Alcohol Industry Analysis in India

India Alcohol Industry Outlook from 2024 to 2034

India’s alcohol industry size is estimated to reach US$ 55,840.0 million in 2024. Sales of alcoholic beverages in the nation will likely rise at 7.2% CAGR throughout the assessment period, totaling US$ 112,338.9 million by 2034.

Demand for spirits like vodka, whisky, and rum in India remains exceptionally high. As per the latest alcohol industry analysis, the spirits segment is anticipated to total a staggering valuation of US$ 50,552.1 million by 2034.

India's alcohol industry is heavily influenced by changing demographics and lifestyles. With a growing young population and increasing urbanization, there is a rising demand for alcoholic beverages, particularly among the younger demographic who view alcohol consumption as a part of socializing and entertainment.

With more women entering the workforce and gaining financial independence, there has been a shift in cultural attitudes towards alcohol consumption, leading to increased consumption among women as well. This demographic shift is driving the growth of the alcohol industry in India, with a greater acceptance of alcohol as a social norm.

One of the defining features of India’s alcohol industry is its massiveness and diversity. It encompasses a wide range of alcoholic beverages, including whiskey, rum, vodka, gin, beer, wine, and indigenous concoctions unique to various regions. Each category caters to distinct consumer segments, from discerning connoisseurs seeking premium spirits to young urbanites embracing innovative cocktail culture. This positively impacts the overall performance of the industry.

Growing demand for premium and imported brands and the rise of craft spirits and microbreweries are expected to boost the growth of the alcohol industry in India. Similarly, the increasing popularity of experiential drinking venues catering to diverse consumer preferences will likely fuel alcohol sales in the nation.

India Alcohol Industry Overview

Key Drivers and Trends in the India Alcohol Industry

• Rising alcohol consumption in India
• Consumers in India are increasingly opting for high-quality and upscale alcoholic beverages
• There is a growing trend towards artisanal and small-batch production in the alcoholic drink industry.
• More consumers are prioritizing health and seeking out low-alcohol or alcohol-free options.
• The popularity of cocktails and mixology is on the rise, with a focus on unique and creative drink experiences.
• Increasing millennials and GenZ population is expected to uplift alcohol demand in India
• The alcohol industry is witnessing a surge in online sales and home delivery services, offering greater convenience to consumers.
• Shifts in government regulations are impacting pricing, distribution, and licensing within the alcohol sector.
• There is increasing awareness and demand for environmentally sustainable practices in alcohol production and packaging.
• India's diverse cultural heritage is reflected in the variety of regional and indigenous alcoholic beverages available.
• Consumers are embracing a more sophisticated and relaxed approach to socializing, opting for quality over quantity.
• Alcohol brands are leveraging digital platforms for marketing, engagement, and virtual events to connect with consumers.
• Rise of wine tourism, also known as vinitourism and enotourism, will create growth opportunities for alcohol brands in India.’
• Expanding canned alcoholic beverages sector is expected to improve the alcohol industry share in India

Factors Expected to Limit Growth of the Liquor Industry in India

• Expanding non alcoholic beverages industry in India.
• High cost of premium alcoholic beverages.
• Growing awareness about the side effects of high alcohol consumption.
• Rising penetration of illicit alcohol in India

Nandini Roy Choudhury

Principal Consultant

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Historical Performance Vs. Future Alcohol Industry Insights

Sales of alcohol products, including spirits, wine, and beer, grew at a steady CAGR from 2019 to 2023. For the next ten years, the alcohol industry in India is projected to progress at a healthy 7.2% CAGR, totaling a valuation of US$ 112,338.9 million by 2034.

• Increasing disposable income and changing consumer preferences towards high-quality and luxury drinking experiences are expected to drive growth in the alcohol industry.
• The growing popularity of premium and flavored vodka, along with increasing cocktail culture and urbanization, will likely boost sales of alcoholic beverages in India through 2034.
• The rising trend of premiumization is anticipated to present opportunities for brands to tap into affluent consumer segments and cater to their evolving tastes.
• Craft spirits, artisanal cocktails, and experiential drinking venues are among the key trends shaping the liquor industry in India, reflecting a shift towards sophistication and uniqueness in drinking culture.

State-wise Insights of India's Alcohol Industry

Maharashtra Holds a Significant Value Share in India’s Alcohol Industry

Renowned for its vibrant cities like Mumbai and Pune, Maharashtra commands a significant share of India's alcohol industry. Fueled by a sizable population of alcohol enthusiasts and rapidly developing urban centers, the state boasts a culture of high alcohol consumption. Its thriving industry offers an extensive array of alcoholic products, supported by a robust infrastructure of breweries, distilleries, and liquor manufacturing units.

Maharashtra's well-established network of liquor outlets, bars, eateries, and hospitality establishments effectively caters to the diverse demands of alcohol consumers. This further solidifies its position as a key player in India's alcohol industry.

Huge Rush of Tourists in Goa Uplift Alcohol Demand

Goa's alcohol industry is set to experience a robust compound annual growth rate (CAGR) due to its status as a popular tourist destination with vibrant nightlife and relaxed alcohol regulations. The influx of domestic and international tourists, drawn to Goa's beaches and festive atmosphere, drives significant demand for alcoholic beverages, contributing to the industry's sustained growth.

Goa's liberal alcohol policies, which include lower taxes and extended drinking hours, create a conducive environment for the sale and consumption of alcohol, further fueling industry expansion. The presence of diverse bars, nightclubs, and beach shacks offering a wide selection of alcoholic beverages adds to the appeal, attracting both locals and tourists alike.

The rising disposable income among residents allows for increased spending on leisure activities, including premium and imported alcoholic beverages. This will likely play a key role in fueling the growth of the alcohol industry in the state through 2034.

