WHEN DIAGEO acquired United Spirits, the investment was fundamentally built on the promise of India’s future consumption. At that point, the economy was rapidly bifurcating into two distinct cohorts: the young and the old. And that’s exactly how it has played out.
I often joke that India produces an ‘Australia’ every year in terms of consumption; roughly 20 million new consumers turn 21, reaching the legal age to purchase alcoholic beverages. This represents a massive 25 per cent of the world’s emerging consumption spectrum added annually.
Furthermore, India is ‘ageing down’. While much of the world gets older, our average age is approximately 28 and is set to fall to 26.5 over the next two decades. Consequently, the market will be driven by young people with rising disposable incomes seeking distinct, premium experiences.
Consumer behaviour is also evolving. The days of aspiring to drink what one’s father or grandfather drank are fading. Instead, we see a shift towards specific occasions—from brunches and ‘third spaces’ to Netflix marathons or solo moments of calm. Each environment demands a different choice. With disposable incomes far higher than they were a decade ago, young people are increasingly willing to dabble in new categories.
Simultaneously, older consumers have reached a new level of affluence. They are well-travelled, culturally exposed and well-heeled. They are no longer satisfied with standard offerings; they seek bespoke, personalised and highly differentiated experiences.
Historically, India was a laggard in premium beverage experiences, despite having one of the world’s oldest distilling traditions. Ancient scriptures mention soma rasa, and spirits were once integral to every lifecycle event, from births to deaths. However, the commercialisation of the last 80 years prioritised mass consumption, severing our connection to native processes and regional spirits.
We are now witnessing a rediscovery of roots. Increased self-confidence means consumers are looking inward rather than outward. This sentiment has birthed a vibrant craft movement. We have seen waves of craft gin, a surge in world-class Indian single malts, and a renewed interest in native drinks like mahua, feni, and toddy. The future lies in this marriage between the traditional and the progressive.
The old notion that imported is inherently better is dissolving. Whether in the automotive, apparel or spirits industry, Indian companies have stepped up their proposition. Consumers are open to Indian brands, but they will only return if the quality remains consistent.
As India exports more spirits, our products are facing the scrutiny of discerning international drinkers. And to stand up to that, Indian companies must maintain authenticity and quality at the highest possible level. In doing so, we are not just serving a domestic market; we are defining a new global standard for Indian excellence.
Damodaran is chief innovation officer, Diageo.
—As told to K. Sunil Thomas