My Vision Is To Create Iconic Brands That Connect With Consumers Across The Globe
Read this exclusive interview with Amit Dahanukar, Chairman and Managing Director of Tilaknagar Industries
Tilaknagar Industries Ltd. (TI) is a prominent player in the Indian alcoholic beverage industry. With a rich history dating back to 1933, the company has evolved into a leading Indian-Made Foreign Liquor (IMFL) producer. TI boasts a diverse brand portfolio, featuring renowned names like Mansion House and Courrier Napoleon brandies. In this exclusive interview, Amit Dahanukar, the Chairman and Managing Director of Tilaknagar Industries speaks about the resilience of the brand and his vision to make it a world-class brand.
As the Chairman and Managing Director of Tilaknagar Industries, you play a pivotal role in the company's strategic direction. Could you share the vision and key initiatives you have set for Tilaknagar Industries?
Tilaknagar Industries Ltd. (TI) has today emerged as a leading Indian-Made Foreign Liquor (IMFL) player. Our brand portfolio led by Mansion House and Courrier Napoleon brandies has made a substantial contribution to the company’s success and growth. We are now well-poised to not only maintain this momentum but give it a further thrust.
My vision therefore is to create iconic brands that connect with consumers across the globe.
At TI, we are passionate about brandy as a product category and aim to redefine the brandy space in India. With a steady focus on our core strengths and values, over the years, we have achieved a leadership position in the brandy category which is the second-largest IMFL category after whisky. Going forward, we will be looking at launching premium and innovative products not only in brandy but in other categories as well. In addition, we will continue to strengthen our position in current markets while we expand to newer geographies, with an aim to increase market share on the back of profitable growth as well as become net debt-free over the next few quarters.
In FY23, we achieved a 43 per cent year-on-year growth as against the IMFL industry growth of about 12 per cent. Our aim is to continue to grow faster than the overall IMFL industry in the years ahead.
Tilaknagar Industries has a rich history in the alcoholic beverage industry. How has the company evolved over the years, and what are the current trends and challenges you see in this industry?
Tilaknagar Industries was founded in 1933 as Maharashtra Sugar Mills Limited (MSM). In 1973, the company forayed into the alco-bev industry by relocating its non-sugar assets, establishing Tilaknagar Distilleries and Industries Limited. The two entities, MSM Limited and Tilaknagar Distilleries and Industries Limited were then merged in the year 1993 to form Tilaknagar Industries Ltd. Since its entry into the alco-bev space over 50 years back, the company has maintained a sharp focus on the brandy segment, with two of its brands being ‘Millionaire’ brands. Moreover, Mansion House Brandy is the fastest-growing brandy brand and the second-fastest-growing spirits brand globally. Additionally, Mansion House is the largest brandy brand in India.
Premiumization is definitely one of the most prominent trends that the alco-bev industry is presently witnessing. Tastes and preferences of consumers are constantly evolving which gives industry players an opportunity to offer unique and curated experiences through innovative product offerings. Consumers are becoming more experimental and aspirational which, in turn, has given a significant push to flavoured drinks and cocktail culture.
In so far as the challenges are concerned, the alco-bev industry is highly regulated and different taxation and distribution systems prevailing in different states make the business a bit challenging. In addition to this, pressures like inflationary headwinds do have an impact on the industry as a whole.
Your educational background includes a Master's degree in Engineering Management from Stanford University. How has this academic experience contributed to your leadership style and decision-making?
The academic experience at Stanford largely helped in my approach to problem-solving. It enhanced my capabilities to think out of the box and inculcated a deep sense of teamwork in me.
Collaborative decision-making and team-building are some of the key takeaways from my time at Stanford. At TI, what has worked the most for the revival of the organization is the convergence of diverse professional skills to address the macro challenges facing the company rather than adopt a compartmentalized approach to issues. Not only did this help us widen the resource bandwidth; it also created a much wider ownership of the organizational goals and objectives.
