After the challenging operating environment, the industry sentiment for the alcoholic beverages sector is turning favourable. This aided by supply chain normalcy, stable input costs, unlocking of the economy and lower tax burden.
There has been a gradual recovery in out-of-home consumption of alcoholic beverages. After being affected in the first half of the financial year (FY) 2021, this will drive further volume growth in the coming quarters.
Recovery trends visible
The Covid pandemic slowed the growth of the economy and completely halted the supply chains. As products were deemed as non-essential, the opening up of its distribution channels were slower. This compared to those in essential categories.
But, with the phased unlocking of the economy, restrictions on the manufacturing and distribution eased. By the end of the first half of FY21, most of the channels were opened and allowed to function with certain restrictions.
This resulted in progressive recovery in volumes of alcobev players on a sequential basis. Besides, the recovery was slow because of fewer operating hours and night curfew.