Tag Archives: alcohol beverage

Indian liquor trends pre and post COVID

The Covid-19 pandemic has continued to impact India since its arrival in spring last year. The government initially reacted by imposing a national lockdown from 23rd March to 4th May last year. The on-trade was completely closed, as were most liquor shops in every state. Places of work shut down, so many young office workers left the urban centres. With the on-trade stifled, retail purchases and consumption of beverage alcohol at home became the norm in most mainstream categories. In India, however, women and younger consumers still feel uncomfortable drinking in front of more conservative parents and family members at home. Limitations on space and refrigeration favoured spirits over beer, RTDs and – especially for young urban women – wine, all of which are usually consumed cold.

The implications of the pandemic response for India’s status as a federal republic soon became clear. The importance of excise duty income from alcohol, tobacco and fuel was brought into sharp relief as revenue streams dried up and the diminishing income from national taxes, such as GST, were used to offset fiscal shortfalls at state level. Most states responded by increasing excise duties – often suddenly and steeply – as well as charging taxpayers one-off cess payments, commonly levied by central governments for a specific purpose. Unusually, this cess (tax on tax), commonly levied by central government for a specific and clearly defined purpose (and not shared with state governments), has been applied in a number of instances at state level as a Corona-cess. Some states have been more reluctant than others to review, reduce or cancel such supposedly temporary measures. For instance, Andhra Pradesh – where the government had tried to enforce prohibition before the pandemic – imposed a 75% excise duty incre for two days just as the national lockdown ended last May; and on the same day, Delhi imposed a 70% cess on the maximum retail price (MRP) of all liquor, which remained until 7th June.

The timing of the lockdown could not have been worse, especially for beer. The category relies on young urban drinkers and after-work occasions and its peak season for consumption was about to start. When lockdown ended, bars and restaurants re-opened in most states, but were limited to 50% occupancy, and workers were slower to return to offices. Many are still working from home or – during Q1 2021 – have returned to it.

Compared to some countries, where citizens often remained risk-averse and pessimistic after the first lockdown, Indian consumer confidence seemed to bounce back quickly. Many Indians assumed – wrongly – that their everyday hygiene challenges afforded them a high degree of natural immunity to the coronavirus.

The past year has confirmed that India is squarely a brown spirits market. Whisky absorbs two-thirds of consumption in this market; brandy – with a strong presence in the south – takes 20%; and rum takes around half of that. In a total market that has shrunk by around one-fifth, whisky declined only slightly less than brandy and rum, which fell around one-quarter. Beer and RTDs suffered precipitous falls, deprived of many of the venues and occasions that had driven consumption forward. All clear spirits witnessed steeper declines in consumption than dark spirits: in each category, sales of domestically produced brands bottled in India (BII) fell away faster. Even allowing for the experimentation evident in categories such as Irish whiskey, consumers sought out brands that they knew, had earned equity and had consistent quality. In short, they sought out certainties.

Two other fundamental shifts have also occurred. Firstly, the premiumisation trend – evident before the pandemic – saw some importers shift their focus to retail, increasing its offering of high-end brands, which were previously targetted at Duty-Free and at the on-trade. Disposable income spent on going out to eat and drink before the pandemic was instead often redirected to premium-and-above products for at-home consumption. Secondly, as a corollary to this and confirming the pressure on the mainstream, was down-trading out of Indian-made foreign liquor (IMFL), either bottled in origin (BIO) or BII.

Budget-conscious consumers instead chose either country liquor or illicit alternatives, having long been deprived of licensed outlets in which to purchase their nips.

The on-trade closure has also impacted routes to market and the supply chain and it increasingly determines choice. When all outlets closed, some states permitted home delivery, which many thought heralded the long-expected rise of the e-commerce channel. In reality, this was an expedient option for retail outlets: e-commerce has not seen a consequent increase in regulation or investment since. On the contrary, drinks ordering apps, such as Hipbar, appear to have been actively discouraged.

The effects of a six-week shutdown of alcohol supply lasted long after it ended: restocking and logistics issues extended out-of-stock occurrences well into the summer months. Importers often found it difficult to source supplies as exporters were reluctant to ship to trading partners in an uncertain economy, not least because they wanted to avoid passing on rising logistics costs to consumers.

One of the responses, driven by leading country liquor suppliers, has been the emergence of intermediate or medium liquor produced locally: this refers to a price band of distilled liquor sold under licensed quota in certain states – presently Rajasthan and Uttar Pradesh only – competitively priced between country liquor/IMIL (Indian-made Indian liquor) and IMFL. Commonly the price, set by the state, is at a 25% premium to the country liquor price, a similar proportion lower than IMFL pricing.

This system has the additional benefits of almost guaranteeing state excise income and reducing the occurrence of country liquor-related health issues through better-quality product. In theory, this model should be attractive to many more states. In practice, its implementation may be limited by the relative scarcity of country liquor distillers able to produce medium liquor of the requisite quality. Nevertheless, with investment and a little covert encouragement from the states, that provision will doubtless evolve over time.

In a decentralised India, the domestic beverage alcohol industry relies on a relatively small number of states for its success. The top three states – Uttar Pradesh, Maharashtra and West Bengal – account for one-third of India’s population. The top six states account for half of the population. West Bengal is the only corporate state: the beverage alcohol industry is regulated directly through a state body. By contrast, the five largest states in the south are each home to beverage alcohol corporations.

This complexity and large size of India means that there are very few companies that are truly national. Even those that are considered national – thanks to a contract bottling network – still retain large regional brands in their portfolios. There is a small number of multinationals twinning domestic production with imports that are focussed on urban distribution shared among importers and wholesalers. India has a larger number of local distillers aspiring to convert their regional origins into a multi-region or national presence; and there are many smaller distillers, the majority of whom supply locally. Most distillers, therefore, will only be trading in one or two jurisdictions and navigating one or two bureaucracies. For the larger players, these challenges are manifold.

