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2024 in Retrospect: How Alcobev Players Defied the Odds and Broke New Grounds

The alcobev sector flourished in 2024, balancing growth with challenges. Premiumisation, innovation, and sustainability stood out as key drivers of success and future opportunities.

India’s alcobev industry has grown to become one of the fastest-developing sectors in the country, showcasing its transformation from tradition to modernity. Over the past few decades, this sector has emerged as a dynamic force, fuelled by changing consumer preferences, increased disposable incomes, and a rising affinity for premium and artisanal beverages.

Per capita alcohol consumption in India has risen significantly, growing from 1.3 litres in 2005 to approximately 3.1 litres in 2022, reflecting the country’s evolving consumer base and expanding market. In 2024, the alcobev sector reached a valuation of $55 billion, driven by a compound annual growth rate (CAGR) of more than 6%. Analysts project that by 2025, the sector will see further growth, with an expected CAGR of 8-10%.

This growth trajectory has been supported by increased urbanisation, a young population eager to explore global trends, and a shift toward mindful indulgence. However, the industry faced its share of challenges, including escalating production costs, supply chain inefficiencies, and regulatory complexities. To better understand the highs and lows of 2024, key industry players provided their perspectives on consumer trends, innovations, and the future outlook.

Consumer Preferences Shape the Market

The year was largely defined by the shift in consumer preferences, with buyers driving the industry toward greater innovation and authenticity. Modern consumers demand products that resonate with their values and provide unique experiences, prompting brands to innovate across production, marketing, and packaging.

Vikram Damodaran, Chief Innovation Officer at Diageo India, attributed much of the year’s success to this change. “Today’s consumers are looking for more than just a drink; they seek experiences rooted in quality, authenticity, and sustainability. We have embraced this change by leveraging our heritage, incorporating locally sourced ingredients, and celebrating artisanal techniques. This approach has not only strengthened our connection with audiences, but has also earned us over 70 national and international awards,” he explained.

**Tarun Bhargava, Proost’s Co-Founder and CEO**

Proost’s Co-Founder and CEO, Tarun Bhargava, shared how their brand remained focussed on balancing quality with environmental responsibility. “While trends like IPAs and craft beers dominated the market, we stayed true to our core identity, producing beer with consistently unique flavours. Consumers appreciate our mature, well-crafted beers free of off-notes. Also, we’ve adopted practices such as reusable packaging to align with the expectations of eco-conscious buyers,” he said.

**Shekhar Swarup, Joint Managing Director at Globus Spirits L**td.

Shekhar Swarup, Joint Managing Director at Globus Spirits Limited, stressed that sustainability and authenticity extend beyond production. “We’ve implemented advanced water management systems and effluent treatment technologies to significantly reduce our environmental impact. Each bottle tells a story of authenticity, showcasing top-quality ingredients, time-honoured distillation methods, and artisanal techniques. This ensures that sustainability and authenticity are central to both our products and operations,” Swarup shared.

Premiumisation Gains Momentum

The move toward premium offerings was another defining trend of 2024, with younger consumers showing an increased preference for high-quality, craft, and luxury beverages. This trend highlights a growing demand for exclusivity, innovation, and elevated drinking experiences.

Rupi Chinoy, Director of South Seas Distilleries, spoke about the success of their Crazy Cock Single Malt. “Crazy Cock is a journey. The name reflects the founder’s bold vision, resilience, and passion for creating something extraordinary. Our mascot, the cock, symbolises a new dawn for South Seas Distilleries and the Indian single malt category. This spirit represents decades of dedication and meticulous craftsmanship,” Chinoy explained.

Adding to their accomplishments, Rupi highlighted the launch of Six Brothers Mahura (Mahua), a unique spirit firmly rooted in Indian heritage. “Our Six Brothers Mahura, crafted from 100% Mahura flowers native exclusively to India, revives a legacy long overshadowed during colonial times. As the country’s first commercial distillers of Mahura, we see it as our mission to bring this category to global prominence. Mahura has the potential to become India’s ambassador on the international stage, standing shoulder to shoulder with spirits like Tequila from Mexico and Cognac from France,” she shared.

