POTABLE ALCOHOL INDUSTRY - AIDA Indiaaidaindia.org/pdf/Delhi2018/Dr. Shovan...
Transcript of POTABLE ALCOHOL INDUSTRY - AIDA Indiaaidaindia.org/pdf/Delhi2018/Dr. Shovan...
POTABLE ALCOHOL INDUSTRY
CHALLENGES & WAY FORWARD FOR 21ST CENTURY
Dr. Shovan GanguliSr. Vice President Diageo India R&D
• Diageo Technical Capability
• Alcoholic Beverages Market
• Challenges Portable Alcohol Production
– Raw material
– Water
– Neutral Spirit Specifications
• Alcohol Congeners & Consumer
Experience
• Way Forward for 2021
IndiaOpportunity in Alcohol Industry
Content
DIAGEO’S BRAND TECHNICAL CENTRES
Diageo - 4 Main Brand Technical & 4 Satellite Hubs (Panama, SV, NR, Singapore)
International Supply Technical HQ, MenstrieScotch, formulated products(Dublin - Creams, Italy – Wines,Panama & Singapore)
Tech Dir. - Robert McElroy
Plainfield, IllinoisNorth America Technical CentreSpirits, Formulated Products, Creams
SVP – Pietro DiPilato
International SupplyTechnical, Panama
Tech Dir. - Robert McElroy
OpEx Beer Technical Centre, DublinBeer, Malt Drinks, fermentationAfrica spirits.
Tech Dir. – Paul Gallagher
International SupplyTechnical, SingaporeScotch, local and white spirits
Tech Dir. - Robert McElroy
USL Technical Centre, BangaloreMainstream Spirits, Whisky
Tech Dir. – Shovan Ganguli
DIAGEO INNOVATION R&D CENTRESInnovation R&D partner with Supply Technical to bring innovations to life
Woodside, Herts England
Norwalk, Connecticut
Sydney
Innovation R&D folks work in close partnership with market-facing Supply Project Managers
Hong Kong
Bangalore, India
ALCOHOLIC BEVERAGES MARKET
ALCOHOLIC BEVERAGES MARKET POTENTIAL INDIA
There is not 1, but 3 distinct India TBA Growth
Potential Spirit
requirement by 2026 –Expected
1.7X@ 5% CAGR
~3 Bn to 5 Bn
~ +7%annual
LDA-New Entrants
~18 million/annum
Per capita Consumption
5X less
Market Potential Premiumization of IMFLPremium variants of core IMFL brands that mimic focus brands
Premium priced variants to give better sensorial experience and markers of aspiration to consumers Opening up the opportunity and new occasions
Meeting Global Specification of ENA to Globalize and Premiumization of core brand to win Emerging Market
India : Growth through premiumization ~15%Emerging Market : Additional ~40 Million Cases /Annum for IMFL
Emerging Market Potential for IMFL
Population Growth : >90% of 500m increase in LDA+ population coming from emerging markets over the next decade
Spirits Growth : - Aspirational Products - Headroom for formal spirits
growth, especially Africa
Income Growth: - Increase of 1 Billion consumers globally
earning >$5k p.a. in the next decade.
