INDIA ALCOHOL MARKET ANALYSIS

Stringent government regulations have significantly restrained the growth of the alcohol market in India in recent years. The various state governments across India have implemented strict laws governing the production, distribution, pricing and availability of alcoholic beverages. Some key regulations that are limiting market expansion include restrictions on the number of retail liquor shops that can operate, regulatory controls over pricing and taxes, and bans or limitations on advertising and promotion of alcohol products. The regulations have made it very difficult for companies to explore new market opportunities and grow their business organically. Restrictions over retail availability mean that companies cannot open new shops or franchise their existing retail networks even in areas where there is rising demand. Caps on retail prices combined with high taxes have squeezed company margins and profitability. The advertising bans prevent brands from effectively promoting themselves and competing for market share. Companies are left with limited options to creatively market and raise awareness about their products among legal-age consumers.

Market Opportunities: Premiumization/craft alcohol market growth

The Indian alcohol market has seen significant changes over the past few years with the rising popularity of premium and craft alcohol. Consumers are increasingly seeking unique drinking experiences and are willing to pay more for higher quality drinks that are produced using traditional or novel methods. This premiumization trend provides excellent opportunities for growth in the Indian market.  More Indian consumers, especially millennials and Gen Z, are exploring craft beers, wines, spirits and cocktails. They want artisanal products that have an interesting story and flavor profile. Traditional liquors like fenny and daru are also seeing renewed interest from urban populations who want to experiment with indigenous drinks. Several small craft brands have emerged who are handcrafting unique products using organic ingredients, innovative recipes, or reviving legacy techniques. For example, breweries in certain northeastern states are infusing beers with indigenous herbs and spices. Similarly, distilleries in Maharashtra, Goa and Sikkim are crafting novel single malts, gins and organic country liquors.