According to the industry body CIABC, sales of Indian-made foreign liquor (IMFL) experienced a 14 percent increase in volume, reaching 385 million cases in the fiscal year 2022-23. Notably, premium IMFL products priced over INR 1,000 per 750ml bottle saw remarkable growth, rising by 48 percent. These sales figures indicate that the impact of Covid-19 has completely subsided, as they are nearly 12 percent higher than the pre-pandemic levels of FY 2019-20.
The industry is projected to witness a growth of 8 percent in the current fiscal year, as stated in a report by the Confederation of Indian Alcoholic Beverage Companies (CIABC). The report highlights that the industry is expected to reach a volume of around 412-415 million cases, with each case containing 9 liters.
In the fiscal year 2023, whisky retained its position as the largest segment within the industry, accounting for 63 percent of the total sales. It is projected to achieve a sales volume of approximately 243 million cases, solidifying its significant presence in the market.
Moreover, after many years of decline, Gin seems to have reversed the trend and is back in growth, added the report CIABC, which is the apex body of the Indian Alcoholic Beverage Industry.
As per the report’s findings, the liquor industry has observed a persistent trend of premiumization, wherein consumers increasingly opt for higher-priced offerings.
“Higher price segments are growing much faster than the lower segments and the share of brands above INR 500 per 750ml bottle is now at 20 per cent,” it said, adding the price segment of INR 1000 and above is dominated by imported products and reported 48 per cent growth.
Approximately 79 percent of total sales in the market are attributed to low-priced products, which are sold at prices below INR 500 per 750ml bottle, signifying their continued dominance in the industry.
Of the total sales, approximately 21 percent were attributed to products priced between INR 500 to INR 1,000, while a modest 3 percent came from higher-priced offerings above INR 1,000, primarily comprising imported goods.
According to the report, there has been an increase in the market share of Indian products priced at INR 1,000 and above, rising from 18 percent to 20 percent in FY23. This indicates a faster growth rate for Indian products in this segment compared to their imported counterparts.
CIABC Director General Vinod Giri said, “Liquor industry has sailed through the adverse impact of the Corona pandemic on sales. After a slowdown for couple of years, we are again on fast sales growth path.”
The CIABC report states that with few exceptions, consistent growth has been observed across various regions in India.
“It has grown by 32 per cent in Western region, 22 per cent in Eastern region, 16 per cent in Northern region and 9 per cent in the Southern region,” it said.
Like earlier, the Southern region has remained the largest contributor to sales volume with 58 per cent share followed by West and East, which contributed 22 per cent equally.
With the North region contributing 16 percent of the overall sales, it is worth noting that states like Punjab have witnessed a remarkable growth of 54 percent compared to the previous year.
“This appears that the new excise policy has had a very positive effect in a state where IMFL segment has historically been very sluggish and smaller compared to even neighbouring states including Himachal and Uttarakhand,” it said.
Despite facing challenges such as disruptions caused by excise policy changes and the unavailability of numerous brands, Delhi managed to maintain a robust year-on-year annual growth rate of 36 percent.
“However, a closer analysis shows that much of this growth is attributed to the First quarter of 2022-23 when various trade schemes and promotions were run to liquidate the stock in view of the impending changes in the excise policy. Thereafter sales growth has been trending down reaching negative range,” it said.
Nevertheless, certain states experienced a decline in sales. For instance, Telangana witnessed a decrease of 6 percent, while UP saw a slight decline of 1 percent, and Uttarakhand observed a decrease of 3 percent in sales.
According to CIABC’s outlook, it anticipates a recovery in sales for Telangana and Uttarakhand, while expecting other states to maintain their growth momentum.
“Following the likely Growth Momentum, we expect the liquor industry to end the year FY 23-24 to end around 412-415 million cases which would be a growth of 7-8 per cent,” it said.
CIABC said it may see challenges in UP, West Bengal and Delhi unless appropriate regulatory interventions are made in these states.
