India’s beverage alcohol market is tapped to record significant growth, driven by a youthful population with up to 20 million new consumers annually and an increasing preference for premium products, according to IWSR.
Despite global trends showing modest growth, India’s market outperforms with notable increases across all segments, leading the research company to forecast a “continued upward trajectory” in the coming years.
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, according to IWSR. This growth is set against a global backdrop of just +1% volume growth for total beverage alcohol, highlighting India’s unique market dynamics.
“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.
India’s demographic profile, with a median age below 30, positions it advantageously compared to countries like the US and China, where the median age is closer to 40. This demographic advantage is expected to introduce approximately 15 to 20 million new legal drinking age consumers annually. Furthermore, the country is on track to add 283 million more middle-class consumers between 2021 and 2031, significantly expanding the market for premium beverage alcohol products.
Holway notes, “Premiumisation is now acquiring a distinctly Indian element,” pointing to the success of local players who are offering premium-quality, premium-priced spirits. Indian whiskies, for example, now span a wide range of price points, from INR500 to INR13,000 a bottle, comparable to super-premium imported single malts. This trend reflects a broader shift in consumer preferences towards higher-quality products, both imported and domestic.
Despite the optimism, the market’s growth is hampered by India’s complex regulatory landscape and high alcohol taxes, which vary significantly from state to state. “Local and imported products alike have to navigate a complex beverage alcohol landscape in India,” the report notes, emphasizing the challenges of high costs of entry and varying levels of taxation.
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