The second half of 2020 saw the Indian beverage alcohol market emerging quickly and largely unscathed from Covid-19 and lockdown. Leading spirits companies in particular were reporting quarterly revenues and volumes that had recovered to pre-pandemic levels. This was in spite of the on-trade remaining stifled, e-commerce failing to expand and the regulation and excise duty rises imposed by most states. However, by the second quarter of this year – the beginning of the new financial year for most corporations – this initial optimism about rapid recovery has somewhat evaporated.

The picture, though, is mixed. India’s federal state model shows up the inconsistencies between states: decisions can often be arbitrary, poorly thought through and political rather than practical, but a successful model in one state can be swiftly adopted in another. On the one hand, the Delhi state government’s legislation lowering the legal drinking age from 25 to 21 is positive for the industry. On the other, Andhra Pradesh will join Bihar, Gujarat and some other smaller states and territories to prohibit alcohol for around 250m people, which is nearly one-fifth of the population.

It cannot be overstated how the pandemic and its effects demonstrated the importance of beverage alcohol revenues to individual states’ budgets. Some state governments recognise this and are approaching their beverage alcohol policy with pragmatism by listening to the industry more attentively.

The key issues revolve around the temporary and permanent changes brought about by the pandemic. Office work may have changed permanently, calling into question whether or not urban on-trade lighthouse accounts will recover. It is uncertain when occupancy rates in on-trade venues rise above the current 50% constraint. The medium liquor system may see expansion into further states. It is also questionable whether premiumisation will persist or the second Covid-19 wave will dent consumer confidence fundamentally.

The wider economy, of course, is a determining factor. Declining disposable income has particular relevance for beverage alcohol spend. The industry is circumscribed by its investment in advertising and promotion. The pandemic has sharpened the senses of many executives and players, but left others close to collapse, unable to survive further uncertain events. States have pursued short-term solutions throughout the pandemic and it is unknown if this approach will persist. However, it is likely that the distilling capacity of the domestic industry will not grow. This has implications for all, given the contract-bottling model that has enabled the largest players to become truly national.

General Forecast Assumptions

On-Trade – In some states, the on-trade had re-opened up to 85% of its former capacity by Q1 2021. However, the occupancy restriction to 50% remains, so the real throughput is also likely to be at 50%. This will continue to affect beer and RTDs. Furthermore, on-trade sub-channels are re-opening at different rates.

Restaurants opened faster than bars; and bars faster than night venues. Whilst this appears to affect wine and premium spirits in higher-end outlets, the impact will be mitigated by the flexibility of suppliers, many of whom have switched attention to retail and targetting wealthier consumers.

Medium Liquor – Consumers in some states are now being offered a wider choice. Those who had traded down to country liquor may choose medium liquor instead of IMFL. Currently this is available in Rajasthan and Uttar Pradesh, but more states may institute this. A significant number of consumers may prefer the taste and the brands on offer in the category to IMFL.

E-commerce – When three of the larger eastern states – West Bengal, Chhattisgarh and Jharkand – permitted home delivery of alcohol, it was thought e-commerce would, at last, be stimulated by the lockdown conditions. They were soon joined by Orissa and Maharashtra. However, steep delivery charges, regulatory uncertainty, a reluctance to invest and a poor delivery-logistics framework continue to hamper growth, as well as the nature of Indian e-commerce defined on the invitation issued by the West Bengal authorities as “handling the electronic ordering, purchase, sale and home delivery of alcoholic liquors from licensed food [and liquor] outlets”. Retail competitors required to pay for annual licences have lobbied against the channel as well. Some significant platforms – Amazon, Flipkart (Walmart), Big Basket, Swiggy, Zomato and the mobile app Hipbar, reportedly backed by Diageo and, in Mumbai, Living Liquidz – responded to state-level invitations to get involved after the Supreme Court ruled in favour of home delivery from licensed retail. However, it has become clear that any bureaucratic encouragement of home delivery has primarily been one of a range of responses to the crowds that gathered outside liquor shops last year and, while recurring lockdowns may help to accelerate e-commerce, the channel will not significantly impact the industry for the foreseeable future. Informal delivery, where customers call up the liquor store and get an order dropped off by moped, already existed and will continue.

Regulation – Uttar Pradesh, India’s most populous state, had previously imposed a cess of 20 per bottle of beer. West Bengal, the fourth most populous state, increased consumer tax by 30%. Rajasthan, the sixth most populous, enacted both, adding20 per bottle and imposing a 10% increase in consumer tax. Their approach is unlikely to change. Additionally, the election in Bihar state did not return a government willing to reverse prohibition. Andhra Pradesh’s government was unable to enact prohibition but has discouraged some national players by making trading there problematic. However, it is assumed there is no foreseeable regulatory movement throughout the forecast period.

Consumer Base Expansion – India’s population is approaching 1.4bn, with less than half being of legal drinking age. The actual number of alcohol consumers is believed to be closer to 160m, only 7.5% of whom are women. Per capita rates for beer and RTDs remain low at around 1.2 litres for men and 150ml for women, re-calculated at 10 litres and 1.25 litres on estimated drinking population numbers. Wine has similar rates to RTDs, spirits are 1.8 litres per capita and nearly 15 litres on a re-calculated basis. There are more younger consumers joining the potential drinking population every year. Uptake by women reportedly increased during the pandemic.

At-Home Consumption – This trend is likely to persist beyond the pandemic. Wealthier consumers of premium spirits and imports spend for indulging at home and for gifts. The wedding industry will revive: most wine suppliers are focussing on higher-end offerings, educating consumers about its accessibility and suitability during meals, as well as drinking before and after. Beer and RTDs will find difficulty switching as their core message is based on going out and socialising rather than at-home consumption, and most consumers have insufficient refrigeration space at home.

