Luxury spirits company Moët Hennessy has been present in India since 2001 and in October, it will celebrate the 5th anniversary of the local variant of Chandon (sparkling wine) produced at its Nashik plant. Apart from Chandon, the company's brand portfolio in India includes Dom Pérignon, Glenmorangie, Ardbeg, Belvedere, Moët Chandon (champagne), and Hennessy. Fortune India spoke to Laurent Morel, president and regional director Southeast Asia, Pacific and Japan, Moët Hennessy, about Chandon and the growing spirits business and emerging trends in India. Edited excerpts:
You entered India in 2001. How has the experience been so far?
India has always been very different originally for Moët Hennessy as most of the Asian market has been built on Hennessy first and foremost. In the Chinese and even the Japanese markets, 25 years ago, it was all about Hennessy at that time. When we became serious about India about 20 years ago, it was obvious that Hennessey would not be the only focus. We also had a vision that we should and could produce our sparkling Chandon in India. At that time in Asia, we were only producing it in Australia, and not even in China.
The Indian taste is a lot more for whiskey, so we are pushing a lot more of Glenmorangie and Ardbeg, where we see a lot of potential. Chandon is our priority and the vodka brand, Belvedere, is also growing faster than the category. It's a very different game as compared to Japan, China and Southeast Asian market.
How has the Indian market evolved and what are the emerging trends?
The market is shifting. We witnessed a lot of growth though we started with a small base in India. At the same time we see a shift toward premiumisation in all categories; the premium segment is growing faster than others..... Also, there is a global trend of drinking less but better. Millennials are more health conscious and want a different experience. They don’t want to drink the same drinks as their fathers. So, you see some new brands have emerged in 5 or 10 years.
There is another feature—the level of taxation; it is one of the highest in the world and different from other Asian markets, including China, where the tax is very low, and Hong Kong, where there is no tax on wine and champagne. That (the higher tax rate) has somehow put India into a specific corner of the industry. Big players are going into local production.
Chandon is celebrating its 5th anniversary. Will we see more local variants of it?
Chandon India is our locally-produced sparkling wine. Currently, we have three different variants of it—Chandon Brut, Chandon Rosé, and Chandon Délice. We will continue to expand this brand here because we see a huge potential for it.
How would you like to capitalise on the rising cocktail culture in India?
Everywhere in the world we see millennials drinking cocktails. It was not the case say 20 years ago. Digital connection is bringing the millennials together. They have an aspiration to experience the same trends. The first thing is to have the right quality product, then is to bring the right kind of messaging with our partners—bartenders—and also training and education so that both our consumers and trade partners know what we are providing .
In the world of cocktails, you have two types. the generic cocktail, where you don't name the brand, and are mixed with carbonated drinks. They tend be cheap products. Then you have the premium cocktail—it's branded cocktail. For instance, it is Belvedere and a quality non-alcoholic drink. The hero is the brand. It is where we see us playing a role.
What are the challenges and peculiarities of working in India?
There are challenges like high import duty for our portfolio, though that doesn’t apply to Chandon. But with Chandon, the challenge is to maintain the quality with the right kind of grapes. As India is a big market, we have to adapt according to each state. From outside you may think it is one but each state is different—that is a challenge.
Every country has its own specificity. India being a tropical country, heat is another challenge. Quality has to be maintained even after bottling, as the champagne can even become undrinkable when exposed to heat and light.