In an interview with CNBC TV18, Madhu Kela pointed out that India is the world’s third-largest alco-bev market by volume, trailing only China and the United States. He explained that the market is projected to grow from ₹1,70,000 crore in FY15 to ₹5,00,000 crore by FY28. However, per capita consumption, particularly of beer, remains significantly lower than global standards, suggesting vast room for expansion.
India’s alcoholic beverage (alco-bev) industry is on the cusp of transformation, driven by policy reforms, premiumisation, and an untapped consumer base, he opined.
Madhu Kela explained that China’s Kweichow Moutai’s current profitability of $12.5 billion which dwarfs the combined profitability of Indian alco-bev companies, which stands at a mere $0.5 billion.
Madhu Kela says the alco-bev market could be the next big billion-dollar opportunity. The market is projected to grow from ₹1.7 Lakh Cr in FY15 to ₹5 Lakh Cr by FY28. China's biggest Co has $12.5 Bn profit while the combined profitability of Indian alco-bev cos is mere $0.5 Bn pic.twitter.com/6WmX26gAO4
— RJ Stocks (@RakJhun) November 30, 2024
He pointed out that this disparity underscores the immense growth potential within the Indian market. Interestingly, Moutai started at a similar profitability level 15 years ago before growing exponentially, indicating the transformative potential of the alco-bev industry when adequately leveraged.
It is worth noting that India is the world’s third-largest alco-bev market by volume, trailing only China and the United States. The market is projected to grow from ₹1,70,000 crore in FY15 to ₹5,00,000 crore by FY28. However, the per capita consumption, particularly of beer, remains significantly lower than global standards, suggesting vast room for expansion.
Kela emphasized that structural and policy changes at the state level support this growth trajectory. For instance, Uttar Pradesh’s 2018 liquor policy disrupted monopolistic distribution practices, spurring sales for organised players and boosting state excise revenues. Similarly, Andhra Pradesh’s focus on providing quality alcohol at reasonable prices sets benchmarks for other states, signalling a shift toward a more organised and growth-friendly framework.
He also pointed out that a key driver of growth in the Indian alco-bev industry is premiumisation—the shift towards higher-quality and higher-priced alcohol. Companies like United Spirits and Radico Khaitan have significantly increased the share of premium products in their portfolios. Additionally, Indian single malts are gaining popularity, surpassing imported single malts in consumer preference. This shift reflects the evolving tastes of Indian consumers and the growing demand for quality over quantity.
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