INDIA ALCOHOL MARKET ANALYSIS

India Alcohol Market Size and Trends

The India alcohol market is estimated to be valued at USD 55.81 Bn in 2024 and is expected to reach USD 92.57 Bn by 2031, exhibiting a compound annual growth rate (CAGR) of 7.5% from 2024 to 2031.

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The India alcohol market has been witnessing significant growth over the past few years. Factors such as rising disposable incomes, changing lifestyle, and social drinking habits have been driving the market growth. While the consumption of beer and spirits has increased substantially, India made foreign liquor (IMFL) continues to dominate the market. However, there is a rising popularity of the craft beer and premium whisky segments. The growing acceptance of women drinking alcohol particularly in urban areas is another factor that will support the market expansion in the coming years. Overall, increasing spending power and shifting trends towards western drinking culture make the India alcohol market an attractive space for investments.

Rise in income levels and increase in discretionary spending

With India's economy growing at a rapid pace over the past decade, personal incomes have risen substantially. According to recent estimates, the average annual household income in India increased from around US$1,100 in 2010 to nearly US$1,800 in 2020. This rise has been fueled by robust job creation in sunrise industries and service sectors. As incomes increased, so has the amount of discretionary spending power with individuals. Alcohol happens to be one of those luxury/leisure goods whose demand increases along with the rise in discretionary incomes. Young urban Indias today have more exposure to global lifestyle and are willing to spend on premium alcoholic drinks when dining out or socializing with friends. They see alcohol consumption as a sign of social status. Alcohol manufacturers have cleverly targeted this segment through innovative products, premium branding, and attractive packaging. Aggressive marketing campaigns on digital platforms have also increased visibility. Overall, the growing middle-class population with higher spending power has enhanced the addressable market for premium alcohol brands. However, much of the increased income is still being spent in the lower-priced alcohol segment as well which also aids the overall category growth.

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Society and culture play a big role in shaping consumption behaviors. India society is known to have deep-rooted conservative views when it comes to alcohol consumption historically. However, over the past decade, social attitudes have started evolving at a fast pace, especially in urban areas. Young Indias today have more exposure to global culture through easy access to media and internet. They are comfortable socializing over drinks and do not necessarily see alcohol as a vice anymore. Even in smaller towns and cities, people have become more open-minded about casual drinking. Changing mindsets have made alcohol more acceptable as a means of socialization, relaxation, and enjoyment rather than just inebriation. Alcohol companies promoting a moderate drinking lifestyle through their branding and responsible consumption campaigns have also helped mold positive social perceptions. Greater social acceptability of alcohol coupled with consumers' desire to socialize more freely is working in favor of the market.