Category-wise Insights of India Alcohol Industry Report

The table below provides in-depth insights into leading segments in India’s alcohol industry. This information can help companies invest in demanding products, offer popular flavored alcoholic beverages, and use the most preferred distribution channels to maximize profits.

Spirits Remain Highly Sought-after Products across India

As per the latest analysis, demand in India remains high for spirits, and the trend is expected to continue during the assessment period. The target segment is expected to generate a total revenue of US$ 50,552.1 million by the end of 2034. This can be attributed to factors like:

• Growing consumer preference for premium spirits
• Availability of a wide variety of distilled spirits across India
• Rising popularity of cocktail culture
• Increasing demand for spirit-based RTDs
• Targeted marketing strategies by leading spirit brands to promote their products
• The surging popularity of vodka, especially among common masses in India

In India's dynamic alcohol sector, characterized by diverse spirits, including whisky, rum, vodka, gin, brandy, and tequila, one prominent driver is consumers' evolving preferences and increasing sophistication. As consumers become more discerning and cosmopolitan, there is a growing demand for premium and craft spirits.

Factors such as exposure to international trends, rising disposable incomes, and a desire for unique and high-quality drinking experiences are increasing the popularity of premium spirits. This shift is reshaping the landscape of the Indian spirits sector, prompting producers to innovate, diversify their product portfolios, and elevate the overall quality standards to meet the evolving tastes of consumers.

Multiple Advantages of Bottles Make them a Popular Packaging Type for Alcohol

Bottles are expected to dominate the liquor industry in India throughout the forecast period. This can be attributed to their advantages in preserving quality, enhancing perception, and offering practical functionality. The target segment is expected to have a total valuation of US$ 66,279.4 million by 2034.

• Bottles remain a popular packaging type for alcohol due to their ability to preserve quality and convey a perception of premiumization. They offer versatility in sizing, catering to diverse consumer needs, and serve as effective canvases for branding and marketing efforts.
• Bottles, particularly glass bottles, convey a sense of quality, tradition, and luxury, aligning well with premium or aged alcoholic beverages.
• The recyclability of glass bottles appeals to environmentally conscious consumers. Further, bottles hold cultural significance, embodying tradition and aesthetics in beverage consumption.
• The development of sustainable paper bottles will further boost the target segment in the coming years.

Competitive Landscape

India’s alcohol industry is characterized by intense competition and dynamic forces shaped by a variety of factors, including regulatory frameworks, consumer preferences, and industry dynamics. As one of the largest alcohol leaders globally, India attracts both domestic and international players vying for industry share across various segments, including spirits, beer, and wine.

With a diverse range of offerings and a vast consumer base, the competitive landscape of India’s alcohol industry is multifaceted, with key players employing strategies such as product innovation, pricing strategies, distribution network expansion, acquisitions, mergers, and marketing campaigns to gain a competitive edge. Understanding the nuances of this competitive landscape is crucial for businesses seeking to navigate and thrive in India's dynamic alcohol sector.

Recent Developments in India's Alcohol Industry

• In 2023, Coca-Cola entered the Indian alcoholic beverages sector with the launch of Lemon-Duo, a globally acclaimed ready-to-drink concoction.
• In 2022, Tilaknagar Industries acquired a19.5% stake in Pune-based startup Incredible Spirits. This acquisition will help the company strengthen its position in the fast-growing alcoholic ready-to-drink (RTD) industry.
• In 2019, Radico Khaitan, an Indian spirits company, collaborated with Japan's Asahi Group to launch and distribute Asahi Super Dry beer in India.

Key Companies in India's Alcohol Industry

• Heineken N.V.
• Carlsberg A/S
• United Breweries Holdings Limited
• Devans Modern Breweries Ltd.
• Diageo PLC
• Carlsberg India Pvt. Ltd.
• Anheuser-Busch InBev.
• B9 Beverages Pvt. Ltd.
• Crown India Alcohols India Limited (AB InBev)
• Radico Khaitan Ltd.
• Beijing Enterprises Holdings Limited
• Dogfish Head Craft Brewery, Inc.
• Squatters Pubs and Craft India Alcohols
• Sierra Nevada Brewing Co.
• The Boston India Alcohol Company, Inc.

Key Coverage in the Indian Alcohol Industry Report

• Information About Top Indian Alcohol Brands
• Factors Making Alcohol Common in India
• India’s Changing Alcohol Industry
• Drivers Expanding India Spirits Market
• Government’s Role Behind the Flourishing Beer and Wine Market in India
• Analysis of Rising Export of India-made Spirits and Sales Impact
• India’s Potential to Become a Global Leader in Alcoholic Beverages

Key Segments Covered in the India Alcohol Industry Report

By Product Type:

• Beer
  • Lager
  • Specialty Beer
  • Craft Beer
  • Low-alcoholic Beer
• Spirits
  • Whisky
  • Rum
  • Vodka
  • Gin
  • Brandy
  • Tequila
• Wine
• Red Wine
• Rose Wine
• White Wine

By Distribution Channel:

• Food Service Industry
  • Restaurants
  • Hotels
  • Bars, Pubs, & Clubs
• Retail
  • Liquor Stores
  • Specialty Retailing
  • Government-run Retail Outlets/ State Excise Department
  • Online Retailers

By Flavor:

• Natural/Un-flavoured
• Flavoured
  • Citrus
  • Ginger
  • Apple
  • Vanilla
  • Berry
  • Others

By Price Range:

• Economy
• Premium
• Super Premium

By Packaging Type:

• Cans
• Bottles
• Tetra Pak
• Others (Pouches, Miniature)

By Region:

• North India
• South India
• East India
• West India
• Northeast India