It has been a dynamic year for the spirits industry in India. From regulations to customer trends, old brands taking pole positions, to new brand launches, a lot has happened in the country.
India started the year feeling the impact of demonetisation, which had taken place in November 2016. With currency notes being short in circulation, sales were affected across popular brands and segments. Cash sales of spirits dropped significantly, with retailers witnessing a drop of even 30 to 40 per cent. This led to a consequent decrease in marketing by leading brands. Large industry events saw modest turnouts and low sponsorship funds. Even though these were great opportunities for networking, most industry platforms were also shifted.
Close on the heels of the demonetisation followed the Highway Ban in April 2017, that caused major shrinkage in the Indian spirits market. Post the ban on alcohol sales near highways, the market shrank by five to 20 per cent.
Happily though, it was not a year only of challenges and some heartening trends emerged. India now boasts of four out of the top five fastest growing spirit brands in the world. Whisky remains the favourite among all other spirits in India, and there’s no challenger in sight. Other major categories of spirits and their variants haven’t been able to shake whisky’s dominance in the market.
A recent study carried out by The International Wine and Spirit Research, states that Indian whiskies occupy seven of the top 25 fastest growing spirit brands. Imperial Blue is leading the way with 27.7 per cent growth between the years 2013-14, with Officer’s Choice following closely behind at 18.4 per cent, largely due to its popularity among many lower-income consumers.
Pernod Ricard India is also taking its Indian whiskies, like Royal Stag, Blenders’ Pride and Imperial Blue to global markets.
Officer’s Choice has already overtaken Smirnoff as the world’s largest spirits brand, Royal Stag and McDowell’s, owned by Diageo, also being closely in the queue.
Interestingly, age has stabilised with people are looking at a differentiated taste spectrum. A whole new generation of drinkers has discovered brown spirits at a time when age statements are no longer valued as significant. It may be that younger drinkers never come to think much about age statements the way that an older generation of customers prize these numbers printed on labels.
Among international brands, Chivas 18 Years Old gained most significantly, with The Glenlivet growing amongst the single malt category. Pernod Ricard will also be launching Aberlour & Scapa in early 2018.
In addition, the American whiskey category has seen a renaissance worldwide and India has been no exception. It is the second biggest imported whiskey category after Scotch in India and has been growing steadily in the last few years. Consumers are increasingly choosing American whiskey for the taste, quality and the values that resonate with the category. Some of the key factors driving this growth, are the increasingly disposable incomes, growing aspirations among legal drinking age consumers to upgrade and an increased exposure to global brands.
Young Indians travelling the world are seeking brands which are authentic and have a legacy of craftsmanship. In 2017 leading bars across India upgraded their whisky menus and ensured a higher degree of service standards. Hotels like Taj Krishna, Hyderabad, JW Marriott, Bengaluru and The Lodhi in New Delhi, invested in raising the “Bar of the Bar”. Whisky and food pairing is now a regular feature on most menus.
According to Vikramjit Roy, a leading chef in India, who runs the successful Asian restaurant PoH, “While whisky offers a great pairing with Indian cuisine, we also have some great menus with Asian and Japanese cuisine.”
In terms of Indian brands, Paul John and Amrut grew well in the market with the former gaining a wide distribution base. Indians have a differentiated opinion on Indian single malts, in terms of taste and adoption.
Berry Bros. & Rudd also introduced its single cask whiskies in India. Sazerac Rye bought 28 per cent in Paul John and will be buying another 15 per cent in the next two years. Industry leaders, feel that it will give a big boost to the Indian whisky attain distribution in the US market as well as Sazerac Rye considering bottling Bourbon in India.
Japanese Whiskies still remain elusive, with Indian consumers buying them only from travel retail; still they are steadily gaining a foothold in India. Radico Khaitan, a major Indian liquor producer, started the trend in 2011, by launching Suntory’s premiere whiskies in the Metropolitan cities of India. Though this association lasted only three years, hotels and customers are constantly seeking Japanese whiskies. Cask Spirit Marketing, a leading spirits firm, will be importing Kirin-Fuji Sanroku in the beginning of 2018.
High growth was also witnessed in women appreciating whisky and have emerged as an audience on their own. According to Kamal Mohandas, a fashion designer, “Whisky is so much more easier and elegant to enjoy. Thanks to a much wider choice, in bars across India, our girls night out are spent appreciating different flavours of whisky. I see a lot of them enjoying premium blends and Irish whiskies.”
With the growing popularity of whisky, societies are also becoming popular. People are keen on learning about whisky making and the correct ways of enjoying it. Whisky centric bars, such as Whisky Samba in Gurugram and Kode in Mumbai both launched in 2017, are playing a key role in providing varied whisky experiences.
Whisky will see a new high in India in the next few years, and developments in 2017 will be a significant platform to this growth.
The image of whisky is becoming younger as more standalone bars add to their whisky portfolio. Although 2017 did not start well, it ended on a positive note for discerning lovers of the amber nectar.
The Cheroot Malt and Cigar Lounge at the ITC Grand Chola
Singh Sahib Nalli gosht
Queen and King from the Amaranta menu at the Oberoi Hotel
The Elan Bar at the Lodhi Hotel, New Delhi