India is witnessing a gin renaissance, with a variety of good quality brands across a price range now available. This has promoted the gin culture in the country, as consumer opt for artisanal and local gin brands.
Gurpreet Singh, co-founder and director of World of Brands claims there will be an emergence of good quality gin brands going forward. These will bridge the large price gap between the lower priced varietals that have existed for a really long time and are losing preference to the more recently established entry level premium gins.
- What’s India’s annual gin consumption currently? How much is this expected to grow year on year for the coming 3 years?
The industry has been unstable for the past couple of years on account of the pandemic, but this isn’t reflective of the reality. The last ‘normal’ year of 2018-19 and 2019-20 indicates that gin sales was around 1.5 million cases.
This indicates that this beverage can be expected to grow at over 25 percent for the next three years. A lot of this growth is coming at the expense of vodka, which still remains 5-6 times the size of Gin.
- How are you making the most of this interest?
In this area the Great Indian Gin (GiG) has made 3 interesting investments. The first is redefining the entry level pricing for the premium gin segment and therefore making gin more accessible; in effect bringing the price closer to large volume popular vodka brands.
We are also investing in creating popular flavours in a familiar format (colourless liquid with a great flavour and aroma) to attract the vodka consumers who prefer drinking their vodka as a flavoured drink. It is important to note that 50 percent of vodka consumers drink vodka in a flavoured format. We launched Great Indian Nagpur Orange Gin and are on the verge of launching Great Indian Shimla Green Apple Gin.
We are also investing in small packs of 60ml and 180ml, to allow for consumer trials and help the penetration of the brand overall. The lower put down price offers an easier access to trails into the category.
It is important to note that over 20 percent of consumption comes from smaller size packs and yet the premium Indian gin brands had opted to not launch across these small packs.
What’s the percentage of artisanal and local gin brands in the annual gin sales currently?
Since it is a small category, gin’s data is not tracked closely enough to define the slicing of the data by artisanal and premium Indian Gins. It is however estimated that the premium Gins today contribute around 20% of the overall Gin category. Around 2/3rds of this is contributed by the premium Indian Gins which have launched over the last few years.
- For many years, IMFL gin brands in the value segment (Rs 240-900) were popular in India. Why are consumers increasingly willing to swap these for newer brands, even if they are more premium?
Two things have happened over the last few years. On one end a large sized Indian company in the AlcoBev space got bought out by a large international company. They have slowly shifted the focus of their Indian operations to the more premium brands in line with their global strategy.
This reduced their interest in the lower priced segments and brands and their gin brand was a casualty in the process. The consumer was forced to choose between lesser-known local brands vs shifting to other white spirts.
On the other end premium Indian Gin brands were launching in large numbers and consumers found excitement in these new shinny offerings and the premium range of vodka consumers started moving to Gin. In effect vodka ballooned at the lower end of the price segment and Gin boomed at the premium end of the segment. While most companies have not realised this churn, some happened to have brands at the right price in their portfolio and benefitted due to this.
- How can hotels and restaurants make the most of this growing interest and relook at their spirits inventory?
The HORECA (Hotels, Restaurants & Cafes) segment has struggled a lot in the last few years on account of the pandemic. Lost revenue on account of shut downs due to the pandemic was harshest on this channel. However, those that have survived have a lot to gain on the other side of this pandemic. History is witness to periods of high growth following economic slow-downs on account of such pandemics and prolonged periods of depressed economic growth (thought the current situation has gotten a lot more complicated on account of the raging war in Europe which is impacting the world economic recovery).
Nevertheless, in India one is witnessing a far more positive economic outlook, stability in the economy and a general sense of belief that better days are ahead of us. This with the overall changes that India is witnessing in terms of a younger population, a large working class, higher disposable income, migration leading to higher number of single living and nuclear families, improved connectively on account of the digital revolution will compound growth overall and the HORECA segment stands to benefit in a very big way.
On top of this there is an expectation of binge consumption which will lead to higher growth in sectors which people have missed the most over the last few years – travel, entertainment, events, parties and get-togethers with friends and family. All these will positively impact the AlcoBev category.
Consumers are seeking to be excited with new experiences even in their existing outlets which they frequent. The category of Gin is the segment where most of the action is taking place. Outlets have a great opportunity to create excitement with their consumers in the form of a larger range of Gin brands and investing in creating good quality cocktails. Some outlets have interestingly started creating a separate Gin bar or section within their outlets.
Creating differentiation with events with a focus on mixology, flair bartending and masterclasses concepts for their consumers can allow their consumers to not only experience a night with a difference but also get involved in the excitement first hand.
