High Spirits: Navigating India's Booming Alco-Bev Renaissance

A Spirited Exploration

India has a long history of alcohol production, dating back thousands of years. Industrial-scale production began more than two centuries ago when the British established the first modern distillery in Kanpur in 1805. Since then, the industry has grown significantly, with 40 distilleries in operation by the early 20th century. Today, the Indian alco-beverage market is worth $50 billion and is primarily dominated by Indian Made Foreign Liquor (IMFL) and Indian Made Indian Liquor (IMIL). This growth is driven by consumer demand for quality and a wide variety of options, which enhances the experience for bars and bartenders.

Intoxicating Insights

(1) Whiskey Wonderland

The Indian whiskey market leads globally with 48% consumption, driving the growth of premium brands tailored to evolving tastes.

India’s temperate climate expedites maturation, giving Indian Whiskies a distinctive character and complexity at a relatively younger age. This has led to the emergence of India’s Single Malt industry at home and internationally.

Indian Brands like Indri, Amrut and Paul Johnhave won international accolades, driving Indian whiskey drinkers to embrace local brands thereby reshaping alcohol consumption trends.

Bonus: Here’s a neat guide explaining the 11 types of whiskeys.

(2) Booming Craft Beer Revolution

Craft beer dominates the $7 billion craft alcohol market in India, with brands like Doolally and Bira leading and, revolutionising the industry, and paving the way for numerous brands. 

India's craft beer production surged since 2015, offering premium small-batch options between inexpensive domestic (e.g., Kingfisher, Haywards 5000) and imported brands. Prior to this, the mid-market segment was vacant, although Kingfisher Ultra and Danish labels like Carlsberg made attempts to fill this gap. Doolaly spearheaded change by revising licensing procedures in India, starting in Maharashtra. Today, there are over 200 microbreweries across cities offering a variety of tastes and flavours based on changing consumer preferences, producer innovation, and shorter feedback loops.

‍(3) Embracing White Spirits

In 2020, India's gin market was valued at $914.7 million, a figure projected to reach $1.6 billion by 2030 thanks to a healthy annual growth rate of 7-8%. This significant expansion, largely at the expense of vodka – a segment still 5-6 times larger than gin – reflects shifting consumer preferences influenced by India's tropical climate and vibrant cuisine. 

The increasing adoption of white spirits in a market traditionally dominated by brown spirits has paved the way for a new wave of homegrown gin brands like Stranger & Sons, Pumori, Terai, and Greater Than. These brands are tailored to suit the changing palate of consumers, offering unique blends that harmonise beautifully with the diverse flavours of Indian cuisine, providing a genuinely refreshing experience.

(4) Fine Wining

Indian wine production has seen significant growth in the last decade, with a 70% increase in domestic production and a 40% jump in imports. This growth is driven by factors such as the rising popularity of Rosé wines, a strong emphasis on sustainability practices, and a projected industry value of $274 million by 2026 with a remarkable 29.3% y-o-y growth in 2022.

Sula, the leading force in the Indian wine industry, is consistently reaching new heights each year. Currently, 25% of their wines are consumed by women. Fratelli and Grover Zampa are other popular brands known for their local identities and experiential activities like wine trails and festivals.
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Indian Success Stories

Stranger & Sons by Third Eye Distillery

Stranger & Sons emerged from the creative ingenuity of Third Eye Distillery, founded in Goa. This distinctive gin stands out not only for its craftsmanship but also for its commitment to sustainability. Emphasising unique branding and environmental consciousness, Stranger & Sons utilises eco-friendly packaging and renewable energy sources.

Growth & Marketing Initiatives

• Launched limited edition bottles of their innovative product, Perry Road Peru, to create a sense of scarcity and exclusivity.
• Forged partnerships with popular restaurants to foster collaborations between the brand and the culinary world. Initially, only served alcohol on tours across cities including Bangalore, Mumbai, Goa, and Delhi.

• Curated a playlist, Settle & Sip Slow Playlist, tailored to enhance the consumer experience and set the mood for the consumers.
• Made in India t-shirts - Collaborated with No Nasties, an ethical and sustainable clothing label, to strengthen the brand's alignment with its values.

‍Amrut Distilleries: The Pioneers of Indian Single Malt

Established in 1948, Amrut Distilleries initially produced Indian Made Foreign Liquor (IMFL) for the Canteen Stores Department. In the 1980s, the company shifted its focus to crafting high-quality barley-based whiskey, departing from the prevalent molasses-based whiskey production in India. By 2001, they successfully repositioned Amrut as a globally recognised brand, showcasing Indian craftsmanship to be on par with that of esteemed whiskey brands from Japan and America.

International Launch & Growth

Amrut whiskey was launched in Glasgow, Scotland in 2004, strategically targeting the UK and Europe markets to create aspiration for Indian consumers. 

• Focused on quality over quantity, they made a bold move into the luxury whiskey market in Europe, challenging existing perceptions. 
• Received endorsement by key industry figures such as whiskey expert Jim Murray who rated Amrut highly in 2005 and 2010, and The Whiskey Advocate magazine via consecutive World Whiskey Awards for ‘Amrut Fusion’ and ‘Amrut Two Continents’. 
• Expanding swiftly, they entered North America in April 2010, solidifying their global presence and reputation. 
• With distribution in 44 countries and 25 expressions, Amrut is now renowned as a top-quality single malt whiskey brand.

While Stranger & Sons quickly expanded within select cities in India, Amrut pursued a contrasting strategy, positioning itself as an aspirational global brand with growing popularity in the UK, Europe, and the US before eventually entering the Indian market.

What’s next?

India's alco-bev industry is growing rapidly, with per capita alcohol consumption increasing. The WHO predicts it will reach 7.9 litres by 2025, indicating a promising future for the space. Domestic brands today are providing a wide range of distinctive flavours and options, with gin, craft beer, wine, and whiskey leading the way to offer a unique drinking experience in India.