April 12, 2024

India Alcohol Market is Estimated to Witness High Growth Owing to Increased Popularity of Premium Drinks

Beer market holds the major share followed by hard liquor and Indian Made Foreign Liquor (IMFL). IMFL and beer segments are mainly driven by increased consumption by younger population in urban areas. Moreover, increased popularity of premium and international liquor brands has been fueling the growth of hard liquor or IMFL market in India. Easy access and availability of a variety of alcoholic brands through organized retail outlets, supermarkets, bars and restaurants have boosted the alcohol industry substantially.

The India Alcohol Market is estimated to be valued at US$ 57,116.16 Mn in 2024 and is expected to exhibit a CAGR of 5.6% over the forecast period 2024 to 2031.

Key Takeaways
Key players operating in the India Alcohol Market are Brand Energy & Infrastructure Services, Layher Holding GmbH & Co. KG, Safway Group Holding LLC, ULMA Construction, PERI GmbH. Increased disposable income, changing consumer preferences, rising number of pubs and bars especially in metro cities, growing consumption among female population and experimentation with different flavors are some of the key opportunities in the Indian alcohol industry. Technological advancements like use of artificial intelligence for identifying customer behavior and spending patterns, introduction of smartphone apps and web-based platforms for ordering drinks are augmenting the consumer experience in alcohol sector.

Market Drivers
Easy access to credit and personal loans, rising social acceptability of liquor consumption and high social media influencer marketing are some of the major factors fueling the growth of alcohol market in India. Availability of low-priced hard liquor and affordable beer brands is encouraging experimentation among young population and driving volumes. Developing cold chain infrastructure and growth of modern retail have positively impacted the distribution network and demand for alcoholic beverages in the country.

Current challenges in India Alcohol market:

The current challenges faced by India Alcohol market include strict regulatory policies, increasing health consciousness, ban on alcohol advertisements, increasing taxes on alcohol products. The implementation of stricter rules regarding the sale and consumption of alcohol by various state governments has disrupted supply chains and demand dynamics over the past few years. Also, rising incidents of road accidents and social issues related to alcoholism have compelled public health advocates to impose restrictions. Further, initiatives like ‘dry days’ around festival seasons and near religious places negatively impact revenues in the on-trade sales channel.

SWOT Analysis
Strength: Well established distribution network, strong brand recognition of leading players, easy availability of raw materials.
Weakness: Strict regulatory environment, vulnerability to economic slowdowns, increasing health awareness.
Opportunity: Growing young population, urbanization, expansion in e-commerce, premiumization trends in top cities.
Threats: Alternatives like herbal drinks and cannabis, ban on advertisements, increasing taxes.

Geographical regions:
North India leads in terms of market value on account of states like Punjab, Haryana and Uttar Pradesh having high per capita consumption. Southern states like Karnataka, Andhra Pradesh and Tamil Nadu are also major revenue contributors due to more liberal alcohol policies and social acceptance compared to some northern states.

Fastest growing region:
The Northeastern states in India are projected to be the fastest growing regional market during the forecast period. States like Arunachal Pradesh, Manipur, and Mizoram offer high growth opportunities as alcohol consumption is gaining acceptance in rural and traditional communities compared to earlier conservative attitudes. Development initiatives and rising disposable incomes are augmenting the demand.

Note:
1. Source: Coherent Market Insights, Public sources, Desk research
2. We have leveraged AI tools to mine information and compile it