It has been a tumultuous two years for the alcobev industry globally and in India. The third wave is likely to hamper the global market and the Indian market is likely to grow at a much faster rate.

The global alcoholic beverages market was estimated to be at USD1.58 trillion in 2020 and is projected to grow at a compound annual growth rate (CAGR) of around 3.5 per cent between 2020 and 2023.

According to Market Research.com, The global alcoholic – beverages market grew from $425.45 billion in 2015 to $499.76 billion in 2020 at a CAGR of 3.27%. The global alcoholic – beverages market is expected to grow from $499.76 billion in 2020 to $735.83 billion in 2025 at a CAGR of 8.04%.

According to Statista, In India revenue in the Alcoholic Drinks market amounts to US$44,343m in 2021. The market is expected to grow annually by 7.30% (CAGR 2021-2025). The market’s largest segment is the segment Spirits with a market volume of US$31,119m in 2021. In global comparison, most revenue is generated in China (US$311,827m in 2021). In relation to total population figures, per person revenues of US$31.82 are generated in 2021. In the Alcoholic Drinks market, 0.4% of total revenue will be generated through online sales by 2021.

By 2025, 13% of spending and 10% of volume consumption in the Alcoholic Drinks market will be attributable to out-of-home consumption (e.g., in bars and restaurants). In the Alcoholic Drinks market, volume is expected to amount to 14,712.6ML by 2025. The market for Alcoholic Drinks market is expected to show a volume growth of 12.0% in 2022.

The average volume per person in the Alcoholic Drinks market is expected to amount to 8.32 L in 2021. Other than India being the largest consumer of Whiskey in the world, Wine is becoming extremely popular especially among women in India. There is 22.8% growth in the Vodka’s demand. The punch here is that with the growing middle class population, these current numbers will pale in coming years. The consumption of alcohol in India will reach 16.8 billion liters by the year 2022. By 2030, 50% of Indian drinks consumers are set to buy more of the same category of alcoholic drinks that they are consuming, 26% are expected to move to higher brands and 24% will spend on newer categories of alcohol.

Non-alcoholic beverage sales increased 33% to $331 million over the last 52 weeks, according to data from Nielsen. The products have done especially well in e-commerce, as Nielsen found a 315% increase in online non-alcoholic and low-alcoholic beverage dollar sales in the same time.

Heineken, for instance, bet big on its non-alcoholic beer and subsequently brought in $54 million in 2020 sales.

In the Non-Alcoholic Drinks market, volume is expected to amount to 36,105.0ML by 2026. The Non-Alcoholic Drinks market is expected to show a volume growth of 5.6% in 2022. The average volume per person in the Non-Alcoholic Drinks market is expected to amount to 21.57 L in 2021.

Americans are drinking less overall than they have at most points over the last 20 years, according to a recent Gallup analysis, so it’s not surprising that non-alcoholic drinks are gaining popularity. And Millennials and Zoomers – who are drinking less than Boomers and Gen X did at their age – are leading the sober-curious movement.

While the industry faced a heavy blow during the first half of 2020 with a sales decline of 29 percent due to the nationwide lockdown induced by the pandemic, but a strong revival in sales took place in the second half of 2020 because of which the segment could restrict its overall decline to 9 percent in the fiscal year 2020-21, confirmed Confederation of Indian Alcoholic Beverage Companies (CIABC).

For years altogether, the Indian alcohol market was dominated by large brands like Allied Blenders’ Officer’s Choice, United Spirits’ McDowell’s, Pernod Ricard’s Imperial Blue, and United Breweries’ Kingfisher, among others. However, today with the increase in demand for alcoholic beverages, rise in disposable income, and urbanization of tier-II and tier-III cities, a number of start-ups have come to the fore with a fresh and unique approach to manufacturing, packaging, and marketing, to offer a plethora of alcoholic beverages and also mixers and premixed cocktails with distinctly Indian flavors to the consumers.

The alcoholic beverages industry contributes to around 1.5 million jobs in India and generated around USD48.8 billion in sales revenue in 2019. The sector is open to foreign investments and many states offer subsidies for local manufacturing (for example, Maharashtra and Karnataka for wines). From the demand side, factors such as rapid urbanisation, changing consumer preferences and a sizeable and growing middle-class population with increased purchasing power have contributed towards growth in demand for alcoholic beverages.

The sector is open to foreign investments and many states offer subsidies for local manufacturing (for example, Maharashtra and Karnataka for wines). From the demand side, factors such as rapid urbanisation, changing consumer preferences and a sizeable and growing middle-class population with increased purchasing power have contributed towards growth in demand for alcoholic beverages.

According to industry estimates, the number of people consuming alcohol increased from approximately 219 million in 2005 to 293 million in 2018; it is projected to increase to 386 million by 2030. The share of the uppermiddle income group in alcohol consumption has increased steadily from 7 per cent to 21 per cent and is expected to increase to 44 per cent by 2030.

Alcoholic beverages are among the top three sources of revenue earning across most states. Yet there seems to be a lack of transparency, predictability, and clarity in the tax regime to ensure that the revenue earning objective is aligned with other objectives of the government like ‘Make in India’ and exports from India. The governance and pricing models for alcoholic beverages vary widely across the states. The states through their excise policies, control the entire supply chain of alcoholic beverages from manufacturing and distribution to registration and retail. There are frequent and ad-hoc changes in these policies, creating uncertainty and preventing manufacturers/distillers to plan their investment.