India predicts imported spirits boom

The sale of imported spirits in India is expected to grow at a rate of 25% a year, reaching five million cases (55million litres) by 2015.

Imported vodka brands like Smirnoff are taking advantage of India’s thirst for foreign spirits with cultural brand extensions

According to the Associated Chambers of Commerce and Industry of India (ASSOCHAM), the imported spirits market is currently estimated to be at 3.1million cases (28million litres), but is expected to soar as young professionals switch to more premium brands.

“Growth of imported spirits in India is largely driven by the spurt in tendency amid young Indian professionals and entrepreneurs to migrate from local brands to international brands,” said Mr D.S. Rawat, secretary general of ASSOCHAM at the launch of a study entitled ‘India’s emerging imported spirits market’.

“With more number of Indians travelling abroad for studying and other professional reasons, their fondness for imported liquor is also rising which is certainly leading to growth in the business as they acquire taste for imported liquor and can afford to buy the expensive spirits from duty-free shops abroad,” he added.

“Besides, growth in the sector has also been fueled by rising income levels, increasing young population, growing number of working women, increasing media penetration and expanding exposure to western lifestyle amid people in the upper-middle income group in India for whom serving expensive liquor reflects their lifestyle and status symbol.”

The report highlighted vodka as a major force for spirits growth overall, as it is emerging as a starting drink of choice for young consumers in ‘tier II cities’, and predicted the category to reach 10.2million cases by the end of the year.

Sales of spirits are expected to accelerate in tier II and III cities across the country as producers target the on-trade. As such, the report predicted a significant investment from international brands in marketing, brand innovation and expansion to new markets within India over the next few years.

However it warned that the potential for imported brands in India will be restricted if tight regulations, state levies and high import tariffs on imported spirits sold through both the on- and off-trade are not relaxed.