Amrut Distilleries has attracted investment interest from numerous parties; however, it has not considered altering its shareholding structure, especially as the Indian single malt whiskey business is experiencing growth due to a premiumisation trend in the country.
Rakshit N. Jagdale, the managing director of Amrut Distillers, disclosed that the company has garnered interest from numerous investors lately, though he didn’t provide specific details. Currently, the company has no plans to go public on the stock market, but its focus remains on expanding exports and capturing a larger market share.
Jagdale added that currently, single malt whisky contributes approximately 25% to 26% of the annual turnover of INR 500 crore. He anticipates that the share of this premium category will rise to 35-40% of the total turnover within the next five years.
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According to preliminary estimates from the Confederation of Indian Alcoholic Beverage Companies (CIABC), Indian single malts captured approximately 53% of total sales in 2023. Out of the roughly 675,000 cases (each containing nine liters) of single malts sold in India last year, Indian producers accounted for about 345,000 cases, while Scottish and other producers made up the remaining 330,000 cases.
As domestic single malts gain popularity among consumers, global giants are also introducing local brands. For instance, Pernod Ricard launched Longitude 77 and Diageo introduced Godawan, among others.
Nevertheless, Jagdale remains undeterred by the entry of global giants into this market. He believes this will only stimulate industry growth, viewing it as a positive development.
“The entry of both Diageo and Pernod into the Indian single malt whisky market speaks volumes about the potential of this category,” he commented. “We view this positively and anticipate robust growth in the Indian single malt category. What we’ve observed is a shift in consumer preference towards quality over quantity in alcohol consumption.”
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This indicates the growing demand for Indian single malt whiskey and the necessity to meet this demand. The increasing popularity of Indian single malt is a positive trend for domestic companies like ours, which have been offering unique products and serving the market in this category for two decades,” Jagdale stated. He further added that the entry of global companies presents an opportunity for local firms.
“The category is growing and will keep growing on a global scale. Since Indian single malt whisky has been commended for its quality, we can now compete with Scotch, Irish and even Japanese whisky’, the official said.
Jagdale also mentioned that there is ample room for the single malt business to expand, with the Indian market for single malt growing at a rate of 12% year on year.
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Jagdale stated that India’s increasing wealth and preference for premium and quality products are expected to further bolster the growth of the category.
Rising income levels could lead to a rise in sales. The growth potential for major alcoholic beverage companies in India is remarkable. There has been an upsurge in both the export and import of alcoholic beverage products. Presently, our annual exports of single malt whisky amount to INR 35 crore, and this figure is expected to increase further.
According to ICRA, a credit rating agency, the Indian alcoholic beverages industry is poised for improved margins and higher sales in the fiscal year 2025.
ICRA predicts that several indigenous alcoholic beverage (alcobev) companies will see revenue increase of 8–10% in FY2025. A rise in volume of approximately 3-5% and a growing inclination towards premium products are expected to propel an 11–13% gain in revenue for Indian produced foreign spirits (IMFL) producers.
Amrut, the maker of the acclaimed single malt, has earned global recognition and awards for its signature product. This achievement has motivated other Indian brands to aim for increased competition and expansion.
In 2022, Indian and Scotch brands directly competed, with the former selling around 281,000 cases, indicating a 2.4 percent growth in sales. In contrast, the latter sold 296,000 cases, showing a notable 35 percent rise in sales, according to the data.
Amrut stole the limelight in 2022’s top-selling offerings, surpassing Glenlivet with two of its products, closely followed by Paul John. Leading the pack was Amrut Fusion with 99,000 cases sold, while Amrut Amalgam followed closely with 94,000 cases.
However, the alcohol industry in India faces challenges due to varying state tax rates and weather-related disruptions.
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In contrast to Scottish single malt, India’s environment presents a unique challenge for desi single malt: the angel’s share. This term refers to the alcohol that evaporates while being matured and aged in wooden casks before being distilled into whisky. When spirits age in casks kept in dark cellars, the industry tradition goes that “angels come to sip their share of alcohol.” In the negotiations for a free-trade deal, this disagreement has turned into a point of contention between India and the UK.
Nevertheless, Amrut believes that you ought to work with what you have and aiming for the best possible result. They also mentioned the various state taxes that exist, even in US markets.
The Indian Alcobev market is subject to government regulation, which means it is a heavily regulated and taxed sector. It offers chances as well as problems, according to the company. It further stated that better business ease will result from some states updating their excise laws.
Regarding the FTA, Jagdale commented that the India–UK FTA will change the alcobev landscape in our country. The prices of products bottled at the origin will decrease, but the Indian single malt category, which boasts quality on par with Scotch, is prepared for this shift.
Amrut is also currently increasing its distillery capacity with a capital expenditure of around INR 10 crore.
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