The Indian spirits industry is witnessing a notable trend of premiumization. Major liquor companies in the country have observed significant growth in their premium products, with double-digit figures, and anticipate this momentum to persist as consumers increasingly opt for higher quality options across different price ranges.
In the calendar year 2022, Allied Blenders and Distillers (ABD) announced that its renowned brand, Officers Choice Whisky, achieved impressive volumes of 24.9 million 9 litre cases. Additionally, ABD experienced significant growth in its premium IMFL line, Sterling Reserve Whiskies, with a remarkable year-on-year increase of 39 percent, resulting in sales of 5 million, 9 litre cases.
The industry is anticipated to witness mid-single-digit percentage growth, with the premium segments exhibiting a faster rate of expansion. However, it is important to note that these premium segments have relatively lower starting points in terms of volume.
According to a recent industry report from CIABC, there has been a significant increase of 48 percent in the sale of high-end liquor priced above INR 1,000 per 750 ml. The report also emphasizes that although the market continues to be largely influenced by products priced below INR 500, premium brands now account for 20 percent of the market share.
Amar Sinha, the Chief Operating Officer of Radico Khaitan, expressed his satisfaction with the outstanding performance of the liquor giant’s premium segment during the fiscal year 2023. Sinha reported that Radico Khaitan’s ‘Prestige & Above’ brands experienced remarkable growth, achieving a 23.9 percent increase in net sales, reaching an impressive INR 1,496.2 crore this year. Additionally, Sinha stated that the company achieved a volume milestone, selling approximately 9.35 million cases and achieving a nearly 20 percent year-on-year growth.
According to Amit Dahanukar, the Chairman and Managing Director of Tilaknagar Industries, the liquor company experienced significant volume growth in the previous fiscal year. This growth was primarily driven by its premium brands, such as Mansion House Brandy and Courrier Napoleon Brandy. In comparison to the industry’s growth rate of 12 percent, Tilaknagar Industries achieved an impressive year-on-year growth of 43 percent.
Sharing a future outlook, Dahanukar said, “In the current financial year, we aim to carry forward the momentum we achieved in FY23 in terms of sales volumes. We also expect inflationary pressures, which were prevalent in the second half of FY23, to abate going forward. That will have a positive impact on our margins.”
Considering the immense potential, brands are actively introducing high-end products across various price ranges. ABD, a company that recently unveiled a limited-edition Officer’s Choice Scotch Whisky, firmly believes that there are additional clear and distinct opportunities for the brand in the premium market segment.
The Managing Director of Tilaknagar Industries expressed the company’s intention to not only introduce new products but also reinforce its presence in the South Indian markets. Furthermore, they have set their sights on expanding their premium offerings to the markets in East and North-East India.
Sinha from Radico Khaitan also revealed that the company has recently introduced a high-end gin and is actively increasing the distribution of its ready-to-drink vodka cocktails in various areas of Karnataka.