What distinguishes Six Brothers Mahura is its unparalleled authenticity. “This is a spirit no other country can replicate. Distilled in the same copper pot stills as Crazy Cock Single Malt and platinum-filtered for an exceptionally smooth finish, Mahura is versatile…ideal for sipping neat, on ice, or as a cocktail base. Its reception in the bar scene has been phenomenal, with establishments like Bandra Born hosting the world’s first dedicated Mahura bar, exclusively serving Six Brothers cocktails that have quickly become a sensation,” Chinoy elaborated.

Globus Spirits took advantage of the premiumisation wave by introducing DŌAAB India Craft Whisky. The first edition, Six Blind Men and the Elephant, was designed to appeal to discerning drinkers who value creativity and tradition. This product showcased the growing appetite for unique offerings that bridge the gap between heritage and modernity.

**Kimberly Pereira, Chief Operating Officer of Maya Pistola Agavepura**

The agave-based spirits segment also gained traction in 2024, with many referring to it as the “Year of Agave”. Kimberly Pereira, Chief Operating Officer of Maya Pistola Agavepura, highlighted the category’s growth. “Agavepura is a 100% pure agave spirit that stands apart from tequila and mezcal. It reflects our homegrown roots while appealing to the global palate. As cocktail culture evolves and celebrity endorsements grow, agave-based menus are becoming more prominent in bars across India. We are proud to lead this movement, fostering greater appreciation for authentic, well-distilled agave spirits,” Pereira said.

**Leti Blagoeva, Co-Founder SLAB Ventures**

SLAB Ventures tapped into the premium spirits market with a lineup that has garnered global recognition. Co-Founder Leti Blagoeva detailed their offerings, saying, “Our Single Estate Vodka is made in Poland, the birthplace of vodka, exclusively from winter wheat and filtered through rare black pearls, ensuring unparalleled smoothness. Meanwhile, our whiskies, INCEPTION and VORTEX, are crafted in Scotland and have received gold medals at several prestigious international competitions. D’YAVOL INCEPTION was even named the ‘Best Overall Scotch’ at the New York World Spirits Competition.

“Looking ahead, we are excited about expanding our range of spirits. In 2025, we plan to launch an Anejo Tequila crafted in Jalisco, Mexico, in keeping with our commitment to authenticity. Moreover, we are broadening our global reach; D’YAVOL will soon be available in the UK and the US. For us, it’s still the beginning, and there’s much more to come from the brand in the coming years,” Blagoeva commented.

The Experiential Turn

The year 2024 also marked the rise of experiential marketing, as brands sought to create deeper connections with consumers by offering immersive experiences. These efforts went beyond traditional marketing, emphasising storytelling, creativity, and meaningful engagement.

Swarup enlightened how Globus Spirits leveraged this trend. “With Six Blind Men and the Elephant, we offered an experiential journey. This limited-edition release allowed us to involve with consumers who value exclusivity and creativity, encouraging a stronger bond with our audience,” he said.

Similarly, SLAB Ventures leaned into experiential marketing through its D’YAVOL AfterDark platform. Blagoeva described the initiative, saying, “Consumers today look for more than good products; they want to engage with the brand’s story. D’YAVOL AfterDark combines exclusive artists, signature cocktails, and a vibrant nightlife atmosphere. This initiative has reverberated not only in India, but also in international markets like the UAE and Australia.”

Varun Jain, Founder and CEO of Smoke Lab, explained how their premium events brought the essence of Smoke Lab Vodka to life. “We curated a series of events that embodied our brand ethos, from art-infused cocktail evenings to sensory experiences like Smoke Lab Nights, where guests explored our vodka variants paired with music, visuals, and gourmet cuisine. Collaborations with leading mixologists, chefs, and lifestyle brands helped us to deliver unique experiences,” he stated.

He also highlighted partnerships with sustainable fashion and design brands to reflect Smoke Lab Vodka’s commitment to modern luxury and environmental responsibility. “To enhance exclusivity, we introduced limited-edition bottles featuring bespoke packaging inspired by contemporary art and design. These bottles were accompanied by curated tasting notes and recipes, encouraging consumers to celebrate with elegance and creativity,” Jain added.

Vikram Achanta, Founder & CEO of Tulleeho and Co-Founder of 30BestBarsIndia and India Bartender Week, shared his perspective on the growing importance of experiential drinking. “Experiential events have become a central aspect of consumer engagement, offering meaningful opportunities to connect with the beverage community. This year, Tulleeho participated in marquee events like ProWine, Bar Convent Berlin (BCB), and exclusive masterclasses highlighting Sake, among others,” he noted.

