Diageo expects ‘exponential’ India premium vodka sales growth

Diageo Plc (DGE), the maker of Johnnie Walker scotch and Smirnoff vodka, expects an “exponential” jump in sales of its premium vodkas in India this year, as rising incomes encourage consumption.

“Ultra premium vodka is growing at exponential rates in India,” Mark Barnard, Diageo’s chief commercial officer for Asia-Pacific, said in New Delhi today. “The category will grow at about 35 percent for the next five years and we plan to grow about 55 percent, outstripping category growth.”

Vodka sales in India may expand by 12 percent between 2009 and 2015, helping Asia’s third-biggest economy overtake both Germany and the U.K. in consumption of the spirit, according to the London-based International Wine & Spirit Research. Salaries in the world’s most populous nation after China will grow an average 12.9 percent this year, the fastest in Asia, according to a survey by Aon Hewitt LLC, boosting disposable incomes.

“We see consumers, with more wealth being created in Asia, aspiring for more international premium brands,” said Gilbert Ghostine, president of Asia Pacific operations at the London- based company. Consumers in the region are upgrading from local spirits, he said.

Diageo, the world’s largest distiller, expects sales in India to rise by more than 30 percent annually for the next three to five years, Ghostine said.

“We strongly believe in the potential of the Indian market,” he said. “We are expanding our distribution footprint and are also looking at introducing new brands.”

India will overtake Russia to be the world’s second-largest spirits market in 2013, IWSR said in November.

Diageo aims to double revenue from the Asia Pacific to 20 percent by 2015, Ghostine said. The region has contributed an average 11 percent to the distiller’s sales for the last five years, according to data compiled by Bloomberg.