The rising premiumisation of liqour in India

India is the fifth-largest player in the global alcoholic beverages market

Representative image | AFP Representative image | AFP

A characteristically unique spirits market, informed, curiosity-driven experimental consumers, and niche consumption patterns evolving to the tune of every month – this is what the cards have in store for the Indian alco-bev space in 2024. Today, India is the fifth-largest player in the global alcoholic beverages market, with an indicative projection to take the country to the third-largest market in the upcoming years. Here’s what is fuelling India’s high-spirited growth trajectory in the space:

Premiumisation is here to stay 

If 2023 is any indicator, the Indian spirits market is experiencing an unprecedented increase in the premium category. While it was a broad theme given much prominence in the past year, the culture of premiumisation is solidifying as a behavioural tendency for Indian consumers. Driven by curiosity and a steadily rising disposable income, young India is now responding to homegrown spirits with a resounding ‘YES’, at par with any international label.

As the evolving Indian consumer is increasingly seeking premium liquor that offers a distinctive taste, high quality, and a sense of craftsmanship; the demand for craft spirits is equalizing its supply. There’s an affinity to catch up and stay on par with global trends, and alco-bev is heralding the phenomenon of bringing the world into India. More than just a passing trend, premiumisation is becoming deeply ingrained in the Indian psyche, representing a lifestyle choice towards a culture of embracing products and services across categories. The steady rise in the sale of spirits retailing above ₹2,000 per bottle highlights India's evolving spirit consumption habits, as indicated by the CIABC Report 2023.

The spirit forecast 

The global gin wave struck the country only six to seven years after it took the world over, however, at present, the power of social media communities comes through in such a manner that the international tequila and mezcal wave struck the country within one year of its inception. The velocity with which India is catching onto global trends is catapulted by its value-driven and knowledge-seeking consumers who are picking up global cues at a faster pace. Combine this with informed choices and a willingness to spend to acquire best-in-class products, the coming year will see niche demands for premium, boutique spirits. As agave spirits will top charts and prioritize shelves for 2024, artisanally produced gins will deepen their stronghold into Tier II and III cities – with a forecasted pan-India penetration. Within the spirits market, data indicates India remains a brown spirits market, with whisky (66.7 per cent), brandy (18.8 per cent), and rum (12.1 per cent) together accounting for more than 98 per cent of the spirits industry.* While Indian artisan whisky catapults ahead, rum will revel in a new spotlight, as more consumers begin to experiment with craft and premium rums that were once in the back seat.

Conscious consumption and ‘come-home’ culture

With 10-12 million people expected to attain the legal drinking age each year, India is poised to have one of the largest populations of liquor consumers in the world. The spirit community in the country increasingly demonstrates the maturity of its consumers, who are no longer differentiating between Indian and foreign-produced liquor, rather, are embracing each spirit for its pedigree story. Premium is no longer dictated by an elaborate price tag – what consumers truly look for is a stand-out, world-class story behind the spirit, its true-to-roots approach, the qualitative focus in each ingredient and process – undercurrents that Indian consumers are discernably taking note of while indulging in purchases.

Brands and producers must take note of and appeal to the microscopic changes in consumer behaviour, mapping and addressing each niche with the respect it deserves. India’s ‘come-home’ culture where hosting guests and gatherings at one’s ease is a priceless component of its alco-bev consumption culture. Forming an atmosphere that is unique to India, this culture of hosting is a huge driver of premium and ultra-premium spirit purchases. The drive to connect with and lead a lifestyle that is of international repute is a need that propels the Indian consumer towards premium choices. 

The Indian spirit community is at its point of convergence – where consumers are driving evolution forward with their informed demands, and calling onto brands to keep up! With spirit houses realizing the power of premiumisation, they now need to step up and leverage the consumer intent of deriving value from each consumption. With a growing resonance of restaurants and bars stepping up the mantle with dedicated beverage programs, housed by award-winning mixologists with tidbits of global pop-ups, the Indian alco-bev space is making waves in providing channels of engagement and experimentation for the new-age consumer. With a 5x increase in the number and variety of spirit brands available in India, to the extent of limited-edition releases selling out in under 24 hours, it is not far behind where we observe spirits produced on local soil, possibly taking over global markets.

Keshav Prakash is the founder and curator of The Vault Festival. All opinions expressed in the article are solely of the writer.

Join our WhatsApp Channel to get the latest news, exclusives and videos on WhatsApp

*Articles appearing as INFOCUS/THE WEEK FOCUS are marketing initiatives