Achanta also underlined the growing popularity of travel-inspired events, with consumers seeking pop-ups and bar takeovers by world-renowned establishments. “The recent takeover by Handshake Speakeasy, crowned the world’s #1 bar in 2024, in Jaipur is a prime example. We anticipate immersive drinking experiences gaining even more momentum in 2025. To prepare for this, we are exploring new opportunities, including events with Tulleeho Tequila Club,” he added.

Challenges and Adaptation

Despite the successes, the alcobev industry faced significant hurdles. Mounting raw material costs, supply chain disruptions, and regulatory changes created obstacles that required companies to remain agile and innovative.

Bhargava outlined these challenges, saying, “We faced price pressures due to intensifying costs, logistical delays in obtaining permits, and changing excise policies. Adapting to these circumstances demanded a proactive approach and collaboration across teams to ensure smooth operations.”

Adding his perspective, Amit Dahanukar, Chairman and Managing Director of Tilaknagar Industries Ltd., reflected on the complexities of managing these challenges while launching a new premium offering. “As leaders in the brandy category, we recognised the need to elevate its perception. This led to the launch of Monarch Legacy Edition, our first luxury brandy, in November 2024, aimed at redefining the category and spotlighting the depth and complexity of brandy. However, navigating volatile commodity prices, particularly ENA and packaging materials, was a major obstacle. We overcame this by strengthening our asset-light model, ensuring robust cash flows, and focussing on premiumisation to improve margins. Agility and staying attuned to consumer needs allowed us to turn challenges into opportunities,” he mentioned.

Nevertheless, the industry’s resilience shone through as brands implemented strategic solutions to navigate these difficulties. Investments in technology and sustainable practices helped mitigate challenges, ensuring continued growth.

Urban and Rural Synergies

As the alcobev sector looks ahead, balancing urban sophistication with rural potential has become a critical focus. While metropolitan regions continue to demand premium products, rural areas present untouched opportunities for growth through tailored offerings and localised strategies.

Bhargava described Proost’s approach to addressing this divide. “In cities like Delhi and Gurgaon, we are concentrating on launching lagers that cater to refined tastes. For rural markets, the weight is on deeper penetration and affordable products that resonate with local preferences,” he shared.

Simba Beer and ZigZag Vodka, co-founded by Ishwaraj Singh Bhatia, are also pursuing a dual-market strategy. “Rural and urban audiences require distinct approaches. By combining innovation with eco-conscious practices, we’re catering to the needs of both markets effectively. Plans are underway to introduce new flavours and experiences that further immerse consumers in our vibrant world,” Bhatia noted.

Future Outlook

Looking ahead to 2025, the alcobev industry is poised for further growth, with estimates suggesting a valuation of $60 billion and annual sales exceeding 1.2 billion cases. The focus on innovation, sustainability, and health-conscious options is expected to drive this expansion.

Jain shared his company’s plans for the upcoming year. “We are introducing vodka flavours inspired by regional and global culinary influences, launching limited-edition artisanal vodkas aimed at connoisseurs who value exclusivity, and enhancing our presence in emerging markets like Europe, Australia, Asia, and Latin America. We will also strengthen our reach in established regions such as the U.S. and the Middle East by forming partnerships with premium distributors,” he said.

**Ishwaraj Singh Bhatia, Co-founder and COO, Simba Beer and ZigZag Vodka.**

Bhatia accentuated the importance of aligning with evolving trends. “We foresee 2025 as a year of experiential consumption, eco-friendly practices, and personalised premium offerings. At ZigZag, we will focus on creating immersive brand experiences, implementing sustainable methods, and collaborating with mixologists to craft innovative, trend-driven products that resonate with today’s consumers,” he conveyed.

Damodaran pointed to two critical trends expected to shape the future of the alcobev industry. “Affluent consumers are seeking bespoke, exclusive experiences, while younger demographics are driving the demand for low- and no-alcohol options,” he observed.

Damodaran also talked about plans for Indian craft spirits. “We are closing 2024 on a high note with Godawan’s entry into the UK market. In 2025, we aim to build on this momentum through The Good Craft Co.,” he added.

