UNITED SPIRITS LIMITED

USL was earlier McDowell and Company Limited. Later it was called United Spirits Limited
(USL) is the Rs. 5500 spirits arm of multi-billion dollar UB Group is the largest spirits company
in India and second largest spirit company in the world. Whyte & Mackay and Bouvet Ladubay
are now 100% subsidiaries of USL, the company also has 20 millionaire brands (selling more
than a million cases a year) in its portfolio. It also enjoys a strong 59% market share for its first
line brands in India. United Spirits' brands have won the most prestigious awards for flavor,
ranging from Mondial to International Wine and Spirit Competition (IWSC) to International
Taste & Quality Institute (ITQI); more than 108 awards & certificates.

MICRO ENVIRONMENTAL FACTORS:

Competitors Direct competitors like: USL has managed to stay

 Radico khaitan
 Balaji distilleries
 Globus spirits
 Khoday india
 GM breweries
 Indage vintners
 Som distilleries
Indirect Competition:
 :Feni in Goa,Yu in
Manipur,Sikkimese
Tongba and Rajasthani
Liquor- Kesar kasturi,
Asha and Jagmohan

Suppliers Backward integrated
Consumers
ahead of its competitors by
heavily investing in R&D
which enables it to introduce
new brands rapidly. It has
been present in India for many
decades which give it an
advantage of strong brand
loyalty and also a strong brand
image
The group believes in
backward integration of their
manufacturing cycle. It has
allocated sections that cater to
different, levels in the value
chain. it leads to cost
effectiveness
USL’s USP has been its strong
brand loyalty.
 PRODUCT PRICE PLACE PROMOTION
PREMIUM BRANDS INR -1540 TO It has established As alcohol
:SCOTCH & WHISKY- 840000 manufacturing and companies are
DALMORE, JURA, WHYTE bottling plants in not allowed to
& MACKAY, BLACK DOG every state of promote their
WINES- BOUVET India. brands directly
LADUBAY, FOUR SEASONS due to legal
USL has restrictions the
established a ---USL group
VODKA- PINKY VODKA INR 2585 robust distribution used
network covering -kingfisher
the whole country mineral water
-kingfisher
MID RANGE PRODUCTS soda and
WHISKY- ANTIQUITY, BELOW INR -Mc dowell’s
SIGNATURE,ROYAL 1000 mineral water.
CHALLENGE,
McDowell’sNO1,BAGPPIPER -Smirnoff and
, DIRECTOR’S SPECIAL, Antiquity
HAYWARD, DSP BLACK music cassettes
and cd’s are
RUM- CELEBRATION RUM, INR 300 TO used for
OLD CASK RUM, OLD promotion.
ADVENTURE RUM
-kingfisher
VODKA- ROMANOV,WHITE INR 500 TO 700 yearly
MISCHIEF, BLUE RIBAND calendars

-it bought the

Royal
challengers
Bangalore team
in IPL.

- it also owns
the F1, FORCE
INDIA team.

MARKETING MIX:
 Demographic Economic Socio-cultural Technological Political Natural
legal
TARGET -shift in -Preference for -Agriculture
SEGMENT- expenditure local or -It came up -Taxes volatility in
-The ageing pattern traditional with first pre- imposed on term of
population, -higher liquor mixed gin, first alcoholic ingredients
-Young disposable -A change in single malt beverages used.
population income lifestyle has manufactured in are very -Increase in oil
(70% of prestige -The ongoing been witnessed Asia and the high. prices.
and 50% of economic slump with Huge first diet -factors
premium has led to a shift spending on versions of like IMPACTS
customers are in from on premise food, drink, whisky variants Custom -Increase in
age group of 21- to off premise entertainment having exotic duty production
24yrs) consumption as and travel. flavors of lime Oil prices cost.
- 500 Mn are off premise -They are & ginger, new Labor
currently of legal consumption has targeting Indian concept drink reforms
drinking age in proved more communities Rum N Fizz Raw
India. And, about economical. living abroad. and vodka in material
600mn Indian’s India. prices and
are currently IMPACTS IMPACTS -It used Tetra various
below legal -Disposable -Preference for packs in the governmen
drinking age and income is traditional spirits industry t policies.
100mn will come predicted to liquor leads to in India for -The ban
of that age over increase, which indirect packaging on alcohol
next 3-4years. might lead to competition - USL scientists
advertising
increase in use cutting
edge, -Each state
IMPACTS alcohol
-As 500mn consumption. sophisticated has its own
people are -Company can instruments like excise &
currently of legal follow premium GC, HPLC and tax
drinking age, the pricing for its Spectrophotome structures ,
company has products. ters for highly
levies &
addressable Consumers are sensitive &
market size to aggressively critical quality regulations
analysis regarding
cater to. willing to pay
premium for licensing
higher quality IMPACTS fees and
brands. -Better and labeling
innovative requiremen
packaging.
ts
-Competitive
edge over IMPACTS
others due to -Low
different and penetration
innovative of foreign
 products liquor
variants. brands in
India due
to stringent
governmen
t rules.
-Intense
competitio
n from
local
players due
to varied
state taxes.

