May 15, 2019
India’s alcoholic beverage market is growing at a CAGR of 8.8 per cent and is expected to reach 16.8 billion litres of annual consumption by the year 2022
Players in the Indian premium wine industry include Sula Vineyards, Fratelli Wines, York Winery, Grover Zampa Vineyards, Charosa Vineyards, among others
Whiskey, which makes up 60 per cent of India’s IMFL market, has seen encouraged premium Indian brands such as Amrut, Paul John, Rampur and Unibev
Besides growing number of microbreweries around India, local bottled craft beer brands include Bira, Simba, White Owl, Medusa Brewing and White Rhino
Ayurveda, the traditional Indian system of medicine, has used alcoholic beverages for thousands of years in its formulation. Madya, as alcoholic drinks were called in ancient India, was derived from fruits, sugar, cereals, and herbs, among others, with a multitude of applications. Owing to its health benefits, taste and even intoxicating factor, distilled alcohol gradually found its way into the diet of the masses. Such drinks were also known as Ira, Madira, Hala, and Balavallabha. Meanwhile, examples of ancient Indian alcoholic beverages included Sura, Sukta, Sidhu, Maireyah, Majja, among others. As these drinks were increasingly consumed over the millennia, the diabolical effects of overconsumption of alcoholic drinks and the rules against them were recorded in history. This rich science, tradition, and culture around alcoholic beverages have led to a premium liquor industry in India that is being driven by high-end R&D and entrepreneurship.
Driven by improving affordability, relaxation of social barriers, changes in lifestyle and marketing tactics, the consumer base of premium Indian alcoholic beverages has fast grown over the years. Furthermore, opening up of the economy in 1991 brought in foreign brands and investments that boosted competition in the space. Currently, the Indian alcoholic beverage industry is mainly made up of Indian-made Foreign Liquor (IMFL), Indian-made Indian Liquor (IMIL), wine, beer, and imported alcohol. Surging activity in the space has helped set the ground for the development of premium Indian wine, beer, and alcohol brands that have found takers globally. India’s alcoholic beverage space is growing at a CAGR of 8.8 per cent and is expected to reach 16.8 billion litres of consumption by the year 2022. Herein, wine, whiskey, and beer have emerged as popular items among consumers, leading to investments in local premium brands.
The past two decades have witnessed the birth of premium Indian wine brands that are competing with their global peers. Leading players in the Indian wine industry include Sula Vineyards, Fratelli Wines, York Winery, Grover Zampa Vineyards, Charosa Vineyards, KRSMA Estates, among others. Growing consumer base has encouraged a steady rise in investment, foreign partnerships, even acquisitions, an instance of which was recently recorded when Bengaluru-based Myra Vineyards was acquired by larger Indian rival, Grover Zampa Vineyards, in early 2019. Meanwhile, in 2018, Sula Vineyards had sold over 1 million cases – becoming the first non-Chinese brand to do so in Asia. India produced over 20 million litres of wine last year, while consumption was estimated at more than 30 million litres. This has offered opportunities for local production as well as import from Europe, the Americas, South Africa, and Australia, among others.
While wine consumption rises in India, whiskey has remained the most popular alcoholic beverage, with the nation representing the largest market for the liquor globally. Whiskey, which makes up around 60 per cent of the IMFL market, has seen a steady growth of indigenous premium brands such as Amrut, Paul John, Rampur, Unibev, among others. Apart from these, which are mainly aimed for export markets, there are more mass-market brands that have seen a steady rise in investments aimed at catering to the growing demand. These activities have been powered by the availability of good quality raw materials in the form of cereals, fruits, among others, as well as the right climatic and topographical conditions. This has helped India’s liquor market reach a valuation of around US$35 billion, as per KPMG’s findings, and is anticipated to keep growing in the coming years. New innovation and investment will ensure this growth.
India’s youth-heavy urban population with disposable income and fast-evolving lifestyle has encouraged the nation’s craft beer revolution. Apart from the microbreweries that are mushrooming over the nation, a number Indian bottled craft beer brands have come up such as Bira 91, Simba, The White Owl, Medusa Brewing Co, White Rhino Brewing, among others. Currently, the Indian microbrewery industry, spanning the nation’s big urban centres, is competing for the growing market with India’s traditional mass-market brands. This sector is also seeing applications of the latest in technology to deliver curated experiences. Indian entrepreneurship has touched upon other varieties of alcoholic beverages that are now supplied worldwide. Meanwhile, the nation has emerged as a reliable production destination for foreign liquor for export. The high-level of activity promises strong business potential in the alcoholic beverage industry.