Sales for liquor are said to grow always because people are usually in two state of mind, happy or sad, and they drink to celebrate happiness and they drink to get over the sadness. So whatever the mood, the liquor business will definitely grow.
According to ASSOCHAM, sales for Imported spirits will cross a five million cases mark by 2015. The sale of imported spirits including the duty-free travel trade in India is likely to reach about 550 lakh litres by 2015.
Growing at a compounded annual growth rate (CAGR) of about 25 per cent, the imported spirits market in India is currently estimated at about 280 lakh litres and about 3.1 million cases, according to a study titled, ‘India’s emerging imported spirits market,’ released by The Associated Chambers of Commerce and Industry of India (ASSOCHAM).
With the rise in income levels, exposure from the west, influencing media experiences and the augmentation in the number of working professionals, industries across retail are getting a boost. The growing purchase power is letting people rise on their standard of living and they are now reaching out for things which are high on ticket value. Also globalisation, increased social drinking and the growing travel experience that people experience today, drives them to go after international labels. “Growth of imported spirits in India is largely driven by the spurt in tendency amid young Indian professionals and entrepreneurs to migrate from local brands to international brands,” said DS Rawat, secretary general of ASSOCHAM while releasing the findings of the study. He adds, “With more number of Indians travelling abroad for studying and other professional reasons, their fondness for imported liquor is also rising which is certainly leading to growth in the business as they acquire taste for imported liquor and can afford to buy the expensive spirits from duty-free shops abroad.”
Indian brands are also working towards bringing international labels to India, increasing the reach of foreign labels amongst the Indian clientele. Natures Bounty Wines & Allied Products Pvt Ltd promoted by Amit Burman brought 'Kuchh Nai', the scotch whiskey from Glasgow, England to India a year ago. William Grant and Sons, the maker of Glenfiddich, Grant’s Balvenie and other top brands are also expanding their portfolio in India.
Scotch and wine tasting sessions by international labels is also fuelling the growth of this category. Also the opening of specialised liquor stores has increased the accessibility not just for men but also for women who can now walk in to stores and purchase liquor all by themselves. This was previously considered a taboo.
ASSOCHAM also states that accelerated levels of growth in sales of liquor in tier II and tier III cities will be witnessed as companies are focusing on retail channels like bars, restaurants and pub joints across these towns apart from huge investments in infrastructure, supply chain, bottling facilities etc. which will also open employment avenues
According to ASSOCHAM the overall liquor consumption in India is growing at about 30 per cent CAGR and is likely to reach about 20,000 million litres by next three years from current level of about 7,000 million litres. In terms of revenue the alcoholic beverage market is currently estimated at about Rs 52,000 crore and is likely to reach about Rs two lakh crore during the course of next three years, said ASSOCHAM. Wine consumption in India is likely to reach around 14.7 million litres (in volume terms) by the end of 2012 from around 4.6 million litres in 2008 registering a growth of 35 per cent during the course of past 4 years, according to ASSOCHAM. The Indian wine market (in value terms) stood at Rs. 800 crore as in 2008 is likely to touch Rs. 2700 crore mark by the end of this year.The vodka market in India is growing at about 25 per cent annually and is likely to reach about 10.2 million cases by the end of 2012 as vodka is emerging as a starting drink of choice for the youth at metros and tier II centres, according to the ASSOCHAM.
Duties levied on imported liquor are very steep in which adds greatly to the price. Imported Scotch attracts a 150 per cent Union government tariff. State duties also add to the price of imported whiskey bottled outside the country. If duties are lowered, the growth will further get a push.
A number of reasons are facilitating the growth of imported liquor in the country and people are more than open to be able to access foreign labels just around the corner. Till people keep drinking, the industry definitely has a lot of potential.