Indian spirits market braces for a mixed bag in 2024, smaller cos may sparkle
NEW DELHI : The Indian spirits market, which navigated through a complex year due to tax hikes, state elections, and policy shifts in 2023, is expected to see a flat growth in 2024. While major players are likely to find solace in the premium segment, smaller regional companies are poised to steal the spotlight with faster growth compared with their larger counterparts. The hangover from 2023 challenges could linger amid sharp tax increases in states like Karnataka and the dampening effect of elections across nine states.
Despite an initial surge in Punjab following a new excise policy, the market has now hit a plateau. The impact of the festive season remains to be fully realised, with analysts expecting a tepid 5-6% growth. Smaller brands could brew growth, while giants might focus on "value up-trading" and pushing premium options. The real action is expected to come from smaller regional players.
Spirits consultancy IWSR forecasts a 4% volume growth for the entire segment. However, this outpaces the 1% growth across the globe. The Indian beer and wine markets are expected to grow 3% and 10%, respectively, till 2027.
Affordability, improved retail experiences, and increased experimentation with new products are driving cautious optimism in the market. The growing comfort of younger consumers in public drinking spaces could add as a key factor of growth, said Jason Holway, senior market analyst at drinks consultancy IWSR. In 2022, spirits volumes climbed 2%, beer rose by 38%, RTDs surged 40% and wine increased by 19%, according to IWSR figures; and, in all cases, value rose ahead of volume.
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