2017 has been a dynamic year for the Spirits Industry, in India. From regulations to customer trends, from old brands taking Pole Positions, to new brand launches, a lot has happened in this year.
India started the year with feeling the impact of demonetisation, which had taken place in November 2016. With currency notes being short in circulation, sales were affected across popular brands and segments. Cash sales of spirits dropped significantly, with retailers witnessing a drop of even 30%-40%. This led to a consequent decrease in marketing by leading brands. Large industry events saw modest turnouts and low sponsorship funds. Even though these were great opportunities for networking, most industry platforms were also shifted.
Close on the heels of the demonetisation followed the Highway Ban in April 2017, that caused major shrinkage in the Indian Spirits market. Post the ban on alcohol sales near highways, the market shrank by 5% -20 %. About 30,000 shops shut and large liquor companies had to choose channel de-stocking as there wasn’t clarity on the way forward.
Additionally, sales were impacted in key states like Haryana in North India, where a monopoly distribution was adopted by the state government, leading to a lot of small players being eliminated since they could not afford a high entry fee being demanded.
Happily though, it was not a year only for challenges and some heartening data did emerge. India now Boasts of Four out of the Top Five Fastest Growing Spirit Brands in the World. Whisky remains the favourite amongst all other spirits in India, and there’s no challenger in sight. Other major categories of spirits and their variants haven’t been able to shake whisky’s dominance in the market.
A recent study carried out by The International Wine and Spirit Research, states that Indian whiskies occupy seven of the top 25 fastest growing spirit brands. Imperial Blue is leading the way with 27.7% growth between the years 2013-14, with Officer’s Choice following closely behind at 18.4%, largely due to its popularity among lower-income consumers.
Pernod Ricard India is also taking its Indian whiskies, like Royal Stag, Blenders’ Pride & Imperial Blue to Global Markets.
Officer’s Choice has already overtaken Smirnoff as the world’s largest spirits brand, Royal Stag and McDowell’s, owned by Diageo, also being closely in the queue.
Interestingly, Age has stabilised with customers an people are looking at a differentiated taste spectrum. A whole new generation of drinkers has gotten into brown spirits at a time when age statements are no longer valued as significant. It may be that younger drinkers never come to think much about age statements the way that older generation of customers, prize these numbers printed on labels.
Amongst international brands, Chivas 18 YO gained most significantly, with The Glenlivet growing amongst Single malts. Pernod Ricard will also be launching Aberlour & Scapa, in early 2018.
In addition, the American whiskey category has been seeing a renaissance worldwide and India has been no different. As per industry estimates, it is the second biggest imported whiskey category after scotch in India and has been growing with a CAGR of more than 11% in the last few years. Consumers are increasingly choosing American Whiskey for the taste, quality and the values that resonate with the category. Michter’s – The US No 2 Top Trending Brand has been introduced to the Indian Market by Cask Spirit Marketing and is becoming the favourite of many customers. Some of the key factors driving this growth, are the increasingly disposable incomes, growing aspirations amongst legal drinking age consumers to upgrade and an increased exposure to global brands. Young Indians travelling the world are seeking brands, which are authentic and have a legacy of craftsmanship.
Year 2017, also saw, leading bars across India upgrading their Whisky Menus & ensuring a higher degree of Service Standards. Hotels like Taj Krishna, Hyderabad, JW Marriott, Bengaluru & The Lodhi in New Delhi, invested in raising the “Bar of the Bar”.
Not just wider Lists, Whisky & Food pairing is now a regular feature on most Menu`s. Even guests are looking forward to being guided on Whisky paired Menu`s & make an effort to under the pairing. According to Vikramjit Roy, a leading Chef in India, who runs a successful Asian restaurant like PoH, “Whilst Whisky offers a great pairing with Indian Cuisine, though we have also some great Menus with Asian & Japanese Cuisine. Regular guests are guided on the selection of Whisky & its pairings with our Menu.”
In terms of Indian Brands, Paul John & Amrut grew well in the market with the former gaining a wide distribution base. Indians have a differentiated opinion on Indian Single Malts, in terms of taste and adoption.
Berry Bros. & Rudd. also introduced its Single Cask Whiskies in India. Sazerac Rye bought 28% in Indian Whisky company Paul John & will be buying another 15% in the next 2 years. Industry leaders, feel that it will give a big boost to the Indian whisky attain distribution in the US market as well as Sazerac Rye considering bottling Bourbon in India.
Japanese Whiskies still remain elusive, with Indian consumers buying them only from Duty Free; still they are steadily gaining a foothold in India. Radico Khaitan, a major Indian liquor producer, started the trend in 2011, by launching Suntory’s premiere whiskies in the Metropolitan cities of India. Though this association lasted only 3 years, Hotels & Customers are constantly seeking Japanese whiskies. Cask Spirit Marketing a leading Spirits firm, will be importing Kirin-Fuji Sanroku in the beginning of 2018.
High growth was also witnessed in Women appreciating Whisky. From a time, they were only accompanying Men enjoying, primarily, Scotch Whiskies, Women have emerged as an audience on their own. According to Kamal Mohandas, a fashion designer, “Whisky is so much more easier & elegant to enjoy. Thanks to a much wider choice, in bars across India, our girls night out are spent appreciating different flavours of Whisky. I see a lot of them enjoying premium Blends & even Irish whiskies.”
With the growing popularity of whisky, societies about it are also becoming popular. People are keen on learning about whisky making and the correct ways of enjoying it to the hilt. Whisky centric bars such as Whisky Samba in Gurugram and Kode in Mumbai, both launched in 2017, are playing a key role in providing whiskies with varied experiences.
Whisky will see a new high in India, in the next few years & developments in 2017 will be significant to this growth.
The Young are embracing Whisky, the image of Whisky is becoming younger as more & more standalone Bars are adding to their Whisky portfolio. Year 2017, did not start well, though it is ending very well…. Its ending on Whisky being on a great high & still on top of the Charts for discerning lovers of the amber nectar.