India: India stands out as growing market for spirits despite global decline

India has stood out as a growing market for spirits even though global alcohol consumption has plummeted over the past four years, The Drinks Business reported on November 4.

The sector has felt the pinch with international drinks giants such as Diageo, Pernod Ricard, Remy Cointreau and Brown-Forman all seeing shares nosediving as much as 75%, eradicating nearly US$830 billion in market value, according to the recent Bloomberg tracking index.

In fact, shares of the world’s 50 leading alcoholic drinks brands have reportedly fallen by an average of 46% since June 2021. However, during 2024, IWSR figures showed how India added 6% in total beverage alcohol volume and 9% in total beverage alcohol value. Growth was evident across all categories, but most notably in beer and whisky.

Now, analysts have gone so far as to warn that drinks companies must brace for further challenges and have higher that the downturn may continue as producers face weaker sales, bigger debts as well as management changes via restructuring to stay afloat.

Driving the decline has been the shift in consumer lifestyles which have included increased health awareness. Added to this, inflation has also played a part in moving people away from spending money on alcoholic drinks.

As a result, drinks companies all over the world are now hurriedly reinventing themselves with non-alcoholic alternatives in a bid to stay relevant.

Despite the growing issues, India continues to be an exception to the global decline and, while the world drinks less, India is continuing to drink.

This can also be seen via data on beverage alcohol sales volumes in Indian travel retail which increased by 13% in 2024, far outpacing the 6% increase in volumes sold in India’s domestic market.

Another example of the market’s success can be seen by per capita alcohol consumption in India having jumped from 2.4 litres in 2005 to 5.7 litres in 2016, with this having been forecast to reach 6.7 litres by 2030.

In its totality, the Indian drinks market is now worth US$60 billion and amid the global turmoil, shares of United Spirits, Radico Khaitan and Globus Spirits have risen up to 14 times in the last four years. This summer, Radico Khaitan posted a 73% surge in quarterly profits, reflecting the rising demand for premium spirits among consumers in India.

According to Business Standard reports, India’s state governments also earned around ₹19,730 crore in revenue from alcohol sales. Additionally, in just four years, alcohol consumption has surged dramatically in key Indian states: Madhya Pradesh: From 245.3 million litres in 2021-22 to 456.4 million litres in 2024-25, an 86% increase; Rajasthan: From 235.9 million litres to 304.2 million litres, a 29% leap.

To understand more fully what is behind India’s growing alcohol demand, Future Market Insights identified that around 60% of India’s population is under the age if 35, driving demand. Compounded with this, the WHO Global Report has also noted a 50% increase in alcohol use among Indian women over the past two decades, broadening the category’s reach to new demographics. While in June this year, Emily Neill, chief operating officer research and operations for the IWSR revealed that India was “leveraging demographic momentum to fuel [total beverage alcohol] growth” amid stabilising inflation and expanding GDP.

Additional research from Statista and ReportLinker has also showed average incomes across India have grown by 30%, helping to boost the sector, and in a separate piece of research Dainik Bhaskar also recently revealed that demand for premium drinks in India is rising by 18% annually making the market one to watch.