Key Market Factors

Cultural – The legal drinking age varies from state to state. In most states it is 21, but 25 in the populous states of Haryana and the Punjab. In Maharashtra it is 21 for beer and wine, and 25 for liquor. Bigger states with a drinking age of 18 include Rajasthan in the north and Kerala in the south. Delhi is about to lower its LDA from 25 to 21.

Three states with larger populations prohibit alcohol. Gujarat has been dry for the longest, with Bihar and now Andhra Pradesh having imposed prohibition more recently. Outcomes are mixed, with Bihar and Andhra Pradesh reportedly having some of the highest per capita consumption rates for beverage alcohol nationally once illicit alcohol is factored in.

Demographic – A key driver of consumption has been urbanisation, particularly among younger LDA drinkers. The lockdown appears to have reversed this, with young office workers returning to their parents’ houses in smaller cities, towns and the countryside.

The overall population is nearly 1.4bn and grows by 15–20m or more every year. The drinking population is considerably smaller: at least half can only afford very cheap country liquor, which is largely unbranded alcohol with an estimated market of 250–285m cases.

The rapidly growing middle classes, who can afford premium-and-above, may number more than 150m. However, 98% of middle-class women and more than 20% of men are said not to drink for philosophical, religious or cultural reasons.

Some 49% of the population is aged under 19, and few drink, although younger consumers are generally more willing to consume alcohol than many of their parents. This leaves a market of between 25m and 30m people with the inclination and resources to drink IMFL.

Economic – There is little state support in India and wellbeing is the individual’s responsibility. With livelihoods uncertain but a young population inclined to optimism, the second Covid-19 wave may hit confidence hard and a volatile economy will see more cautious expenditure. Excise rates vary substantially from state to state even before the pandemic, which exacerbated the difference when states imposed cess payments to make up fiscal shortfalls.

A number of observers mention a shift to modern retail. This is consistent with state governments looking to secure the revenues they can expect from beverage alcohol and also with consumer expectations around improving retail venues.

Trade – Difficulties with the supply of stock have been widespread. It is reported that lack of supply inhibited sales, especially of premium products. The pandemic hindered logistics and rendered delivery more expensive. Brand-owner allocations have also reduced the agility to respond to demand.

A further element is that the phenomenon of medium liquor in Rajasthan and Uttar Pradesh offers more settled revenue for states and gives consumers an alternative to IMFL. One leading country liquor supplier reports now selling twice as much medium liquor as it does country liquor per month. India is unusual in that spirits demand is significantly more developed than demand for beer. While there is some interplay between the two with bang-for-buck consumers keen to maximise alcohol content per rupee delivery, there were some signs that demand for beer was beginning to develop separately.

However, strong beers of 8.5% ABV still represent more than 82% of demand. The first lockdown also affected trade, and was both severe and ill-timed – six weeks without sales, just before peak season for beer and RTDs. The on-trade revived in the second half of 2020 with near full re-opening in some states, but night and weekend curfews, combined with 50% capacity limits, continue to constrain this channel. The uncertainty of lockdown and the unavailability of liquor drove some consumers back down to country liquor, although not in the south where it is banned in five large states.

There was more limited up-trading by wealthier consumers. However, mainstream products, brands and players have been affected with some of the less financially secure domestic players closing for some months. In some of the larger states, competition in the beverage alcohol category is relatively open. In more there are state corporations set up as wholesalers and frequently as retailers too. In all states, beverage alcohol participants must navigate a web of licences, quotas and taxes, and sometimes incentives.

In certain key states, the regulatory authorities that control pricing have rationalised their price lists. In Delhi, Rajasthan, Madhya Pradesh and Haryana the correction has been downwards for higher-priced imports.

It is reported that there is shift to modern retail. This is consistent with state governments looking to secure revenues from beverage alcohol and also with consumer expectations around improving retail venues.

Political – Breweries have been investigated by the Competition Commission of India (CCI) which has now resulted in fines for collusion and operating a cartel. The reputational impact is more serious than the financial cost.

Radico Khaitan goes from Local to Global

It has been a long successful journey for Radico Khaitan which first produced supplied extra neutral alcohol ENA to production of their 15 brands, to creating five millionaire brands, operating 28 bottling units, going the premiumisation route, and creating world class brands in the luxury brands category. Dr. Lalit Khaitan looks back in retrospect at the journey and is confident that his son Abhishek Khaitan, who has worked alongside him will take the company to greater heights.

What effort does it take to make a company like Radico Khaitan? Can you share some insights into that?

Establishing a business from scratch requires perseverance and a clear vision. Nothing can be achieved within a few years. When my father, Mr GN Khaitan, bought the loss-making Rampur Distillery in 1972, we produced extra neutral alcohol (ENA) and supplied bulk alcohol for several liquor companies. We started production of our brands in 1999, and now have over 15 brands including five millionaire brands, and operate 28 bottling units across the country. The mantra for success is quite simple: understanding of market or segment, the audience’s taste, and taking decisions to narrow down market gaps.

What are the three key turning points that you attribute to the success of making Radico the biggest IMFL company today?

First turning point was when turned from a bottler to creating our own brands with – The launch and success of 8 PM whisky is the turning point as we started the branded IMFL business with it. We sold a record one million cases of 8 PM in the first year of its inception, a record that is yet to be broken by any other brand in India; in fact, it made it to the ‘Limca Book of Records 2001’ for the achievement. We utilised the best marketing brains and tools to popularise the product; even the commercials for the product won many accolades at that time.

