The premium liquor category has provided some relief to liquor manufacturers this festive season, driven by young consumers upgrading their preferences and habitual drinkers transitioning to premium options. Liquor brands have increased their ad spends by 15-20 percent focusing on digital and experiential mediums.
India’s $32-billion liquor industry is projected to grow by an additional $7 billion by 2028, according to London-based drinks consultancy IWSR. Manufacturers, from whisky to beer producers, are ramping up production, betting on the country’s young population—460 million, or 33 percent of Indians, are of legal drinking age, according to the Economic Survey.
In fiscal year 2023, the industry sold 385 million cases of 9 liters each, representing a 14 percent growth over fiscal year 2022 and a 12 percent increase compared to pre-COVID levels in fiscal year 2020, according to data released by the Confederation of Indian Alcoholic Beverage Companies (CIABC) in July. In 2023, liquor sales in Delhi increased by 31% during the festive season compared to the same period last year.
Premium Liquor in Demand
Recently, Diageo expanded its McDowell’s & Co. portfolio with the X Series, venturing into white spirits and dark rum. The lineup features Vodka, Dry Gin, Citron Rum, and Dark Rum, marking the brand’s move into new categories.
Vikram Damodaran, Chief Innovation Officer at Diageo India, told Storyboard18, “Premiumization stems from changes in core consumer behavior. Disposable income has been increasing, especially among the youngest drinking demographic. These consumers are exploring a variety of categories, and premiumization is the way to meet this demand through value, offerings, and variety.”
Discussing Diageo’s focus on two types of consumers—affluent and young—Damodaran said, “Affluent consumers desire unique products and personalized experiences, such as limited edition bottles, while younger consumers are embracing cocktail culture, seeking variety in flavors and categories.”
Jitin Merani, Co-founder of The Glenwalk, said, “There’s been a shift towards premium brands and products, which has led to higher revenue generation for various alcohol and beverage companies. The premium segment has grown significantly, with its share rising from 42% to 49%.”
Increase in Ad Spending
The Glenwalk is on track to cross Rs 100 crore in sales this festive season, targeting 100,000 cases sold by December 31. The company has increased its ad spend by 20 percent to expand its reach.
Merani commented, “Our team has been efficient, and we’ve taken an optimized approach to ad spending. While we’ve entered new markets that require launch resources, our below-the-line (BTL) spends are within budget, although trade marketing and material procurement costs have been higher per case this year.”
He added, “We’re focusing on maintaining our relevance and staying consistent with the approach we adopted last year. We’ve wisely allocated more budget to influencer marketing and digital initiatives to ensure our marketing communications are fully monitored.”
Merani also highlighted their use of digital media through social platforms and partner opinion leaders, noting, “We can’t do much with traditional media like TV, radio, or print, so we’re working on creating brand extensions that could drive our above-the-line (ATL) efforts.”
Latambarcem Brewers, expecting 1,100 percent revenue growth compared to last year, introduced two new premium mass-market products: The Rocket Rice Lager and Super Maka 15%. Discussing ad spending, co-founder Ishan Varshnei said, “This year has been crucial for us as we’ve expanded our market presence. We’ve increased our ad spend by 30% to sustain this momentum.”
He further explained, “As consumer preferences evolve and demand for premium, craft beverages grows, we’ve focused on amplifying our reach across both digital and offline channels to engage a broader audience.”
Varshnei also noted that Latambarcem has expanded its offline presence through events and experiential marketing, stating, “This holistic approach has significantly boosted our brand presence, aligning with consumers’ rising interest in authentic, premium experiences.”
Upgrading to Premium
Moksh Sani, Founder and Director of Living Liquidz, observed that regular drinkers are upgrading to premium liquor. He said, “Indian consumers, especially the younger generation, are becoming more conscious of their alcohol choices. With access to information on the internet and companies’ focus on showcasing their brands via social media and digital platforms, consumers are increasingly influenced to try premium alcohol, resulting in this upgrade.”
Latambarcem’s Varshnei added, “Over the years, we’ve noticed a subtle yet significant shift among habitual drinkers. Many are seeking not just a drink but an elevated experience. This has led to a natural transition towards premium liquor, as consumers look for refined flavors and better-quality ingredients.”
He continued, “This trend reflects a broader mindset shift—people are willing to invest more in what they consume, seeking brands that align with their evolving preferences. At Maka di, we see this as an exciting opportunity to introduce consumers to the craftsmanship behind our brews, offering a unique blend of premium ingredients and authentic experiences.”
Shifting consumer preferences and a younger, more discerning drinking population, is driving significant growth in India’s alcohol industry. With premiumization at the forefront, liquor manufacturers are well-positioned to capture the market’s evolving tastes and preferences in the coming years.