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Alcohol consumption patterns in India

To start off, it has been assessed by the World Health Organisation that an individual consumes about 6.2 litres of alcohol per year. According to the World Health Organization (WHO), average alcohol consumption in India was 5.7 litres per person above the age of 15 per year in 2016, up from 4.3 litres in 2010. On per capita consumption, India is ranked 101 (with Moldova leading with 15.2 litres. In the immediate neighbourhood, the figure for Pakistan is 0.3 litres and China is 7.2 litres).

Moreover, about a third of India’s population consumes alcohol on a regular basis and 11% of the total number of Indians are moderate or heavy drinkers. One-third of males and one-fourth of females in India who have made it a part of their lives say, in surveys, that it causes problems to their physical health, finances and household responsibilities. But alcohol —the recent events have shown—is an intricate and essential part of the Indian economy.

Now let us evaluate state wise consumption of alcohol, measured in consumption per capita, per week in millilitres. For Toddy and country liquor, Andhra Pradesh and Telengana have the highest levels of consumption which drops to the lowest levels in states like Jammu and Kashmir, West Bengal, Maharashtra and Gujarat (for obvious reasons). The consumption in these states are as low as 100 ml per capita per week. Levels of Toddy consumption have seen a sharp decline in the northern state of Bihar as well, which still ranks in the medium to average range (101 – 500 ml. per capita per week).

Moving on to beer, imported wine and imported alcohol varieties, we see that Andhra Pradesh and Telangana still consume more than 300 ml. per capita, making those states the highest consumers in this category. Himachal Pradesh shows a sudden spike (101- 300 ml), and so do the north eastern states of Arunachal Pradesh and Mizoram and the islands of Andaman and Nicobar (>300 ml). Goa too, sees a high trend in this category, with the average between 101 and 300 ml per capita per week. The rest of the country remains quite conservative in their consumption trends of Indian Made Foreign Liquor (IMFL) varieties.

Overall, it has been observed that the Union Territories of Dadra and Nagar Haveli, Arunachal Pradesh, Andaman and Nicobar Islands, Andhra Pradesh, Telengana, Daman and Diu, Sikkim and Pondicherry are among the highest consumers of spirits and alcohol varieties in India.

Now one of the reasons why there has been greater number of calls for bans on alcohol in certain areas is due to the fact that these regions suffer from chronic alcoholism and resultant poverty. The regular consumption of any variety of alcohol and especially country made liquor has also been found to be inversely proportional to family income, thus providing further evidence for this trend.

Consumption of local brews and toddy is one of the major reasons for deaths in alcohol related incidents. In recent years, about 136 people were killed in one single incident. In January 2015, in a village in eastern Maharashtra, 94 people lost their lives due to hooch liquor contamination and resulting toxicity. The states that have prohibition in place presently are: Nagaland (since 1989), Manipur (since 1991, except the hill districts), Kerala (2014), Gujarat and Lakshadweep (on all islands except Bangaram).

India is one of the fastest growing alcohol markets in the world. Rapid increase in urban population, sizable middle class population with rising spending power, and a sound economy are certain significant reasons behind increase in consumption of alcohol in India.

Indian Alcohol Consumption – The Changing Behavior provides a comprehensive analysis of the market size of alcohol industry on the basis of type of products, consumption in different states, retail channel and imported and domestic. The Indian alcohol industry is segmented into IMFL (Indian made foreign liquor), IMIL (Indian made Indian liquor), wine, beer and imported alcohol. Imported alcohol has a meager share of around 0.8% in the Indian market. The heavy import duty and taxes levied raise the price of imported alcohol to a large extent. Alcohol is exempted from the taxation scheme of GST.

The Indian alcohol market is growing at a CAGR of 8.8% and it is expected to reach 16.8 billion liters of consumption by the year 2022. The popularity of wine and vodka is increasing at a remarkable CAGR of 21.8% and 22.8% respectively. India is the largest consumer of whiskey in the world and it constitutes about 60% of the IMFL market.

Though India is one of the largest consumers of alcohol in the world owing to its huge population, the per capita alcohol consumption of India is very low as compared to the Western countries. The per capita consumption of alcohol per week for the year 2016 was estimated at 147.3 ml and it is expected to grow at a CAGR of 7.5% to 227.1 ml according to estimates.

The states of Andhra Pradesh, Telangana, Kerala, Karnataka, Sikkim, Haryana and Himachal Pradesh are amongst the largest consumers of alcohol in India. The most popular channel of alcohol sale in India is liquor stores as alcohol consumption is primarily an outdoor activity and supermarkets and malls are present only in the tier I and tier II cities of India.

The trends and pattern of alcohol consumption are changing in the country. With the increasing acceptance of women consuming alcohol, growing popularity of wine and high demand for expensive liquor, the market scenario seems to be very optimistic in the near future.

The study reflected changing pattern of the consumer’s mindset towards alcohol consumption in India. 3% of the respondents who consumed alcohol favoured wine for its health benefits. Though the popularity of whisky is highest in the Indian market, its market share is expected to decrease in future.

Alcohol consumption in high-income countries witnessed constant growth, but it has been growing in low and middle-income countries as well. Before 1990, Europe had recorded the highest level of alcohol use. However, the study forecasts that Europe will not hold that title for long.

Going ahead, the world will drink more, and more people will drink as well. The research also suggests that almost half the adults across the world will consume alcohol by 2030, whereas a quarter of them will become binge drinkers.

Binge drinkers are those people who drink 60 grammes or more pure alcohol in one or more sittings, in a month.

Starting Young

Indians are not just drinking more, they are drinking dangerously as well. As many as 57 million people are facing the after-effects of alcohol addiction. A survey by the Community Against Drunken Driving (CADD) revealed that over 88% of youth below 25, consume or purchase alcohol though it’s illegal. Punjab, Goa, Tripura, Chhattisgarh and Arunachal Pradesh rank high on alcohol consumption. However, Uttar Pradesh has the highest number of alcohol drinkers in India.

Regulating alcohol

A few state governments like Bihar, Gujarat, Mizoram and Nagaland, have prohibited the sale of alcohol. States like Kerala, Bihar, Tamil Nadu have imposed variety prohibition since 2016. The state government of Rajasthan allows sale of liquor only until 8.30 in the evening. India has also witnessed an increase in the number of drunken driving cases. According to reports, fines from drunk driving in India in 2018 alone, was at around `6 crore.

