in Traditional Kallu, but disinterested in travelling to a traditional shack (toddy shop) to try the same
• Tourists/Travellers coming to Kerala
Product#2 Viridio (Strong Alcohol Serving)
• Legal Drinking Population with emphasis on 30+ segment• Achievers Club/Social societies and Corporate events• Club membership /Social drinking occasions• Gift for old memories/nostalgia
Product Concept | PositioningProduct#1 Kallu (Light Alcohol Serving)
• Premium beverage alternative for beer• Healthy and strong; tastes better• Connect with nature: beaches & backwaters - Coconut• Social drinking icon: youthful and stylish• Family acceptance-”drink to be shared with your family”
Product#2 Viridio (Strong Alcohol Serving)
• Status symbol and epitome of power• Strong serving for the elite• Macho image of the tough guy
Product Concept | Price & PlaceProduct#1 Kallu (Light Alcohol Serving) Product#2 Viridio (Strong Alcohol Serving)
SKU Price Available in
650 Ml. 200 Bars,Beverage Outlets, Clubs, Shacks, Pubs
330 Ml. 120
500 Ml. 175 Modern Retail/Speciality Chains
SKU Price Available in
750 Ml. 2500 Premium Bars, Clubs, Resorts etc.
Masters Choice(Pack of three blends)
6500
Product Concept | Promotion Strategy | Kallu
Phase 2 : Building relevance
Phase 3 : Awareness & Loyalty
Phase 1 : Building a base
• Drive relevance through product ads in select lifestyle channels and strategic placements in movies and serials
• Billboards at select strategic locations with maximum exposure to TG
• Social Media campaigns with hashtags and videos involving youth
• Relevant PR activities and sponsorship programmes-cultural nights and parties
• Music dance food event ‘Kult-night’ in Beaches, New-year eve sponsorship
• Tie-up with restaurants to launch “Come-Quick-Drink-Eat” campaign-engage the TG to use product
• Treasure hunt in Kerala, where clues are in blogs, twitter and fb page of company
• Tie up with Kerala tourism in order to get reach through tourist spot hotels and resorts throughout Kerala
• Hotel/Hospitality chains collaboration for exclusive usage
• Vending machines for Cans in select malls
• Welcome drink for foreigners
• Youth focussed posters and magazine ads.
Product Concept | Promotion Strategy | Viridio
Phase 2 : Building relevance
Phase 3 : Awareness & Loyalty
Phase 1 : Building a base
• Business and corporate exclusive partnerships
• Social Media campaigns
• Foreign market entry by collaborating with Airline partners and hospitality chains
• Hall of Fame Award Series
• Sponsoring big events
• CSR activities to build brand reputation and goodwill
• Music show in TV & Youtube – Nirvana•a combination of coke studio & Dewarists•Promoting Indian Music: Indian folk, Classical Indian
• Association with select premium resorts, clubs and 5 star hotels across India
• Advertisements in select lifestyle magazines
• Campaign involving a senior celebrity explaining his journey to success
• Sponsorship of Shows involving interactions with successful personalities
Future Impact
Social Impact: • Employment Opportunities to receding sector of
coconut planters, toddy tappers• 1% Coconut plantation Kerala create 1 Lakh
job opportunities
• Woman Empowerment: Job opportunities in distilleries (exploiting traditional expertise)
Economic Impact: • Employment Opportunities to receding sector of coconut
planters, toddy tappers• 1% Coconut plantation Kerala create 1 Lakh job
opportunities
• Positive impact on Kerala tourism: with current ban on liquor, Kallu can be the next best choice for tourists
Cultural Impact: • Authentic alcohol drink of Kerala gets a national and
thereafter international exposure
• Rising image of Toddy, Indian made• • Positive impact on Indian food: being served along, gives
‘The Indian Feel’
References• http://
www.newindianexpress.com/states/andhra_pradesh/World-Coconut-Day-Celebrations-Today/2015/09/02/article3005688.ece
• http://www.amrutdistilleries.com/validated/pages/aismw.html• http://www.coconutboard.nic.in/• ccs.in/internship_papers/2012/261_feni-industry_raunaq-sahu.pdf• http://www.futuremarketinsights.com/reports/indian-alcohol-market• http://
www.thehindu.com/news/national/andhra-pradesh/kerala-backs-liquor-ban/article7156166.ece