Liquor sales in India saw little change in the June quarter, with a decline in brandy and rum consumption. Last year, the spirits market had grown by 7% in the same period.
United Spirits’ managing director, Hina Nagarajan, mentioned on a recent investor call that the first half of this year was slower than expected, but there’s hope for a rebound in the second half. Whisky, which makes up two-thirds of the market, saw a modest 0.4% growth in volume, while brandy and rum volumes dropped by 1% and 2.4%, respectively. However, vodka and gin saw gains, albeit from a small base.
For fiscal 2024, the spirits market reached 412 million cases, a 4.2% increase from the previous year. After several years of high growth, the industry has now stabilized. Despite this, premium brands continue to thrive, with younger consumers favoring higher-priced options or trading up more quickly.
Raw material prices for spirits, such as extra-neutral alcohol and packaging, have softened after a record surge last year. Increased excise duties in Karnataka and election-related disruptions in the supply chain also impacted sales.
Amar Sinha, COO of Radico Khaitan, noted that without these disruptions, the market could have grown by 4-5%. Lower-priced products, which were hit hard by price hikes, are starting to recover as commodity and packaging costs decrease.
India’s drinking population is around 300 million, with about 150 million able to afford premium brands. The overall slowdown in liquor sales reflects a broader trend of reduced consumer spending in sectors like apparel and beauty, following two years of pandemic-driven growth.
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