Tilaknagar Industries Ltd. has ambitious goals for the year, particularly in the brandy segment. “In 2025, our aim is to increase brandy’s ‘share of voice’ in the market,” stated Dahanukar. “Following the launch of our luxury brandy and whisky portfolio, we plan to drive further marketing investments. Monarch, in particular, has already seen strong pre-order interest from export markets in Asia and the Middle East, and we intend to deepen our reach in southern India. Alongside this, we are preparing to expand our portfolio across both local and international markets,” he informed.

As the industry evolves, driving change and nurturing creativity will remain essential for long-term success.

Alcobev Sector Soft Target, Governments Keep Hiking Taxes Arbitrarily

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Telangana government’s delay in settling dues, liquor industry in dire straits
Cash-strapped Congress government mulling increase in liquor prices
Third tax hike in the last five years

With the exception of States which have prohibition, all other States, if they need to shore up their revenues, first target alcobev sector. State government after state government have increased excise duties, license fees etc without batting an eyelid and in most cases without taking the industry into confidence. The alcobev sector is the milch cow.

The latest news is that the cash-strapped Congress-led Telangana government is looking at the liquor industry to come to its rescue. Telangana’s alcobev sector, which is a major revenue earner for the state, is now faced with two major issues – government’s inability to clear outstanding dues of over Rs. 4,700 crore and its impending decision to increase taxes on liquor – both of which adversely impacting the sector.

To give a perspective, the Telangana government is depending on Overdrafts, Ways and Means Advances and Special Drawing Facility (SDF) from the Reserve Bank of India to meet its expenditure. The Congress government which came to power in December 2023 in Telangana has so far raised Rs. 12,358.48 crores through these routes.

In many states, excise is a major revenue generator and in Telangana revenue from liquor sale doubled from Rs. 12,703 crores in 2015-16 to Rs. 31,225 crores in 2021-22. For 2022-23, the state government had projected a revenue of around Rs. 37,500 crores from liquor. In 2023, the Telangana Excise Department managed to collect Rs. 2,639 crores without selling a single bottle of liquor, the money coming from nearly 1.32 lakh applications charging Rs. 2 lakh non-refundable application fee for the allotment of 2,620 liquor shops.

Fiscal deficit up

Despite the increase in revenues, the government has not been able to reduce the fiscal deficit as the Congress government has announced quite a few freebies that is costing the exchequer. To shore up revenues, the Congress government is planning to increase tax on liquor which in turn will push up the prices. The proposal made recently is expected to come into effect soon. The previous Bharat Rashtra Samiti (BRS) government in its term had hiked the liquor prices twice and now the Revanth Reddy government is contemplating, in five years that would be the third tax hike.

An industry veteran told Ambrosia “Nobody likes a tax increase. As liquor is a discretionary product, people slip down the value chain or they resort to alternate sources of supply, so both of which have implications to both the state government and the suppliers. In that respect, it is not the best of moves. This kind of thing is happening in other states, given that they have made electoral promises and have to fund that and alcobev is the soft target.”

The veteran who has held top posts in various companies said “As of now, we don’t know what levels the tax is going to be increased. Somewhere, there is a mention of license fee going up, we don’t know whether it is tax on consumer or manufacturers/suppliers or both we don’t know yet.”

The CEO of the International Spirits & Wines Association of India (ISWAI), Nita Kapoor in an interview with ET Hospitality has called for urgent attention to the critical issue of high state excise duties that account nearly 70- 80 percent of consumer MRP, inflationary pressures adding significant pressures on the industry. As inflation rates rise in the country, the alco-bev sector faces significant challenges due to escalating costs of production, transportation, raw materials, and exorbitant import duties. This combination poses a dire threat to the industry’s sustainability.

Ms. Kapoor said, “The liquor industry has consistently and significantly contributed by generating 25-40 percent of revenues for state governments and nearly 2 percent of nominal GDP. However, the current tax and tariff structure, characterised by high excise duties, limited supplier price flexibility, and exorbitant import duties of 150 percent (50 percent BCD + 100 percent AIDC), is pushing the industry toward a crisis. Regulators must recognise the necessity of inflation-linked adjustments in supplier prices as the Alcobev industry is a cornerstone of economic activity.”

Beer suppliers due Rs. 1,200 cr

On the one hand hike in liquor prices and on the other the government not releasing outstanding dues, both are hitting the industry hard. Beer suppliers, it is estimated, are to get nearly Rs. 1,200 crores, pending since October 2023. The alcobev sector has urged the government to resolve the issue as some of them were finding it difficult to go ahead with production.