Assam is the highest alcohol consuming state in India

In the 15-54 age group, with 59.4%, men from Assam were found to be the highest consumer of alcohol in the country. In the latest Health and Family Welfare Statistics (HFWS) in India, it has been reported that 26.3% of women and 59.4% of men between 15-54 years of age consume alcohol in Assam. This is the highest in the country and the national percentages for the same age group are respectively 1.2 and 29.5. However, in terms of percentage of the population for both men and women in the age group 15-49 years who drink alcohol about once a week out of a total population (men and women) who drink alcohol, Assam women scored 44.8% and men scored 51.9% Meanwhile, in the 15-54 age group for women, Nagaland, Himachal Pradesh, Goa, and Karnataka recorded the lowest alcohol consumption with 0.1%. In the same category for women, Jammu & Kashmir occupies the second position with 23% women found to be consuming alcohol. In the 15-49 age group, with 59%, men from Arunachal Pradesh were found to be the highest consumer of alcohol in the country. The HFWS report further revealed that percentage of the population of men and women in the 15-49 years who drink alcohol about once a week was found to be 45.2% and 55.1% respectively for women and men of Arunachal Pradesh. For women and men in Nagaland, the percentage of the population who drink alcohol about once a week in the 15-49 age group was found to be 65.5% and 46.4% respectively. As for the other states from the northeast, the percentage of the population of men and women in the 15-49 years who drink alcohol about once a week are – Manipur 21.3% and 40.1%; 25.1% and 42.4%; Mizoram 20.3% and 41.2%; Nagaland 65.5% and 46.4%; Sikkim 33.9% and 43.5% and Tripura 50.8% and 47.1%. The five southern states of Andhra Pradesh, Telangana, Tamil Nadu, Karnataka and Kerala together consume as much as 45% of all liquor sold in the country. The financial position of these states is precarious as the Coronavirus lockdown completely dried up this crucial liquidity tap for them in April. Although these states consume as much as 45% of all liquor sold in the country annually. Not a drop was sold in April, and given the dire state of their revenues, these states have been anxious to make good the losses by opening up the vends, said the survey. While Tamil Nadu and Kerala top the list in revenue percentage terms at 15% each, for Kerala the tax on liquor is its single largest revenue source. The revenue share is 11% each for Karnataka and Andhra Pradesh and 10% for Telangana, shows the report. Delhi is at number three when it comes to liquor revenue share with 12% of tax revenue, but its citizens swig only 4% of the national intake. Tamil Nadu has another distinction – it is the single largest consumer of liquor in the country, guzzling as much 13% of national sales, closely followed by Karnataka with 12%. Andhra quaffs 7% of the national intake, followed by Telangana (6%) and Kerala (5%). While all other states have high population, when it comes to Kerala, despite being home to only 3.3 crore people, it draws the highest revenue because among the five states it charges the highest tax rate on liquor. However nationally, Maharashtra charges the highest rate, but draws only 8% of its tax revenue from liquor – primarily because it is the most industrialised state and has many other sources of income – and also consumes only 8% of the national intake despite being the second most populous state. Twelve states – the five southern ones, Delhi, Punjab, Uttar Pradesh, West Bengal, Madhya Pradesh and Rajasthan – account for 75% of liquor consumption in the country. But uncorking the bottled spirit will also be a problem for these 12 states as they contribute to more than 85% of all Covid-19 infections/deaths as well. Among these 12 states, Kerala has the lowest national average in this at under-1%, the report said. You might associate Goa with booze and partying, but a higher proportion of people in Telangana consume alcohol than in the former. And a larger percentage of men drink in Bihar, a state under prohibition, than in Maharashtra. Gujarat and Jammu & Kashmir, in that order, have the least consumption of alcohol among men. When it comes to women’s consumption of alcohol, Sikkim and Assam, with 16.2% and 7.3%, respectively, top the charts. But here, too, Telangana comes next, topping Goa. Barring Telangana and Goa, most of the states at the top are in the northeast. The consumption among rural women is significantly higher than in urban areas in most states, which could also be due to less hesitation in admitting to alcohol consumption compared to urban women. This difference in prevalence of alcohol consumption exists between rural and urban men too, but the difference is not as high as among women. Covid-19 may change many aspects of work, life and the economy, but India’s relationship with alcohol will likely remain intact. If anything, the linkages might get stronger. When the pandemic-induced lockdown was first announced, the Centre excluded liquor shops in the category of establishments that would stay open. It was not deemed to be “essential”. States backed the Centre’s stance. But as the days under the lockdown accumulated, and as the economy and tax collections slumped (with more money from the Centre not forthcoming), states started clamouring with the Centre to allow liquor vends to reopen.

State controls

India has had a conflicting history with prohibition. States have been torn between the need for revenues and the broader problems its abuse created. As a result, they have been imposing dry days, and some form of control. Some states have gone the full hog in imposing prohibition: Gujarat (since 1960), Nagaland (since 1989), Bihar (since 2016), Mizoram (since 2019), and in most parts of Lakshadweep. In most parts, states control liquor distribution. Take, for example, TASMAC (Tamil Nadu State Marketing Corporation), set up in 1983 by then-chief minister M.G. Ramachandran as the monopoly liquor wholesaler for better control over distribution. For retail, it auctioned licences to the private sector. This, in turn, led to problems, including cartelisation and customer complaints – and lower revenues to the state. Twenty years later, the J. Jayalalithaa government claimed monopoly over retailing too. It has served the state well. Its revenues jumped from `2,828 crore in 2002-03 to `31,157 crore in 2018-19. It’s also a reason why Tamil Nadu has been pushing the Centre to reopen liquor shops. Unlike the purchase of a car or a computer, lost liquor sale is lost forever. Thus, for TASMAC, which was selling 160,000 cases of Indian-made foreign liquor and 90,000 cases of beer every day, the sales might not necessarily return, reducing the ability of Tamil Nadu to fund even ongoing schemes. The time has come to ‘de-criminalise’ liquor as the state of Goa has done successfully. Considering that 50% or more of the price of every bottle finds its way to the coffers of state governments, it is preposterous that tipplers are treated with such scant respect.

Alcohol consumption in India to touch 6.5 billion litres by 2020

Alcohol consumption in India to touch 6.5 billion litres by 2020 Although perceived to be a recession-free industry, Covid-19 proved that the alcobev industry too could be brought to its knees. However, demographics in India and various factors prove that the industry could bounce back provided that legislative interference is to a minimum.

Alcohol consumption in India is estimated to touch about 6.5 billion litres by 2020 from about 5.4 billion litres in 2016, data from Statista revealed.

Revenue in the alcoholic drinks market amounts to US$1,371,385m in 2020. The market is expected to grow annually by 8.7% (CAGR 2020-2023).

The market’s largest segment is beer with a market volume of US$522,299m in 2020. According to global comparison, most revenue is generated in the United States (US$222,098m in 2020). In relation to total population figures, per person revenues of US$184.26 have been generated in 2020.

Revenue in the whisky segment amounts to US$18,791m in 2020. The market is expected to grow annually by 8.5% (CAGR 2020-2023). Compared globally, most of the revenue is generated in India (US$18,791m in 2020). In relation to total population figures, per person revenues of US$13.62 have been generated in 2020. The average per capita consumption stands at 2.6 L in 2020. Revenue (2020)+2.2% yoy is US$18,791m. Average Revenue per Capita (2020)+1.2% yoy is US$13.62. The alcohol market in India is divided into different segments such as country liquor, Indian Made Foreign Liquor (IMFL), beer, and imported liquor. According to IWSR Drinks Market Analysis, a London-based research firm, India is the world’s ninth-largest consumer of all alcohol by volume. After China, it is the second largest consumer of spirits (whiskey, vodka, gin, rum, tequila, liqueurs). India consumes more than 663 million litres of alcohol, up 11% from 2017. Per-capita consumption is rising. India consumes more whiskey than any other country in the world – about three times more than the US, which is the next biggest consumer. Nearly one in every two bottles of whiskey brought around the world is now sold in India. When worldwide booze consumption dipped in 2018, India partly drove a 7% uptick in the global whiskey market.

Five southern states – Andhra Pradesh, Telangana, Tamil Nadu, Karnataka and Kerala – account for more than 45% of all liquor sold in India. Not surprisingly, more than 10% of their revenues come from taxes on liquor sales, according to the research wing of Crisil, a ratings and analytics firm.

The other six top consuming states – Punjab, Rajasthan, Uttar Pradesh, Madhya Pradesh, West Bengal and Maharashtra – mop up between less than five to 10% of their revenues from liquor. The combined annual sales of alcohol companies have grown 3.7% in the last five years. Among listed entities, Diageo-controlled United Spirits has the highest market capitalization at `38,000 crores. The company which sells local whiskey, McDowells as well as Johnnie Walker, is the biggest player in the spirits market and holds 33.4% of the Indian scotch and whiskey market by volume. French rival Pernod Ricard commands 24% of the market with brands such as Royal Stag and Glenlivet, according to International Wine and Spirits Research (IWSR). Even within the premium segment, Diageo and Pernod Ricard control more than 70% of the whiskey segment.

Three global spirits giants – Beam Suntory, Brown-Forman and Bacardi – are collectively introducing more than a dozen new brands in the premium whiskey segment in India, which is the world’s largest whiskey consuming nation. These three companies are among the biggest distillers globally.

