The India alcohol market comprises alcoholic beverages such as beer, wine, spirits and others. Alcoholic beverages are widely consumed across various occasions owing to their positive effects in socializing and recreational activities. Beer dominates the Indian alcohol market and is a preferred drink among youth and millennial population. Beer provides refreshing experience to consumers due to its low alcohol by volume. The rising disposable income and growing socializing trend have increased the beer consumption in India in last few years.
The global India Alcohol Market is estimated to be valued at US$ 49580 Mn in 2023 and is expected to exhibit a CAGR of 6.7% over the forecast period 2023 to 2030, as highlighted in a new report published by Coherent Market Insights.
Market Opportunity:
One of the major opportunity for growth in the India alcohol market is the increasing consumption rates among millennials. Millennials in India have become one of the largest consumers of alcohol owing to rising socializing habits. They consider drinking as a way to socialize and unwind from daily stress. The alcohol companies are strategizing their marketing initiatives and launching new product varieties targeting the millennial population in India. They are introducing innovative beer flavors and cocktail recipes to attract younger consumers. If the alcohol manufacturers successfully build brand recognition among millennials, it can drive the future growth of the India alcohol market during the forecast period. Focusing marketing strategies on millennial population will help companies tap into the growing consumption potential from this demographic segment.
Porter’s Analysis
Threat of new entrants: The threat of new entrants is moderate in the India alcohol market. Expanding distribution networks and establishing brand recognition require significant investments which deter new players. However, low raw material and labor costs provide some incentive for new entrants.
Bargaining power of buyers: The bargaining power of buyers is high. The market has numerous local producers providing substitutable products. Buyers can easily switch to alternatives if quality declines or prices rise too high.
Bargaining power of suppliers: The bargaining power of suppliers is moderate. Although raw material costs contribute significantly to production costs, their supply chains are well established. However, suppliers of specialized production equipment have some pricing power.
Threat of new substitutes: The threat of new substitutes is moderate. While alternative beverages like fruit juices, carbonated drinks, and bottled water are options, alcohol fills a unique social and recreational need. However, growing health-consciousness could boost substitutes over time.
Competitive rivalry: Rivalry among existing competitors is high due to many regional and national firms vying for market share. Players compete on branding, quality, pricing, and distribution.
SWOT Analysis
Strengths: Wide supply base for raw materials like grains, molasses and sugarcane. Strong traditions and social acceptance of alcohol. Established distribution networks.
Weaknesses: Skewed excise taxation increases product costs. High dependence on rains for agricultural inputs exposes it to climate risks. Outdated technologies at some SME production levels impact quality.
Opportunities: Growing young population and socializing trends boost demand. Innovation in premium and new product categories like craft beers and spirits. Export potential to international markets.
Threats: Rising health awareness and anti-obesity campaigns could hurt demand long-term. Stricter drunk-driving laws and litigations pose regulatory risks. Income volatility makes the industry prone to economic downturns.
Key Takeaways
The Global India Alcohol Market Growth is expected to witness high over the forecast period of 2023-2030. The increasing young population, growing socializing trends and celebrations in the country are driving the market. The global India Alcohol Market is estimated to be valued at US$ 49580 Mn in 2023 and is expected to exhibit a CAGR of 6.7% over the forecast period 2023 to 2030.
Regional analysis indicates that southern India accounts for the lion's share of the market currently owing to strong liquor consumption traditions. States like Kerala, Tamil Nadu, Telangana and Karnataka dominate production and sales. Western India is another major regional market led by Maharashtra and Gujarat. Northern and eastern states arewitnessing fastest growth aided by rising disposable incomes of young urban populations.
Key players operating in the India alcohol market are DIC CORPORATION, Solvay S.A., Lion Idemitsu Composites Co., Ltd, Toray Industries, Inc., Tosoh Corporation, SK chemicals, Chengdu Letian Plastics Co., Ltd., Celanese Corporation, TEIJIN LIMITED, SABIC, Zhejiang NHU Co., Ltd., LG Chem, RTP Company and Ensinger.These players are focusing on new product development, expansions and partnerships to strengthen market presence.
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