Mumbai: Sales of Scotch and premium imported Japanese, Irish, and American whiskies saw a significant slowdown in growth in 2023 compared to the previous year, indicating reduced demand for higher-priced liquor products that are typically resilient to economic slowdowns, and a growing preference for Indian malts.
For example, Scotch and US whiskey, the largest categories, grew by only 7% in 2023, down from 33% and 70% respectively, the previous year, according to executives citing an International Wine and Spirits Record (IWSR) report. Irish whiskey saw its growth decline to 40% from 81% a year earlier, while Japanese whiskey grew by just 3% in 2023 compared to 57% in 2022. The slowdown was attributed to supply constraints, particularly in bulk Scotch, coupled with a focus on high-end products and a high base effect from the previous year amid rising living costs.
Pernod Ricard, a leading Scotch producer, noted that the growth rate reflects the industry’s shift towards more stable growth patterns. “Moreover, there continues to be a persistent imbalance between the strong demand for aged whiskies and Scotches and their limited supply. The aging process is inherently meticulous and time-consuming, contributing to constrained supply despite sustained high demand,” said Jean Touboul, CEO of Pernod Ricard India. He added that despite moderate overall growth, the trend towards premiumization persists, leading to significant value growth.
Sachin Mehta, Country Director for India and the Indian subcontinent at William Grant & Sons, owner of Glenfiddich and Balvenie brands, also affirmed that the trend of premiumization in India remains strong. “Consumers are opting for fewer but higher quality whiskies, a trend that most companies in the industry are focusing on,” said Mehta.
While premium and super-premium imported brands still performed well within the segment, entry-level brands, which compete directly with Indian malts, experienced a decline.
The high base effect from previous years also played a role. In 2022, Indians consumed over 7.5 million cases of Scotch whisky, nearly double the amount consumed in 2020 (3.9 million cases). Similarly, between 2020 and 2022, Irish whiskey consumption increased fivefold, Japanese whiskey sixfold, and American whiskey threefold, collectively reaching 500,000 cases, up from 150,000 cases.