Sustainability and responsible business practices are increasingly important. How does Tilaknagar Industries incorporate these principles into its operations, especially in the context of the beverage industry?
In today’s business landscape, long-term organizational goals cannot be realised without embracing the ideology of sustainability. At TI, we are actively identifying and implementing strategic initiatives that will help create a wealth of values for our society, stakeholders, and the environment. For instance, we have considerably reduced usage of mono cartons from our packaging, across most product offerings. This is in line with our broader mission to reduce the waste generated at different levels during manufacturing and other activities. We are also exploring setting up a solar power generation setup.
The alcoholic beverage industry is highly competitive. What strategies does Tilaknagar Industries employ to maintain a competitive edge and continue to grow?
Tilakanagar Industries’ robust growth over the past few years can be attributed to the company’s persistent focus on its core strengths and values.
TI has emerged to be one of the leading players in the brandy category - the second-largest IMFL category. Along with maintaining a leadership position through its millionaire brands, Mansion House Brandy and Courrier Napoleon Brandy, the company has made aggressive efforts towards gaining market share in existing as well as new markets. In addition, premiumization and category-first innovations have continued to fuel our growth.
In FY23, we launched India’s first premium flavoured brandy i.e. Flandy. This ‘first of its kind’ product has received an encouraging response and is steadily growing.
We also unveiled the premium variant of Mansion House Brandy, namely Mansion House Reserve. This product has been introduced in Tamil Nadu in a segment worth 2 mn+ cases per year, and we are already seeing good momentum being built in the state on the back of this launch.
The above innovations and launches have been in line with our aim to open up the brandy category to a more experimental and aspirational audience.
In our endeavour to redefine the brandy category in India, we also unveiled the first integrated digital campaign for the Mansion House brand, titled ‘A Warm Welcome’. While celebrating genuine connections, inclusivity, and compassion, the campaign aims to establish clear category codes for the brandy category.
While brandy will continue to contribute predominantly to our growth over the next 18-24 months, we will also see some very interesting and innovative products being launched in other IMFL categories.
Tilaknagar Industries has been involved in various alliances and collaborations. Can you share some notable partnerships and their significance for the company?
Recently, Tilaknagar Industries announced an investment of Rs 9.75 crore in Spaceman Spirits Lab Private Limited (SSLPL), makers of premium Indian craft gin, Saṃsara. Samsara is one of the fastest-growing Indian craft gins. Post this investment, Tilaknagar Industries holds 10 per cent of the issued and paid-up share capital in SSLPL on a fully diluted basis.
This acquisition allows us to participate in the booming Indian craft spirits industry, a segment that has of late witnessed a sharp rise in popularity.
Prior to this, TI had also invested Rs 1 crore for a 19.50 per cent equity stake in Pune-based start-up, Incredible Spirits Private Limited (“ISPL”). ISPL is the maker of SWIGGER, India’s first Ready-to-Drink (RTD) Alcoholic Shots product which has recently been launched in Goa in four very interesting and unique flavours.
Could you tell us more about Tilaknagar Industries' product portfolio and its approach to meeting the diverse preferences of consumers?
The desire to experiment with premium products among consumers is evident. This has resulted in an upsurge in demand for flavoured drinks and the rise of cocktail culture. In line with these trends and after extensive market research, we have introduced a couple of innovations in the brandy category.
Tilaknagar Industries is a brandy-first company and offers a bouquet of premium brandy products across various price points. The company’s flagship brand, Mansion House Brandy has emerged as one of the fastest-growing brandy brands, globally. Under the Mansion House brand umbrella, we have launched India’s first premium flavoured brandy (Flandy) in three flavours - Orange, Cherry, and Peach, to begin with. We plan to introduce more flavours to our Flandy range. In addition, we also unveiled Mansion House Reserve French Style Brandy, the premium variant of Mansion House Brandy.
In FY23, our brand Courrier Napoleon Brandy became the company’s second millionaire brand, after Mansion House, with a strong 50 per cent growth, year-on-year.
