Indian Liquor Market

India is the 3rd largest liquor market in the world.

One of the fastest growing markets in the world, on the back of demographics & economy.

Strong MNC presence with Diageo, Beam Global, Pernod Ricard, Heineken, SAB Miller, Carlsberg and more.

There are 3 broad categories – IMFL (Indian Manufactured Foreign Liquor which includes whiskey, rum, brandy, vodka & gin), Beer and Country Liquor (cheaper, spiced liquor).

The overall retail market size of liquor is $35

billion per annum.

Overall growth of the market is 8% per annum, mainly driven by IMFL and beer.

Country liquor is a slow growth market. Beer has been consistently growing at over 15% per annum over the last few years.

Indian Liquor Market

IMIL industry has been growing at more than 10 per cent CAGR since 2010 while the IMFL industry has grown by 6 per cent CAGR with flat growth in the last two years

Liquor consumption in India

• Indian choice of liquor influenced by colonial past• Whisky and brandy introduced by British

colonized India• Rum, favourite of naval merchant ships

between India & West indies

• While India has its own traditional alcoholic drinks, the general population now regards them as primitive and reserved only for the poorest of the rural population.

• While the majority of the whiskey consumed in India is domestically produced, the branding remains distinctly Western

• Indian whiskey is representative of the status of the new Indian middle class and their disposable wealth, foreign liquor brands are a symbol for the elite.

• IMFL - 42.8% alcohol content

• IMIL – 30-36% alcohol content

• Still consumers feel that country liquor(Indian made Indian Liquor) gives instant kick and has higher alcohol content

• Southern India has totally banned country liquor

Consumption pattern

Coconut production in India

India stands first in productivity & production and third in area under coconut

Contributes more than Rs 8000 crores annually to GDP

Foreign exchange of more than Rs 2000 crore by export of coconut products.

Kerala has largest area(8.2 lakh HA under coconut tree cultivation in India.

Also No 1 in production

Source: http://www.newindianexpress.com/states/andhra_pradesh/World-Coconut-Day-Celebrations-Today/2015/09/02/article3005688.ece

Kerala Toddy Kerala – India’s highest per-capita consumption of toddy, wine, hard liquor and other

varieties of booze

The wine got from the coconut palm in Kerala is more popularly known as kallu, palm toddy or simply toddy.

Not only a popular drink in Kerala but also across the globe including Asia and Africa known by different names like emu and oguro in Nigeria; nsamba in the Democratic Republic of the Congo; nsafufuo in Ghana; kallu in South India; matango in Cameroon; tuak in North Sumatra, Indonesia; mnazi in Mijikenda, Kenya; goribon (Rungus) in Sabah, Borneo; and tuba in the Philippines, Borneo and Mexico.

Kerala toddy is also referred by the foreigners as coconut vodka.

Coconut tree used for getting toddy more economically worth than value of timber

Alcoholic content in toddy is about 8.1%

Many consider toddy a healthy drink; Even preferred by women in central Kerala.

“I have been drinking fresh toddy for the past three decades from the coconut or palm trees in my home. This is no taboo at all and in fact it's a real refreshing drink," said a 65-year-old housewife in Kottayam.

50,000 workers employed under the labor department with the welfare board;Kerala Samsthana Chethu Thozhilali Union

The state has 5,200 shops that sell toddy 

Kerala Toddy – Income and Revenue ModelFor coconut tree owners An annual amount paid by tapper by

negotiation or daily toddy quantity based

Different price for tree farmers in different parts of Kerala

Rs 150-350 per month for a high yielding tree

Rs 20-30 per litre if the final price to drinkers is fixed at Rs 100 per litre

For tappers Excise Department claims Kerala produces

around 8.35 lakh litres of toddy a day and consumes 7.21 lakh litres

Toddy is worth Rs. 1.20 crore a day given the average price of Rs. 60 a litre.

Source: http://www.thehindu.com/news/cities/Kochi/in-toddy-numbers-dont-match/article4928785.ece

ChallengesLack of toddy tappers The younger generation is not interested in learning

the art of extracting toddy, nor do they climb coconut

trees to pluck

Hygiene factorNot so clean toddy shop

(“Kallu shaap”)

Serious question over quality

Past death tragedies caused due to adulterated toddy

Drinkers migrating to other alcoholic beverages

Pungent smellThe number of toddy shops

in the state have shrunk from 4850 in 2010-11 to

4122 in 2013-14. 

