Restriction or responsibility: Diageo's Amrit Thomas on surrogate advertising

If you have ever pondered why a club soda or music CD is being advertised on television, then fret not because you are not alone. It might have taken you quite a while to realise the reason behind such ads – certain categories aren’t allowed to advertise and have to adopt a means called surrogate advertising.

While many alcobev companies have for long lobbied for lenient laws when it comes to advertising and marketing, the restrictions still continue. But Amrit Thomas, Chief Marketing Officer, Diageo India, feels these aren’t restrictions at all and is quite happy with how things are currently as far as the marketing norms for the alcobev category is concerned.

“We really don’t see these norms as restrictions. We have a code that we have created as an industry and an internal marketing code that we follow. So, we don’t see this as a restriction but we believe that this is absolutely the right way to be responsible and we want to be a responsible marketer. We are happy with where we are,” said Thomas.

Being a responsible brand is necessary, but so is marketing and being in the public eye. And although music CDs and mineral water and clubs sodas have been the go-to means of advertising for these brands, the tide is changing. Brands today are looking to create meaningful properties that will go a long way in not just claiming mind-share but also reflect the core values of the brand.

Pernod Ricard recently launched a YouTube channel Royal Stag Barrel Large Short Films, which has made a name for itself by showcasing some great short films. The short films don’t just give a platform for some good content but according to Raja Banerji, Assistant Vice-President, Marketing, Pernod Ricard India, also highlight the brand’s core philosophy.

McDowells’ No.1 Soda created quite an impact when it launched a song inspired by its tagline ‘Yeh No.1 Yaari Hai’ in the year 2014. Taking that success forward, McDowell’s has launched its new sonic asset, ‘No.1 Yaari Jam’. Through this new platform, the brand intends to take its association with music to the next level as it becomes a first-of-its-kind platform that will provide inspiration and platform for artists and bands from across India to join the brand on its journey to tell stories of Yaari through music.

Thomas believes that it is important for brands to think beyond the visual world and think of other senses if they want to stand out and not be become outdated.

“Every one of us, as consumers, receives 11 million bits of information every second and through all our senses we process only about 50 of them. That is a massive battle for attention. When we think of brand identity we are visually driven. Of course the world is visual and it is important to have a visual identity but brands for long have forgotten about the other senses. So, we took a step back and said that if we have to build their identity and equity in an increasingly cluttered world then we must build in other senses. Just like one has a visual brand world, one must also have a sonic brand world. Sounds are more closely associated with emotions and feelings and because of that, it aids in brand memorability (sic) and brand preference,” said Thomas.

McDowell’s ‘mogo’ or musical logo has been created by Rajeev Raja and BrandMusiq. BrandMusiq believes in creating identities for brands using sound and music, a concept still in its nascent stages in India.

The platform was launched with five Yaari soundtracks, in five different languages, shaped by ace music directors Salim and Sulaiman Merchant along with distinguished and renowned music artists from across India. The tracks have been produced by Qyuki Media and creatively supported by DDB Mudra.

McDowell’s will promote this platform and its content through a 360-degree marketing plan, including platforms such as Saavn, Gaana and iTunes.

According to Thomas, Diageo is the market leader in the spirits category in India, which is a sweet spot to be in right now considering the fact that 19 million new Indian consumers enter the legal drinking age each year and by 2027, the country is expected to have over one billion consumers in the category.

Calling premiumisation an intrinsic part of their strategy going forward, Thomas said, “We will continue to manage our power brand portfolio but will give a premiumisation leg to it. This is true not only for us but across categories. Every category is building up premiumisation ladder within the brand and across their brand portfolios.”

While India is leading in the whisky segment with approximately 48 per cent global volumes, the rum category has de-grown since 2012 by 1.4 per cent CAGR. As a part of boosting sales and growing the industry, Diageo has launched Captain Morgan rum to bring the international bestseller to India so that the Indian run segment premumises. The brand already has Celebration rum for the mass segment and luxury rum brands like Ron Zacapa sell as part of its reserve collection.

The premium and above segment is expected to grow at a CAGR of 14 per cent in 2016-21, whereas the prestige segment is estimated to grow at 12 per cent over the same period.

But despite the lucrative number of new customers entering the legal drinking age in the country and the fact that the market for beer in India is expected to grow at 7.5 per cent annually for the next five years, Diageo has no plans to enter the beer segment anytime soon. Bira, a two-year-old player in the category, is expecting to grow three-fold next year to be a Rs 450-500-crore brand.

It must, however, be noted that Diageo has paid roughly 1.8 billion pounds for a 55 per cent stake in United Spirits and had agreed to pay $75 million to Vijay Mallya to step down as chairman of United Spirits.

But in November this year, Diageo sued Vijay Mallya to recover the $40 million they paid him last year on the grounds that the king of good times had breached the $75-million deal they made with him. Kingfisher, one of the most famous beer brands in the country, is however with Heineken. The Dutch brewer bought the entire 3.21 per cent shares owned by United Spirits in United Breweries, which is the maker of the beer. Heineken paid a total of Rs 872 crore to acquire the shares in the brewery.

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