India: United Breweries Ltd gains market share, retains number one spot in India in 2016

United Breweries Ltd gained market share in 2016 to retain its number one spot in India’s alcoholic drinks space by way of volume sales, while Diageo Plc-owned United Spirits Ltd lost marginal ground, Euromonitor International said in its latest report.

India’s alcoholic drinks market, which grew at a compound annual growth rate (CAGR) of 6.3% between 2011 and 2016, is projected to grow at a 6.5% CAGR between 2016 and 2021 in volume terms, the research firm added in its yearly report.

Euromonitor includes beer, wine, spirits and ready-to-drink products and premixes in its assessment.

UB had a 23.5% share of the total alcoholic drinks market last year —up from 22.5% in 2015 and 22.0% in 2014. In contrast, USL’s market share stood at 19.5% in 2016, down from 19.8% in 2015 and 20.2% in 2014.

“UB continued to lead alcoholic drinks in India in 2016 thanks to its strength in the beer category via its hugely popular Kingfisher brand. United Spirits remained in second place but continued to lose share due to many of its local brands being discontinued following its takeover by Diageo,” Euromonitor said.

UB and USL did not immediately respond to Mint’s email queries on market share.

Within spirits, Diageo-USL continued to lead the market with a 41.2% share of total volume sales due to a diverse portfolio that caters to all income groups and a strong distribution network, Euromonitor said. French liquor firm Pernod Ricard SA, which ranked number two in spirits (13.3% share), had the strongest increase in volume share of around one percentage point in that category.

The spirits market grew 4% in volume terms last year and hit sales of 2.7 billion litres, slightly faster than the 3.4% CAGR it clocked between 2011 and 2016. But trade restrictions such as the Supreme Court’s ban on liquor sales near highways, and taxation on spirits in various states hindered growth, the report said.

Blended Scotch whisky was the best performing category within spirits and recorded total volume growth of 14%. Single malt Scotch whiskies and vodkas also performed well, growing 10% and 6%, respectively, in 2016.

Volume sales of beer grew 7% to hit 2.9 billion litres, slower than the 9.2% CAGR it clocked between 2011 and 2016. That growth is driven by an expanding urban population with many preferring to socialize over beer, the report said. Imported premium lager was the best performing category within the beer market last year while demand for craft beer, albeit still a niche, has also been growing.

At the overall alcoholic beverages level, growth will be driven by India’s huge untapped potential that both local and global manufacturers are eyeing. An increasing acceptance of social drinking and an increase in the sales of premium lager and spirits will also boost the market, Euromonitor said.

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