Alcobev Industry Primed For Robust Expansion Led By Domestic Players: Systematix

Systematix Research Report

We hosted a discussion with an alcoholic beverage sector expert with leadership experience in the Liquor Industry. The discussion centered around the recent trends and outlook for the sector going ahead. Key takeaways:

1. Indian made foreign liquor industry size stands at 350-400 million cases annually with whisky/ brandy/ rum/ vodka/ gin contribution standing at 60%/24%/9%/4%/3% respectively;

2. During the last few years the IMFL industry volumes have been growing at 7-8% CAGR, however excise duty rationalization and favorable State Government policies shall lead to 8-10% volume growth in FY25E;

3. Prestige and Above category has witnessed a strong growth in the last couple of years, wherein the share of P&A in IMFL industry has increased to 26-27% from 20% earlier. North India has been the major contributor to the P&A category. Indian companies too have been playing a major role in launching new products in the P&A space;

4. Vodka which was considered more of an urban beverage has seen rise in consumption in rural post Covid. This has led to rise in the rural share of Vodka from 30% during pre-Covid to 40% now;

5. On brandy, 90% of the brandy consumption comes from South India. Due to absence of any kind of country liquor in South brandy was being consumed which led to a rise in the category;

6. Ready To Drink are experiencing healthy growth in the urban markets however the addressable market for RTDs is small;

7. In the Beer category, Kingfisher the market leader is losing share to players such as Budweiser and Tuborg;

8. In the wine space, the category is witnessing a decline as consumers are shifting to vodkas and gins.

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