One in two Indians are favoring premium spirits, as per Bacardi India managing director Vinay Golikeri, citing the Bacardi Cocktail Trends Report 2024. Golikeri emphasized that “Premiumisation continues to flourish, and currently we are into the golden era of spirits given that the cocktail culture is thriving in India.”
The producer of Bacardi rum, Bombay Sapphire gin, Grey Goose vodka, and Dewar’s Scotch is ramping up its premiumization efforts across its range to align with evolving demand patterns, he elaborated.
Continue Exploring: Premiumization trend to fuel India’s soaring liquor industry, Crisil Report reveals
Golikeri described India as a “standout” market for the multinational alcohol and beverage manufacturer. However, he refrained from disclosing the specific contribution of Bacardi’s Indian division to its global sales. As per the most recent data from the business intelligence platform Tofler, Bacardi India reported revenue surpassing INR 500 crore for the financial year that ended on March 31, 2023.
Just like in other consumer-focused industries, companies in the spirits sector like Diageo, United Spirits, Radico Khaitan, and Jagatjit Industries are also prioritizing premiumization to capitalize on the increasing demand for greater profitability.
As per the Confederation of Indian Alcoholic Beverage Companies (CIABC), alcoholic beverages priced above INR 1,000 experienced a growth rate four times faster than those priced under INR 500 in the calendar year 2023. Vinod Giri, the director-general of CIABC, attributed this rising trend of premiumization to a blend of factors. “Consumers are increasingly open to exploring different alcoholic beverages, and notably, the perception of spirits is shifting from mere functionality to embodying a lifestyle choice or a means of making a statement,” he remarked.
In a March report, credit ratings agency ICRA projected growth of 8-10% for the Indian alcoholic beverages sector in the current financial year. This growth, it noted, would be bolstered by consumer inclination towards premium products, with volumes expected to increase by 3-5% on a strong foundation.
Over the last three to four years, Scotch whisky sales in India have nearly quadrupled, according to Vijay Dev, the category lead for whiskies at Bacardi. He emphasised Dewar’s outstanding achievement in the Scotch whisky market in India, pointing out that the company’s volume has grown by an astounding 44.2% in the previous five years, above industry norms.
He added, “India offers us a significant growth potential, considering the increasing preference for premium Scotch whisky.”
The executives at Bacardi India refrained from commenting on the implications of the government’s recent directive, which requires alcohol manufacturers to provide a list of products marketed as surrogate extensions, including water, soda, and music festivals.
Continue Exploring:Â Central Consumer Protection Authority cracks down on liquor brands for violating surrogate advertising regulations
Spirits manufacturers promote and market products such as water, music festivals, music CDs, and soda to bypass regulations on advertising spirits. The CIABC has called on the government to reconsider its crackdown on this practice. Like other alcoholic beverage companies, Bacardi also heavily invests in events and platforms like NH7 Weekender and Xperiences to attract consumers.
The Central Consumer Protection Authority (CCPA) has instructed spirits manufacturers to disclose lists of products promoted under the same brand or as alternatives to alcoholic beverages over the past three years. Additionally, the authority has mandated these companies to provide details regarding the revenues generated from the sale of surrogate brand extensions during this three-year period.
Continue Exploring:Â CIABC presses for unfettered advertising rights for liquor brand extensions amid regulatory scrutiny
