India is the world’s second-largest country, and its love of alcohol is even larger.
Despite India’s reputation as a fairly conservative and religious country, Indians really like to party. With a population of 1.35 billion people, it is no surprise that India has the third-largest alcoholic beverages market in the world. The size of the alcoholic beverage market in India is equivalent to around $35 billion. The alcoholic beverages market in India is rapidly growing, with an expected annual growth rate of around 7.9% from 2018 to 2021. Its revenue for 2018 is equivalent to $67,661 million. Spirits are the largest market segment, with a volume of $61,076 million in 2018.
India’s alcoholic beverages market is growing faster than the speed of an average American college student taking a shot of Fireball.
The massive growth of the alcoholic beverages market in India can be contributed to the country’s growth in other areas. India’s urban population has been increasing at a rapid rate, its middle class has had more spending power, and the economy has been in a good place for the last few years. For Indians, all of these factors are great reasons to have a drink or two, or three, or ten!
The rapid growth of the alcoholic beverages market in India is directly correlated with an increase the country’s overall alcohol consumption rate. In 2016, India’s annual alcohol consumption was projected to be around 5.38 billion liters, and is forecasted to reach 6.53 billion liters by 2020. The legal drinking age in India varies by state, ranging from 18-25 years. The the total amount of the country’s population that is of legal drinking age is around 485 million, which is more than the total populations of the United States and Mexico combined.
India drinks more whiskey than pretty much every other country.
At its core, India is a whiskey-drinking country with the world’s largest whiskey industry, consuming roughly half of all of the whiskey in the world. The alcohol industry in India is made up of three distinct categories: beer, homemade liquor, and Indian Manufactured Foreign Liquor (IMFL). Whiskey is placed in the IMFL category, along with rum, gin, and vodka. Three out of the four most popular alcohol brands in India are whiskey. The four most popular alcohol brands in India are as follows:
- McDowell’s No.1 (whiskey) – The most popular alcohol brand in India, manufactured by United Spirits Limited, a subsidiary of Diageo based in Bangalore. United Spirits Limited is the second-largest spirits company in the world.
- Kingfisher (beer) – The most popular beer brand in India, brewed by United Breweries Group, a conglomerate company that is also based in Bangalore.
- Royal Stag (whiskey) – The second-most popular whiskey brand in India, manufactured by French distilling company Pernod Ricard.
- Imperial Blue (whiskey) – The third-most popular whiskey brand in India, also manufactured by Pernod Ricard.
Kingfisher, the second-most popular alcohol and the most popular beer brand in India.
Royal Stag, the third-most popular alcohol and second-most popular whiskey brand in India.
Imperial Blue, the fourth-most popular alcohol and third-most popular whiskey brand in India.
Despite having the third-largest alcoholic beverages market in the world, the Indian government has placed a strict ban on all alcohol advertisements.
Many alcohol companies in India participate in a practice known as surrogate advertising in order to promote their products with the sanctions placed on them by the government. Surrogate advertising is a type of advertising that is used to promote banned products, most commonly alcohol and tobacco, by disguising it as another product. For example, in an alcohol advertisement, the company uses the brand name and logo, but the actual product being advertised is usually something like club soda or mineral water. In India, it is just as effective as regular advertising because the majority of consumers know the brand names and associate them with the brand’s main product lines, i.e., the alcohol or tobacco products.
Royal Stag, for example, uses its sponsorship of the 2018 Asia Cup, the cricket tournament between India, Pakistan, Sri Lanka, Bangladesh, and Afghanistan, in order to promote their product. No alcoholic beverages are featured in the advertisement, just the brand’s logo, a creative slogan, and an opportunity for fans to win tickets to the big game in Dubai. The use of event sponsorships in Indian alcohol advertisements is becoming increasingly commonplace because the government has been enforcing stricter bans on surrogate advertising.
Gabby Hazard – Master of Management – Tulane University – Global Business Projects Fall 2018