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Diageo’s India unit eyes high-end spirits to reverse market share loss

United Spirits Ltd will scale back its roster of more than 150 brands and focus on the faster-growing top end, hoping to bolster its fortunes in a market dominated by cheaper, local names.

Anand Kripalu, chief executive of the unit of Britain’s Diageo Plc, said the maker of Johnnie Walker whisky expects growth in top-end spirits to outpace the mass market over the next few years, as a growing class of wealthy young professionals demands better quality.

It expects to focus its main marketing and promotion efforts on around 15 top brands and will de-emphasise or consolidate others.

Whisky-swigging India is now a battleground for global drinks makers, as groups like Diageo and rival Pernod Ricard SA tap emerging markets to offset sluggish growth in the developed world.

It is now Diageo’s second-largest market by sales.

“Awareness, certainly, for premium brands is going up and affordability is going up,” Mr Kripalu told Reuters.

“We are focussing on select brands, which we believe are the critical ones, big drivers of growth,” he said, adding that only those brands would receive strategic investment.

India’s alcoholic beverages market remains small compared with other large economies such as China and the United States. But drinks makers are betting on rapid urbanisation, a young population and a fast-growing middle class.

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