Indian alcohol market is dominated by whiskey which falls under spirit category. However, the wine market is expected to show highest growth in the forecast period. The Indian alcohol market is broadly segmented as spirits, beer and wine.
Valley Cottage, NY -- (SBWIRE) -- 08/25/2016 -- Alcohols are the intoxicating beverage consisting of spirits, wine and beer. It is defined by the alcohol content and the major raw material used in it. For instance, spirits are mainly made by fermenting grains and sugar, whereas wine is made by fermenting fruits/berries. Indian alcohol market has been flourishing since 2001 and registered growth between 7-12% till 2011 when the growth finally declined due to heavy import taxes, state government taxes, excise duty and political instability in election season. The year 2013 was a great fall in Indian alcohol market when the spirits volume actually declined by 2-3% in India. Alcohol industry is a part of huge US$ 12 billion beverage industry of India excluding milk and milk products.
Indian alcohol market is dominated by whiskey which falls under spirit category. However, the wine market is expected to show highest growth in the forecast period. The Indian alcohol market is broadly segmented as spirits, beer and wine. Spirits are further sub-segmented into whiskey, rum/brandy, vodka, gin and others. The market is projected to register a flat growth in the forecast period.
Consumers are largely inclined towards quality alcohol due to increasing disposable income and better standard of living. Other drivers include greater inclination towards social drinking as well as women indulging into alcohol consumption. As India has huge youth population, the demand of alcohol would remain high in the coming years. The market saw a boom in Vodka sales in past decade as Vodka was positioned as the alcohol for women. Youth largely prefer beer and the salaried youth are inclined toward whiskey and rum. In beer segment, more than 85% of the market is dominated by strong beer rather than mild.
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There exists quite a few restraints in the market such as high taxes, stringent government regulations on manufacturing and selling liquor, and ban on advertisements among others. Alcohol consumption is also subjected to the overall economy's growth in terms of gross net income per capita and household expenditure. Thus, development in the economy would give a thrustto the alcohol market further but in a less pronounced manner.
One of the most notable trend is the demand of premium liquor among the consumers. The growth of premium segment would surpass the overall growth of alcohol market due to greater exposure towards foreign brands. India has seen a burst of high net worth individuals in past two decades and the list is ever increasing, which would fuel the growth of market in premium segment. In addition to travel retail theatres and duty free retailing would further boost the growth of premium alcohol in the market. Companies are launching exclusive new brands and products at premium prices to increase their margins and capture the upper class consumers. In September 2014, SABMiller, which also happen to be the second largest player in beer segment (after Kingfisher) launched its premium brand "Miller Ace" in India to compete with brands such as Carlsberg and Anheuser-Busch InBev.
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Many international brands such as Diageo plc, PernodRicard, and The Carlsberg Group already forayed into the market with their million-dollar brands. The market is also moving towards consolidation with large number of acquisitions and joint ventures. One of the biggest mergers in recent past is that of London based Diageo plc and Indian firm United Spirits Limited, (USL). Diageo acquired 54.78 % share in USL by shelling whopping US$ 3 billion by mid-2014. USL is the dominant player in Indian alcohol market commanding majority of market share.
Some of the major players in Indian Alcohol Market are United Spirits Limited, RadicoKhaitan, Jagatjit Industries, Globus Spirits, Allied Blenders and Distillers Pvt. Ltd., Sula Vineyards, SABMiller India Ltd. and John Distilleries Pvt Ltd among others.