Second was when we started premiumisation – with the launch of Magic Moments Vodka in 2006, followed by six versions under the brand Magic Moments Remix within two years of its release also helped us gain a strong footing in the industry. The brand established itself as the industry’s undisputed leader and category driver by capturing more than half of the category’s market share. Our decision to enter the vodka business paid off as Magic Moments rose to become the world’s seventh-largest vodka brand. I would also like to talk about the decision to go premium in 2009 with the launch of Morpheus XO Brandy as the game-changer for us and a successful PAN India brand.

Third was when we entered into Luxury segment -Then the launch of Jaisalmer Indian Craft Gin and Rampur Indian Single malt in 2018, not only mesmerised the Indian consumers, but brought a delightful experience to the connoisseurs’ world by endorsing Indian brands in the international markets. We have successfully built our brand equity in international markets and currently export products to over 85 countries.

Looking back do you feel that there are some things that you would’ve liked to do differently than today?

The way things have turned out for us, I would not change a single thing. The Branded story of Radico, which we started with in year 2006 is a perfect example of growth and scaling up.

A success of the company is directly attributed to its leaders. But how important is it to have the right team and processes in place to achieve that success?

If the team doesn’t resonate well with the vision and the mission set by the management, the whole idea of an efficient leader can fall apart. No success is assured without having employees who are focussed on accomplishing the unified business objective. In my view, anybody can copy machines, but it is manpower who makes all the difference in success and not so success.

What do you think Radico took such a long time to diversify into premium brands?

As I have always maintained, the decision to enhance the brand portfolio has to be taken after taking stock of the overall market dynamics. We entered the premium category in 2006 and that was the time when the liquor market was witnessing a shift from just social acceptance to the development of a society that enjoys drinks. The success of our premium brands attests to the right timing. Besides market leaders including Magic Moments Vodka with over 60% of the market share and Morpheus XO Brandy which has a market share of over 60% in the premium brandy segment- 1965 Rum has achieved a 10% market share in defence, Magic Moments Verve has achieved a 20% market share amongst all premium vodka brands and Rampur Indian Single Malt and Jaisalmer Indian Craft Gin are a rage not only in India but world over. This testament is proof of our timings being right and the strategy being robust.

In the last two years, the company has been churning out some great products in the gin and whisky category like Jaisalmer and Rampur? Moving forward do we expect to see more products like those?

Product innovation is of the utmost importance for us. Our latest offerings including Royal Ranthambore Heritage Collection Whisky and Magic Moments Dazzle have been yielding encouraging responses. We are also working on scaling up the existing brands like Rampur Indian Single Malt, Jaisalmer Indian Craft Gin, 1965 Spirit Of Victory Rum, Morpheus Brandy, and 8 PM Premium Black Whisky. Going forward, you will see a host of products in the premium range from the House of Radico Khaitan.

With its premium products, Radico is focussing a lot on exports as well. But slowly these products are now available in India as well. What was the reason why this strategy was adopted? Was it to replicate the success that some of the other manufacturers have achieved using this route?

We had this strategy for two of our luxury products Rampur Indian Single Malt and Jaisalmer Indian Craft Gin and it worked wonders for us. Both the products are a rage world over. The primary reason was that the single malt and the craft gin categories were already established abroad. In India, these categories are now emerging. Hence, we launched the product first in the international market before bringing them to the domestic market.

What was your vision for the company a decade back and how has it changed considering where Radico is today?

My vision is to work constantly to improve quality standards and enhance customer satisfaction. And it has always been that. Be it last decade or two decades ago. I do not feel that we have to change it as it ultimately gets converted into revenue growth and increased market share. The Customer is the King for us.

The dynamics of the industry and also the way it operates is constantly changing. What are your thoughts on those? Is there anything that you would like to see differently about the industry or any suggestions you would like to make that can improve things?

Right from advertising to marketing, liquor industry operates in a very challenging business environment. For instance, alcohol companies are not allowed to advertise directly so we have to strategise differently to make our brands more visible, rope in more brand ambassadors, and create creative campaigns with infotainment. Since the market is also growing, we have to be on our toes to offer the best products to our consumers and devise marketing strategies that will ensure that our products reach them.

One of the major challenges that has emerged in the recent past is around our surrogate brands. According to the existing rules, companies need to have a separate revenue model for the surrogate brands with a certain amount of turnover and this creates an additional challenge for us.

However, we find solutions to all of these obstacles within the purview of law because we are a responsible company. We have a legacy to maintain. Non-compliance with state regulations is not an option for us. Since we have over 75 years of experience in liquor manufacturing and 25 years in the IMFL business, the company knows about the law across states and knows how to adhere to it.

In Abhishek, you have a son that has led from the front along with a great team. How does that make you feel as a father?

As I worked hard to help improvise and enhance my father’s vision, I am seeing the same zeal in him. He was instrumental in taking the call towards launching our own brands and premiumisation drive which turned the fortunes around for the company. He is a new-age leader who people look up to and that makes me an extremely proud father.

How difficult is it to compete against multinationals as an Indian brand? Your thoughts?

Once a company has a sound understanding of the market, and back that knowledge with its quality products then competition doesn’t pinch much – be it from domestic or multinational brands. Within two decades of launching our brands, we have expanded our reach to over 85 countries, which is an indication of the capability of Indian brands. I would like to give an example of our latest products Rampur Indian Single Malt and Jaisalmer Indian Craft Gin here; when we took the product to the international market, people were surprised by the fine quality leading to immediate acceptance. The idea behind giving this example was that once you have quality products according to the tastes of the people, competition becomes secondary.