The taboo of low cost local drink

Changing the concept of lower class people’s

drink

Beverage 2000-2001 (Revenue in Crore Rs)

2009-2010 (Revenue in Crore Rs)

Toddy 140Beer 28.93 85.19IMFL 72.19 188.03Source: http://www.ibnlive.com/news/india/sluggish-sale-at-toddy-shops-in-kerala-510238.html

Kerala Liquor Ban – An opportunity for Toddy state promoting low alcoholic drinks instead of hard drinks. 

initial trends show that sales of beer have increased slightly and that of IMFL (Indian Made Foreign Liquor) have dropped 

Reviving Toddy initiatives A Toddy Board, with a share capital of Rs.1 crore, is

being constituted by the State government as part of a move to revive the sinking toddy sector of the State. – June 2015

Reviving coconut sector through Neera

Toddy is tapped from the coconut bunches and collected in a mud pot. Due to the sediments in the pot, juice collected in four hours time gets fermented and turns into toddy, which has an alcohol content of 5 to 8 per cent.

A sap extracted from inflorescence of palm/coconut trees before sunrise it is known as neera. And, the same liquid if tapped in the noon it is called as kallu(toddy).

Neera – wine got from coconut prevented from fermenting

While Neera, a coconut water-based soft drink, is a non-alcoholic, mineral rich and nutritious health drink. In the past, this was one of the most popular traditional industry in the state, with an employment of more than a lakh.

Rising demand for Neera in cities and towns

Case Study #1 Neera Neera is the sweet, white-colored sap tapped from the coconut

tree. Health drink, rich in sugars, minerals and vitamins. Low glycemic index (GI is 35), an indicator of the extent of

sugar absorbed into the blood. Abundant source of minerals, 17 amino acids, Vitamin C etc raw material for many value-added products such as palm

syrup, palm jaggery and palm sugar which have high domestic and international demand owing to their high nutritional values.

A coconut palm yields on average two liters of neera daily, which may go even up to 4.5 to 5 liters based on the health of the tree.

Neera is an unfermented drink which does not contain alcohol. But on fermentation, neera becomes toddy.Ph Value  3.9 - 4.7

Sugar 14.4Citric Acid 0.60Alcohol 0Iron in mg 0.15Phosphorus 7.59Ascorbic Acid 16.30Protein 0.23 - 0.32

Case Study #2 Goan Feni Distilled directly from fresh juice without blending of spirits

In 2009, feni became the first and only Indian beverage to have obtain the GI (Geographical Indicator) status

It has gone from being predominantly the liquor of choice for the lower classes to a famous drink that tourists are keen to try out.

Similar to that of Scotch Whisky (originated in Scotland)

Feni is generally sold unbranded to retailers and consumers, but some brands have emerged owing to private concern. Around three-fourths of the distillers sell their produce to bars directly, and bottlers direct their sales through whole sellers.

Feni-making industry used to be largely unorganized, scattered, and family-owned.

IMFL (Indian-made Foreign Liquor) crowding out feni owing to its superior, more organized market structure and widespread marketing.

Case Study #3 Amrut• Amrut Distilleries was set up in 1948 ; first Indian single malt

brand in 2004• Cracking luxury market

• In Glasgow's famous Pot Still whisky pub, Amrut was given to a group of connoisseurs, without telling them where it was from. Each person named a different region of Scotland as the likely place of origin, but they were unanimous in their appreciation.

• Amrut has ten variants in its single malt portfolio and it sells in 22 countries across the world

• Target segment - luxury whisky market in Europe

Amrut speciality :• Unlike other Indian whiskies that used

molasses, Amrut was using barley. • Bangalore’s climate is much warmer

than frigid Scotland, which meant a higher rate of evaporation

• But because the maturation was accelerated it meant that one year of maturing in India would be equal to three in Scotland

Brand building activities• consumer tastings in the form of

prominent whisky exhibitions and tutored tastings across the world and endorsements -

• Amrut Fusion Single Malt, ranked by prominent whisky expert Jim Murray in the 2010 edition of the Whisky Bible.

• Whisky Advocate magazine has awarded back-to-back World Whisky Awards to Amrut Fusion and Amrut Two Continents.