The Director General of the Brewers Association of India, Vinod Giri said, “In absence of immediate resolution of this problem, I fear some companies may be forced to opt out of the state.” Of the Rs. 1,200 crores due to beer suppliers by Telangana State Beverage Corporation (TSBCL), around Rs. 900 crore is beyond tender credit terms of 45 days, he said, adding some of it is even 120 days overdue. “Payments are being released but amounts are too small and don’t even cover new outstandings, leave aside past ones.”

The alcobev companies in a statement said, “Delayed payments is creating a stressful cash flow situation for the manufacturing companies, hindering their ability to invest in operations, buy raw materials, pay employees and continue supplies to the consumers. Despite repeated attempts by industry leaders to meet key ministers in the state, the issue remains unresolved. This lack of communication and action is causing frustration and uncertainty amongst manufacturing companies in the state.”

It said that this might force companies to curtail supplies to Telangana. Unless the government does something soon, some companies may be forced to cut costs, including job retrenchment. This situation, the alcobev sector said would further dent industry confidence and dampen investor sentiment in Telangana.

As regards the delay on the part of the government on outstanding dues, the industry veteran mentioned that “All suppliers put together beer, spirits and wine, as of May 31^st the outstanding was over Rs. 4,700 crore. That itself is an additional cost the supplier is bearing and if consumers resort to alternate sources, it is not good for the suppliers. The suppliers have held on for quite some time, the question is for how long can they hold on.”

Telangana major liquor consumption state

Liquor consumption in Telangana is high as the state guzzles over 6 crore cases of beer or 15% of 40 crore cases sold across the country per annum. As regards Indian Made Foreign Liquor (IMFL), Telangana’s consumption is about 3.4 cases or 9% of 39 crore cases sold.

The non-payment of dues and the constant hike in liquor prices had left some in the trade to sell liquor above the maximum retail price (MRP) to make up for the losses. Besides, some licensed vendors were reported to have opened bars in the guise of permit rooms. The Bar Owners Association complained to the Excise Department against the wine shops which were allowing consumers to drink on the premises. The Association argued that they were already burdened by the excise rules of the government and adding to the woes were the so called ‘permit rooms’. In the process, the government was also losing revenue. The bar owners, on the other hand, complained that bars with retail outlets on the premises was affecting their business.

Despite woes, AP traders planning to move to Telangana

Whatever the issues, the consumer in Telangana continues to patronise the alcobev sector and this has enthused some liquor manufacturers to move or add liquor businesses from Andhra Pradesh to Telangana. According to reports, some of the liquor dealers in Andhra Pradesh were selling unknown brands at exorbitant prices through the state-run AP Beverages Corporation Limited (APBCL). Brands such as President’s Medal, Capital, Timer, Boom Boom, Classic Blue, Old Admiral, Royal Green and Sentinel were out in the market, particularly rural, in large numbers.

There have been allegations that out of 100 liquor companies, the APBCL procured 75% of its liquor from only 15-16 manufacturers like SPY Agro, Adan Distilleries, PMK Distilleries, etc., which are controlled by the erstwhile ruling party leaders of YSRCP. It now remains to be seen how the Telegu Desam Party which has come to power in Andhra Pradesh will take a call. However, the Telangana market being a lucrative one, the AP businesses are looking at Telangana.

Meanwhile, in Telangana there are charges and counter charges from the ruling dispensation and the BRS. In an open letter to the Telangana Chief Minister, A.Revanth Reddy, the BRS leader M.Krishank urged the Chief Minister not to introduce adulterated liquor in Telangana. Krishank said that on May 21, minister Jupally Krishna Rao stated that no proposals had been made to allow new liquor companies to operate in Telangana State. He warned that if anyone reported such news, a defamation suit of Rs 100 crore would be filed against them. However, on May 27, the BRS party exposed minister Jupally Krishna Rao’s falsehood, revealing that the government had indeed granted permissions to a company named Som Distilleries, pointed out Krishank. The Minister acknowledged stating that the decision was taken by the Beverages Corporation. It is now reported that the government has decided to cancel the permission given to Som Distilleries to sell its liquor in Telangana.

The liquor industry not just in Telangana is looking for stability in policy making but also to ensure that the government takes care of the liquor industry which is a revenue-spinner.