Bira 91 ‘Imagined in India’ limited-release beers pleasing the desi palate with innovative flavours

The late English author Gilbert Chesterton once wrote: “Let a man walk 10 miles steadily on a hot summer’s day along a dusty English road, and he will soon discover why beer was invented.” He’s right, of course — there’s something about the combination of the warmest season and an ice cold brew that just works. Summer in Delhi is unbearable and we do not have an opposition for this. And, how most of us beat the heat is by gulping down frosty and flavourful beers. Delhiites can now rejoice as India’s popular beer brand Bira91 brings you a range of four new limited-release beers – Bollywood IPA, Kokum Sour, Brown Ale, and Mango Lassi – as part of their ‘Imagined in India’ initiative. Team Ambrosia was part of the preview tasting, hosted on April 07 2022 at the beautiful QLA, in Mehrauli, Delhi. The tasting was followed by dinner, curated by Chef Vicky Ratnani, and a live music set by DJ MoCity and DJ Nida. It was what we call a perfect dreamy evening filled with all the finer things in life.

A melange of flavours

The ‘Imagined in India’ beers are made with indigenous products and are inspired by the raw creativity of today’s India led by emerging artists, entrepreneurs, and startups combined with the cradle of flavours that find a home here.

The Bollywood IPA variant has a tropical twist, inspired by west coast India Pale Ales that were born in California, while Kokum Sour has traditional ingredients from the Konkan coast. We loved the Brown Ale – a blend of English Nut Brown Ale and the Antwerpian Amber with notes of coconut and vanilla. Fans of lassi would appreciate the taste of their Mango Lassi version that merges its Wheat Ale and a milkshake beer into one.

Ankur Jain, founder and CEO of the company, said, “For this generation of consumers, beer means flavour, and we deliver on that promise. ‘Imagined in India’ is an attempt to bring together the many flavours of India and its creative energy fuelled by emerging artists, entrepreneurs, and startups. Each beer is brewed with unusual ingredients – local and seasonal – which makes them unique.”

He further added, “Each of these flavours originated at the Bira 91 Limited-release Taproom at Koramangala, Bengaluru, where they received tremendous consumer love and affinity. The flavours were voted as the top-ranked choices by beer lovers, which inspired us to bring them to consumers across the country.”

Earlier, back in 2021, Bira 91, in collaboration with non-alcoholic drinks brand Svami, had rolled out Cucumber flavoured Kölsch. The Bira 91 x Svami Cucumber Kölsch is brewed with pure German Pilsner malt, a fresh cucumber flavour and the delicate caress of the finest German noble hops, with an IBU of 18 and an ABV of 6%. It is a crafted blend of bitter-sweet notes and cool cucumbers creating a crisp, balanced, and revitalising beer.

Staying true to the brand’s playful image, Bira 91 encourages consumers to be more experimental and creative, while exploring new flavours in everything, including the beers that they drink. The new ‘Imagined in India’ range is yet another exciting testament to delivering on that promise.

Collaborations for community growth

To bring alive the flavours, Bira 91 has collaborated with Kulture Co, a curated platform spearheading the new wave of Indian Graphic Art across borders. The brand on-boarded contemporary Indian artists from the Kulture Lab – artists who are breaking the mould and taking modern India to new frontiers – to conceptualise and design the packaging of the four new flavours.

Channelising their art and creativity on a new canvas, artists Ranganath Krishnamani, Osheen Siva, M. Sajid and Prince Lunawara showcase a vibrant palette of local stories around shared identities painted onto these beer cans, paying homage, and narrating the story of our home country.

Commenting on the idea behind designing the packaging of Bollywood IPA, artist Ranganath Krishnamani said, “Conceptualising the packaging of a flavour so bold and dynamic, that it takes you to the heart of Mumbai, where all things Bollywood originated, was truly exhilarating. Incorporating the charming art deco cinemas in Colaba, the iconic ‘kaali-peeli’ cabs, and the vintage colour scheme was the perfect way to capture Bollywood on a can.”

Designer of the Kokum Sour packaging, Osheen Siva, too expressed his thoughts behind the masterpiece and said, “Kokum is a tangy flavour, as Indians have developed a taste for since childhood. To depict a taste so loved yet so new to the beer industry was exciting. I conceptualised it to be something offbeat and loud. For me, the can had to give consumers an idea of what they were picking up from the rack when indulging in a Bira 91 Kokum Sour Beer.”

“Imagined in India to me is being authentic, raw and connected to our roots. Capturing the taste of Brown Ale that recognises uplifts and celebrates diverse communities of India and having the essence reflect in the artwork on the packaging was a great experience,” M. Sajid, who designed the Brown Ale packaging, enthused.

Prince Lunawara, who creatively illustrated the Mango Lassi can said, “India loves mangoes and merging the flavour with beer is as creative as it can get. Through the can, my idea was to celebrate this creativity and the beauty of India’s flavours.”

The limited release beers will retail in metros like Delhi, Mumbai, Bengaluru, and Pune.

According to Expert Market Research, the India beer market stood at a value of nearly 371 billion in 2020. The industry is expected to reach approximately 662 billion by 2026, rising at an estimated CAGR of 9.2% during 2022-27.

The story of Godawan, The Bird, and the artisanal Single Malt Whisky it inspires

Diageo launches Godawan, its artisanal single malty whisky, set to redefine the world of sustainable, modern and conscious Indian luxury.

Godawan, the Great Indian Bustard, a regal, majestic avian… once found all over India, is now nearing extinction, and finds its last refuge in Rajasthan.

Rajasthan, a land of stark contrasts… an arid land of extremes which envelops within it some of the harshest weather conditions. However, culturally, it also preserves and conserves with delicate care and passion everything that exists on its land – whether it is the fauna such as Godawan, its flora such as barley, its innovation in the form of step wells, or its people – known across the world for their thriving, colourful and intricate arts & craft.

