Guest Article: Richa Panigrahi: It's going to be WAR; are you drunk enough?

The liquor industry is poised for a war of relevance. Brands need to reinvent themselves to remain pertinent.

They say the liquor industry isn't affected by recession. Last year's figures tell a different story. An industry which is used to growing in double digits saw only 8 per cent rise in sales in 2011-12. The major reason, of course, is the significant price hike in states including Maharashtra and West Bengal. The coming year doesn't look very good in terms of growth, either. According to the industry pundits, liquor demand is estimated to increase by less than 5 per cent. We can safely assume that we will see aggressive marketing efforts from all the brands, clubbed with many new launches this year to grab their share of the market. It will become imperative, more so today, to stand out, be different and BE RELEVANT.

To be fair, the liquor industry has evolved immensely over the last 10 years. From a seller's market to a buyer's market, the marketing has changed to cater to more distinct psychographics' groups rather than one single group which, well, just drank. It has grown and transitioned from price to value-led buying behaviour. And, the offerings within the category are now varied and significant.

Vodka has managed to carve a sizeable niche in the category, especially for the women drinkers in the country, another fast growing consumer base. It has managed to immerse and be relevant in today's discourse. Which Indian movie with urban setting doesn't have a celebration with vodka shots?

Rum and beer have successfully ensured their place as the recruiters for the category. Wine, too, is slowly entering the market as a celebratory drink with family and friends. Domestic wineries have grown by offering quality and consistent products coupled with marketing activities of tours and shows.

Brandy, on the other hand, still has a strong hold in rural and semi rural India, especially in the South.

All these liquor types have grown at an enviable rate and have eaten into the whiskey market. The Indian market traditionally has been whiskey-skewed, with whiskey commanding about 60 per cent of the sales pie. But it won't be long before the rest of them catch up. Whiskey grew 3 per cent as opposed to 12 per cent growth in Vodka last year. The players in the whiskey industry need to relook at themselves and ask the question - they sure have made it large but are they relevant still? And, for how long?

The market is no longer valid for products or brands who behave as if they are to the manor born. All brands need to reinvent themselves to remain relevant.

Today, more than half of India's population is under the age of 25, and at that age their heroes in films drink beers or take vodka shots.

In India, whiskey, whether it is through brand communication, product packaging or surrogate association, sticks to the traditional codes. Communication hasn't moved beyond the matured man's space and their experienced, achiever zone (except may be Imperial Blue, which has a witty take on the same). Packaging again sticks to an overt theme of masculinity, with crests and highlands, conservative cues of barrels and wheat. Surrogate sticks to lifestyle-led associations.

Where is the new? In a generation where everything is so fast paced and about immediate returns, the concept of nursing a glass and waiting for the "suroor" while getting philosophical is totally redundant. The young generation - did I mention that it is more than half of the population - wants to experiment - with their music, clothes and tastes in life. And, whiskey as a drink is not giving it to them. The drinking ritual itself is staid and unexciting. The taste variation is too subtle for them to appreciate or even fathom. Unfortunately, no brand is trying to address that.

The West, on the other hand, is already targeting to woo the new drinkers - especially men in their 20s and women overall - who find straight-ahead whiskey too harsh. Flavours are being launched - Dewaar's Highlander Honey, Jim Beam 's Honey and Red Stag (cherry) variants, and Jack Daniel's Tennessee Honey, to name a few - the innovation in the flavours are the direct result of success of flavoured vodka products.

We need to take a leaf out of the west's innovation or else there is a strong possibility that whiskey will take the tea route. India, which was the heartland of tea drinking till a few years back, slowly lost its position to coffee amongst the youth of India by refusing to cater to their mindset. The young no longer meet over a cup of chai; they prefer conversations over a cup of coffee. Domestic consumption of coffee is rising at about 5-6 per cent every year, while tea consumption is increasing only at about 2 per cent annually. A case of concern for the tea brands, which are now experimenting and modernising products, flavours, formats et al. This year is likely to see a burst of such innovation in this category.

The liquor industry will be going through the war of relevance in times to come.

Whiskey needs to change and innovate too, whether it likes or not, whether the purist object or not. Or else, like General Eric Shinseki, chief of staff, U. S. Army, once said, "If you don't like change, you're going to like irrelevance even less."

Richa Panigrahi is VP, marketing, DY Works. Her 15 year career track has taken her from architecture to brand planning, by way of retail design, visual merchandising & shopper marketing.