Rising Disposable Income & Premiumization in Liquor Industry Growth

Table of Content

1. Executive Summary

2. Industry Overview

   • What is Insurance?

   • What is the Property & Casualty Insurance

   • Useful ratios in analysing P&C Insurance

   • What is the Life and Health (L&H) insurance?

   • Products and Distribution of Life insurance Key profitability metrics

3. Indian Insurance Sector

   • Timeline of Insurance Industry from 1818 to Present

   • Advantage India 17 Industry Structure

   • Methods Using for Analysing of Indian Insurance Sector

   • Penetration Analyses

   • AUM TrendsRegion-wide Distribution of Offices

   • International Comparison of Insurance Density

   • Segment Wise Gross Direct Premium

   • Strong potential in crop Insurance

   • Capital infusion driving Growth and Efficiency

   • Nationwide trends benefiting the Insurance Industry

4. Competitive positioning

   • Porters Five Factor Analysis

   • SWOT Analysis of Insurance Industry

5. Comparable Analysis

   Performance Metrics Analysis

   Herfindahl-Hirschman Index (HHI) Analysis

6. Key Risk

7. Disclaimer

   
   

Executive Summary

The evolution of the Indian liquor industry over the decades presents a compelling narrative of transformation and growth. The sector, deeply rooted in ancient traditions, has transitioned from culturally significant brews to a highly commercialized market dominated by Indian Made Foreign Liquor. Whisky, which accounts for about 67% of total spirits consumption, recorded a volume of 260.07 million cases in 2024 and is forecast to climb to 502.80 million cases by 2034, reflecting a steady compound annual growth rate of 7.6%. This growth is underpinned by rising disposable incomes and changing consumer lifestyles, where premium and super-premium segments are increasingly gaining traction. Companies have strategically invested in expanding their portfolios, with domestic giants now challenging multinational incumbents by blending innovation with traditional value.

Industry players are not only capitalizing on the expanding market but are also adopting digital strategies to streamline distribution and enhance consumer engagement. For instance, the vodka segment, valued at around USD 3.0 billion in 2022, is expected to reach USD 5.0 billion by 2030, supported by a CAGR of 6.4%. Similarly, the gin market, buoyed by the growing popularity of craft spirits and the incorporation of indigenous botanicals, is projected to grow from USD 1,666.3 million in 2024 to USD 2,710.9 million by 2031 at a CAGR of 7.2%. These figures underscore not only robust growth opportunities but also a clear strategic shift towards premiumization and innovation, driven by both local consumer trends and global market practices.

However, the industry is not without its risks. Regulatory complexities, including varied state policies and high taxation, present ongoing challenges that require constant strategic adjustments. Companies are actively addressing these risks by diversifying their product offerings and investing in sustainable practices, such as eco-friendly packaging and digital marketing initiatives, to mitigate market volatility. While the competitive landscape is intense—with traditional products coexisting alongside emerging craft variants—the overall trajectory remains positive. The resilience and adaptability of key players, such as Diageo, Pernod Ricard, United Spirits, and Radico Khaitan, position the Indian liquor industry for sustained long-term growth, making it a robust sector for future investment.

Key takeaways

India's liquor legacy begins with ancient traditions, where alcohol played a pivotal role in religious and social rituals. Early historical texts, including Vedic scriptures, highlight the use of ritualistic drinks like Soma and fermented brews like Sura.

Post-independence, the government adopted a socialist approach by establishing state-run monopolies to regulate the industry. Economic liberalization in the 1990s catalysed the entry of multinational companies, sparking a significant market diversification.

India's alcoholic beverage market is projected to expand from $52.4 billion to $64 billion by 2030, underscoring a significant growth trajectory.

Indian Made Foreign Liquor (IMFL), especially whisky, remains the dominant segment, with mass-market as well as premium offerings thriving. The market has seen an upward trend in premiumization, as rising disposable incomes and urban lifestyles drive demand for superior quality spirits.

Whisky, which accounts for about 67% of total spirits consumption, recorded a volume of 260.07 million cases in 2024 and is forecast to climb to 502.80 million cases by 2034, reflecting a steady compound annual growth rate of 7.6%.

Domestic brands are increasingly competing with international players, showcasing innovative craft and single malt whiskies. Regional diversity remains strong, with country liquors maintaining cultural significance in rural and semi-urban areas.

Indian liquor industry indicates a moderately concentrated market, with a total HHI score of 2896.62.

The Indian liquor industry is dominated by United Spirits, which holds a 46% market share, United Breweries with a 25% market share, is the second-largest player, followed by Radico Khaitan (13%). These three firms together account for 84% of the industry, making the market highly concentrated. Smaller players such as Allied Blenders (4%), Piccadily Agro (3%), and Tilaknagar Industries (2%) contribute to market diversity but hold much smaller shares individually. Other notable firms include India Glycols, Sula Vineyards, Globus Spirits, and Som Distilleries, each with 1-2% share, suggesting limited competition at the lower end of the market.

The emergence of craft spirits reflects a growing consumer preference for quality and innovation. Consumers are increasingly exploring lower-alcohol and health-conscious options, reflecting evolving lifestyle preferences.

Digital transformation has reshaped distribution channels, with e-commerce and online marketing playing a crucial role in market expansion.

The rum segment is diversifying with flavoured variants that cater to younger consumers and changing tastes. Vodka and gin segments are experiencing robust growth, with data-driven forecasts predicting significant revenue gains in the coming years.

The sector provides employment to around 79 lakh individuals, representing 1.5% of India's total workforce.