The flourishing and world-renowned arts and craft of Rajasthan, such as sandstone and marble art, are a testament to “beauty in scarcity” and crafting exceptional things of beauty from what nature provides.

Godawan, Diageo India’s artisanal Single Malt Whisky, is crafted in, its provenance inspired by, and dedicated wholeheartedly to this Rajasthani ethos – of beauty in scarcity, and sustainability. The heat of over 100°F combined with six-row barley, that requires lesser water, helps create a whisky with an incredible depth of flavour, and a rich and complex character. The aridity means the “Angel’s share” is higher than average in Godawan – leaving behind a whisky with stunning taste profiles, which are finished in special casks selectively curated with Indian botanicals.

Diageo proudly call themselves “The Spirit of the Desert” – the spirit of Rajasthan with its culture, people and ecology which permeates in the character and flavour of their liquid. With Godawan, they doff their hats to the artisans and the innovators who are defining modern Indian luxury that is sustainable, that is ecologically conscious, and truly nurturing of the land it comes from.

Speaking about Godawan, a Single Malt which will change the way world perceives Indian whiskies, Shweta Jain, Chief Business Development Officer, Diageo, says, “When it comes to premiumisation, we, at Diageo India, believe in constant disruptions to up the ante. We believe that our consumers deserve better. We also know that modern affluent Indians are looking for luxury that makes them feel rooted and enriched. Godawan is a product borne out of this belief. It will help our consumers discover an Indianness hitherto unknown – rich and meaningful. Godawan – the spirit of the desert – will redefine the way Indian single malts are perceived globally with its truly world-class story and flavour.

Vikram Damodaran, Chief Innovation Officer, Diageo India, says, “Godawan, Diageo India’s innovation in artisanal single malt whisky, is proof that India is the next emerging destination for quality single malts as well as artisanal craft spirits. Each bottle of Godawan can be traced back to a cluster of barley farms in Rajasthan, ensuring transparency and authenticity of the product and gets its provenance from extreme temperatures which lend it a rare & subtle complexity, and a unique taste. The whisky is not just a testament to the region’s craftsmanship and ingenuity, but also commitment to sustainability and preservation of the land it comes from – and it begins with the Great Indian Bustard.”

Godawan is a labour of love, for our roots, for our heritage, for our land. And it is the embodiment of our commitment – to the conservation of the Great Indian Bustard, and to our communities of artisans and craftspeople. With only a few Great Indian Bustards left in the world, every bottle we make contributes to the conservation of this exquisite bird.

Godawan, The Spirit of the Desert. A story waiting to be told.

The unique whisky-making process involves: Slow-trickle distillation from locally sourced six-row barley; Uniquely matured at temperatures reaching 100°F; Finished in special casks selectively curated with Indian botanicals Godavan will be available in Rajasthan and Delhi to begin with and will then be subsequently available in the rest of India. It will also be available in Dubai from April onwards.

Oh Summer Beer

A summer beer can be just about any style, as long as it’s crisp and refreshing and makes you never want to go back inside again. They range from light and fruity to hoppy and complex, but the best summer beer is the one you come back to again and again as soon as the temperature crawls above 60 degrees.

The global beer market size reached US$ 640.2 billion in 2021. Looking forward, IMARC Group expects the market to reach US$ 750.3 billion by 2027, exhibiting at a CAGR of 2.7% during 2022-2027, according to a new report by IMARC Group.

Beer is a fermented alcoholic beverage that is made by brewing and fermenting starches derived from cereal grains. It is flavoured using hops that not only add a buttery flavour to the beverage, but also act as a natural preservative. Apart from this, other flavourings, such as herbs and fruits, are also added to attribute a specific flavour and fragrance to the drink. It is a rich source of niacin, folate, riboflavin, pyridoxine, potassium and magnesium.

Moderate consumption of beer is widely associated with numerous health benefits and aids in maintaining blood pressure levels, preventing kidney stone formations, and minimising the chances of developing cardiovascular disorders, including angina, stroke and heart attack. Owing to this, it is gaining widespread popularity across the globe.

Global Beer Market Trends:

One of the major factors influencing the global beer market is the rapid spread of the Coronavirus disease (Covid-19) and the consequent social distancing norms and lockdowns imposed in several countries as a control measure. The decrease in the number of social gatherings is projected to lead to a decline in the on-premise consumption and sales of beer in bars, restaurants, pubs and public events. However, this trend will to be offset by the demand for to-go packs as well as home delivery services, mainly through online platforms. Another factor driving the market is the widespread preference for specialty beer among individuals. These beers are brewed to a classic style by incorporating different flavours, such as honey, chocolate, ginger and sweet potatoes. This adds a distinct flavour and aroma, which further adds innovative and eccentric flavours to the drinks. The growing inclination toward craft beer is also accelerating the market growth. Since microbreweries produce portioned amounts of beer, they lay enhanced emphasis on the flavour, quality and brewing techniques as compared to large-scale commercialised breweries.

The potential for beer growth in India is strong as well. AB InBev, for example, began brewing Budweiser in the market back in 2010. In January 2021, Kirin Holdings announced an investment of $30 million in New Delhi-based B9 Beverages, the maker of the Indian craft beer Bira. IWSR anticipates beer consumption in India to return to pre-Covid-19 levels by the end of 2023, continuing on its growth path from there.

Expanding beyond beer

As consumers moved to the at-home occasion, the trend for convenience has helped to shape purchasing behaviours. In markets such as the US, the ready-to-drink (RTD) category, which includes hard seltzers, has been taking share from beer.
RTDs provide a growing opportunity for brewers to diversify their product portfolios. Indeed, Heineken entered the hard seltzer category in September 2020, with the launch of Pure Piraña in Mexico and New Zealand. In the US, Heineken partnered with AriZona to launch the AriZona SunRise Hard Seltzer in October 2020. AB InBev states that Bud Light Seltzer is their leading innovation in the US market, with over 75% of volume being incremental to their portfolio. In fact, 2021 was the first year in which a hard seltzer commercial (Bud Light Seltzer) aired during the Super Bowl.

