United Spirits Limited (USL), which is owned by British giant Diageo at present, is one of the largest liquor producers in India. The company’s past, business model and market capture trend have changed the Indian liquor industry. Not only the brand or sales figures, USL’s success revolves around strategic acquisitions, marketing expertise and sensing consumer mood. In this blog, we will examine how United Spirits has become the leader in the Indian liquor industry and where it is heade.
United Spirits: Beginnings and Growth
United Spirits Limited began its journey in the 1980s, when it first came into existence as a part of the United Breweries Group. Indian industrialist VJ Mallya was one of the group’s most well-known faces. The central line of business of USL was the manufacture and sale of whisky, rum, vodka, brandy and other spirits.
United Spirits in 2007 entered the top rank as one of the biggest spirits companies in the world and reached new heights.
Brand Portfolio and Market Position
USL boasts a few very popular brands under its portfolio:
- McDowell’s No. 1
- Royal Challenge
- Antiquity
- Bagpiper
- Signature
- Director’s Special
They are so well liked within the Indian market that they have something for nearly every tier of customer—bottom-of-the-line to high-end.
Besides this, the company also manufactures international brands, particularly post-acquisition of Diageo, when USL incorporated such renowned brands as Johnnie Walker, Smirnoff, Black Dog, Ciroc, etc. to its list of products.
Diageo Acquisition: A Game-Changing Change
In 2013, Diageo, the British drink behemoth, became United Spirits’ largest shareholder. The takeover was not merely a shift in ownership. It also infused world-class business ideas, enhanced marketing capabilities and a robust distribution network.
With Diageo at the helm, USL has upgraded the quality of its products, repositioned its brands more strategically and followed a premiumisation approach – which has resulted in higher profit margins.
Marketing Strategy and Branding Expertise
USL’s marketing and branding is one of its plus points. USL has been able to spread its brands far and wide – music festivals, sports sponsorships, film tie-ups.
McDowell’s No. 1 “Yari” campaign and particularly Royal Challenge’s “Bold Moves” campaign have influenced the younger generation immensely.
Social and Policy Challenges
The Indian alcohol industry has its share of social and legal issues. Alcohol prohibition in some states, imposition of heavy taxation, restrictions on advertising are big obstacles in the path of business. USL has, however, managed to overcome them by sticking to the norms through clever branding (like surrogate advertising).
Also, through CSR (Corporate Social Responsibility), the company engages in various social initiatives such as drinking water initiatives, health and education programs.
Dominance in the market and competition
While USL is number one in the Indian alcohol industry, it faces challenges from Radico Khaitan, Pernod Ricard (the creator of Blenders Pride and Royal Stag), and Allied Blenders & Distillers (most known for Officers Choice).
But USL is way ahead of competition in terms of its production capability, brand network and marketing skills.
Future directions
Premium spirits are gaining more and more interest with the urban middle class and upper class. Keeping pace with the demand, USL is expanding its investment in its premium and super-premium segments on a continuous basis.
The company is spearheading initiatives in future directions through digital marketing, e-commerce licenses (where legal), and cocktail culture.
Conclusion
United Spirits is not merely a business – it is a behemoth force driving the Indian alcoholic beverages market. With the powers of creative strategy, effective management, and a strong brand portfolio in its favor, USL has repeatedly demonstrated why it is the industry leader. The company will most likely continue to expand its presence in the Indian as well as global markets in the years to come.
