India’s alcoholic spirits market sees 6% growth in June quarter on whisky, premium category demand

INDIA – Sales of alcoholic spirits in India picked up pace in the June quarter, with volumes rising 6 percent year-on-year, according to state excise department data.  

The improvement marks a recovery for the segment after several quarters of muted performance driven by higher taxes, regulatory disruptions, and reduced consumer spending. 

Whisky, which accounts for nearly two-thirds of total spirits consumption in India, posted a 7 percent volume growth—its strongest performance in nearly two years. 

Other categories also saw robust gains, with vodka volumes expanding 14 percent, rum rising 9.5 percent, and gin surging 48 percent from a relatively small base.  

Brandy, however, which is the second-largest spirits category in the country, declined by 2 percent during the quarter. 

Industry executives described the uptick as an early indication of recovery, particularly with rural demand showing signs of improvement following healthy monsoon rains. 

“We genuinely believe there are early signs of recovery, and things can improve further in rural markets,” said Praveen Someshwar, managing director of Diageo India, during the company’s recent earnings call. 

The rebound follows a subdued March quarter when spirits volumes grew just 0.5 percent, disappointing expectations of a post-pandemic revival.  

For the 2024/25 financial year, spirits volumes grew by only 1.6 percent compared to 4.2 percent in the previous year. 

Companies are increasingly focusing on value-led growth, with premiumisation becoming a central strategy across categories. “It’s time that we actually relook at what the KPI of the industry is,” said Alok Gupta, managing director at Allied Blenders & Distillers.  

“As premiumisation happens, you have to move from tonnage to revenue. Consumers are trading up across categories, including rum and brandy—not just whisky.” 

India, the world’s most populous nation with a population exceeding 1.4 billion, has an estimated 300 million alcohol consumers. Nearly half of them consume low-cost or unbranded liquor, a segment that continues to face margin pressures from rising costs and competition. 

“The lower end of the business has always faced margin pressure and cost escalation,” said Abhishek Khaitan, managing director at Radico Khaitan.  

“Our focus has been on premiumisation, and our semi-luxury and luxury products are growing in strong double digits.” 

Policy shifts also shaped market performance during the quarter. Distribution issues in Telangana and the reversal of Delhi’s excise policy weighed on sales, while Karnataka’s reduction in state levies and Andhra Pradesh’s decision to allow private retail sales offered relief to the industry. 

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