“The whisky category is large and in growth. Consumers are increasingly opting for quality over quantity and prefer blends that appeal to the Indian palate,” said Neeraj Kumar, Managing Director, Beam Suntory India, which recently launched Yamazaki, Hibiki, Oaksmith Indian whisky and Roku gin. Suntory, the world’s third largest spirits producer, said these new brands will benefit from the distribution and customer partnerships serviced by Teacher’s and Jim Beam for the past many years.

India consumed 212.7 million cases of whiskey in 2018

Scotch sales in the Indian market was among the top three in terms of volume, with 112.6 million bottles sold to India in 2018, compared to top-ranked France at 187.8 million bottles and second-placed US at 136.8 million bottles. In terms of value, India came in at £138.8 million, up 34.1% compared to 2017.

IWSR data showed double-digit growth for Indian whisky last year, and this market continues to expand despite considerable roadblocks. The importance of the Indian whisky market to the global well-being of the whisky category cannot be overstated: nearly one in every two bottles of whisky bought around the world is now sold in India, and seven of the top ten global whisky brands are Indian.

Indian whiskies, notwithstanding, India is still the sixth biggest global destination for Scotch whisky. The Indian influence on the whisky market is not waning either, with the IWSR reporting double digit growth last year.

India’s performance last year was mildly amplified by the boost that the regularization of the Uttar Pradesh market gave sales, but the 11% volume rise has still highlighted the opportunities that continue to exist for whisky in India. Demand is being fuelled by a rising consumer base of young consumers who are becoming more affluent in a country where the global reach of some of the smaller cities is becoming more significant, diluting the historical whisky sales bias towards the big three cities of Mumbai, Delhi Gurgaon and Bangalore.

According to IWSR figures, 93% of all whisky traded in India falls into the ‘value’ segment, and that leaves plenty of scope to develop the higher end segments. These new affluent consumers prefer premium products, and the value of the whisky market in India increased by 17% last year. This is a long-term trend, with the average price of whisky in India nearly doubling in ten years to US$7.18 for a litre. The appeal of the Indian whisky market is not just that all price bands are thriving, but just how early in the premiumization cycle the market is in.

Conversely, India’s 2018 results were helped by no new regulatory or tax interference and the market progressed accordingly. The premiumization process resumed, with the top end of the ‘Bottled in India’ market (selling for around a ₹1000 a bottle) flourishing. This has prompted the emergence of some pioneering and cult Indian whisky companies like John Distillers and Amrut Distillers who are raising the bar for Indian whisky.

Attempts are also being made to create a buzz around the use of whisky in cocktails, which will make the category more relevant not just to younger drinkers, but also to the female market. Many of these new ‘young brands’ are helping to contemporize the category and broaden the appeal away from the 35-year-old plus core users to the rapidly expanding younger age segments. There is already evidence that in the higher echelons of Indian society, women are developing a taste for top end whiskies.

The innovation in the category is helping Indian Whisky to carve out its own identity and in the longer term this will enhance its reputation among whisky connoisseurs from further afield. To date, Indian whisky exports have tended to follow the path of the large Indian expat communities, particularly in the Gulf. They have also attracted a following in some African markets, serving as entry level brands for those consumers wanting to upgrade from the illicit spirits market. The next generation of high-end Indian made malts are already showing that they are of a sufficient standard to capture an audience in Western markets.

Currently, the Indian Whisky category is strong: its innovation is bringing new consumers into the category and is building its profile among whisky purists, both internally and externally. Whether this trend will continue with the ever-present threat of Federal or State disruption remains to be seen; the category is prone to taking one step forward and two steps back following government regulation or tax changes.

While India consumed 212.7 million cases of whiskey in 2018, imported whiskey accounted for about 2% of the overall consumption by volume as Indian-made foreign liquor dominates the segment with relatively low price tags.

India’s alcoholic beverages industry is heavily regulated, with high excise and taxes imposed in most states, making it an important source of revenue. Additionally, import duties on foreign wines and spirits exceeds 150%, making them three to five times pricier than elsewhere in the world. As a result, many companies launch their products at duty free to gauge consumer responses. For instance, Brown-Forman recently launched Woodford Reserve Baccarat Edition, Woodford Reserve Double Oak, BenRiach scotch and Jack Daniel’s Bottled-in-Bond Tennessee whiskey at Indian duty free before introducing them at retail shelves and bars.

Despite slowdown in the overall spirits segment, companies, especially selling either imported or the pricier bottled in India (BII) spirits, said their business has remained insulated in the country where 19 million people are becoming eligible for drinking every year. And newer launches are not just restricted to whiskey. Bacardi, maker of the eponymous white rum and the world’s largest privately held spirits company, said consumers are trading up to premium liquor across categories. Online liquor delivery remains a non-starter, four months after markets like West Bengal, Jharkhand and Chattisgarh permitted the same, said company and industry executives, attributing the slow burn to steep delivery fee charged by aggregators Swiggy and Zomato and lack of clear guidelines. Online food delivery, in contrast, has reached pre-Covid numbers.

During peak lockdown months, while the central government had permitted opening of shops to sell essentials, it had denied sale of alcoholic beverages, which led some states to allow online delivery of alcohol. Spirits brands such as single malt maker Amrut Distilleries and whisky maker John Distilleries said retail outlets must be roped in to bring fair trade practice.

The government should encourage licensed retail outlets to set up their own portals to sell alcohol rather than allowing aggregators such as Swiggy and Zomato. Online players directly eat into the share of conventional retail outlets. Leading liquor firms such as United Breweries, Radico Khaitan, Amrut Distilleries and John Distilleries said that the e-commerce model for liquor will take a few years to scale up.

The long-term dynamics of the industry in India remained intact due to a host of favourable factors. Expansion of the middle-class, increasing rural consumption and dispersed urbanization, greater acceptance of social drinking and a higher proportion of the young population entering the drinking age are some of the factors, that will work in India’s favour.

When some Indian cities eased the grinding lockdown recently to prevent the spread of the novel Coronavirus, long queues were seen outside liquor shops across the country. In cities like Mumbai, a Covid-19 hotspot, booze-loving people made a mockery of social distancing rules, prompting the government to shut the shops again.

The harsh lockdown meant that the demand for alcohol was intact. There have been reports of a spike in alcohol sales around the world: in the UK, sales were up by 22% in March and in the US they have risen 55% compared to the same period last year.

“There have been long queues outside liquor shops across India. But not a drop was sold in April, and given the dire state of their revenues, these states have been anxious to make good their losses by opening up the liquor vends,” the research agency said. Lack of liquor taxes has left near-bankrupt states groaning under the lockdown with little money to spend.

A third of Indian men drink alcohol, according to a new government report. More than 14% of all Indians aged between 10 and 75 drink. The World Health Organization (WHO) estimates 11% of Indians are binge drinkers, against the global average of 16%. Indians are drinking more than before. A recent study of liquor consumption in 189 countries between 1990 and 2017 found that consumption in India had grown by 38% – from 4.3 litres a year per adult to 5.9 litres. Consumption had gone up because the “number of people with sufficient income to purchase alcohol has outpaced the effects of measures aiming to reduce consumption”. However, selling alcohol in India is challenging because the local governments are intrinsically anti-alcohol, something that is partly driven by philosophical reasons, but also because a hard-line attitude to alcohol is a political vote winner. In India, each of the twenty-nine states govern their own alcohol policy and regulations. There is no legitimate cross-border trade allowed, and state governments control taxation, production, the route-to-market, regulation and pricing. If a company wanted to have national reach in India, they would need to have an operation in each state – a process that is both bureaucratic and expensive.

To further complicate matters, marketing alcoholic drinks brands in India requires considerable ingenuity. India is ‘dark market’ where advertising and promoting alcohol is prohibited; as such, companies marketing and launching new brands do so prudently with good liquid, good packaging and good distribution.

