India offers strong growth prospects for beverage alcohol companies in 2024 and beyond, driven by a mix of positive demographics, premiumisation, an increasingly sophisticated retail channel, and a progressively more adventurous consumer base.
The market could be boosted still further by any relaxation of the country’s complex and burdensome regulatory framework and any reduction of high taxes, thanks in part to the expected signing of free trade agreements, such as that with the UK.
Indian consumers have long been drawn to the aspirational status of imported products, such as Scotch whisky, but they are also increasingly taking pride in the rising quality levels of domestic spirits, some of which now rival imports in terms of prestige and pricing. Craft gins and Indian single malts currently epitomise this reappraisal.
What’s happening now?
India offers a beverage alcohol market with strong growth prospects. Against a backdrop of a +1% volume growth for global total beverage alcohol in 2022, spirits volumes in India increased by +12%, with beer up +38%, wine up +19% and RTDs up +40%. In all cases, value grew ahead of volume. IWSR forecasts suggest a continued upward trajectory.
“India is one of the few large beverage alcohol markets in the world to consistently display growth momentum, and this is expected to continue,” says Jason Holway, Senior Research Consultant at IWSR. “Imported spirits and wines, while dwarfed by sales of IMFL (Indian Made Foreign Liquor), remain a notable and still growing element of demand, tapping into the local premiumisation momentum.
“Importantly, Indian drinkers are already accustomed to international-style products. They know their applications, they enjoy them and they have long been open to spending a little more on imported – and now also local – products.”
India’s demographic dividend
Demographics are one of India’s key assets. Now the world’s most populous country, India has a median age below 30, while in the US and China this metric is closer to 40. Not only does this deliver around 15 to 20 million legal drinking age (LDA) prospects per year (source: UN World Population Prospects), it also means that the working age population is expanding, absolutely vital to sustaining economic growth. Between 2021 and 2031, the country is expected to add 283m more middle-class consumers (source: ICE 360 data).
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