India Alcoholic Drinks Market Outlook to 2029

The report titled “India Alcoholic Drinks Market Outlook to 2029 – By Market Structure, By Product Types (Beer, Wine, Spirits, Others), By Consumer Demographics, By Distribution Channels (On-trade, Off-trade), and By Region,” provides a comprehensive analysis of the alcoholic drinks market in India. The report covers an overview and genesis of the industry, overall market size in terms of revenue, market segmentation, trends and developments, regulatory landscape, customer profiling, issues and challenges, and a comparative landscape that includes competition scenario, cross-comparison, opportunities, bottlenecks, and company profiling of major players in the Alcoholic Drinks Market. The report concludes with future market projections based on sales revenue, market trends, region-specific analysis, and success case studies that highlight major opportunities and cautions.

India Alcoholic Drinks Market Overview and Size

The India alcoholic drinks market reached a valuation of INR 4.5 trillion in 2023, driven by changing social norms, increasing urbanization, and a growing preference for premium and craft beverages. The market is characterized by major players such as United Spirits, Radico Khaitan, Pernod Ricard, Carlsberg India, and Anheuser-Busch InBev, which dominate with their extensive distribution networks, wide product portfolios, and strong brand presence. These companies have been pivotal in shaping the market by launching new product lines and leveraging technology to improve customer engagement.

In 2023, Radico Khaitan introduced a new premium whiskey brand, leveraging the rising trend of premiumization in the Indian alcoholic drinks market. The launch aims to capture the attention of the growing middle-class consumer base looking for high-quality alcoholic beverages. Key urban centers such as Mumbai, Delhi, and Bangalore are major markets due to their high disposable income and evolving consumer preferences.

Market Size for India Alcoholic Beverage Industry on the Basis of Revenue in USD Billion, 2018-2024

Source: TraceData Research Analysis

What Factors are Leading to the Growth of the India Alcoholic Drinks Market:

• Economic Factors: Economic growth and rising disposable incomes, especially among urban populations, have contributed to the increasing consumption of alcoholic beverages. In 2023, alcoholic drinks accounted for a significant portion of the consumer expenditure on beverages, driven by a growing appetite for premium products and greater purchasing power among middle-income consumers. This trend is particularly prominent among young professionals who view alcohol as a social indulgence.

• Changing Social Attitudes: India is experiencing a cultural shift in social norms regarding alcohol consumption, with drinking becoming more acceptable in many urban centers. This has led to an increase in alcohol consumption, particularly among younger consumers. The acceptance of alcohol as part of social occasions and celebrations has further fueled demand, with whiskey and beer emerging as top choices.

• Premiumization: There is a growing consumer preference for premium and high-quality alcoholic beverages. Premiumization is driven by rising incomes and the desire for sophisticated drinking experiences. In 2023, premium whiskey and craft beer segments grew by approximately 20%, reflecting a demand shift towards higher-quality products.

Which Industry Challenges Have Impacted the Growth of the India Alcoholic Drinks Market

• Quality and Adulteration Concerns: Concerns about the quality of alcoholic beverages, particularly in the unorganized sector, remain a significant challenge. Approximately 30% of consumers have expressed hesitation in purchasing lower-end spirits due to fears of adulteration and counterfeit products. This lack of trust in product quality can deter consumers from engaging with lesser-known brands, thereby limiting market penetration for smaller producers.

• Regulatory Complexities: The alcoholic drinks market in India faces a complex and fragmented regulatory framework, with each state imposing different laws on production, distribution, and taxation. In 2023, it was reported that regulatory hurdles caused delays and increased costs for manufacturers trying to expand into new regions. Additionally, high excise duties and bans in certain states pose challenges, especially for new market entrants.

• High Taxation and Pricing: Alcohol in India is subject to high taxation, which significantly inflates prices for consumers. This has impacted the affordability of alcoholic beverages, particularly for low- and middle-income consumers. In many states, taxes account for over 50% of the retail price, making premium and imported beverages less accessible. As a result, higher prices limit the growth of both the mass and premium segments.

