Homegrown liquor brands add zing to their blends with local ingredients
According to a study by Mintel India, incorporating regional herbs and spices, and dialling up provenance and ingredient purity are attributes coveted by affluent Indian consumers.
Be it gin, vodka or rum, a clutch of Indian entrepreneurs based in Goa is brewing potent blends that aim to become alternatives to legacy liquor brands from companies like Diageo and Pernod Ricard. Each of these homegrown brands have one thing in common: a local flavour extracted from ingredients sourced from India. For instance, Maka Zai, a white rum, is made from sugarcane grown in and around the Panchganga river in Maharashtra; the ingredients of Hapusa Gin comprise juniper from the Himalayas and the other botanicals plucked from across India. Clearly Good Gin, too, is infused with Indian botanicals.
Statista estimates that the spirits segment in India is projected to reach $39,459 million in 2021. Whiskey dominates the market with India being among the top ten countries for Scotch whiskey. India’s beer market is projected to reach $14,981 million in 2021, driven by its consumption by the upwardly mobile youth. Homegrown spirits are competing against not just existing brands in their own categories, but also the popularity of beer. Can they replicate the success of craft beer?
“The new Indian consumer who is well-travelled and has tried a wide range of spirits has a curiosity towards spirits made locally. That is the consumer we are targeting,” says Varna Bhat, CEO and founder, Blisswater Industries, which makes Rahasya, a craft vodka priced at Rs 850 for a 750 ml bottle.
Crucial to the adoption of craft spirits is appreciation for the product. “There is a section of consumers that does not want to drink alcohol to get drunk. They are looking at premium experiences and drink less, while drinking better,” points out Kasturi Banerjee, founder, Still Distilling Spirits. Banerjee is behind Maka Zai, a homegrown rum brand with two varieties — white and gold.
According to a study by Mintel India, incorporating regional herbs and spices, and dialling up provenance and ingredient purity are attributes coveted by affluent Indian consumers. “These brands are more likely to cater to one-third of Indians from SEC A who say that they would be interested in purchasing spirits with botanical ingredients as compared to SEC C,” the report states.
Glass half full
Being small-batch distilleries, these brands have the uphill task of achieving a pan-India brand recall, followed by pan-India distribution. Prabhtej Singh, founder of Simba, now a popular craft beer brand, says it took the brand four years to be recognised all over India. The beer is yet to be available in several states.
Founders backed by heavy investments can hope to scale up operations and reach crucial markets like Maharashtra, Karnataka and Delhi, or they run the risk of becoming restricted to Goa, which is more welcoming towards liquor companies. Rahasya hopes to be available across Karnataka, Chhattisgarh and Maharashtra by the end of 2021. Industry analysts say a brand that is strapped for funds could take as long as 10 years to achieve scale in this market.
The other challenge is the scale of manufacturing of these brands. While having small batches lets them experiment and keep a lean team, it becomes harder to compete against well-established brands which command more shelf space. A small batch distillery could produce about 2,000-3,000 litres of a spirit per day. In comparison, spirit moguls like Diageo or Pernod Ricard could manufacture as much as 20,000-30,000 litres daily.
Brands also need to be cognisant of the biggies entering their turf. “It is after Bira 91 and Simba established the craft beer category in India that United Breweries’ Kingfisher launched its own variation called Kingfisher Ultra Witbier in December 2019,” Singh points out.