United Spirits Ltd (USL), a group company of Britan’s Diageo Plc, is the largest Indian spirits company involved in the manufacture, sale and distribution of beverage alcohol. USL produces and sells around 120 million cases of Scotch whisky, IMFL whisky, brandy, rum, vodka, gin and wine. It has 88 manufacturing facilities across 23 states in India.
Key Facts:
– USL is the market leader in the spirits category with 40% market share
– Diageo is the global giant in beverage alcohol
– USL’s portfolio includes brands such as McDowell’s No.1, Royal Challenge, Signature and Antiquity
– USL imports, manufactures and sells Diageo’s iconic brands such as Johnnie Walker, VAT 69, Black & White, Smirnoff and Ciroc in India
– USL enjoys strong brands across categories and price points
– USL operates in three segments such as popular, prestige & above and super premium
– The popular segment includes brands like McDowell’s Brandy and Rum, Bagpiper, Old Tavern and Director’s Special Whiskey
– The prestige & above segment includes brands like McDowell’s No.1 Whisky, Royal Challenge, Signature, Antiquity and Black Dog
– The super premium segment includes brands like Johnnie Walker, VAT 69, Black & White and Smirnoff
– 49% of its revenue comes from popular segment, and the remaining 51% comes from prestige and super premium
– USL has 4 brands that sell more than 10 million cases annually
– USL has 14 brands that sell more than a million cases each year
– USL’s top 21 brands have grown at a CAGR of 8% in the past 5 years
– USL exports its brands to 37 countries across the globe
– USL has a strong distribution network of 81,000 outlets across India
– USL is a major contributor to state excise revenues with a contribution of over Rs 35,000 crores annually
– South India prefers Brandy & Rum whereas North India prefers Whisky
– USL is moving towards a franchise based model similar to Pernod Ricard (PR)
– USL is focusing on more profitable premium and super premium segment
Management:
– Mr. Anand Kripalu, MD & CEO of USL, has a Bachelor’s degree from IIT, Chennai and an MBA from IIM, Kolkata, and has completed the Advanced Management Program from Wharton Business School. He was formerly president of Mondelez and MD of Cadbury India. He worked at HUL for 22 years. Mr. Anand is leading USL’s transformational journey
– Mr. Mahendra Kumar Sharma, Chairman of USL, has completed the Advanced Management Program at the Harvard Business School. He worked at HUL for 33 years. He is on the board of reputed companies such as Wipro, Asian Paints, Blue Star and ICICI Bank also member of the Executive Board of the Indian School of Business
– Diageo is bringing in better processes, better control and better corporate governance
– Able and honest management
Investors:
– Diageo Plc holds close to 55% of the company
– FIIs hold close to 23.7% of the company
– Mutual Funds hold close to 5.3% of the company
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