Malt-based RTDs are currently dominant in the US owing to their taxation base, and brewers they are in prime position to take advantage. Elsewhere, the alcohol base of choice varies by country, driven by consumer preference and local alcohol tax structures.

Changes in purchasing behaviour propel e-commerce

As with the wider beverage alcohol industry, Covid-19 has propelled the value of the alcohol e-commerce channel. Heineken, for example, reported that Beerwulf, its direct-to-consumer platform in Europe, nearly doubled its revenues in 2020, while in the UK, its revenues tripled. Online sales of its home-draught systems grew as well.

Beer has traditionally under-traded online, primarily due to the channel offering lower margins. However, this will change as consumers continue to buy more groceries online and beer is included in the weekly shop. This is especially true in the US, where IWSR expects sales of online beer to grow rapidly as supermarket chains increasingly invest in the channel.
Online beer sales hold the greatest market share in countries including Japan, the UK and the US. From a lower base, online beer sales will also grow rapidly over the next five years in markets such as Israel and Nigeria.

The entrepreneurial spirit of small-batch players

Craft breweries, which tend to be more dependent on the on-premise, have propelled interest in the global beer category and revitalised its fortunes in many markets. IWSR believes that the entrepreneurial spirit of the sector will mean that craft brewery regeneration will be quick. In the US, for example, IWSR has seen the pandemic lead to a “buy local” approach amongst some consumers, which will benefit small-batch players.

Innovation in the no/low space reignites the category

No- and low-alcohol beer is a bright spot for the category, as moderation and wellness trends continue to resonate with consumers. IWSR data shows that, to date, most volume has come from no-alcohol rather than low-alcohol beer across 10 key markets.

Broadly, low-alcohol beer is giving way to no-alcohol offerings particularly in markets such as Australia, France and the UK. Spain, for example, is seeing a shift from low- to no-alcohol beers, as consumers seek healthier choices and view the newer 0.0% brands as more modern. In South Africa, investment from Heineken and the emergence of a craft segment has helped to generate interest in the no-alcohol category.

While no-alcohol beer has existed for decades, in markets like the US, no-alcohol beer has premiumised through the release of no-alcohol versions of non-lager styles, long the domain of no-alcohol beer. More recent no-alcohol styles, such as IPAs, stouts or porters, are starting to make a real impression, driven particularly by new challenger brands, many of which are not linked to traditional brewing. The recent no-alcohol extension of Guinness – despite some teething issues – will help to underline that no-alcohol beers are no longer the sole domain of lagers.

While several key beer players continue to steer the no/low beer category, the market is fragmented with a number of smaller brands vying to establish themselves as market leaders in this space. The segment is likely to become even more of a focus for smaller craft producers who are able to bring a diverse range of products to the market in future.

Australian wines focus on India paying rich dividends

Australia’s industry is different. It is much more mature, and our climate allows for a more diverse variety of wines to be produced. So it isn’t a “like for like” comparison. In fact, we see no real competition between the domestically produced and imported wines. Both are targetted to different parts of the society. Domestic wines are often perceived as “value for money”.

Imported wines often carry a perception of quality among Indian customers who are willing to pay a premium. According to some statistic, imported wines account for about 35% of the country’s total wine consumption in terms of value but only about 12% in terms of volume.

Australia is looking at the upper end of the spectrum in wines, we see an opportunity for Australian labels to offer an experience to consumers.

The diversity and quality we can offer, gives us the ability to provide consumers with something that few new world countries can.

What experiences of Asian markets would you like to bring to the marketplace?

The Indian wine market is in a nascent stage, especially for imported wine. We are delighted to see wine culture slowly evolving and consumer adoption growing.

As the industry continues to grow, we are hoping to see more advanced matching of wines and foods. Cobranding of wine experiences with other activities, like premium tourism. Curated experiences that take the consumer on a journey. Tasting rooms, which we see coming up in Maharashtra soon, are something we are working on.

Our main aim is to see wine transformed from consumption to experience in the mind of the consumers.

Exports of Australian wines in glass bottles have grown 2% in value and unpackaged wines by 13%, what are your comments? Do you see an opportunity for bulk wine exports to India?

There is an opportunity for bulk wine. But current duty structures don’t really make it viable. There is no significant cost saving to import bulk as custom duty remains same for bottled and bulk wine. It’s not something we are looking into right now.

We do see opportunities for private labels in India and have had success with Australian brands developing private labels for Indian organisations.

What kind of pricing strategy should Australian wines adopt as the global trends are for low-end wines and high-end wines?

Brands should consider a multi-pronged strategy. Offering an entry level wine to generate awareness of their label in the market. Support this with a more premium offering, that elevates the perception of quality.

What are your comments on the growth of wines in value (less than $2.50 per litre) by 8% and that of high-end wines ($50 and more) increase by 34% in value?

This is a very encouraging trend. It shows a maturing of consumers’ pallet and an appetite for a premium experience.

As has been the case all around the world, as the industry matures, consumers’ pallets become more sophisticated and the premium segment emerges. We also see this trend in the fact that importers are not only seeking entry level wines, but also mid and premium level wines

Australia has unique position in Indian market. Australia has significant market share not only in wines value less than $2.50 per litre, but also high-end wines, too.

Australian wines have an approximately 23% market share, and a little over US$ 6 million in value. What target would you like to set for yourself in terms of market share and value?

We are very proud of our position in the market. It’s something we want to hold on to and grow. We haven’t set targets in terms of overall dollar value. We want to focus on creating a brand for Australian wine, as we feel this will give the best outcome.

