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Mint
03-06-2025
- Business
- Mint
India is the world's fastest-growing alcohol market when global demand cools
India isn't just raising a toast, it's raising the bar. The country is now the fastest-growing alcohol market among the world's top 10 liquor-consuming nations even as global demand dipped. Beer outpaced all other categories in India in 2024, while whisky continues to dominate, putting the country on a path to cross $50 billion in alcohol sales by 2031, according to new data exclusively shared with Mint by London-based spirits consultant IWSR. India could even possibly dethrone France and the US as the world's top Scotch market by volume by 2027, it said. The country's alcohol market grew 9% by value last year, reaching just under $40 billion, IWSR said. That's an increase of over $3 billion in 12 months, marking India's entry into the top five by value last year. Volume was up 6%, placing the country eighth globally by size—just ahead of the UK and Spain. Rising urbanization, higher incomes and a young population are driving demand, especially for premium brands. 'India is a spirits market dominated by whisky, with a total alcohol by volume momentum that most markets presently lack. Scotch remains the pinnacle for many, almost certainly made more accessible by the recently announced India-UK FTA," said Jason Holway, a senior consultant at IWSR. 'It seems a question of when, not if, demand for Scotch overtakes that seen in France and the US, with both Bottled in India (BII) and Bottled in Origin (BIO) likely to contribute." Also read | Why India is the toast of the global alcohol market: Its young voters BII is alcohol imported into India in large quantities and bottled domestically, typically priced between ₹1,000 and ₹2,000, covering both local and international brands. BIO includes liquo fully produced and bottled overseas—such as Scotch whisky from the UK—and then imported as a finished product. Global growth cools India's growth contrasts with global trends. Worldwide alcohol consumption dipped 1% by volume in 2024, even as value edged up 1%. 'Contractions in the US and China contrasted sharply with gains in India and Brazil in 2024," IWSR said. 'The largest contributors to value growth over the next decade are developing markets, India, Brazil, Mexico and South Africa, with an expected incremental growth of $28 billion." Still, IWSR predicts the global alcohol market will grow by $34 billion, or 3% by value, over the next 10 years despite economic and political challenges, with India expected to contribute much of that growth. From 2024-29 alone, the market is projected to grow by $16 billion, or 1%, across 160 countries. Beer on a high India's beer was the fastest-growing category, rising 9% in 2024. Wine followed with 4% growth and spirits grew 3%. According to IWSR's forecast, the country is expected to contribute nearly 50% of global alcohol market value growth through 2034, led by whisky and beer. India is already one of the largest destinations for Scotch shipments—including bulk supplies used in domestic blends—and is projected to become the world's third most valuable alcohol market by 2032, overtaking the UK and trailing only China and the US. Whisky drives the consumption. Dark spirits—whisky, brandy, dark rum and gold tequila—made up 95% of all spirits consumed in the country. Read this | PVR Inox seeks to widen alcohol sales in select premium markets to combat shrinking audiences Rising disposable incomes and a deeper understanding of premium and single malts have also contributed to the growth of India becoming one of the world's largest whisky-consuming markets, said Paul P. John, chairperson of John Distilleries Ltd. 'In addition, the growing affordability of imported brands is further boosting brand awareness." Scotch whisky alone saw a 6% jump by volume and 7% by value in 2024 over the year prior. It's likely to get a further fillip from the recently signed India-UK free trade agreement that's expected to make imported Scotch more accessible. This will open up the market to UK spirit manufacturers too. Last month, India and the UK agreed to cut the 150% import duty on Scotch and gin to 75% to start with, and gradually lower it to 40% over the next 10 years. Mint recently reported that Diageo India, the maker of Johnnie Walker, Ketel One, Tanqueray, Captain Morgan and McDowell's No. 1, expects the move would lead to a high single-digit drop in retail prices for consumers. Demand is also rising fast enough that India could soon outpace long-time Scotch markets like France and the US, IWSR said Demographic advantage Alcohol sales in India are expected to grow 8-10% to ₹5.3 lakh crore in FY26, with profits also likely to improve, Mint reported recently, citing data from Crisil ratings. The report, based on 25 major liquor firms, estimates a 5–6% rise in overall volumes, led largely by spirits like whisky and rum, which contribute nearly 70% of industry revenue. 'India's spirits market is set for strong growth over the next decade, and we're very bullish," said Paramjit Singh Gill, CEO of the consumer division at Globus Spirits, which makes Terai gin and Doaab single malt, among others. 'Rising disposable incomes in tier 2 and 3 cities are driving demand, with more consumers in these markets willing to spend on premium spirits." Consumption is also propelled by a young, drinking-age population. The country is projected to reach the height of its demographic advantage around 2041, when people aged 20 to 59—the core working-age group—are expected to make up 59% of the total population, according to the Economic Survey of 2018-19. Read this | Following listing, beer maker Kati Patang plans to acquire and incubate small alcohol businesses to expand While the base is still small, Gill expects the premium segment to grow at a high double-digit rate. 'Younger consumers are also prioritizing experiences and exercising greater choice. Plus, millions of Indians are entering the legal drinking age each year, further expanding the market." Still, while the appetite is strong, the average price point remains modest. Just 1% of the country's spirits market in 2024 was classified as 'premium" (priced above ₹2,820 for a 750ml bottle). Most of the market—93%—sat firmly in the 'value" segment, with bottles priced between ₹180 and ₹1,133
