Bucking the trend: India’s promise as a beverage alcohol market

IWSR forecasts suggest a continued upward trajectory for India’s beverage alcohol market in 2024 and beyond.

Against a backdrop of 1% volume growth for global total beverage alcohol in 2022, spirits volumes in India increased by 12%, with beer up 38%, wine up 19% and RTDs up 40%.

“India is one of the few large beverage alcohol markets in the world to consistently display growth momentum, and this is expected to continue,” said Jason Holway, senior research consultant at IWSR.

Imports are a vital part of the story here. “Imported spirits and wines, while dwarfed by sales of IMFL (Indian Made Foreign Liquor), remain a notable and still growing element of demand, tapping into the local premiumisation momentum,” Holway said. “Importantly, Indian drinkers are already accustomed to international-style products. They know their applications, they enjoy them and they have long been open to spending a little more on imported – and now also local – products.”

Rising levels of affluence are driving continued premiumisation in the country. India, now the nation with the highest population in the world, has a median age below 30. In the US and China this metric is closer to 40. This delivers around 15 to 20 million legal drinking age prospects per year, according to UN World Population Prospects. It also means that the working age population is expanding, which is vital to sustaining economic growth. Between 2021 and 2031, the country is expected to add 283m more middle-class consumers, ICE 360 data shows.

Value grew ahead of volume across all categories. IWSR consumer research has indicated an uptick in claimed spend, with consumers wanting to prioritise higher quality products in the future.

Premium-and-above blended Scotch volumes are predicted to grow at a CAGR of 13% between 2022 and 2027, and premium-plus malt Scotch at 19% CAGR. Indian single malts and craft gins are also expected to post strong double digit CAGRs to 2027.

“Premiumisation is now acquiring a distinctly Indian element,” says Holway. “A number of local players operating at the value/low-price end of the market are now offering credible, premium-quality, premium-priced spirits.”

Relaxation of the country’s complex regulatory framework and reduction to high taxes due in part to expected free trade agreements will likely boost the market further if they do, as predicted, come to fruition.

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