Importantly, younger generations, particularly the age group of 20-35 years, is the emerging consumer segment for wine. This is due primarily to an exposure to Western culture.

Austrade India have a significant presence on the ground. Austrade has offices in six Indian cities (Mumbai, New Delhi, Bangalore, Chennai, Kolkata & Hyderabad). We are working closely with Indian importers and providing personalised one-on-one service to understand importers’ requirements to expand their portfolios and connect with Australian wineries. Austrade is playing an important role to maintain and grow Australian market share in imported wines in India.

With a very low per capita consumption of wine (a tablespoon) and total consumption of 30 million litres how would you rate prospects of Australian wine in India?

With the market being in a developing state, there is huge potential for Australia.

Historically, India has been a market for spirits and beer and wine consumption has been limited by availability of domestic wine as well as the high cost of imported wines.

In a country with a billion-plus population, it is estimated that wine in India has penetrated only a small segment of the population so far, resulting in low capita consumption of wine. Wines are increasingly becoming popular among younger generations and are now being served at functions, events, Indian marriages, and gifting.

Australia’s proximity to India, in comparison to other wine producers, gives Australian exporters a slight advantage. Not only are freight cost moderately cheaper, but diplomatic relations are strong due to our shared democratic values and large Indian diaspora in Australia.

The position of Australian wine and its wineries is critical. We want consumers to think of Australia in terms of a premium brand for wine – A leader in the new world.

With India being such a young country (by demographics and at heart) we’ve taken a long-term vision for the market.

With India importing about 500,000 cases of wines per annum what is the scope for Australian wines in India?

With the market being in such a developmental state, there is huge potential for Australia. The amount of wine imported will grow over the coming years and if Australia can establish its brand in the market it will be a big part of that growth.

Many well-known Australian wines are not present in India – Jacob’s Creek, Hardy’s, Yellowtail are three accessible brands. For consumers looking to explore Aussie labels and varieties further there is Yalumba, Torbreck, Two Hands, Penfolds, Lindeman’s, Wolf Blass and Debortoli available across a range of state, just to name a few.

Imported rosé is witnessing increased interest due to its versatility and food pairing. Rosé is often discussed as an excellent wine to pair with vegetarian food. It suits the Indian palate as it is light and fresh like white wine, but with the body and fruitiness of a red wine. Blush-coloured medium sweet Moscato wines that are low in alcohol content are emerging as a trend amongst health-conscious consumers. This is something Australia can bring more of to the market.

“Wine-in-can” is a new segment that is targetted primarily at millennials for on-the-go consumption. We’ve already seen success for Australia in this area with Barokes.

All these trends support the notion that Australia will continue to be a leading choice for consumers in India.

With 19 million young people entering the drinking market each year and with young people a prime target audience for wines, how do you plan to address this target and the general wine drinking audience?

The perception of wine needs to be looked at. For a long time, wine has held a distinct position in the Indian consumers’ mind. It has been seen as a sophisticated and stylish drink as compared to other alcoholic beverages, like whiskey, scotch and rum that are considered men’s drink or gin, which might be considered a preference for females.

But the thing with wine is there are so many different varietals and tastes, that there is a type of wine for everyone.

If we can bring exciting options, like rosé or different sparkling varieties I think it can really excite new consumers and appeal to broader tastes.

Right now, wine consumption in India is largely limited to urban areas and metropolitans. Austrade advises its Aussie labels to focus not only on metros, but also to look at tier-2 and tourist locations.

Younger wine drinkers in India are an experimental group who are searching for new experiences; an appetite we hope to satisfy with Australian wine.

Lotus Family Trust to pick up 7.13% stake in Tilaknagar Industries

Alcoholic beverage manufacturer, Tilaknagar Industries Limited (TI) in an intimation to the stock exchange has said that its Board of Directors has approved issuing over one crore eighteen lakh equity shares on preferential basis to Barclays Wealth Trustees (India) Pvt. Ltd. acting as a Trustee of Lotus Family Trust.

TI said that the preferential issuance of equity shares would be done for cash at a price of `53 per share, including a premium of `43 per share. After the issue of the aforesaid equity, the Lotus Family Trust would hold 7.13% whereas the promoters would continue to hold nearly 49% equity in TI. The company has got shareholders’ approval for the same at an Extra-Ordinary General Meeting on November 27, 2021.

Recently, TI had reported having completed its debt-restructuring process which included one-time settlements (OTS) with banks, resulting in a financial turnaround. As part of the process, the company had entered into a long restructuring agreement with Edelweiss Asset Reconstruction Company (EARC) wherein total loans of `523 crore have been restructured at `344 crore at an interest rate of 9%.

Earlier, TI had issued approximately 1.39 cr shares to Edelweiss Asset Reconstruction Company Limited (EARC) at a price of `24.36 per equity share (including premium of `14.36 per equity share). The allotment of shares on preferential basis to EARC was done in respect of conversion of part of the debt owed to EARC by the company amounting to approximately `33.86 cr.

The company has also said that the Board of Directors has approved issuing over Twenty Seven Lakh Equity Shares to Edelweiss Asset Reconstruction Company Limited (“EARC”), an asset at a price of `53 per share (including a premium of `43 per share), fully paid-up towards restructuring of debt by way of conversion of part of the debt owed to it by the Company amounting to over Fourteen Crores into Equity Shares of the Company on preferential basis.

Led by strong growth and sharp decline in finance costs, TI, maker of the famous Mansion House brandy, registered profit in the April-June quarter of the current financial, after a series of quarters. The company also reported a 140% increase in net sales to `135.30 crore in the quarter ended June 2021 as against `56.38 crore in the same period a year ago.