Emperador sets sights on mid-market

MANILA, Philippines - The brandy making unit of tycoon Andrew L. Tan’s conglomerate Alliance Global Group Inc. is tapping into the emerging middle income market for its domestic expansion.

Emperador Inc. aims to become a strong player in the middle income segment in the medium term as it boosts its presence globally, an executive said.

“We believe there is organic growth for Emperador brandy, higher than the industry growth of six percent,” Emperador president Winston S. Co said during a corporate briefing organized by COL Financial Group Inc.

Emperador plans to capture the open space, which is the growing middle class, Co said.

“Four to five years from now, this middle class will be 10 percent of the spirits industry,” Co said, adding that this translates to seven to eight million cases in the medium term.

The listed firm earlier launched Emperador Deluxe, priced at roughly P150 per bottle, for the middle income market. It is also Emperador’s answer to imports.

To date, one million cases of liquor catering to the middle income segment are shipped into the Philippines, not enough to meet the local demand, Co said.

“Who are the players here [in the middle income market]? The answer is none. We are the first,” Co said. Emperador targets to corner 50 to 60 percent of the middle income market in the next four to five years.

As of July, Emperador controlled 96 percent of the local brandy market and 48 percent of the total spirits segment, Co said.

Emperador targets to double its sales volume in the next five years as it intends to corner a third of the global brandy market. The liquor maker sold 31 million cases of brandy last year.

Late last month, foreign unit Emperador International Ltd. acquired another 409 hectares of vineyard land in Madrid, Spain, boosting its vineyard property to nearly 1,000 hectares.

Co said the acquisition is part of the company’s backward integration program, allowing Emperador to control grape production, aging and bottling in Spain.

“Not only will we have our secure source of materials, at the same time it could improve costs in the future,” Co said.

In August, Emperador committed to invest P5.8 billion in Spain as part of its plan to become a significant global brand. It earlier acquired 100 percent of Spanish brandy maker Bodega San Bruno, including the San Bruno trademark that has been registered since 1942.

The world’s top brandy maker liquor maker Emperador raised P16.2 billion through a private share sale in September to bankroll its international unit’s expansion.

Emperador produces and sells Emperador, Generoso and Emperador Light brandies and a line of flavored alcoholic beverages called The Bar.