Publish Date:Dec 2012
No. of Pages:65
Drinking practices vary substantially among different countries and different masses, despite that both alcoholic beverages and non alcoholic beverages are very popular among all ages of people. The alcoholic drinks market is broadly classified wine, beer, hard liquor, liqueurs and others. The Indian alcoholic beverages market has been growing rapidly for the last ten years, due to the positive impact of demographic trends and changes like rising income levels, changing age profile, changing lifestyles and reduction in beverage prices. Similarly non-alcoholic drinks market is broadly classified into carbonated drinks, non-carbonated drinks and hot beverages. These include juices, energy drinks, carbonated drinks, tea, coffee and bottled water.
This report focuses on spirits market of India, which includes vodka, rum, whiskey, brandy, and gin. India is considered to be a lucrative unexplored destination for alcoholic drinks by several international companies operating in saturated alcoholic beverages markets of Europe and the US. India’s alcoholic beverage market has grown steadily in the last 5 years. It is the second largest market for spirits gloablly and has been growing at a CAGR of about 10% for last ten years.
Growing urban population, increasing disposable income, changing social norms are the key factors driving the growth of Indian spirits market. The Indian scenario of alcohol industry is unlike the global pattern. In the West, traditionally the consumption of beer and wine is high whereas Indians mainly consume hard liquor, like scotch and whiskey. The consumption of whiskey is significantly high in India, accounting for about 70% of the total market share. Meanwhile, the Indian spirits market is also facing certain challenges, like government regulations, environmental issues, and other social factors associated with alcohol and its variants.
Although the spirits segment is very fragmented, with country liquor, IMFL, and international players serving the market, about 86% of the market is catered by few major players like United Spirits Limited (USL), Radico, Jagatjit and Mohan Meakin. The market consists of five segments: whiskey, rum, vodka, brandy and gin. Whiskey has the largest market share in India. Some of the popular brands are Officer's Choice, McDowell's No.1, Bagpiper, Royal Stag, Old Tavern and Original Choice. The other emerging drink is Vodka which is marking its popularity among youth in metro cities and tier 2 and tier 3 cities as well. Brandy is an old spirit and is popular among aged group population of the country.
Many international brands are also entering the Indian market through strategic business initiatives like mergers, joint ventures and acquisitions. Recently, the world’s biggest brand Diageo announced to initially acquire 27.4% stake in United Spirits for a medium term. The conclusion of this will provide United Spirits with around INR 3,300 crore (approximately US$7.06 billion), a large part of which the company will use to repay its high debt of around INR 8,000 crore (approximately US$17.14 billion). Such mergers and acquisitions are expected to bring dynamic changes in the Indian liquor industry.