Highway ban hangover cured, Indian whisky joins party

MUMBAI: Three in every five whisky cases sold globally in 2018 were Indianmade as sales bounced back after a dip due to the temporary ban on highway sales and regulatory issues to grow at 11%, the strongest in four years. In fact between 2014 and 2018, sales of Indian whisky expanded at over 50%, three times the growth rate for global liquor market, highlighting the strong affinity for a tipple that is associated with packing more of a punch than other spirits.

At 176 million cases, one in every five spirits across categories — whisky, vodka, gin, rum and brandy — consumed globally were an Indian variant of whisky, according to the latest data from the International Wine and Spirits Research (IWSR), which ranked all brands selling over one million cases annually.

“Indians like strong drinks which can give them an instant high,” said Deepak Roy, executive vice chairman at Allied Blenders, maker of Officer’s Choice, the highest selling whisky globally at 34 million cases. “Hence, whisky is the default choice of liquor in India, except in the southern part of the country, which prefers brandy. Also, white spirits (such as gin and vodka) are generally associated with cocktails.”


While India does not have a dominant indigenous liquor similar to baiju in China or Russian vodka, the market is dominated by locally produced and adapted versions of European spirits known as Indian-Made Foreign Liquor, or IMFL. Brands owned by ABD, United Spirits Ltd (USL) and Pernod Ricard, account for nearly 90% of the overall Indian whisky segment.

Last year’s growth was also due to the low base of 2017, when several Indian whisky brands saw a dip due to Supreme Court restrictions on sale of alcohol near state and national highways, which led to the closure of about a third or about 30,000 of the country’s liquor vends.

Shifting Focus to Pricier Variants
The court subsequently clarified its ruling, easing conditions for liquor sales and allowing many outlets to reopen. Also, policy changes in West Bengal, Chhattisgarh and Jharkhand to allow liquor sales only through government-owned corporations, similar to states such as Delhi, Rajasthan, Kerala and Tamil Nadu, added to the uncertainty.

Companies, however, maintain that premium brands showed no signs of a slowdown and with 20 million people reaching legal drinking age each year, it’s not surprising the segment is thriving.

“This growth is also mirrored by the continued consumer trend towards premiumisation motivated by rising affluence, globalised outlook, urbanisation, progressive lifestyles — all leading to faster adoption, thus trading up to premium brands,” said Abanti Sankaranarayanan, chief strategy and corporate affairs officer at Diageo India, which owns the world’s second-largest whisky brand — McDowell’s No.1.

At the cheaper end of the spectrum, a variety of entrylevel brands sell in substantial volumes but companies are shifting their focus toward pricier variants to mop up greater profit. For instance, ABD's sales are skewed toward Officer's Choice, which contributes about 90% to total sales. The company is looking to push the Sterling Reserve range of premium whiskies, which crossed 1.2 million cases in the first year of launch in 2018.

Two years ago, USL decided to opt for the franchise route for some of its popular or mass-market brands such as Bagpiper and Director’s Special whiskies in a few states.

“The next level of growth will be multinationals taking these successful Indian whisky brands to newer markets and making them part of their global portfolio,” said Sandeep Arora, director at luxury spirits consultancy Spiritual Luxury Living. “Within the premium category, there are brands such as Amrut, Paul John and Rampur that are made in India but are being recognised as Indian single malts globally, similar to the Scotch segment.”