A few years back, if you were offered an Indian whisky, at anyone`s residence, you may have felt offended, since the basic standard was a single malt or a premium blended whisky. Over the years things have changed quite interestingly & today Indian whiskies are not just being sought after but also being served with pride. Lot of new Brands have entered the mainstream Indian whisky market post the launch of the “First” global Indian whisky, Amrut in Glasgow in 2004.The response to Indian Single Malts has been very encouraging and the acceptance level by consumers across the world has been great. Specially the malt connoisseurs, who are willing to experiment and try out the new world single malts. “This augurs well not only for Indian Single Malts but also all new world whiskies. The world has taken notice of what is happening in the whisky world outside of Scotland and keen to support great quality malts that are being produced. The standard Indian Whiskies (IMFL) continue to grow in traditional markets like Middle East and Africa. We do hope that UK, EU and Australia will soon lift the non-tariff barriers on Indian Whiskies and give a big boost to exports of Indian Whiskies” avers, Sanjeev Banga, President – International Business Radico Khaitan Ltd.
India’s whisky Industry has been growing for over a decade, though in the last three years, the rise of Indian whisky brands has brought much recognition to the Indian whisky market. Indri Indian Single Malt Whisky has already bagged prestigious awards like International Spirits Challenge 2022 and is the only Indian Single malt to win a Gold Medal in the World Whisky category Single malt – no age statement category 2022.
According to Thiruvikram Nikam, JMD at Amrut Industries, “In the last few years there has been a constant increase of interest for Indian Whisky. We at Amrut are exceeding the demand expectations which can be considered a good response for Indian Whisky. To add to this, we are present in 55 countries and the response has been very encouraging. India`s huge demographic spread, coupled with exposure to various types of spirits, has led to increase in sales across different segments of spirits. In context to the improvement in sales of premium whiskies, in the last few years we have seen a very active interaction between the brand and consumers thereby increasing brand awareness, quality and so on. Social Media marketing has also played a major role in bringing the consumers to the brands”. As they say, change is the only permanent thing. In that light, consumers trends and preferences keep evolving. Currently, there is a trend where the consumer is willing to try and appreciate a variety of spirits, including a surge in Indian Gins. One also senses a Rum boom in the coming years, with of course premium whiskies continuing to do better and dominating the figures. A good growth for Indian whiskies, not only in India but across the globe, is possible provided Indian Spirits maintain a good standard and disciple in manufacturing the produce.
“Despite the global pandemic and changing economic scenarios in the last three years, the Indian Spirits market has seen growth in its consumption. Due to the second wave, the alcohol Industry took a significant hit in the pandemic itself, but the government regulations on taxes helped drive sales still. We at Indri have seen that lot of people are experimenting with Premium Indian Single Malts in the past 2 years. The critical word here is an experiment. The Indian liquor industry has changed over the last three to four years. As demand for high-quality goods has increased, the Covid-19 pandemic has accelerated the trend, particularly in metropolitan areas. The dynamics, on the other hand, have changed. The changing drinking habits of the younger generation and the rising liquor industry in the Indian subcontinent have resulted in a significant shift in how individuals use alcohol.”, according to Praveen Malviya, President Piccadily Agro Industries Ltd.
Despite the pandemic and related restrictions, Indian beverage alcohol industry has also performed well in the last 3 years, in the domestic Industry. It is heartening to note that the state governments have realized the significance of revenue generated by this industry and they are taking pragmatic steps to not only improve their revenue collections further but also to create a better environment for the industry as well as related players be it Retail, On Trade and Hospitality industry to function more efficiently and effectively. Premium and luxury category are growing at the fastest pace. There are challenges due to global logistical issue on sourcing of some of the packaging material but hopefully things should settle down soon.
“During the pandemic, there was a drop in Spirit markets however certain segments showed remarkable resilience and growth despite the closure. Categories such as premium Whisky, Scotch Whisky bottled in India, Single Malts, etc continued to grow and have been leading in the recovery back to pre-pandemic volumes, while the overall spirits market declined in terms of volume growth. In India, rising affluence of Indian middle class with rising aspirations levels & increasing disposable income, the urban Indian consumer is seen to be globally aware and treats alcoholic beverages as any other beverage category, this leads to growing experimentation and thereby to the growth of premium whisky. Also this is the category where price laddering is available for the consumer to choose from for every occasion which allows for more experimentation.” According to Paul John, Chairman, John Distillery.
In recent times, India has become a game changer in Alcobev segment. Spirits like gin, vodka, rum, whisky (single malts and blended) and Indian agave have emerged as a strong portfolio, competing in the international market. Indian spirits are also been recognised globally. Though India is still a whisky market, in recent times good scope of Gin and Rum has ben witnessed. With new bartending schools in India, we also see a major shift in the bartending community who give an experience to customers with fresh flavours of Indian spirits. With high engagement on social media, there is a faster knowledge transfer on methods or etiquette of drinking a particular spirit. Retailers are trending with new customer experience at the stores.