Allied Blenders & Distillers (ABD) demonstrated this last year with the fabulous success of their new premium range of whisky, Sterling. Sterling was a good, well presented product and with ABD’s distribution channels, they were able to persuade retailers to put the whisky on their shelves at the cost of sacrificing the shelf space of another of their brands.

There may be ways of improvising, but India remains a difficult trading environment for drinks companies. These conditions are compounded by the fact that the law makers do not legislate with the commercial sensitivities of drinks companies in mind: regulations, tax rises and rule changes can be introduced at damagingly short notice.

The market was blighted in 2017 by unexpected monetary reform as well as a Supreme Court ruling imposing a ban on liquor vends (retail outlets) within 500m distance of any national or state highway. Rules were later clarified to permit bars in hotels to sell alcohol, and the industry deployed their initiative to overcome the ruling. National Highways were quietly exempted by changing them to City Highways, while one resourceful vendor, sited 50m from a liable highway, is said to have created a 501m path that wound its way to his store, so that he would still be eligible to continue to trade. Despite this resilience, it is estimated that 6-8% of outlets closed and the vibrant Indian whisky market flattened.

‘I believe our business is ready to shift gears’ – Varun Jain, CEO, NV Group

With premiumisation being the mantra for many alcobev manufacturers, NV Distilleries not only looking at pushing its domestic market but also making tremendous efforts in the export market as well. Varun Jain, CEO, NV Group feels that the company is now ready to shift its gears as he speaks to Bhavya Desai on its roadmap.

Given the current scenario of the industry, how is NV looking at its roadmap for the current year?

In my opinion all companies have had to face losses in their business as the market was either completely or partially closed. For example, Mumbai allowed only door delivery from the retail outlet before opening the markets. Number of State Government announced lockdown on weekends as well which also adversely affected liquor sales. The liquor industry registered more than 50% drop in its volume during March and April due to the pandemic. 

However, most of the market have substantially recovered their volumes now, except states like Goa and Daman due to the reduced influx of tourists. NV is bridging the gap by putting in place a robust production blueprint which will ensure immediate supply to those states where stock is being currently imported from neighbouring states. 

We are also strengthening the distribution base at all levels and focusing on Retail and Modern trade outlets. We at NV have also talented marketing professionals to take care of the consumer off take from retail and on-premise outlets.

What plans did the company put in place to mitigate any challenges that came from the pandemic?

There are challenges at all levels during the ongoing pandemic. We had to work from home,

keep everything sanitized (People/Place/documents/ Vehicles/Plant and Machinery, etc.) and yet produce the best possible results. The greatest challenges were faced by our work force in the field and manufacturing units.

Every individual is provided with masks/gloves and sanitizers and pedal operated sanitizers are placed in all offices and plants. The norms of maintaining social – distancing are strictly followed by each and everyone and we are in constant touch with all operation managers through Zoom calls only.

What aspects do you attribute to Smoke Vodka’s success?

Smoke Vodka has been well received by the market and also surpassed our expectations. The reason for this is its top of the line packaging and pricing. The price of the Vodka, its 5 times distillation, aniseed flavor (which no other brand offers and a support of three brand extensions, smoke clothing lines / smoke natural spring water in can & smoke sanitizer) have ensured its reach and visibility in a very short span of time.

The innovative digital marketing campaign and promoter led consumer promotions have substantially increased awareness and trials through miniature packs of Smoke Vodka. It is also being used as a gift article because of its international look and feel.

What is the next stage of your marketing strategy for Smoke Vodka pan India?

NV would be aggressively promoting SMOKE VODKA by adopting very innovative marketing strategies. Some of these include:

1. Broad – based consumer trials,

2. Fully exploiting the digital platform,

3. Use of Surrogates (Smoke water / Smoke Clothing line),

4. Making SMOKE visible in all relevant On and Off trade outlets, and

5. Targeting the influencers NV

These are some of the things that we are planning

Do you plan to have any other variants like Gin or Rum under the same brand name Smoke?

Smoke Vodka will be the only spirit brand. But I have created a few brand extensions like Smoke Wear, Smoke Water, Smoke Sanitizers.

How important is it for the NV Group to succeed in the premium product category?

I have always wondered if there are only a handful premium products from India. India has the resources, technology and expertise to create world-class premium products. Even we bottle for few international brands and very early on when I joined NV group, I was sure that I wanted to have our own homegrown portfolio of premium brands. 

Smoke Lab is the first premium brand and we are launching in the USA and other international markets now. There are plans for few more premium brands in the pipeline that will be launched next year. It is important for NV Group and I, personally, to succeed in the premium category. I believe our business is ready to shift gears and capture the premium category. This will establish NV Group as a real global player in the international spirits business.

How is the export market of your products for you?

We are putting tremendous focus on the export market. We have been exporting few brands to the UAE and Africa. Smoke Vodka plans were delayed by a few weeks due to the pandemic but we quickly adapted and stayed the course. By October, Smoke Vodka will be available in USA and few other countries as well.

What are the company’s ambitions to boost its status in the alcobev industry?

NV has the potential of being one of the leading manufacturers and marketer in the industry. There is no other company whose Product – portfolio can be compared with that of NV. We offer Whisky, Rum , Gin ,Brandy , Duet and Vodka at different price points to cater to every segment of the society. 

We can proudly claim that our entire product portfolio sells uniformly and well across states, giving run for their money to the existing giants. NV would be opening in all major markets of India soon led by Smoke Vodka.

How has the company fared this year and what have been the highlights of these results?

NV Group has successfully established markets like Punjab, Chandigarh, Haryana and UP in the last one year. The company has also introduced its topmen brands like Smoke Vodka, Royal Envy Whisky in the western region. This brand is showing huge consumer pull thanks to our innovative marketing and distribution campaign. 

The highlights of this year are as under:

1. Successful launch of Smoke Vodka.

2. Revamping of packaging of brands like, Royal Envy Premium whisky & Blue Moon Vodka.

3. Introduction of Smoke Water in 500 ml Can.

4. Aggressive digital campaign on Smoke Vodka and its surrogate.

5. Restructuring of the operating team in Sales and Marketing.

Beam Suntory Sets High Ambitions for India

After the lull comes the storm as Beam Suntory launches it first Truly International Indian Whisky Oaksmith and the The House of Suntory portfolio including Yamazaki, Hibiki and Roku Gin.

Oaksmith is a premium Indian whisky, crafted by Suntory’s Chief Blender, Shinji Fukuyo, the creator of iconic Japanese whiskies Hibiki and Yamazaki, marks Beam Suntory’s entry into the Indian whisky segment and combines the finest Scotch Malts and American Bourbon using Japanese blending craft to bring the best of East and West for Indian consumers. The global premium spirits company brings its finest and the most popular Japanese whiskies – Yamazaki and Hibiki – and Japanese craft gin – Roku – to India with the launch of The House of Suntory portfolio.

Beam Suntory, the global premium spirits company, has launched a range of four premium spirits in India, signaling its commitment and strategy to grow in India in line with its ambition to reach USD 1 billion in revenue by 2030. The highlight of the launch is the introduction of Oaksmith Indian whisky – created by world-renowned blender Shinji Fukuyo, Chief Blender, Suntory – using traditional Japanese craftsmanship, blended with the finest Scotch Malt whiskies and American Bourbons to make a whisky unique and authentic to Indian taste. In addition, the iconic Japanese whiskies Yamazaki Distiller’s Reserve and Hibiki Japanese Harmony, along with Roku® Japanese Craft gin have also been launched from The House of Suntory portfolio.

The launch of Oaksmith and Oaksmith Gold whisky in India is key to Beam Suntory’s growth strategy and signifies the importance of India to the company. Along with the introduction of Yamazaki, Hibiki and Roku, it reinforces the company’s commitment to lead the growth and premiumisation of the Indian spirits market.

