Saturday, July 13, 2024

India Adds 100 Million Spirits Cases in Three Years From 228 to 412 Million Cases

India’s growing middle class and love for whiskey have pushed interest in spirits to an all-time high. The domestic spirits market has seen impressive growth, with annual sales jumping from 228 million cases in FY11 to 330 million cases by FY18, according to The Economic Times.

Pandemic Challenges and Recovery

The Covid-19 pandemic caused a dip in sales, dropping to 311 million cases in FY21. However, the market quickly bounced back, adding about 100 million cases in three years, reaching 412 million cases by FY24. This recovery even outpaced the combined spirits consumption of major European countries like the UK, France, and Spain.

Market Resilience and Steady Growth

Despite a slower growth rate of 4 percent in the last fiscal year—one-third of the previous rate—the market remains strong. This resilience is due to high demand across various categories and price points, especially for premium products and the growing trend of drinking at home.

“We think people should drink better, not more. With 20 million people in India reaching legal drinking age each year, we are focusing on quality over quantity. India’s per capita consumption is still low compared to developed nations, which shows there’s room for growth,” said Vikram Damodaran, Chief Innovation Officer at Diageo India.

Shift Towards Premium Products

While the industry’s growth rate has stabilized after the post-Covid boom, the move towards premium products continues to drive value. About 300 million people in India are of legal drinking age, but only half can afford cheaper, unbranded liquors. The expanding middle class, who can buy premium and super-premium spirits, makes up about 150 million people.

Positive Future Outlook

Jean Touboul, CEO of Pernod Ricard India, highlighted the growing trend towards premium products, driven by a strong economy, higher disposable incomes, and rising consumer aspirations. “In recent years, we’ve seen a big shift towards premium and out-of-home consumption. Consumers are prioritizing quality over quantity, leading to sustained double-digit growth in premium categories,” Touboul said. He added that the future looks bright for India’s alcoholic beverage industry.

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