Product Concept | Product & Competitive FrameworkProduct#1 Kallu (Light Alcohol Serving)

• Alcohol content ~8%• Served in long cylindrical bottles – White liquid• Competing against Beers(Indian & Foreign)• Served in All Hotel/Motel chains, House boats and shacks

around tourist spots – Kerala and primarily south India during introductory phase

• Promoted along with Kerala Cuisine • SKU – Bottle – 650 & 330 mL, Can – 500 mL

Product#2 Viridio (Strong Alcohol Serving)

• Alcohol content ~42.8%(Industrial Standard)• Served in wide bottomed bottles – Green liquid• Competing against IMFL(Whiskey)• Served across all premium beverage outlets, clubs and

bars across the country• Premium packaging• SKU – 750 mL glass case

Product Concept | Target AudienceProduct#1 Kallu (Light Alcohol Serving)

• Legal Drinking Population with emphasis on 22-40 segment

• People curious/interested in Traditional Kallu, but disinterested in travelling to a traditional shack (toddy shop) to try the same

• Tourists/Travellers coming to Kerala

Product#2 Viridio (Strong Alcohol Serving)

• Legal Drinking Population with emphasis on 30+ segment• Achievers Club/Social societies and Corporate events• Club membership /Social drinking occasions• Gift for old memories/nostalgia

Product Concept | PositioningProduct#1 Kallu (Light Alcohol Serving)

• Premium beverage alternative for beer• Healthy and strong; tastes better• Connect with nature: beaches & backwaters - Coconut• Social drinking icon: youthful and stylish• Family acceptance-”drink to be shared with your family”

Product#2 Viridio (Strong Alcohol Serving)

• Status symbol and epitome of power• Strong serving for the elite• Macho image of the tough guy

Product Concept | Price & PlaceProduct#1 Kallu (Light Alcohol Serving) Product#2 Viridio (Strong Alcohol Serving)

SKU Price Available in

650 Ml. 200 Bars,Beverage Outlets, Clubs, Shacks, Pubs

330 Ml. 120

500 Ml. 175 Modern Retail/Speciality Chains

SKU Price Available in

750 Ml. 2500 Premium Bars, Clubs, Resorts etc.

Masters Choice(Pack of three blends)

6500

Product Concept | Promotion Strategy | Kallu

Phase 2 : Building relevance

Phase 3 : Awareness & Loyalty

Phase 1 : Building a base

• Drive relevance through product ads in select lifestyle channels and strategic placements in movies and serials

• Billboards at select strategic locations with maximum exposure to TG

• Social Media campaigns with hashtags and videos involving youth

• Relevant PR activities and sponsorship programmes-cultural nights and parties

• Music dance food event ‘Kult-night’ in Beaches, New-year eve sponsorship

• Tie-up with restaurants to launch “Come-Quick-Drink-Eat” campaign-engage the TG to use product

• Treasure hunt in Kerala, where clues are in blogs, twitter and fb page of company

• Tie up with Kerala tourism in order to get reach through tourist spot hotels and resorts throughout Kerala

• Hotel/Hospitality chains collaboration for exclusive usage

• Vending machines for Cans in select malls

• Welcome drink for foreigners

• Youth focussed posters and magazine ads.

Product Concept | Promotion Strategy | Viridio

Phase 2 : Building relevance

Phase 3 : Awareness & Loyalty

Phase 1 : Building a base

• Business and corporate exclusive partnerships

• Social Media campaigns

• Foreign market entry by collaborating with Airline partners and hospitality chains

• Hall of Fame Award Series

• Sponsoring big events

• CSR activities to build brand reputation and goodwill

• Music show in TV & Youtube – Nirvana•a combination of coke studio & Dewarists•Promoting Indian Music: Indian folk, Classical Indian

• Association with select premium resorts, clubs and 5 star hotels across India

• Advertisements in select lifestyle magazines

• Campaign involving a senior celebrity explaining his journey to success

• Sponsorship of Shows involving interactions with successful personalities

Product Concept | Promotion Strategy |

Future Impact

Social Impact: • Employment Opportunities to receding sector of

coconut planters, toddy tappers• 1% Coconut plantation Kerala create 1 Lakh

job opportunities

• Woman Empowerment: Job opportunities in distilleries (exploiting traditional expertise)

Economic Impact: • Employment Opportunities to receding sector of coconut

planters, toddy tappers• 1% Coconut plantation Kerala create 1 Lakh job

opportunities

• Positive impact on Kerala tourism: with current ban on liquor, Kallu can be the next best choice for tourists

Cultural Impact: • Authentic alcohol drink of Kerala gets a national and

thereafter international exposure

• Rising image of Toddy, Indian made• • Positive impact on Indian food: being served along, gives

‘The Indian Feel’

References• http://

www.newindianexpress.com/states/andhra_pradesh/World-Coconut-Day-Celebrations-Today/2015/09/02/article3005688.ece

• http://www.amrutdistilleries.com/validated/pages/aismw.html• http://www.coconutboard.nic.in/• ccs.in/internship_papers/2012/261_feni-industry_raunaq-sahu.pdf• http://www.futuremarketinsights.com/reports/indian-alcohol-market• http://

www.thehindu.com/news/national/andhra-pradesh/kerala-backs-liquor-ban/article7156166.ece