The launch event of The House of Suntory was graced by Shinji Fukuyo, world-renowned Chief Blender at Suntory, the creator of the luxury and iconic blends of Hibiki and Yamazaki whiskies, and Neeraj Kumar, Managing Director of Beam Suntory India, along with George Kumekawa, Representative, The House of Suntory. The event highlighted the exceptional legacy of The House of Suntory, the art of making delicate whiskies, and the importance of India for Beam Suntory globally. The House of Suntory brands are being launched across all major cities including Delhi, Mumbai, Pune, Hyderabad and Bangalore. Yamazaki Distiller’s Reserve will be available in the range of INR 10,900 to INR 20,000 across different states; Hibiki Japanese Harmony for INR 10,900 to INR 20,000 and Roku® gin for INR 5,500 to INR 7,100.

“We are thrilled by the appreciation that Hibiki and Yamazaki have received from consumers worldwide, and their popularity among spirits aficionados in India. The growing premiumisation of the Indian market and the appreciation for finely crafted spirits made this the right time to launch these brands, along with Roku gin. Indians today are well-travelled and exposed to global trends, which inspired the creation of Oaksmith for whisky lovers in India,” says Neeraj Kumar, Managing Director of Beam Suntory India. On Oaksmith and Oaksmith Gold, he said, “The beautiful blend incorporates years of tradition that the Beam Suntory family upholds while showcasing Shinji-san’s award-winning blending capabilities making it a whisky that, quite simply, no one else could possibly create.”

Oaksmith is a celebration of mastery and global collaboration, combining the best of East and West in a bottle. Blended by Shinji Fukuyo himself, Oaksmith is a harmonious blend of matured Scotch Malts that adds a strong flavour profile and American Bourbon whiskey, aged for at least four years in American Oak barrels which lends it an unmatched smoothness. That gives the brand its unique name and also inspires the round bottle labels celebrating its distinctive craftsmanship. Befitting the unique and distinct flavour palate, the exquisite six-sided bottle with beveled edges and a tall neck has an equally unique and ergonomic design that is an ode to the finest Japanese craftsmanship and makes it stand tall in this category. The company is celebrating its international pedigree with the use of the world map in all its creative expressions.

Much like The House of Suntory, Oaksmith blend is made using the finest ingredients and sincerity of process that is a hallmark of Beam Suntory’s Japanese heritage which is unique to this brand in the entire Indian whisky category. From seed to sip, the whisky is meticulously crafted to achieve a blend like no other resulting in a bold spirit that is rich on the nose yet approachable and well-balanced on one’s palate with a bright, smooth and unexpectedly long finish. The unique offering will be available at the price of an Indian whisky and the flavourful palate will be well suited to both beginners and connoisseurs alike. There will be two variants of the product – Oaksmith and Oaksmith Gold – which will launch on 19th December 2019 in the state of Maharashtra, followed by the rest of the country in due course. Oaksmith Gold will be priced in the range of INR 800 to INR 1,300, while Oaksmith will be priced in the range of INR 600 to INR 900 depending upon the state of launch. Both the variants will be premium in their respective categories due to the international quality of blend and craftsmanship they offer.

A relentless quest for perfection and commitment to using only the highest- quality ingredients encapsulates Suntory’s philosophy to create the finest spirit possible. Shinji Fukuyo, Chief Blender at Suntory, said, “My travels across the world have helped me understand and appreciate sophisticated flavour profiles. Blending spirits is about creating a harmonious flavour by weaving culture and tradition along with one’s own form of self-expression. This is an art in itself and I am very grateful that people globally have appreciated the quality and artistry of Hibiki and Yamazaki, and hopefully now, Oaksmith.” On Oaksmith®, he added, “While making this blend, I wanted to ensure that it resonates specifically well with the Indian audience while being truly international in its spirit. I travelled across the country to understand the different food cultures and flavours. Eventually what I saw, heard and tasted, helped me explore a variety of flavour profiles and finalize this harmonious blend which has the best of America, Scotland and Japanese craftsmanship. I am extremely proud as the final product completely reimagines what the future of Indian whisky can be.”

On the rising popularity of gin in India, George Kumekawa, Representative, The House of Suntory, said, “In recent years, we have noticed a strong trend among Indians to opt for premium and craft gin as their spirit of choice as it has a softer flavour profile which is easier on the throat and refreshing in its appeal – perfect for brunches and refreshment occasions. With the introduction of Roku gin in India, we are looking to further build the market for both gin as well as craft spirits to help enthusiasts discover new tastes and experiences.”

THRIVING TODAY AND READY FOR TOMORROW

As many of the speakers at the TFWA Conference and workshops this week have suggested, the way to tackle the challenges the industry faces may lie in technological advances. We in duty free and travel retail have the opportunity to create outstanding customer experiences that online retailers can only dream of. When this physical experience is enhanced by the best technology, it can only get better.

As TFWA President Alain Maingreaud pointed out in his opening address at the TFWA Conference, accelerating the adoption of digital and mobile technology will ensure the duty free and travel retail industry keeps pace with traveller expectations and enrich the in-store experience.

Christina Lu

At the Innovation in Action workshop, Alibaba Group’s Christina Lu detailed how the strategy behind their organisation was to “make it easy to do business”.The company’s travel platform Fliggy, which is not only about transaction but also about brand building, provided a huge opportunity to connect Chinese consumers with business.





Julie Menville

But the customer must come before the technology. Julie Menville of Amazon Pay explained how her organisation “started with the customer and worked backwards to create new products and services”. The launch of Amazon Pay meant that shoppers can have the same experience on other websites as they have on Amazon.





Valéry Méary

More innovation came under the spotlight at the next day’s Inflight Focus workshop. Valéry Méary of airfree detailed how technology is transforming the inflight shopping experience. His platform allows passengers to access an online portal, browse and pay for thousands of products, and then collect their purchases at the airport when they arrive.





There’s plenty of scope to build sales, and Elina Jamaluddin from AirAsia explained that her company’s Ourshop inflight platform is performing strongly, despite the fact that AirAsia is a low cost carrier.

Aldric ChauAs ever, solid knowledge of the customer is a key to success, and again use of sophisticated technology can help. Aldric Chau of Cathay Pacific stated that data-driven personalisation leads to customers spending over 40% more than they had planned. This is surely evidence, if it were needed, that investment in technology can pay handsome dividends.

The Impact of E-commerce on Alcohol Trading

IWSR research indicates that 1.8% of the value of all global beverage alcohol is now Sold through E-commerce

Like others, the drinks industry has recognized what a critical medium the digital environment is to interact with consumers, inform them, learn from them and ultimately to sell to them. Regulation has made the online retailing of alcohol more complicated than other sectors and this has stifled development, but this is changing.

IWSR Drinks Market Analysis’ global database now captures just how effective drinks players have been at selling digitally. Although variances inevitably exist between markets, the results for 2018 show that 1.8% of the value of all alcoholic drinks traded around the globe is now sold through e-commerce.

It is wine that has best harnessed the selling power of the online retail environment. Last year as much as 3.6% of all wine value sales stemmed from e-commerce outlets, a figure that translates into nearly US$8bn of sales.

The rapid expansion of wine sales online has even threatened the viability of independent “bricks and mortar” wine stores in the UK. Online wine sales in the country have reached 6.5% of total sales value, prompting one leading wine retailer, Majestic, to announce that they are to sell off much of their retail estate to concentrate on their online business, Naked Wines.

The extensive number of wine producers and the diversity of choice has meant that a culture of experimentation has always existed within the wine sector. The online environment has proved to be well placed to service wine drinkers’ curiosity and to educate and inform consumption choices. The dramatic expansion of online wine marketplaces like Vivino, which after just nine years of trading now claims to have 10 million different wines and as many as 35 million users, has illustrated just how compatible wine selling is within the digital space. Sales of spirits through e-commerce may not be as pronounced as wine, but IWSR research shows that around US$6.5b of spirits were sold online in 2018, a figure that represents 2% of all global spirits’ value sales. For example, ecommerce is reported to now be Pernod Ricard’s fastest growing channel.

