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6 Trends that the Alcobev Industry should watch out for!

Updated: Feb 19


The predictions are made, the forecasts are out – and big changes are foreseen for the 2016-2020 period for the alcoholic beverage industry.

​The current Indian GDP is growing at a zooming rate of 7.5%, making it one of the fastest growing economies in the world, second in tow only to China. Coupled with a median age of 25, which will comprise of 55% of the total population by 2025, India is a country to watch out for in terms of global expansion because of the spurt of growth in the productive population. Disposable incomes too are on the rise as a shift is seen, from a population that ‘saves’ to a population that ‘borrows to spend’. With two or more individuals working to add to the household income – the scope for consumer, convenience and aspirational goods have skyrocketed as consumers have no time or inclination to come home and do chores.  “…the consumer market is pegged at a worth of US $507.46 billion for India”, according to a report by Kimberly Momin & Melissa Cyrill that supports the prediction that India is the next big market to watch out for companies looking for serious expansion. The news is especially heartening for new and major existing players in the drinks industry which had been experiencing a slowdown in the 2010-2015 period. The Boston Consulting Group (BCG) and the Confederation of Indian Industry’s foresights gauge India’s share of global consumption at 5.8% making it a serious topic of perusal for the liquor industry.


Newer Target Segments A target segment that often goes unsung is the rural markets due to issues of reach or lack of appeal. Statistics state that 70% of the rural population in India comprise of 40% of the total consumption of major consumer goods which makes for some pretty large numbers to ignore. Smaller SKU's fit well within a price point suited to the rural consumer who also benefits to experience a  superior product vis a vis the local brands. While prestige value, taste and ambience precede the preference chart of parameters for the urban consumer, price still remains a resolute factor prior to purchase decision along with availability.


Differential ‘Needs’ of the Youth Consumer spend can be broadly divided into categories – Necessities and Discretionary. Necessity items are items of daily use that are indispensable, while luxury spends are marked under Discretionary spending. Dining out, spas, pubs, clubs, gyms, luxury vacations – are high on ‘snob’ value and directly proportional in ‘relevance’ to the under-30 demographic in India. The luxury market is projected to cross US$18.6 billion dollars by 2016, according to a report by ASSOCHAM, and thus timely capitalization is crucial to economic benefit. Spirits volume sales are set to grow to grow by a CAGR of 4% over the forecast period due to a multitude of reasons (Euromonitor, 2016) – changing consumer lifestyles, rapid urbanization, a large Indian youth base that looks for differential drinking experiences and surging disposable incomes to name a few. Consumers are also more alcohol-literate and savvy than before. Major players no longer hold the last word as consumer discretion takes precedence. ​ Riding the ‘Premiumisation’ Wave Alcoholic drinks continue to ride the premiumisation wave as the popular choice of strategy. New products too are conceptually developed keeping ‘premiumness’ and innovation as a dominant brand characteristics as they are key to maintaining a steady growth. Whisky is projected to overtake Vodka in terms of global sales as it associates seamlessly with the ‘premium single malt’ positioning. Indian liquor majors too aren’t far behind on capitalizing on this trend, with roll outs of Indian Single Malts, and investments behind sub- segmentation.  Experimenting Consumers Changing times lead to change in tastes. Consumers are all about experimenting with taste and the overall experience value. Although the premiumness value still holds good, preferences are subject to major swings if experience tops the former. The youth today is on the constant lookout for something ‘new’ and exciting to balance competitive work schedules, and one-of-a kind experiences thus have an extremely high appeal to this segment. Enter ‘Home’tainment.  Catered parties, replete with engaging party games and ample presence of the brand make for exactly what the youth is looking for. ‘Sociability’ is a key word in such activities and major players have effectively tapped into it gauging the needs of the segment. Posting pictures and videos of the events on the brand’s social media pages propels the strategy virally. The Digi-lution No longer is digital the last slideshow in a brand pitch anymore. Realizing the full weight of social media impact on the target segment, brands are actively buying into the digital revolution by making their presence felt via innovative digital campaigns. With the platform, comes a certain emancipation that was felt lacking in traditional media and its reach amongst the target user base has been gauged immensely. The fact that digital creatives impact sales is no longer a classified secret judging by the increasing ad spend earmarked for the digital media budget.


‘Fifteen Minutes of Fame’ The consumer’s perception of self has undergone a huge overhaul. How they perceive themselves has taken a backseat over how peers and opinion-leaders perceive them. Sticking close to current trends whether it is Pokemon Go, color blocking, using hashtags to embrace a social cause or even pouting for an #Instagram post, the selfie generation takes to all like duck to water. Capitalizing on such emerging trends that affect the psychographic behavior of a consumer which in turn affects the purchase decision is a key development that #liquor companies can use to significant growth advantage. How the next years fare for the liquor industry shall be interesting to watch out for.



#strategy #marketing #research #trends #brands #drinks #India

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