GLOBAL ALCOHOL INDUSTRY
Category-wise breakdown of global alcoholic beverages
| Category |Volume(In Mn Litres) |% |
|Beer |185 |78.4 |
|Wine |27 |11.2 |
|Spirits |19 |8.1 |
|RTD’s/ high strength premixes |4 |1.7 |
|Cider/ Perry |1.5 |0.6 |
|Total |236 |100 |
|Source: Euromonitor, HSBC |

Alcoholic beverages include beer, cider, ale, wine (including sparkling barley and rice wine) and spirits such as rum, whisky, brandy, vodka and gin. Almost 40 percent of the world’s alcoholic beverage consumption involves branded drinks that are usually owned by large multinationals investing substantially in marketing and brand management. While growth determined from developing economies provides volume expansion, the mature markets provide enhanced value.

The transformation in consumption patterns arising from demographic changes is redefining product development and marketing in the global alcohol beverages sector. One of the key prevailing trends is premiumisation in developing economies, marked by a growing consumption of superior alcohol beverages.

The premium spirits industry however reported a decline in offtake during the global economic crisis owing to slowdown in developed economies. To counter the consumption of cheap variants, manufacturers launched quality products in Africa, Asia, Europe and Latin America. Manufacturers were also required to address challenges which included promoting responsible drinking, high ingredient costs and preference for low-cost and highquality brands.

The European Union represented almost 57 percent of the world spirits market. The global alcohol industry is expected to exceed USD 1 trillion by 2014 (Source: MarketLine). Market volume is predicted to grow 10 percent to 210 billion litres in 2014. Beer, cider and flavoured alcoholic beverages represent the leading market segment,accounting for over half the market value.

INDIAN ALCOHOL INDUSTRY

The Indian alcohol market is estimated at around USD 15 billion. Nearly 75 percent of this market comprises spirits; the balance is accounted by beer, wines and flavoured beverages. Whisky, brandy, rum, vodka and gin manufactured in India, are referred to as ‘Indian made foreign liquor’ (IMFL). The branded spirits IMFL market is estimated at nearly 225 million cases (nine bulk litres each). Brown spirits (whisky, brandy and rum) account for around 96 percent of the Indian industry.
Whisky is the largest-selling alcoholic beverage in India with a 56 percent share of the IMFL market while brandy (23 percent) and rum (14 percent) represent the other large segments. The Indian spirits industry grew 8 percent in 2011-12.
The Indian IMFL industry is regulated, marked by duties, fees, customs, taxes and restrictions by state and central governments. Intelligent marketing and innovative packaging techniques by some companies have portrayed alcohol as a lifestyle product and an integral part of most social events.
South Indian States, specifically Tamil Nadu and Andhra Pradesh, are the key IMFL consumption centres, accounting around 35 percent of the total IMFL volumes consumed in India. IMFL consumption in the Southern States is higher than
North India because of a ban on country liquor in the South. The Indian brandy market is the second-largest segment of the IMFL industry. Over five years, the brandy market grew at a 13.8 percent CAGR. The per capita brandy consumption was pegged at 0.3 litres in FY10, which has grown in five years at a CAGR of 12.2 percent (Source: Mindpower Solutions). Growth is propelled by an increasing consumption in South India where brandy is very popular. Vodka is the fastest- rowing IMFL segment in India, catalysed by increased consumption in pubs, hotels, restaurants as well as an evolving nightlife and consumer preferences. Vodka consumption grew 44 percent CAGR over the past five years.
Category-wise breakdown of Indian alcoholic beverages
| Category | Volume(In Mn Litres) |% |
|Beer |1510 |46.1 |
|Spirits |1750 |53.4 |
|Wine |10 |0.3 |
|RTD’s/ high strength premixes |6 |0.2 |
|Cider/ Perry |0 |0 |
|Total |3276 |100 |
| | | |

Source:TI Annual Report(2011-12)

1. In particular, according to Euromonitor International 2009, the
Sales volume of spirits products is expected to reach 2.2 billion liters by 2013.

2. CAGR During the year FY07-FY10,IMFL-14%...Beer-12.5%. 3. Market Size In Mn Cases FY10,IMFL-236….Beer-195. 4. Rising per capita Income will make consumers to focus more towards premium categories. 5. Indian Alcoholic Bev Market 12bn USD(2010) 6. Consumption Volume wise(210mn cases) in 2010