Direct selling on owned online platforms has proved less effective for spirits operators than partnerships or acquisitions with established online retailers and delivery services, perhaps because it compromised choice to exclusively sell their own brands. The recent trend has been for operators to partner with existing online platforms to maximise exposure and to showcase their brands from a different angle to consumers.

The development of the online marketplace is happening at different speeds with drinkers in some markets quicker to adopt new purchasing practices and habits than others. The reported 800m Chinese internet users have been quick to embrace the advent of e-commerce. The explosion in smart phone use, social media apps and mobile e-commerce has facilitated this shift in buying habits and meant that 6.5% of off-premise sales of all alcoholic drinks are now ordered online in China.

The e-commerce channel has proved particularly popular for wine sales in China. Encouraged by fierce competition, which has ensured low prices and fast delivery, online sales now account for 9% of sales value – that is a fifth of all off-premise wine sales, as well as online spirits sales of almost 4%.

Even in markets like China where e-commerce penetration is already comparatively high, it can be assumed that the e-commerce channel will continue to take share from “bricks and mortar” retail. The development of the channel will be fuelled by convenience, competitive pricing, a quickening speed of delivery and by rising digital competence.

The shift to digital platforms will change the alcoholic drinks landscape forever, providing a marketplace for a plethora of brands and concepts that are no longer reliant on winning shelf space from a few major retail chains.

The future alcoholic beverage market will be a more diverse and interesting place as a result.

Spirits Producers & Producer Organisations formally unite as the World Spirits Alliance

Global spirits producers unite to get a global voice.



Spirits producers and producer organisations from across the world joined forces recently in Geneva for the formal creation of the World Spirits Alliance (WSA), an international trade association dedicated to representing the views and interests of the spirits sector at the international level. Following many years of successful cooperation, members decided to set up a dedicated, formal organisation to act as the common global voice for the distilled spirits sector.

WSA will act as a representative partner and interlocutor before international organisations, such as the World Trade Organisation (WTO), the World Health Organisation (WHO) and the United Nations (UN). WSA and its members will continue to pursue the elimination of tariff, non-tariff barriers, and discriminatory taxes, fair, transparent and evidence-based regulation, adequate excise tax structures, proportionate evidence-based public health measures for distilled spirits and ambitious strategies to combat illicit alcohol.

“Many of us have been working together for nearly two decades, hence setting up a formal trade association to act as a united global voice on the integrity and social responsibility of our spirits industry is a natural and important step forward. Distilled spirits are a vibrant and highly dynamic sector with a unique diversity of products and producers across the world,” said Marie Audren who will act as Secretary General for the WSA.


       

“The aims of the WSA are to create a common platform for exchange and have a representative body that will allow us to comment on issues of global relevance, particularly in the areas of trade and regulatory policy, and help develop a positive environment for the sustainable success of the sector,” said Rodolfo González González (Camara Nacional de la Industria Tequilera) who was elected as first President of the WSA.


         

WSA members represent producers of products such as Baiju from China, Tequila from Mexico, Brazilian Cachaça, Indian IMFL, Cognac and internationally traded whiskies like Scotch Whisky, Irish Whiskey and American Bourbon (to name but a few).

“Distilled spirits are celebrated and responsibly enjoyed around the globe and generate jobs, economic growth and tax revenue in the countries where they are produced. At the same time, in many markets around the world, distilled spirits are heavily taxed and regulated, and we face trade barriers that are only applicable, or applied more excessively, to distilled spirits. This situation needs to be reviewed and addressed,” said Amrit Kiran Singh (International Spirits & Wines Association of India) who was elected Vice President.



       

“We want to demonstrate to national authorities that we are committed to responsibility and that advancing fair treatment of spirits products in the marketplace will have a positive impact on their economies,” concluded Chris Swonger, President and CEO of the Distilled Spirits Council of the United States (DISCUS).

WSA and its individual members are committed to responsible production, advertising and marketing practices and to encouraging adults who choose to consume spirits, to do so responsibly and in moderation.

The WSA membership includes trade associations and producers of distilled spirits from across the world:

• spiritsEUROPE
• Asia Pacific International Wines & Spirits Alliance Limited
• Camara Nacional de la Industria Tequilera
• The Scotch Whisky Association
• Association of Canadian Distillers
• Pernod Ricard
• DIAGEO
• International Spirits & Wines Association of India
• Japanese Spirits Liquor Makers Association
• Brown-Forman
• Distilled Spirits Council of United States
• Spirits New Zealand
• Rémy Cointreau
• Beam Suntory
• Spirits & Cocktail Australia
• Campari
• Edrington

Budget sets a clear action plan for making India $5 trillion economy

 

India is cruising towards becoming a $5 trillion economy. Indian alcobev industry stalwarts add credence to FICCI’s take on the budget.



Commenting on the Union Budget 2019-20 recently presented by the Finance Minister Ms Nirmala Sitharaman, Mr Sandip Somany, President, FICCI said, “Directionally the budget is good, and it takes forward the plan that was laid out by the government during the Interim budget. There are several positives in the budget, and it provides a set of benefits for most segments of the society. We see a clear action plan for realising the vision of making India a US$ 5 trillion economy over the next few years with a focus on ease of living.”


Anand Kripalu



“A balanced budget that draws from a long-term vision for the country! Through policy reforms to rejuvenate investment, ‘Make in India’ and Ease of Doing Business, as well as measures to tackle the country’s water shortage and climate change, the budget lives up to the government’s vison of a New India that aims at inclusive growth. The acknowledgement of India Inc’s role as the nation’s job and wealth creators is heartening. Operating with the high standards of compliance, in a sector that is in urgent need of regulatory reform, we are delighted at the Government’s vision of ‘Minimum Government Maximum Governance’, which we hope the Centre will encourage States to adopt towards the alcoholic beverages sector,” points out Anand Kripalu, Managing Director and CEO, Diageo India.

The budget maintained its focus on infrastructure development. While the government would continue with its existing major national programmes like Bharatmala, Sagarmala, Rural roads, Udan and Inland waterways scheme, the vision of taking connectivity to the next level through ‘One Nation One Grid’ for electricity and a similar plan for gas grids, water grids, i-ways and regional airports is indeed ambitious and would be transformational in its impact. “FICCI has been advocating the need for such networks and would work with the government on realising this vision. We are also encouraged by the Minister’s focus on promoting public-private partnership for modernisation and upgradation of the nation’s railway infrastructure,” added Mr Somany.

The MSME sector also got its due focus in the budget. Availability of finance and delay in payments are the two key issues faced by MSMEs. The government has attempted to address these through allocation of `350 crore for interest subvention scheme for GST registered MSMEs and creation of a payments platform to enable filing of bills and payment thereof on the platform itself. Also noteworthy is the suggestion to set up a social stock exchange for listing of social enterprises and voluntary organisations. This is expected to open up new avenues for funding for entities working in the social sectors.

Neeraj Kumar



With the Indian economy poised to become a $3 trillion economy in 2019, the Union Budget balanced prudently between focus on enablers for near term growth with a visionary 10 year road map to sustain and scale this growth.

Closer to our category, the announcement to develop 17 iconic world-class tourist sites is good news. We continue to expect greater transparency and ease of doing business in states and central regulatory framework to enable sustainable and compliant growth for our sector, says Neeraj Kumar, MD Beam Global Spirits & Wine India.      

Abhishek Khaitan





The industry sees a confident and clear articulation to boost growth by reduction in corporate tax and sops to housing sector and startups. The focus on sustainability with electric vehicles and water is visionary but enabling infrastructure needs to be implemented.