What are the Regulations and Initiatives that have Governed the India Alcoholic Drinks Market:

• Excise Duty Regulations: The Indian government imposes high excise duties on alcoholic beverages, which vary significantly across states. These taxes account for a large portion of the price consumers pay for alcohol, and in some states, they can exceed 50% of the retail price. In 2023, several state governments increased excise duties to generate additional revenue, impacting the pricing strategies of both domestic and international alcohol brands.

• State-Specific Alcohol Policies: India has a complex regulatory framework for alcohol sales, with each state governing its own policies related to licensing, production, and distribution. For example, states like Bihar and Gujarat have implemented complete alcohol prohibition, while others, such as Maharashtra and Delhi, have adopted liberal policies that encourage retail and on-premise consumption. In 2023, Karnataka eased restrictions on the sale of alcohol in restaurants and bars, providing a boost to on-premise consumption in urban areas.

• Ban on Alcohol Advertising: Direct advertising of alcoholic beverages is banned in India. To navigate these restrictions, companies employ surrogate advertising strategies by promoting non-alcoholic products such as soda, bottled water, or music CDs under the same brand name. Despite this, the government continues to crack down on companies that attempt to stretch the boundaries of surrogate advertising.

India Alcoholic Drinks Market Segmentation

• By Product Type: Whiskey dominates the Indian alcoholic drinks market, accounting for approximately 60% of total alcohol consumption in 2023. Beer follows closely behind, with a growing preference for craft and premium beers. Wine consumption remains niche but is expanding, especially in urban areas and among younger, health-conscious consumers. Ready-to-drink (RTD) beverages and flavoured spirits are also gaining traction among younger consumers.

• By Distribution Channel: The off-trade segment, which includes retail outlets such as liquor stores and supermarkets, accounts for 70% of total sales in 2023. On-trade sales, through bars, clubs, and restaurants, are seeing significant growth, especially in metropolitan areas, where social drinking is more prevalent. E-commerce platforms for alcohol, although restricted in some states, are also contributing to the rise in off-trade sales in regions where legal.

Competitive Landscape in India Alcoholic Drinks Market

The Indian alcoholic drinks market is dominated by a few major players, but the rise of premium and craft beverages has led to increased competition. Traditional giants such as United Spirits, Radico Khaitan, and Pernod Ricard continue to hold significant market shares, while new entrants and smaller craft breweries and distilleries are diversifying the landscape by catering to niche segments such as craft beer and premium whiskey.

Some of the recent competitor trends and key information about competitors include:

• United Spirits: As the largest player in the Indian alcoholic drinks market, United Spirits recorded a 10% growth in revenue in 2023, driven by strong sales of premium whiskey brands such as McDowell's No. 1 and Royal Challenge. The company's focus on premiumization and expanding its product portfolio has contributed to its continued dominance.

• Radico Khaitan: Known for its flagship brands such as 8 PM whiskey and Magic Moments vodka, Radico Khaitan saw a 12% increase in sales in 2023. The company’s recent focus on premium offerings, including its new luxury whiskey line, has helped strengthen its position in the market.

• Pernod Ricard India: Pernod Ricard, with brands like Chivas Regal, Absolut, and Royal Stag, continues to thrive, reporting a 15% growth in 2023. Its emphasis on expanding distribution in Tier 2 and Tier 3 cities, combined with strong marketing efforts, has bolstered its market presence.

• Carlsberg India: Carlsberg is a key player in the beer segment, with its flagship brands Tuborg and Carlsberg seeing a 20% growth in sales in 2023. The company's strategy of targeting the premium beer segment and launching new product variants has contributed to its success in the competitive beer market.

• Anheuser-Busch InBev India: Known for its popular brands Budweiser and Corona, Anheuser-Busch InBev has focused on expanding its premium product portfolio. In 2023, the company reported a 17% increase in sales, driven by strong demand for its international beer brands and strategic marketing campaigns targeting urban consumers.

What Lies Ahead for the India Alcoholic Drinks Market?