As a leading IMFL player, TI continues to maintain a good presence in other categories like gin, and rum and through brands such as Blue Lagoon Gin, Madiraa Rum, and Mansion House Whisky.
Recently, the company also unveiled the all-new Blue Lagoon Gin and launched three variants with a complete branding refresh.
The beverage industry is subject to regulatory changes and consumer preferences. How does Tilaknagar Industries adapt to these shifts and stay agile in its operations?
Over the past few years, Tilaknagar Industries has been able to successfully overcome challenges and hurdles presented by the changing business environment.
Brandy, a popular drink in South India, contributes to 93 per cent of the company’s total volumes whereas 86 per cent of the sales come from this region.
TI has been able to achieve volume growth and expand margins predominantly on account of operating leverage as well as portfolio premiumisation.
As part of our continuous research, we are keenly monitoring the evolving trends which have helped us to stay a step ahead of consumer expectations. These initiatives have enabled us to curate innovative and premium product offerings which have been received well.
Quality and innovation are crucial in the beverage sector. What steps does Tilaknagar Industries take to ensure the quality of its products and drive innovation in its offerings?
We have instituted state-of-the-art quality assurance systems, mechanisms, and infrastructure at all our manufacturing facilities. This ensures our products remain unassailable in terms of quality and consistency.
In terms of innovation, we have already launched India’s first premium flavoured brandy (Flandy) under the Mansion House brand, a category-first innovation. As mentioned, we have also taken a stake in Swigger which has a unique proposition of a ready-to-drink (RTD) shot. These initiatives are a result of the continuous market research we undertake to map emerging trends.
Tilaknagar Industries has a strong presence in the Indian market. Are there any plans for expanding the company's reach globally or exploring new markets?
While international business contributes a small portion of the overall volumes of the company currently, we are actively working towards increasing the same. Given the strong brand equity that our products enjoy, we have a compelling value proposition in key international regions of the Middle East and South-East Asia. In addition, we have a strong pipeline of products in other categories for the international markets.
The COVID-19 pandemic significantly impacted the hospitality and beverage industries. How did Tilaknagar Industries navigate through these challenges, and what lessons were learned?
The COVID-19 pandemic brought down the overall demand for liquor due to restrictions placed across regions in India. However, it also increased at-home consumption which partly compensated for the fall in liquor sales at bars, restaurants, and hotels. COVID-19 also increased consumption of more premium products, with consumers up-trading on alcoholic brands. And this premiumisation trend has only continued.
In your leadership role, what are some of the core values and principles that guide your decision-making and the company's culture?
Passion, teamwork, collaboration, and resilience are the core values that are embedded in our work ethos. And these values have stood us in good stead for over nine decades.
What advice would you give to emerging professionals aspiring to become leaders in the beverage or manufacturing industry?
My advice to emerging industry professionals would be to keep their ear to the ground; be perceptive about the evolving consumer mindscape and stay a step ahead of the trends emerging in the marketplace.
As someone with a strong engineering and management background, how do you balance technical expertise with the demands of leading a diversified company?
Over a period of time, we have developed a substantial bank of resources in technical as well as managerial fields such as marketing, sales, and communication. We have structured our work in a way that allows a free interplay between these various specialisations so that the company continually comes out with winning ideas, products, and marketing strategies. At TI, my role is to catalyse this interplay of skills.
Looking into the future, what exciting developments or strategic directions can we expect from Tilaknagar Industries in the coming years?
The alco-bev industry in India has embarked upon an exciting phase of growth and innovation. The per capita consumption in the country continues to be significantly lower than the global average, offering a huge scope for growth. The emergence of a younger, aspirational, and experimental demographic profile in India bodes well for the industry.
Tilaknagar Industries is already the market leader in the brandy category. While retaining focus on this segment, we will simultaneously look to leverage our expertise in other categories as well. In the next four to five years, we expect our non-brandy portfolio to contribute approximately 20 per cent by volume.
The company will continue to actively tap into emerging trends and opportunities that will aid in driving profitability.
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