Ashwin Balivada, Executive Director, Cheers Group
India’s alco-beverage industry is growing at 8-10% CAGR. The growth is more in the premium segment, where it is 20-30% CAGR. The economy segment has recorded a low growth probably because of rising prices due to increase in duties every year. However, in the deluxe and above segment, people don’t not mind spending extra 5 or 10 rupees.
The beer segment is also poised for good growth. From the present 280 million cases it could go up to 500 million cases. Craft beer and premium beer are expected to show good growth. In the case of wine, good thing is that people are now realizing that wine can also be enjoyed. Ten years ago people were drinking wine only with cake. Now they get together with a bottle of wine, sit down and enjoy it. Though at present wine’s share is less than 1% in the alcobev industry, it could go up to 8-10% by doing 40-42 billion cases. The white spirit segment is also
small in India.
I myself knew nothing about wines five years back. But last time when I had wine with my father, we liked it and discussed it. Wine is the thing for a person aged between 27-30 years. A person who is 32-35 may prefers a rum or whisky but today the same person at some point is drinking wine or white spirits. Every year we are adding about 20 million consumers in the legal drinking age. These people have a lot of disposable income and are ready to experiment. I think they will move to wine, beer, RTDs and cocktails. These segments are also popular with women who are joining the drinking population in rising numbers. So, these segments have tremendous growth potential.
During my interactions with consumers at the retail counter of a duty free or a superstore, I have found they are willing to experiment. This is a good sign because we want people to
drink more wine, more beer, and more white spirits, which is also good for the industry ecosystem.
As far as pricing is concerned, I would say that in Goa a liquor product selling at less than Rs 175 per bottle comes in the economy segment, and products selling more than constitute
the premium segment. For example, Imperial Blue and above would be premium in India and below that would be economy. To popularise wine, reduction in wine price and its availability
in small packs are necessary. Regarding the price impact on one’s liquor choices, I give my own example. When I was studying in 2009, my dad used to give me Rs 100 daily. After accumulating Rs 400 in four days, I had the option of buying 180 ml of Old Monk and spend the rest on food or buy a bottle of wine. I preferred the first option (Old Monk). So, by bringing down wine prices we can generate more trials. If our low-priced wine comes within consumer’s reach and he or she likes it, then probably we can achieve more volume. Wine in smaller bottles can also extend consumers’ reach. If you ask me, I will not be comfortable in buying a 750ml bottle of wine. But if a 180ml bottle is available, I will definitely prefer wine.
We have to give more options to consumers. If premium spirits can grow, then why not premium wine or beer? Unfortunately, beer and spirits are equally taxed in most of the states. If you have two bottles of beer against two drinks of whisky, the former is little heavy on the pocket. So there is need to rationalize beer taxation.