The India alcoholic drinks market is projected to witness steady growth by 2029, with an anticipated CAGR driven by rising disposable incomes, evolving consumer preferences, and increasing urbanization. The market's growth will be influenced by both premiumization and the rising demand for diverse and innovative products.

• Shift Towards Premium Products: As consumers become more affluent, there will be a growing shift towards premium and luxury alcoholic beverages. Whiskey, craft beer, and premium vodka are expected to see robust growth as consumers seek better quality and unique experiences. This trend will likely be driven by younger consumers and urban professionals.

• Rise of Low- and Non-Alcoholic Beverages: Health-conscious consumers are driving demand for low-alcohol and non-alcoholic beverages. This segment is expected to expand rapidly as brands introduce new products catering to consumers who prefer healthier options without compromising on taste. The market for alcohol-free beers and mocktails is poised for significant growth.

• Technological Integration: The use of technology in product development and consumer engagement will play a pivotal role in market growth. Brands are expected to adopt AI and big data analytics for personalized marketing, as well as e-commerce platforms to reach wider audiences. The rise of digital channels will streamline the purchasing process and improve customer engagement.

• Expansion of E-commerce and Online Sales: With the relaxation of alcohol delivery laws in certain states, e-commerce sales of alcoholic beverages are expected to grow significantly. Consumers in urban areas are increasingly using digital platforms for convenience, offering a key growth avenue for companies looking to tap into the expanding online marketplace.

• Sustainability Initiatives: As sustainability becomes a priority, companies are expected to adopt eco-friendly practices in production and packaging. This includes reducing carbon footprints in distilleries, utilizing sustainable materials, and implementing recycling programs. Brands focusing on sustainability will likely attract environmentally conscious consumers, further driving market growth.

Future Outlook and Projections for India Alcoholic Beverages Market on the Basis of Revenues in USD Billion, 2024-2029

Source: TraceData Research Analysis

India Alcoholic Drinks Market Segmentation

• By Alcohol Type:
  • Beer
  • Spirits (Whiskey, Vodka, Rum)
  • Wine (Red, White, Sparkling)
  • Cider
  • Ready-to-Drink (RTD) Cocktails
• By Beer
  • Lager
  • Dark Beer and others
• By Beer
  • Craft
  • Standard Beer
• By RTDs
  • Malt based RTDs
  • Spirit Based RTDs
  • Wine Based RTDs
  • Non-Alcoholic RTDs and others
• By Spirits
  • Brandy
  • Dark Rum
  • White Rum
  • Whiskies
  • Gin
  • Vodka and others
• By Vodka
  • Flavoured
  • Non-Flavoured Vodka
• By Wine
  • Fortified Wine
  • Champagne
  • Other Sparkling Wine
  • Red Wine
  • White Wine and others
• By Distribution Channel:
  • On-Trade (Bars, Restaurants, Hotels)
  • Off-Trade (Supermarkets, Hypermarkets, Convenience Stores)
• By Price Segment:
  • Economy
  • Mid-Range
  • Premium
  • Super Premium
• By Consumer Age:
  • 18-24
  • 25-34
  • 35-54
  • 55+
• By Region:
  • Northern India
  • Southern India
  • Western India
  • Eastern India
  • Central India

Players Mentioned in the Report:

• United Spirits Ltd.
• Globus Spirits Limited
• Jagatjit Industries Limited
• Mohan Meakin Ltd.
• United Breweries Ltd.
• Som Distilleries and Breweries Ltd.
• Tilaknagar Industries Ltd.
• Radico Khaitan Ltd.
• Pernod Ricard India Private Ltd.
• Sula Vineyards Ltd
• Bira 91.

Key Target Audience:

• Alcoholic Beverage Producers
• Distributors and Retailers
• Hospitality Industry (Bars, Restaurants, Hotels)
• Government and Regulatory Bodies (e.g., State Excise Departments)
• Research and Development Institutions

Time Period:

• Historical Period: 2018-2023
• Base Year: 2024
• Forecast Period: 2024-2029