The India Alcohol Market is estimated to be valued at USD 55.81 billion in 2024, exhibiting a CAGR of 7.5% over the forecast period (2024-2031). Furthermore, with rising disposable incomes and increasing preference for premium brands in the country, the market is expected to grow at a robust pace.
The India alcohol market is driven by two key factors - increased disposable incomes and growing online availability. With economic growth and rise in dual income households over the past decade, disposable incomes in India have grown significantly. This has translated into greater demand for premium alcoholic beverages. Moreover, restrictions on physical retail sales have boosted online sales across various e-commerce platforms. Leading alcohol brands have partnered with major online retailers to serve customers safely amidst the pandemic. The digital channel offers convenience as well as opportunities to target new younger customer segments. However, over-regulation around alcohol consumption and health concerns related to excessive drinking may hamper market growth to some extent over the forecast period.
Increasing Disposable Incomes
As the Indian economy continues to grow at a steady pace, disposable incomes of consumers have seen a significant rise over the past decade. Higher disposable incomes mean consumers now have more discretionary spending power which they are using to purchase premium and super-premium alcohol brands. Various market surveys have shown a clear correlation between rising incomes and increased spending on quality spirits and beer. The growing middle and affluent classes who now have larger disposable incomes after paying for necessities represent an attractive target segment for alcohol companies. If economic growth remains strong, disposable incomes are expected to keep rising in the coming years, this further fueling demand.
Changing Social Attitudes
Social attitudes towards alcohol consumption have undergone a gradual change, especially in urban areas. Drinking is no longer seen as a taboo and more people are open to trying new drinks. Younger consumers in their 20s and 30s who have been exposed to globalization and trends online are more willing to experiment with cocktails and craft beer. Even women have started consuming alcohol more freely in pubs, restaurants, and at home parties. This change in mindset has opened the market up for new products and categories. Companies have capitalized on the evolving social dynamics by cleverly marketing premium brands as a symbol of status and sophistication. The trend of changing social openness to alcohol is likely to spread deeper into smaller cities and towns over the medium term.
Stringent Regulations
While the liberalization of rules in recent years has helped, alcohol sales and marketing in India continues to deal with many regulatory constraints imposed by authorities. For example, most states still enforce strict limits on days and hours for liquor sales. Restrictions on advertising and media promotions make it difficult for brands to create awareness. Pricing policies of several states are also interventionist with frequent changes in duties and taxes. Heavy lobbying by prohibition movements further influences policymaking. Complying with the fragmented regulations across states involves high compliance costs for companies. Any sudden adverse changes in policies can negatively impact business operations and forecasts.
Rising Health Concerns
Health and wellness have become top priorities for Indian consumers in the last decade. Rising income also means that people now place greater importance on preventive healthcare. Media coverage of the harmful effects of excessive alcohol consumption has raised awareness. This is driving a trend where some people are cutting back or moving towards low-calorie drinks. Younger generations are also more conscious about maintaining physical fitness. Doctors regularly issue warnings about alcohol being a major risk factor for several serious ailments. While moderate consumption may not halt, health worries could restrain faster growth rates going forward especially in the mass market segments.
Premiumization of Portfolio
As economies develop, there is a universal trend where consumers trade-up from lower-priced mainstream alcoholic drinks to higher-quality premium brands. India is no exception to this pattern and presents attractive prospects for premium spirits, champagne, craft beer, etc. Companies are finding success by offering imported prestigiously labeled products supported by extensive marketing campaigns. As the premium segment still only accounts for a small share of the overall market, there is huge untapped potential as brand consciousness spreads. By cleverly leveraging Indian socio-economic mobility and aspirations, alcohol majors can rapidly scale their premium business over the next decade.
Growing Online Sales
The Indian e-commerce market has been one of the fastest growing globally. However, alcohol sales have traditionally been excluded from online channels due to regulations. But with people leading busier lifestyles and lockdowns increasing online adoption, demands are rising for the ability to order drinks digitally. Some states have started granting permits to certain alcohol e-tailers. Major online grocers have also been quietly piloting home delivery programs. If more regions allow online alcohol, it could open an entirely new avenue for accelerated brand building and sales. Early movers stand to gain significantly by establishing an online foothold before larger competitors.
Link - https://www.coherentmarketinsights.com/market-insight/india-alcohol-market-3145
Key Developments
- In January 2024, Coca-Cola India introduced Lemon-Dou, a lime-flavored cocktail, in select regions
- Nisaki Gin was launched in India in April 2024
- In April 2024, Bio India launched four premium ranges of domestically produced bio-liquor products
- In 2023, Coca-Cola India forays into the alcohol segment
Key Players
United Spirits Limited, Tilaknagar Industries Ltd, United Breweries Limited, Jagatjit Industries, Mohan Meakin, Globus Spirits, Allied Blenders and Distillers Pvt., SAB Millier, Radico Khaitan Limited, Khemani Group, SOM Distilleries and Breweries, Carlsberg A/S, Som Distilleries And Breweries Limited, Khoday India, Amrut Distilleries, Amber Distilleries Limited, Carlsberg India, Raj Innotech, Anheuser-Bush InBev SA/NV, and White Rhino Brewing Co.