Mint
13-05-2025
- Lifestyle
- Mint
India's Gen Z is drinking less, but drinking better
New Delhi: Young Indians are rethinking how they drink. A rising number of Gen Z consumers are cutting back on alcohol or trading quantity for quality, in line with a global shift towards health and wellness. Data indicates that Gen Z drinkers in India are more inclined to reduce their alcohol consumption compared to millennials, who continue to be the primary consumers of alcohol in India. 'There is a clear decline in alcobev consumption globally, and India is not immune to this trend," said Rajeev Samant, founder and CEO of Sula Vineyards. 'Even when we consider the demographic dividend, we still see people on Instagram advocating for a more alcohol-free lifestyle. Things have definitely changed. Alcohol consumption may not be evolving in the way we once expected." Traditionally, the under-30 age group has never been a major wine-consuming segment, he said. 'That said, this cohort in India today likely consumes more wine, relative to previous generations." According to data from IWSR, a global tracker of the alcoholic beverage industry, the attitude of Gen Z (those over the legal drinking age) towards alcohol in India differs significantly from millennials. 'In our latest Bevtrac report on consumer sentiment in India—Gen Z drinkers who choose to drink less outnumber those choosing to drink more by 5%," said Jason Holway, IWSR senior consultant. In a recent survey of full-strength drinkers, 25% of Gen Z drinkers have never chosen to abstain from alcohol for lifestyle reasons, while 41% have chosen to be away from alcohol for one month or more for lifestyle reasons. "In India, boomers, Gen X, and Gen Z are more likely to choose to drink less rather than drink more (millennials are the exception and continue to drive alcohol consumption)," said Holway. As per IWSR, millennials are the generation in India least likely to choose moderation. Millennials who choose to drink more outnumber those choosing to drink less by 8%. Around 28% of millennials have never chosen to abstain from alcohol for lifestyle reasons, while 36% have chosen to abstain from alcohol for a month or more for lifestyle reasons. While older consumers continue with established drinking patterns, younger legal-age drinkers are actively reshaping norms, he said. This doesn't mean Gen Z is abstaining entirely. With increased exposure to bars, pubs, and live events, younger consumers still drink—but with more restraint and a conscious approach. Take New Delhi-based Kanika Dua, for instance. The 28-year-old has cut down from three to four drinks a night to a maximum of two or three. 'It shows up the next day, and with work starting early, I cannot afford a mid-week binge," she said. The era of guzzling is over, said Alok Gupta, managing director at liquor company Allied Blenders and Distillers (ABD). 'There is a need to consume better—so instead of three large drinks consumers may opt for two nice cocktails. Consumers want to prioritise morning workouts or early morning work commitments," he said. Also Read: Delhi's beer shelves are full—but where are the big brands? Booze break Gupta said growing awareness around health and fitness is influencing beverage choices. "The lens through which they consume F&B (food and beverages) has changed," he explained. "The fitness piece brings focus on better consumption, considering factors like calorie count and protein-carb balance, which extends to both foods and beverages. The concern isn't just about drinking less, but also drinking better, leading to premiumization," he added. Consumers are drinking better quality gin or tequila and even trading up to better whiskey or scotch. There are early signs of the "sober curious" trend among Gen Z, though its impact in India is still marginal compared to countries like the US, Vikram Achanta, founder of Tulleeho, a Delhi-based drinks consultancy said. 'There's talk of younger consumers drinking less, but it's not yet meaningful from a volume perspective. India is insulated from some of the shifts we're seeing in the West," he said. Still, they're more conscious of alcohol content. "A Spritz (with 8-10% alcohol content) might appeal more than a Martini (with 20-35% alcohol content)," he said. Mint earlier reported that a growing number of urban Indians were embracing sobriety or moderation—not necessarily due to heavy drinking but because of health concerns tied to their lifestyles. This rising "sober curious" sentiment is fuelling demand for non- and low-alcohol alternatives. This gave rise to a number of new-age startups, brands like Catwalk Botanics, Sober, Copenhagen Sparkling Tea and others that are focused on either creating or importing products from different markets. Though the category remains under 1% of the broader alcobev market, it is slowly gaining traction in metro cities. Global giants like Heineken and Beefeater have also entered this space. Despite growing moderation trends, alcohol consumption in India is growing. The country, with its large population, remains a large market for alcoholic beverages. The compound annual growth rate (CAGR) of total alcohol beverage industry in India from 2018 to 2023 was over 2%. Also Read: Beer brewers, after two tepid years, raise a toast to a longer, meaner summer According to Gupta of ABD, more legal drinkers are entering the market annually, and evolving social norms have led to greater acceptance of social drinking and increased alcohol consumption among women. Volume growth may slow, but consumer numbers are rising, and they're drinking better, Gupta said. India had 18-19 million first-time voters in the 2024 general election and an estimated 65 million Indians will be of legal drinking age (depending on the region) over the next five years. For brands, the message is clear: engaging with this evolving consumer base is critical. Samant of Sula said, "At festivals like SulaFest, 90% of the audience is Gen Z. So, we're doing our part by introducing more people to at least entry-level wines."
