The increase in consumer demand for premium and super-premium spirits, as well as the rebound in out-of-home consumption, are expected to be the primary drivers behind the anticipated double-digit rise in sales of alcoholic beverages in India in the year 2022. Alcoholic beverage manufacturers are broadening the variety of premium spirits they provide to profit from the rising demand for their products. According to projections made by GlobalData, the industry’s leading data and analytics organization, the market for spirits in India is expected to expand at a compound annual growth rate (CAGR) of 7.2% between the years 2021 and 2026.
“Liquor sales returned well in 2022,” says Suneera Joseph, a consumer analyst at GlobalData. “This was underpinned by consumers’ increased choice for higher priced brands, increasing footfall in pubs and restaurants, and stable at-home consumption.” This is supported by the findings of a consumer study conducted by GlobalData in the fourth quarter of 2022, in which 57% of Indian respondents said that their expenditure on spirits was either extremely high, very high, or medium over the previous three months.
Because consumers now have more discretionary money, they are more prepared to spend more for higher-quality alcoholic beverages. As a result, firms are altering their product lines to respond to the shifting patterns of alcohol use to remain competitive.
Joseph continues, saying that “the post-COVID-19 epidemic growth in festive and outdoor events, social gatherings, marriage celebrations, and business get-togethers, without any constraints, would further push liquor sales.” As a result of the fact that customers tend to drink and serve better on special occasions, they will gravitate more toward premium and super-premium alcohol.
This pattern is supported by the results of a poll conducted by GlobalData in the fourth quarter of 2022, in which 39% of Indian respondents said that they had bought items manufactured by foreign/global multi-national brands***. In keeping with this trend, prominent producers of alcoholic beverages like United Spirits, which is owned by Diageo, Bacardi India, and Allied Blenders & Distillers increased their premium product ranges throughout the year.
Joseph draws the following conclusion: “As the movement toward premiumization across all categories of spirits continues to gain pace, companies that introduce spirits at premium pricing points will have a considerable competitive advantage.”
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