“The budget is focussed on vision and inclusive growth,” believes Mr Abhishek Khaitan, Managing Director, Radico Khaitan Limited. The new government till date has pursued pro-growth initiatives and, I believe, this budget will continue the impetus to further boost economic growth and investor confidence. The government is well positioned for a swift and efficient execution of progressive initiatives. Smt Nirmala Sitharaman’s maiden Budget – the first to be presented by a female Finance Minister — emphasises on infrastructure development, freeing up liquidity to troubled NBFCs, generating jobs in the MSME sector, and generally enhancing the ease of doing business. As a listed corporate, we believe that having a 35% public float is positive in terms of better corporate governance standards and valuations and carries a potential of increasing India’s weight in the global indices.

The budget is equally focused on welfare, health, sanitation, water, transformation, standard of living and support to farmers.

Nirmala Sitharaman ji stressing on the ‘Gaon, Garib and Kisan’ aims at enabling the rural economy through multiple schemes. With the aim of boosting the agricultural sector in the country, the government’s plan to reassess the implementation of zero budget farming has the potential of nearly doubling farmers’ income. Additionally, 10 thousand new farmer producer organisations will be set up for ensuring market reach for the farmers. The other schemes announced in the budget such as Pradhan Mantri Matsya Sampada Yojana, cluster-based rural industrialisation for promoting 50,000 artisans, 75000 skilled agri entrepreneurs and overall focus on dairy sector are all very laudable.

The vision of each house having water, electricity and cooking gas by 2022 is commendable and there is a very close interdependence between water, sanitation, health, nutrition, and human well-being. We view water as a central resource for a sustainable India and the thrust to provide piped water to all rural households by 2024 is what inclusive growth is all about.

To conclude I commend Ms Sitharaman for appreciating the contribution of India’s private sector in the fantastic rise of the country’s economy. While the fiscal balance has been managed well with the deficit aimed at just over 3%, the overall, the budget is pro-poor, pro-rural and pro-ease of doing business. The simplification of the GST, the simplification of tax reforms and indirect taxes and the support to startups not only will help in bringing in more capital and employment, it will significantly benefit society at large and help achieve aspirations of millions of Indians.

“I would emphasise that the government has taken due cognisance of the funding needs of a growing economy and this is reflected in a series of measures announced to deepen the country’s capital markets as well as help increase inflows both through the institutional investment and direct investment route. In our pre-budget consultation, FICCI had suggested the need to look at FDI norms in sectors such as insurance, animation, gaming etc. and we are glad this found a mention in the budget,” said Mr Somany. Additionally, to attract cross border investments, the statutory limit of FPI in a company is proposed to be increased from the current 24% to the sector foreign investment limit.

The announcement to further provide `70,000 crore for capital infusion into public sector banks along with measures to strengthen the governance processes within the banks should help in improving the credit flow to the industry. “The NBFC sector has been in focus on account of the stress being faced due to liquidity crunch in the last few months. Acknowledging the important role played by NBFCs, some key measures have been taken which should help ease the liquidity situation for the fundamentally sound NBFCs going ahead. As this happens, we hope to see greater amounts being sanctioned and disbursed by the para-banks particularly in the MSME and retail segment,” said Mr Somany.

Another novel feature of the budget is to marry the benefits of rural infrastructure development with sustainable livelihood opportunities. Having achieved tremendous success over the last five years in terms of promoting connectivity, housing, provision of electricity and clean energy in rural areas, the focus now is to promote traditional resource-based industries and create avenues for self-employment and entrepreneurship. “From the point of view of the farm community, the decisions to set up 10,000 farmer producer organisations and fully leverage the benefits of e-NAM for getting fair and remunerative price are welcome. In FICCI’s Agenda for the New Government, both these points were highlighted, and we had urged the government that these are essential components of any strategy aimed towards doubling income of our farmers over the next few years,” said Mr Somany. To strengthen the education system in the country, FICCI had suggested that the government finalises and implements the National Education Policy, sets up a National Science, Technology and Human Research Foundation; and hasten the setting up of Higher Education Commission of India. FICCI would like to thank the government for having incorporated these suggestions in the budget proposals.

On the disinvestment front, FICCI welcomes the government’s decision to enhance the target for the current year to `1.05 lakh crore. We had of course suggested that given the demands on exchequer, government should look at a target of `1.5 lakh crore. Additionally, the government’s decision to consider divesting its stake in select public sector units to below 51% is interesting and we look forward to details on this subject. “On the taxation front, while we are happy to note the decision to raise the turnover limit from `250 crore to `400 crore for companies that would attract a corporate tax rate of 25%, we had hoped that this rate will be applicable to all firms. Given the way tax policies are evolving globally, we need to be competitive if we are to attract and retain investments at a high level. With the Economic Survey also highlighting the critical role played by private investments in addressing concerns related to growth and employment, a bigger boost to the corporate sector was expected,” said Mr Somany.

Enhanced deduction for interest payments on loan taken for affordable housing, clarification on Angel Tax and the thrust on speedier resolution of legacy tax disputes in the indirect tax segment are some of the other important announcements on the tax side.

Finally, government has remained focussed on making India a ‘cash-lite economy’ and once again we saw in this budget a couple of suggestions that would help the country move ahead on this track.

The Industry Today And The Opportunities Of The Future

The first guest speaker at the TFWA Asia Pacific Conference was Andrew Ford, President of the Asia Pacific Travel Retail Association. He detailed the four areas of his organisation’s activity – advocacy and helping the industry to defend itself, research, (including a report on young China produced in partnership with TFWA), training, and events. With more and more issues facing the industry, and the policy changes that have been taking place in Europe coming to Asia, airports are, he said, more engaged and more aware of the need for advocacy. The association’s Economic Impact report will, he stated, provide valuable insight into the scale and scope of the industry in Asia.

Copyright: TFWA Press Office

A thought-provoking keynote address from The Economist’s Foreign Editor Robert Guest looked at how the geopolitical climate is affecting trading relationships between the world’s superpowers. He spoke of how societies can be ‘open’ or ‘closed’. Travel, he said, can only be good for the world as it broadens the mind. When you let people in, he concluded, you get the benefit of their ideas and culture – and that makes the world more prosperous.

Next on stage, Kate Ancketill, CEO of GDR Creative Intelligence offered fascinating insight into how ‘new retail’ (combining online, offline logistics and data across a single value chain) will define the retail landscape of the future. Multi-tracking, which sees the same retail space adapted and regularly updated to suit a wide range of consumers, is one of the most important movements that is shaping today’s retail.

3Sixty’s Executive Vice President Roberto Graziani spoke of the retail revolution that started with e-commerce and accelerated with the development of smartphone technology. With 25% of all e-commerce sales in the US already being carried out on a mobile, online channels will soon overtake offline. Effective partnerships to leverage data, strong use of data analytics and innovation are essential for omnichannel to truly elevate travel retail.

Offering an airline’s perspective, Campbell Wilson, SVP of Sales and Marketing at Singapore Airlines said that the airline is usually the anchor in any data consortium. He said that sales can no longer only take place on board, and airlines must go online to give travellers what they want, when they want it.

Copyright: TFWA Press Office

Przemyslaw Lesniak, CEO of Lagardère Travel Retail Pacific stated that in the current travel retail market, being a superb retailer is no longer enough. He outlined how he had adopted the welcoming and fun characteristics of the local culture within his own business. More than a brand or retailer, we should actually strive to be ‘an unforgettable host’, he said.

Dong-ik Shin, Director of Concession Planning Team at Incheon International Airport explored the role of retail in the airport of the future. He described a virtuous cycle, in which revenue from travel retail is used to improve facilities and maintain lower charges. This helps airlines to become more competitive and bring in more passengers, which in turn increases retail revenues. Already enjoying duty free revenues which are growing much faster than passenger traffic, his airport’s vision is, he said, to become the world’s best for shopping and dining by 2025.

