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Diageo India enters ready-to-drink market with Smirnoff Ice, taking on Bacardi's Breezer in a nascent segment

Our read

Diageo India's Smirnoff Ice is likely to grow slowly state by state rather than overtake Breezer quickly, because excise rates and distribution, not demand, set the pace.

For operators

Diageo India's Smirnoff Ice launch (4% and 8% strengths, peach and jamun flavours) puts a second big player against Bacardi's Breezer, so retailers and distributors should expect new shelf and cooler-space competition while state excise rates and distribution gaps limit how fast the segment scales.

Watch

Smirnoff Ice listings appearing in more states, or a second flavour or pack launch

Ask next

What else has United Spirits launched this year?

The report

Diageo India launched Smirnoff Ice in 4% and 8% alcohol strengths, with peach and jamun flavours, entering India's ready-to-drink market against Bacardi's Breezer. Smirnoff RTD is growing 12% globally, but state excise rates and distribution remain challenges.

Smirnoff RTD is growing faster globally than the overall RTD category
  • Smirnoff RTD global growth rate12%
  • Global RTD category growth rate10%
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Reported figures

From the report. Source details below

Global RTD growth rate: 10%

What to track next

  • A state announcing a separate or lower excise rate for low-alcohol RTD drinks
  • Bacardi launching new Breezer flavours or cutting prices in response
  • Diageo India management commentary on RTD in quarterly results, including any volume or share figure
  • Retail and bar reports of Smirnoff Ice reorders, or of stock gaps and delisting

Likely next moves

Our read of what comes next — analysis, not reported by the source.

  • Diageo India is likely to widen Smirnoff Ice state by state, starting with markets where excise treatment makes RTD pricing workable, rather than launching nationally.
  • Bacardi may defend Breezer with new flavours, promotions or tighter trade terms as a second large brand enters its segment.
  • Diageo India is likely to lean on the global Smirnoff brand and local flavours such as jamun to draw younger drinkers, with the 4% and 8% strengths used to test price and occasion fit.
  • State excise authorities are likely to keep RTD in existing beer or spirits slabs for now, and RTD-specific rates will probably come only after volumes grow.
  • Expect Diageo India to avoid public volume or share targets for RTD until it has shown repeat purchase in its first markets.

The source

Source Read the source at ET Small Business

Filed

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