The Alcohol industry is seeing some major shift in consumer behaviour and drinking patterns, especially among the GenZ. Today people have become more experimental and are ready to spend more. They are now interested in trading their routine drinks for over-the-top premium alcohol drinks. New consumption habits and a surge in the premiumisation of beverage has also played a big role in this change. Financialexpress.com spoke to the Managing Director of Monika Alcobev, Kunal Patel, to know more about the new trends in the industry and what can be expected in the coming years. Excerpts:
“Super-premium” liquor is set to grow by 13% by the year 2024 – What does this mean for the liquor industry from a growth perspective?
The demand for Super-Premium liquor is at an all-time high already – and the wave has just started. Due to the change in consumption patterns of the consumers, the industry is expecting to see many new brands in the country which have been around in the world but not seen in India thus far. Many big brand houses have started looking for super-premium brands and acquiring them. Brown-Forman acquiring Ron Diplomatico Rum is a great example of the same.
The consumer of today is looking for unique drinks, experientials and is willing to spend for the same. The focus is also on ‘responsible drinking’ – it is not just about getting drunk. There is a lot of attention on the makers of the liquor, the ingredients, the history and more.
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Indian consumers are ready to spend more money on premium liquor. We can say in the coming years this trend is only going to drive industry growth.
Is there any shift in the approach of the producers and marketers to meet consumer demands?
This shift towards premium liquor has definitely forced the players in the market to change their approach. They are looking at introducing more premium brands in their offerings, from producers to retailers alike. Foreseeing the trend, Monika Alcobev started working towards this quite some time back. We have introduced over 200 premium alcobev brands in India. We brought in Jose Cuervo tequila to the Indian market – this is one of the oldest and most well-known brands in the world. We introduced Pisco – a drink that had never been in India before we brought it in (not bragging!) and is a huge hit in the market today.
Even in Gins, where India is seeing an explosion in local brands, there are legacy international brands that are eyeing the Indian market. And the Indian consumer wants something more than the ‘same old gin’. There is a lot of experimentation, and there is a race to capture the market. A lot of single-malt drinkers experimented with Gin. And now, they want something more.
And the ‘more’ happens to be tequila. A lot of single malt drinkers have moved to tequila – and tequila is not just about doing shots. Sipping tequila is a new trend. Tequila & Tonic (TNT) is a new trend.
So it is not just about bringing new brands in the market, but these are creating entirely new drinking styles and audiences.
Why is there a growing demand for Gin and Tequila in the Indian market?
Earlier, whatever happened in the west, came to India in the next 10 years. This time has shortened now due to easy access to information through the internet, social media and the increase in the travel and tourism Industry.
Talking specifically about Gin, the trend is flattening now. There was a time when Gin was the ‘new cool’ in the market. Like mentioned above, this was popular with women, single malt lovers and more. And yes, there is an explosion for Gin, especially with a lot of local gin brands starting in India.
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But we think this trend will wane soon. Tequila is the next big thing. As per the Fortune Business Insights report, ‘The global tequila market is expected to grow from $10.43 billion in 2022 to $15.57 billion by 2029, at a CAGR of 5.89% in the forecast period, 2022-2029.’
Tequila is a versatile drink and incredibly delicious. I mentioned some trends like Sipping Tequila and TNT above. Indians are discovering that there is more to tequila than ‘the drink you have in the middle of a drink’. There are realising the flavours and smoothness of reposado, the unique chemistry of the drink.
Tequila, which is made out of blue agave, is unlike anything else in the market. A 100 percent agave tequila is lower in calories, which makes them popular with some health-conscious crowds. And the availability factor – Tequila, the real deal, can be produced only in five regions in the world – also makes it incredibly cool and popular.
What is Premiumization? How is it shaping the Alcobev industry?
Premiumization is about the focus on flavour, the ingredients, the process, the history and the packaging.
Premiumization has a significant impact on the types of items consumers demand. Consumers now are more open to experiencing new styles, categories and more complex liquids. They have moved from regular alcohol and are in search of something new – constantly. Perhaps it was the impact of COVID-19 and the travel restrictions but people crave new experiences today. And tasting alcohol, with all its history, from around the world is a great part of capturing a slice of that culture.
And like I briefly mentioned above, people are more about ‘responsible drinking’ today. They aren’t buying a bottle. They want to buy an experience – be it the Louis XIII or Bushmills Irish Whisky. Or Diplomatic Rum with its decades of history. Or Hayman’s Gin.
These are not just a type of alcohol but they provide the consumer with a premiumized experience of travel and culture through the palette.
What are the emerging trends in Alcobev Industry? What can we expect in 2023?
Tequila is seeing a huge demand in the market. I foresee a lot of innovation coming in this category, for eg. Maestro Dobel patio tequila is the world’s first turkey-infused tequila.
2023 is going to be a super premiumization of tequila. India will see a lot of brands coming in. However, supply is of concern due to the shortage of these premium blends. The real tequila is from some specific regions only, and there are concerns about the shortage of agave.
Other than Tequila, the rise of premium and innovative rums are going to spark in the coming year.
Tell us about Monika Alcobev and the brands the company brought to the Indian market. How is it positioned to cater to the changing trends?
Monika Alcobev, formerly known as Monika Enterprises, started in 2015. We’ve brought in over 200+ spirit and wine labels to India, including many for the first time to the Indian market. For example, Jose Cuervo, Bushmills Irish Whisky, and Diplomatico Rum among other leading global craft brands.
The whole idea behind Monika Alcobev was to introduce categories and brands of wines & Spirits that India had not seen much earlier. Right from Absinthe to Pisco, tequila to port wines. Indians are open to experiences and we wanted to be the ones to bring those unique experiences. Our portfolio offers a diversified selection of alcoholic beverages. Each brand has been handpicked for its history, its uniqueness and with a deep understanding of its appeal to the Indian market.
What are your plans for 2023? What growth trajectory are you looking at?
We have been seeing good growth in the business. Purely in business terms, we have been seeing high double-digit growth in sales volume for the last few years. We hope to increase that number to the triple-digit in 2023.
But more than the numbers, we hope to continue this journey of bringing some really good stuff to India. We want to be the one to introduce the Indian market to the ‘firsts’ – we recently brought in Choya Umeshu from Japan. We introduced a very unique blended whisky – Lucifer’s Gold – a blend of scotch and bourbon (absolutely blasphemous) and we’re bringing in a new Cuban white rum called Viva El Ron. These are all very exclusive and the early response has been very positive.
So we continue to look for those hidden gems and bring them to India.