For a long time, India has dominantly been a whiskey market, with the classic spirits reigning supreme. But in the last decade, we have witnessed a delightful shift, with an increase in the Indian millennials and GenZ determining the drinking patterns of the market. Premium spirits like rum, vodka, gin and tequila have made their way into our glasses, infusing a younger, fresher energy into the culture.
In the past few years, premium consumption has exploded, and it is no longer just about whiskey or cognac. For instance, tequila was once seen merely as a party shot that was consumed before or after the party. But now, it is being savored and appreciated for its craftsmanship and unique origins. This transformation reflects a broader lifestyle shift, where consumers want every sip to tell a story. This is a new era of drinking in India, where people are beginning to choose experience over excess.
The spirits industry in India stands as a major force, with around 390 million cases of branded spirits sold and generating an impressive Rs. 3.4 lakh crore in excise revenue. Between 2019 and 2023, the overall market grew at a CAGR of 2.6%, but the real highlight is the premium segment, which has enjoyed double-digit growth. This trend is a result of the increasing disposable incomes and a clear pivot towards premium offerings, as the share of premium spirits has risen from 42% to a remarkable 49%. This shift indicates a dynamic change in India’s drinking culture, where quality is the new standard.
Reasons for the shift in the market
This mainly stems from a multitude of factors that are reshaping how consumers engage with premium spirits. There is a rising appreciation for the craftsmanship behind these beverages, as people become more curious about the intricate processes involved in their creation. Today’s consumers are actively seeking out distinctive flavors and exceptional quality, moving away from the ordinary. Social media has revolutionized the way information is shared, allowing enthusiasts to discover and discuss premium products like never before. This accessibility to information has fueled a growing appreciation for high-quality products and has contributed to the rising demand for premium options. Additionally, experiences like craft distillery tours and tastings events are fueling a deeper connection with these spirits. As India transitions from a whiskey-and-rum-dominated landscape, this newfound enthusiasm is encouraging adventurous drinkers to explore a diverse range of premium options, making it an exciting time for the spirit’s market.
Premium spirits priced above Rs. 2,000 are seeing an astonishing growth rate of 48%. This trend is not just an Indian phenomenon; it reflects a global shift where consumers are increasingly drawn to luxurious and high-quality offerings. Across the world, people are moving away from mass-produced options and opting for premium spirits that promise unique experiences. This collective mindset is fostering a culture where the value placed on quality, authenticity, and distinctiveness is driving demand for premium beverages. As consumers prioritize these attributes, the market for opulent spirits is thriving like never before.
Latest Trends in the Spirits Market
The premium spirits market is witnessing several intriguing trends that are reshaping the landscape. One notable trend is the increasing reliance on technology throughout the value chain, from production to marketing. For instance, distilleries are using advanced techniques like AI to perfect flavor profiles and enhance quality control. Additionally, consumers are embracing the versatility of premium spirits, exploring an expansive range of flavors from floral gin infusions to smoky single malts allowing for endless cocktail creativity and personalization. This evolution has also given rise to new occasions for consumption. It is no longer confined to traditional settings, premium spirits are being enjoyed at casual gatherings, brunches, and even wellness retreats.
Another critical trend is the growing significance of brand image and values. Consumers are drawn to brands that resonate with their personal beliefs, such as sustainability or social responsibility. The shift towards transparency in communication fosters trust, as consumers increasingly prefer brands that align with their values and demonstrate genuine commitment to social and environmental issues. Overall, these trends reflect a more conscientious and discerning consumer base, eager to engage with premium spirits that desires for quality and exclusivity. As we look ahead, the numbers paint a compelling picture: the global premium spirits market, estimated at USD 159.04 billion in 2022, is projected to grow from USD 166.62 billion in 2023 to an impressive USD 253.56 billion by 2032.
What the future holds for the Spirits market in India
The premium spirits market is segmented by price range into three main categories: Super-Premium (over USD 50 per bottle), Premium (USD 25-50 per bottle), and Mass-Premium (USD 15-25 per bottle). Among these, the Premium segment is expected to dominate in 2023, capturing a significant share of market revenue. Meanwhile, the Mass-Premium segment is projected to experience steady growth, catering to a broad audience eager for quality without breaking the bank.
However, it is the Super-Premium segment that is truly poised for remarkable expansion, with a forecasted CAGR of 5.2% during the coming years. This growth can be attributed to increasing disposable incomes and a changing consumer landscape that increasingly favors high-end, exclusive spirits. As consumers seek unique and luxurious experiences, they are willing to invest in premium offerings that reflect their lifestyle and aspirations.
The competitive landscape of the premium spirits market is expected to remain vibrant, with major players continuing to invest heavily in innovation and expansion. The rise of low- and no-alcohol options is catering to health-conscious consumers, expanding the premium segment further.
As the landscape of the Alcobev industry continues to evolve, the stronghold of brown spirits highlights a deep-rooted cultural preference in India. With increasing interest in premium offerings and craft distilling, the future looks promising for both traditional and innovative spirits.
