Liquior Industry of India

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LIQUOR INDUSTRY OF INDIA
(WINE SEGMENT)
[pic]

INDEX
PAGE 1. ACKNOWLEDGEMENT ………………………………… 2 2. DESCRIPTION OF INDIAN LIQUOR INDUSTRY………… 3 3. INDUSTRY STRUCTURE ……………… …………. 5 4. KEY DRIVERS OF LIQUOR INDUSTRY …………… 9 5. PLAYERS IN LIQUOR MARKET ………………… 12 6. DETAILED ANALYSIS

6.1 HISTORY ………………………………………………… 14 6.2 CURRENT SCENARIO ………………………………... 19 6.3 CATEGORIES OF WINE …… ………………………… 22 6.4 PORTERS FIVE FORCES MODEL … ……………… 26 6.5 SWOT ANAYSIS ……………………… ……………… 45 6.6 BCG MATRIX ………………………………………… 48 6.7 VALUE CHAIN ………………………………………… 51 6.8 PESTLE ANAYSIS ……………………………………… 61 6.9 OTHER MAJOR MARKETING STRATEGIES ………… 66 7. ANNEXURES …………… ……………………… 72

DESCRIPTION OF INDIAN LIQUOR INDUSTRY

Alcohol Industry In India

Indian Liquor Industry with estimated market value of INR 340 bn is growing at 12-15% over the last two years. The industry is estimated to have sold 115 mn cases of IMFL last year. The sector is expected to maintain its CAGR of ~15% while the premium segment Wine and Vodka is expected to grow at a higher rate. With consolidation and foreign acquisitions gaining steam the sector is about to witness next phase with realization rising in line with that of their foreign counterparts. There are 325 distilleries in India, with an installed capacity of about 3.58 billion litres of liquor. However, production rate is about 40% of total licensed capacity as total requirement of liquor stands at 1.3 billion liters.

Major National Players

United spirits with about 60 % of market share in IMFL is the undisputed leader. Radico Khaitan who entered the IMFL space some 8 years back has already cornered 12 % market share and gaining. Other players include Mohan Meakin (9%), Jagatjit (8.5%), etc.

International players

The major international players are Pernod Richard, Remy Cointreau, and Diageo (Diageo has tied up with Radico for entering Indian markets in brown spirits)

Investment Rationale

Inherent Potential, Deregulation, western cultural influence and high entry barriers has helped the industry in notching up higher sales growth. Alcohol sale is driven by the high GDP growth and more people entering the drinking club with newly obtained prosperity or from up trading from the existing brand.

Inherent Potential

Since liberalization, the economy has been growing at steady pace with per capita income rising from INR 23,222 in 2005 to INR 6,012 in 1991. Shift from country liquor to IMFL is expected with rising per capita income and limiting the sale of country liquor by states due to hygiene factor.

The alcohol industry is very important for the government. It generates an estimated Rs. 16,000 crore per annum in spite of the fact that the per capita consumption of liquor in India is the lowest in the world. The total liquor industry is worth Rs. 2,000 crore. IMFL accounts for only a third of the total liquor consumption in India. Most IMFL’s are cheap and are priced below Rs. 200 per bottle. Alcohol sales proceeds account for 45%of the total revenue collection in the country. Whiskey accounts for 60% of the liquor sales while rum; brandy and vodka account for 17%, 18% and 6% respectively. MNC 's share is only 10% and they have been successful only in the premium and super premium ranges. Post WTO the government may have opened India to foreign distilleries,...
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