United Spirits plans energy drinks under Romanov Red brand

United Spirits Ltd (USL), the largest spirits company in the country, is firming up plans to launch non-alcoholic energy drinks under its Vodka brand — Romanov Red. Vijay Rekhi, president and managing director, USL, said if things go as planned, the energy beverages will hit the shelves in 4-6 months.

The Vijay Mallya-owned liquor company is looking to tap the energy drinks segment to extend its vodka brand. It has adopted a similar strategy for McDowell by launching soda and water under the whisky brand. “Energy drinks is an emerging segment and they are mixed in vodka. We do not want to leave that space unattended. As Romanov is a millionaire (million-dollar) brand, it can be extended with energy drinks,” said Rekhi.
USL’s Romanov Red energy drink would be pitted against Red Bull, Venom and others. An industry expert said that the energy drinks brand would gain from the extensive distribution network of USL. “It can be tied to the various liquor brands of USL and peddled through the same channel as theirs,” he said.

A couple of years back, the company had made an attempt to enter the ready-to-drink (RTD) segment. But the attempt failed and USL yanked its RTD brands off the shelves and shut the division. The company’s RTD brands were meant to take on Bacardi Breezer.

USL is also in the process of rationalising its luxury whisky brand Royal Mist. A senior company official confirmed that it is slowly being removed from shelves across the country.

In the first nine month of FY09, USL sold 66 million cases of alcoholic beverages. As per estimates by Harrish Zaveri and Gaurav Bhatia, analysts with Deutsche Bank, it will close the current fiscal with 88 million cases. In a March 19 report, they said the liquor company’s focus on volumes in lower segment may see some erosion in its realisation per case.

“The higher cost of molasses, and consequently spirits, is more than compensated by the benefits of lower packaging costs. We believe that USL continues to focus on volumes in the lower segment, which could negatively affect the growth in realisation per case,” they wrote in the report.