So where will we see significant growth in the Indian market, reaffirms Sanjeev Banga, “Innovation and experimentation will remain the key drivers of growth. Whilst Indian Single Malts have a unique opportunity to showcase what India can offer to the world, at the same time we feel there are lot of local / regional spirit drinks that need to be brought forward and shared with the world. Staying at home during the pandemic made lot of us experts in making cocktails, so DIY and premixes should also see growth in near future.”
Consumer trends too are changing & evolving In India. Drinking at home during the pandemic unshackled the taboo surrounding alcohol consumption in India. Indians are drinking less but better. They no longer drink to get drunk but to enjoy the moment / occasion / togetherness. Also, Indians are well aware of the global trends and classic case is growing acceptance of Gin. A category that was nonexistence till a few years ago is seeing lot of consumer interest and newer brands being launched at regular interval. Following the global trends, we see Luxury Rum and Agave based spirits the next big thing.
Premium and luxury category are also growing at the fastest pace. There are challenges due to global logistical issue on sourcing of some of the packaging material but hopefully things should settle down soon. Innovation and experimentation will remain the key drivers of growth. Whilst Indian Single Malts have a unique opportunity to showcase what India can offer to the world, at the same time we feel there are lot of local / regional spirit drinks that need to be brought forward and shared with the world. Indians are drinking less but better. Following the global trends, one sees Luxury Rum and Agave based spirits the next big thing.
Ruchika Gupta, Marketing Director, Beam Suntory India – “We founded Oaksmith on some very solid foundations and Japanese principles of Gemba (or deep consumer insights) and monozukuri, our high quality techniques around purity, precision and process. It’s a blend by one of the finest in the blending world, gentleman behind iconic brands like Yamazaki Japanese Single Malt and Hibiki Japanese Blended – Shinji Fukuyo, from Suntory, epitomizing impeccable Japanese craftsmanship. Innovation seeped into everything we do for this brand, Oaksmith has rapidly expanded to almost all state markets. It’s been nothing short of a remarkable journey for Oaksmith to have gained consumer and industry recognition in such a short while. It strives to keep elevating the category as it moves forward.”
Today’s youth are seen to mature early, have more disposable incomes and different needs which have given rise to various consumption occasions. Awareness has increased, and experimentation & exploration have led to craft spirits and cocktails being the new trends. Riding the “ Premiumisation “wave, everyone is opting to go up the price ladder to find products better suited to their tastes. Also digital revolution has given brands a presence across social media as well. Craft Spirits, small batch, Single Malts especially with special finishes, Barrel Aged Rum & and Gins etc are the current flavours of the market and will definitely grow in next 3-5 years.
According to Jai Prakash Chopra, Co-founder of Spaceman Spirits Lab, which owns the Brand Samsara Gin, “I would say all categories have a bright future. There is innovation in every segment. But gin is picking up tremendously. We can see the sudden emerge of new Indian Gins and are doing well overseas too. It`s to early to comment on UK India FTA, but it is good to see many opportunities for both the countries for tie ups, ease of doing business and knowledge transfer. Maybe, this would equip us better to step up the product Outlook through innovative measures. There is a lot of scope for Indian spirits as Indian consumers are not yet aware of the variety of spirits in international trade. With continuous tie ups with local international brands and innovations in packaging, India is an emerging marketplace.”
Indian single malt exports have grown at an average of 25% over the last 3 years and the biggest growth is seen from countries like USA, France, UK, Australia, UAE, Canada, Japan, as well as in Duty Free. New markets like Russia, Israel and Turkey are expected to see a healthy growth in the next few years.
The Indian spirits brands have been on a steady growth across the country and also across different price categories. Though with the FTA, it seems too early to comment in absence of complete information but if there is a drastic reduction in the duties, it may impact the sale of Indian produce, which may adversely affect all the stakeholders within the Indian spirit ecosystem.
UK is one of the biggest markets for Indian single malt brands. Exports to UK have been consistently growing at the rate of more than 10%. In India however the impact of UK India FTA will create challenges for Indian whiskies producers, especially premium Malt Whisky producers. The challenges are not due to quality, as Indian Whiskies are today at par with the best in the world, but rather due to the taxation in favour of imported brands. Beyond the state laws, there also remains the challenge of competing with Imported brands that can advertise globally and also reach Indian consumers online.
Over the last few years, there has been an engaging interaction between Brands & Consumers. Social Media marketing has also played a major role in bringing the consumers to the brands. Indian spirits have also been gaining global recognition primarily due to exceptionally good quality. Indian manufacturers have evolved to produce truly world class whiskies & Spirits and Indian consumers are also slowly accepting this and trying domestic spirits. The wide range of spirits that Indian manufacturers have created have convinced the world on the quality of Indian spirits. The category has gained the confidence of the consumer and we expect this growth to continue and accelerate over the next few years as well.