The alcoholic beverages industry is considered to be highly regulated and a major source of revenue for the government. Companies face increased complexities to set up liquor stores or to import liquor from other countries. These restraints also pave way for illegal smuggling, bootlegging, duplicate and fake illicit spurious liquor production to avoid duties and taxes. Players have extended the depth of distribution coverage for reaching untapped markets and increased penetration in more states by setting up manufacturing capacity in other locations.
The Indian alcoholic beverage market is dominated by Indian Made Foreign Liquor (IMFL) segment. The segment is continuously witnessing growth as large consumers are following the premium and better quality liquor in the IMFL segment with the rise in their propensity to spend and increased hygiene risk in the consumption of country liquor. Country Liquor market has witnessed a steep decline with a negative growth of approximately ~% over the past 5 years. The market share of Country Liquor segment is gradually decreasing. Beer is the second fastest growing market due to its increasing preference by the youth and third largest market in terms of consumption. Wine market in India is in its embryonic stage. Even though the segment has the fastest growth rate as compared to other alcoholic beverage segments, the penetration level is still low.
India’s demographic profile is changing with an increase in youth population. There is an increase in the number of working women with more spending on consumer goods, retail products in organized retails and supermarkets. Consumers are getting more inquisitive. They want to know the story behind a brand, or the history of a brand. They want to a part of the brand culture. This will lead to an entry of new companies and brands in the country resulting in healthy and intense competition, and provision of more variety and choice for the consumers.
The Indian alcohol beverages industry is significantly growing for the International liquor companies which have acquired higher equity stakes in their Indian joint ventures following the increase in the limit on foreign partner’s shareholding. The growth has been more prominent in the capital intensive brewery business, where ownership of brewing capacity is a big entry barrier. Large International beer manufacturers such as Fosters and SABMiller have entered the Indian market through either acquisitions or through Joint ventures with domestic players.
According to the research report titled "Indian Alcoholic Beverage Market Outlook to 2020- Inflating Demand for IMFL and Beer from Youth and Women Segments", the Indian alcoholic beverage industry has bright future prospects even after several complexities. This industry is not yet fully explored in comparison to the western markets which are almost saturated, which makes it a potential market offering a number of opportunities. Further growth can be achieved by the increasing support from government, entry of international brands, proper promotions and branding by the companies and improving the standards of alcoholic beverages available in India, According to the Research Analyst, Ken Research.
The report provides detailed overview on Indian alcoholic beverage market and facilitates readers to identify the ongoing trends in the market and anticipated growth in future depending upon changing market dynamics and government regulations in the coming years. The report will help industry consultants, and other stakeholders to align their market centric strategies according to ongoing and expected trends in the future.