Experts tell Nikhil Kamath, pointing out that the liquor business moves slowly

Business MInutes

In his podcast, Nikhil Kamath discusses the challenges and slow-moving nature of building an alcohol brand in India. Even with Rs 10 crore in hand, entrepreneurs need patience to make any headway in this industry. Abhishek Khaitan, MD of Radico Khaitan, explains that building an alcohol brand in India requires patience and focusing on niche categories. 

To reach all-India, entrepreneurs need to have 30-40 units, while smaller amounts can be targeted into niche categories. The journey to get the first 10,000 consumers is the hardest, but once they do, millions follow. The most important aspect of the brand is payment, as it is the primary product that goes to a distributor, secondary product that goes to the retailer, and tertiary product that offtakes from the retailer. Khaitan acknowledges that alcohol is a different category than beer, and a capital of Rs 50 crore is necessary for success. 

Minakshi Singh, co-founder of SideCar, believes that the journey to set up an alcohol brand is extremely long and would prefer a whiskey brand due to its profitability and longevity. Shuchir Suri, co-founder of Gin Explorer's Club, and Suraj Shenai, founder of Goa Brewing Co., agree that money is not the most important part of the process. Observing consumer behavior in supermarkets and bars can provide inspiration for creating unique products. 

Home-brewing kits can be used for as little as Rs 5,000, and online learning resources are available for learning about the product. Suri highlights that entrepreneurs can set up a brand with as little as Rs 30-50 lakh with a co-packer, but the order size is crucial. In the case of gin, entrepreneurs can start a brand initially with a co-packer with Rs 30-50 lakh, spending 10% of that on creating the brand and listing fees in every state.

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