SHIFTS :

 Going from local to global ie Global and Local both.

 USL shifted its focus from India to set its pragmatically calibrated Global ambitions.
 USL has a global footprint with exports to over 37 countries which depicts its sizeable
presence globally leading to the fulfillment of the company's mission. India accounts for
nearly 9% of the global spirits marketing by volume and for 8.9% of the Asia-Pacific.
 USL used acquisitions to enter in to the global markets.

History of acquisitions undertaken by the company in India before going global.

 McDowell & Co. Ltd.(1951)

 Phipson Distillery Limited (1963 – national presence)
 Herbertsons limited (1973)
 Triumph Distilleries
 Vinters Private limited
 B-aramati Grape industries Limited
 United Distillers India Limited

Acquisitions post the company went global from local.

 Liquidity Inc. (Specialty vodkas – Pinky vodkas)

 In 2007, USL announced the all-cash acquisition of scotch whisky maker Whyte & Mackay
for approximately Rs 6000 Crore .This gave USL access to the key overseas markets and access
to“scotch” inventory.
 June 2005 – UB Group acquired majority stake in Shaw Wallace & Co(scotch company)
Whisky company. And Shaw Wallace Distilleries Limited in 2007 – helped secure supply and
reduce cost along with improving the margins significantly.
 Bouvet Ladubay (2006 – wine business entry which is France based co.)
 UB group consolidated its spirits business by bringing the business of McDowell & Co,
Herbertsons, Shaw Wallace & Triumph Distillers into USL fold.
 Acquired by USL in May 2007

From aiming for more market share to aiming for more share on each customer wallet:
USL strategized on ” Premiumization” in its products portfolio. Growth of the same is as shown
:

STRATEGY 2005-2008:

USL used a strategy to make this shift from Primarily focusing on volume to Primarily focusing
on top-line products and profitability.
USL build a comprehensive product portfolio ,by transcending all distinct price points across
premium segments. It Extended Whyte & Mackay brands in India. W&M , the 4th largest scotch
whisky company in the world ,was acquired mainly to exploit the rapidly growing India
opportunity for Scotch, especially at the premium end and to secure long term supply of critical
raw materials required for premium brands.

A range of Shaw Wallace brands bottled in Original French packages include red, white and
sparkling wines, and Golden Mist - a range of red and port wines for the discerning wine
conscious Indian consumer.USL banked on relatively recession-proof feature of alcohol industry.

IMPACTS of strategies:
Post take over of W&M, Scotch prices further hardened by about 50%.
In 2008, USL fastest growing segments included Premium Vodka 50%, Super Premium Whisky
50% and Premium Scotch 75% which were sluggish 3 years back. Instead of “trading down” ,
consumers are “trading up” to premium products due to increased spending power and growth in
young drinkers.

Contribution of Scotch, Premium & Prestige categories for USL as a % of total sales moved
from 26.1% (FY06) to 35.7% (FY09) and expected to rise to 41.6% by 2012.

USL demonstrated strong top-line growth in recession.