In a country which is among the fastest-growing markets for liquor, cashing in on that trend of rising consumption is India's newest billionaire who is a liquor baron.
India's newest billionaire is 80-year-old liquor baron Lalit Khaitan. He is the chairman of the $380 million (revenue) Delhi-based Radico Khaitan, best known for beverages such as 8 PM whisky, Old Admiral brandy, Magic Moments vodka and Rampur single malt, distilled in the foothills of the Himalayas, as per Forbes.
Shares of the publicly traded alcohol company Radico have jumped 60% this year on rising sales and with the launch of new drinks such as Happiness in a Bottle gin. This propelled Khaitan into the three-comma club with an estimated net worth of $1 billion based on his 40% stake in the company.?According to Lalit Khaitan, his father was a?teetotaler?throughout his life, and even Khaitan himself had never tasted alcohol until his father bought the distillery. Khaitan inherited what was then a small liquor business in 1995 from his late father G.N.Khaitan, who in turn had bought the erstwhile Rampur Distillery and Chemical Company in the 1970s.?
Analysts say that Radico Khaitan¡¯s long-term strategy of expanding its basket of premium brands is paying off. ¡°With more than 15 new brand launches in the past 15 years, the company has successfully built a strong and growing premium product portfolio driven by consumer preferences,¡± as per a December research report by Mumbai-based Sharekhan, the Indian retail brokerage unit of France¡¯s BNP Paribas.
Indians are consuming more expensive alcoholic beverages, hence, the premium segment now accounts for a third of total sales volumes, up from 26% in 2018. Today, Radico Khaitan is one of the largest makers of what¡¯s called Indian Made Foreign Liquor (IMFL) and gets 80% of its revenue from that segment.
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Khaitan¡¯s 80-year-old company, which began in 1943, started off as a bottler and went on to make bulk alcohol before latching onto branded beverages in 1997 when Khaitan¡¯s marketing-savvy son Abhishek joined the business. The industry is even more frothy today. According to IWSR, a London-based data provider, alcohol volumes in India will grow at a compounded rate of 4% between 2022 and 2027, four times higher than the global average. As per the Forbes report, sales of alcoholic beverages in India are projected to touch $64 billion by 2027, up from $52 billion in 2021, according to a November report from the International Spirits and Wines Association of India, a Gurgaon-based trade body. This is because of increasing urbanisation and a rising working population.
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While Radico Khaitan is well-positioned to benefit, it has to contend with a slew of competitors. The biggest competitor is United Spirits, a listed subsidiary of Diageo, which was once controlled by flamboyant liquor tycoon and former billionaire Vijay Mallya, who¡¯s now a fugitive in London. Others include Mumbai-based Allied Blenders & Distillers, maker of the popular Officer¡¯s Choice whisky, which is poised for a public listing, and niche producers such as Goa-based Stilldistilling Spirits India, manufacturer of Maka Zai rum and Third Eye Distillery Holdings, which makes Stranger & Sons gin. This week Coca Cola India made a splash by introducing Lemon-Dou, a concoction of distilled liquor comparable to brandy or vodka.
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