Duty Free World Council’s President Frank O’Connell took to the stage to announce the launch of an industry-wide training platform, created in partnership with the Institute of International Retail. While face-to-face training can be costly and takes staff off the sales floor, the new programme is a cost-effective way to deliver an internationally recognised educational programme. It will provide clear career pathways which will help to improve staff retention, and build a community of loyal staff which will positively impact returns.

Moving on to the highly pertinent subject of sustainability, Vanessa Wright, Group Vice President of Pernod Ricard stated that increasingly consumers want to work for and buy from companies that ‘do the right thing’. There are a number of simple measures that the travel retail industry can take, such as offsetting, but sustainability should be the responsibility of all in an organisation, not simply that of one department. Her own company’s action plan detailed a commitment to strive for sustainability ‘from grain to glass’.

Gemma Bateson, JTI Worldwide Duty Free Corporate Affairs Director examined the challenges arising from the legislative constraints encroaching on brands’ capacity to market themselves effectively. While regulation is not per se a ‘bad thing’, that regulation, which is often designed for the different circumstances of the domestic market, must be proportionate and sensible. The demand for regulation relating to product labelling will affect all categories, and she called for a united approach in combatting the threat.

Nestlé International Travel Retail’s General Manager Stewart Dryburgh said that there was plenty of room for growth in his category, and confectionery & fine food could be worth US $10 billion in 10 years’ time. Key to this growth is meeting consumers’ three core needs, which are Deeper Connections (meaning how connected consumers are to friends and family); Better for You (the ability to choose healthier products); and Elevated Experiences (which means enjoying a bigger and better experience).

The day concluded with a look into the future of technology from Alan Brennan, Managing Director at creative commercial tech agency dcGTR. He said success within the duty free and travel retail industry will be affected by our ability to research and establish what our customers want. Virtual reality technology can enable us to understand how customers would behave in a store, and what choices they would make, without the need to invest in a physical building.

Worldwide Alcohol Consumption Declines -1.6%

IWSR 2018 Global Beverage Alcohol Data shows growth in spirits, but beer and wine volume is down; market expected to grow by 3% over next five years.
Beverage alcohol drinkers across the globe consumed a total of 27.6bn nine-litre cases of alcohol in 2018, but while that number represents a decrease of -1.6% from the year prior, new data from the IWSR forecasts that total alcohol consumption will steadily increase over the next five years, to 28.5bn cases in 2023. In terms of retail value, the global market for beverage alcohol in 2018 was just over $1tn, a number which the IWSR expects to grow 7% by 2023 as consumers continue to trade up to higher-quality products. These figures – and more than 1.5m other points of data – are included in the just-released IWSR Drinks Market Analysis Global Database, which also shows:
Gin was the Leading Global Growth Category in 2018, and Forecasted to Reach 88m Cases by 2023
The largest gain in global beverage alcohol consumption in 2018 was in the gin category, which posted total growth of 8.3% versus 2017. Pink gin was a key growth driver, helping the category sell more than 72m nine-litre cases globally last year. In the UK alone, gin was up 32.5% in 2018, and the Philippines (the world’s large

st gin market) posted growth of 8%, fueled by a booming cocktail scene and premiumisation of the market. By 2023, the gin category is expected to reach 88.4m cases globally, with particular strong growth in key markets such as the UK, Philippines, South Africa, Brazil, Uganda, Germany, Australia, Italy, Canada and France. Notably, Brazil has emerged as a new hotspot for the categ ory, with volumes there more than doubling last year and forecasted to grow at 27.5% CAGR 2018-2023, as the gin-and-tonic trend has increased in upmarket bars of São Paulo and Rio de Janeiro.
Consumption of Whisky and Agave-Based Spirits Continues to Increase
Spurred by innovation in whisky cocktails and highballs, the global whisky category increased by 7% last year, driven in large part by a strong Indian economy (whisky grew by 10.5% in India, as consumers continue to trade up in the category). The US and Japan posted 5% and 8% growth, respectively. The IWSR forecasts whisky to grow by 5.7% CAGR from 2018 to 2023, to almost 581m nine-litre cases. Also, continued interest in tequila and mezcal (especially in the US), and innovation in more premium variants and cocktails, drove the agave-based spirits category to 5.5% global growth in 2018 – and is expected to post 4% growth over the next five years (2018-2023 CAGR).
Mixed Drinks and Cider Grow
The mixed drinks category (which includes premixed cocktails, long drinks, and flavoured alcoholic beverages) grew 5% globally in 2018. By 2023, it is projected that more than 597m nine-litre cases of mixed drinks will be consumed across the world. The growth is backed by continued strong gains in ready-to-drink (RTD) cans in the US an d Japan, the category’s two largest markets. In Japan, most RTDs are locally made and almost exclusive to Japan. Their popularity is partly due to the fact that they are relatively dry, which makes them more food-friendly and sessionable. In the US, the popularity of alcohol seltzers has been a tremendous engine for growth in the RTD market. In the cider category, as investment levels in those products continue to rise, almost 270m cases are expected by 2023, a 2.0% CAGR 2018-2023. Both of those categories (mixed drinks and cider) are taking share from beer as perceived accessibility increases (less bitter, easier to drink).
Vodka, Liqueurs, and Cane Spirits are in Decline
Vodka lost volume in 2018 (-2.6%) as the market for lower-priced brands continued its decline in Russia and the Ukraine (two of the largest markets for this spirit). Higher-priced vodkas, however, showed a more positive trend last year. Nonetheless, the outlook for total vodka over the next five years remains sluggish as the category is forecasted at -1.7% CAGR 2018-2023. Also in decline is the flavoured spirits category (liqueurs), which dropped by -1.5% globally in 2018, and is expected to continue to slip in 2019 before rebounding slightly in 2020. Cane spirits (primarily Brazilian cachaça) was down -1.6% last year, and is forecasted to lose another 4.5m cases by 2023.
Beer Continued to Lose Volume in 2018, but is Expected to Rebound
Global beer declined -2.2% in 2018, impacted greatly from volume decreases in China (-13%). Other large markets such as the US and Brazil also fell (-1.6% and -2.3%, respectively), while Mexico and Germany saw growth (6.6% and 1%, respectively). The future outlook for beer, however, paints a more positive picture, as the category is expected to show a slight increase in 2019 and post a 0.7% CAGR 2018-2023.
Wine Volume Declines, but Value Increases
Wine, which had posted strong global growth in 2017, lost -1.6% in volume in 2018 as wine consumption declined in major markets such as China, Italy, France, Germany and Spain (the US market was flat). However, though consumers are drinking less wine, they’re increasingly drinking better – pushing wine value to increase. Globally, the retail value of wine is projected at $224.5bn by 2023, up from $215.8bn in 2018. The one bright spot in wine volume is the sparkling wine category, which is expected to show a five-year CAGR of 1.17% 2018-2023, driven in large part by prosecco.
Low- and No-Alcohol Products on the Rise
Low- and no-alcohol brands are showing significant growth in key markets as consumers increasingly seek better-for-you products, and explore ways to reduce their alcohol intake. Growth of no-alcohol beer is expected at 8.8%, and low-alcohol beer at 2.8%. No-alcohol still wine is forecasted at 13.5%, and low-alcohol still wine at 5.6%. Growth of no-alcohol mixed drinks is predicted at 8.6%. (Above figures are all CAGR 2018-2023.)
Top Ten Performing Global Markets, 2018-2023
A look at the world’s fastest-growing beverage alcohol markets shows an emergence across a variety of developing countries. A combination of growing legal-drinking-age populations and healthy economies is driving some of this growth, which is expected to continue over the next five years. “Every year our analysts spend months traveling the world to speak with suppliers, wholesalers, retailers, and other beverage alcohol professionals to assess what is happening market by market in this fast-changing business,” says Mark Meek, the IWSR’s CEO. “The raw data we collect is enormously valuable, but equally important is what that data tells us in terms of trends, challenges, and opportunities facing the industry.”