THE PROPORTION OF MC SUB-GROUPS VARY BY MARKET DEPENDING ON THE DEVELOPMENT STAGE
CHALLENGES
CHALLENGES FOR DISTILLERY
• Raw material availability
• Water Availability
• Spirit Quality
• Consumers satisfaction
• Effluent
5594 5490.6
4158.5
01000200030004000500060007000
FY-2015 FY-2016 FY-2017
Prod
uctio
n Vo
lum
e in
Tho
usan
d M
T
Year
Production Volume of Molasses
Source: www.statista.com
050
100150200250300350400
Rice Wheat Coarse Cereals Food Grains Sugar Cane
Prod
uctio
n in
Mill
ion
MT
Crops
Production of Major Crops
2013-14 2014-15 2015-16Source: Annual report 2016-17, Ministry of Agriculture and Farmers Welfare GOI
-Grain availability for ENA
production
- Water Stress in India - >100
million population live in
water stress area
- Climate change –C3 & C4
plants
NEUTRAL SPIRIT SPECIFICATIONS – INDIA V/S GLOBAL
ABV 96 %
Total Acidity 10 ppm
Esters Not Detected
N-Propanol 1 ppm
Methanol 2.5 ppm
Acetaldehyde 1 ppm
Di-acetyl 0.03 ppm
Grain
Molasses
ABV 96 %
Total Acidity 10 ppm
Esters Not Detected
N-Propanol 30 ppm
Methanol 100 ppm
Acetaldehyde 2 ppm
Di-acetyl 0.03 ppm
ABV 96 %
Total Acidity 10 ppm
Esters Not Detected
N-Propanol 5 ppm
Methanol 50 ppm (Earlier 500)
Acetaldehyde 2 ppm
Di-acetyl 0.03 ppm
India Global Diageo
More Stringent
CONSUMER PERCEPTION OF SPIRIT QUALITYpa
ram
eter
s
Aldehyde Level
Methanol Content
N- Propanol Content
Fusel Oil content
Harsh, raw characters in the
blend
Consumer Perception
Spirit Quality
Product Quality
Faster Oxidation due to which
less Blend Stability
Spiritynote, faster
Hangover and Toxic at higher
level
Faster Oxidation and more
pungent in sensory
Alcoholic harsher at higher level
Low top note and Faster
oxidation at higher level
Pungent, Harsher burning
sensation
Different profile, faster
oxidation
Human health
• Relatively more depressant than ethanol
• Metabolizes faster by ADH & ALDH
• Metabolizes slowly by ADH & ALDH
• Contributing to hangover
• Metabolizes by ADH & ALDH to formic acid which damages optic nerve causes blindness
• Contributing to hangover
• Increases DNA damage possibility -carcinogenic
Ove
rall,
hig
her d
istill
ery
cong
ener
s con
trib
utes
st
rong
ly in
han
gove
r
THE WAY FORWARD
THE WAY FORWARD
Challenge
Raw Material
Water
Spirit Quality
- New grains - Millets- Optimized process – High recovery grains- New Gen process for better Starch conversion
- High Gravity fermentation – 18-20% alcohol fermentation
- Water recycling- Use of Millets- Use of new distillation Technologies
- Right Fermentation & Distillation- Good yeast- Production as per demand – No Slob- Use of new Distillation technologies- Better utilities
Way Forward
Facts about crop wise water usages
- Sugarcane: 1157 Kg / 1 kg of Sugar- Rice: 2000 lit / 1 kg of rice grain
Millets: 200 Lit /1 kg of grain (Sorghum, Bajra , Finger Millets or Ragi)
RECOMMENDATION
Emerging Market Challenges : - Right spirit quality
- Technical in-capability to deliver the right cost and quality
- Raw material availability
- Global taste aspiration
Indian Distillers
- Meet the global specification
- Right cost by right and optimized process
- In-house capability to deliver right specs
- Capability for exploring alternate raw material for sustainability
- Adopting new technologies for water and carbon footprint reduction
- In House capability to monitor and control the global requirements – GC, Sensory
- Industry should join hands for better price and quality supply of ENA – Win-Win
situation for both (Distillers and IMFL producers)
How to unlock the global and local market potential ?
Bridge the Gap
USL Diageo Quality Standards for Global Supplies
GRMS (Global Risk Management Standard) – Integrated Standard based on - ISO 22000, ISO 18000, ISO 14000Applicable for both Bottlers and Distillers, for USL Diageo supplies
RECOMMENDATION
Sustainability:
- Alternate raw material from Arid region
- Stand with farmers
- Supply model for raw material
- Partnering with universities &
technology suppliers
- New gen yeast and enzymes
Example :
US Maize and Alcohol Model
Food Valley in Netherlands
CSR can unlock the potential !!!
Benefit to business
Benefit to society
High
HighLow
Partnering
THANK YOU