By Kacey Culliney, 06-Apr-2012
International spirit brands looking to gain traction in the Indian market need to establish a strong local hold and portfolio, perhaps through a partnership, before introducing premium products to market, according to Rabobank.
Rabobank’s report 'The Indian Spirits' said that India is an attractive marketplace that, “offers numerous opportunities provided that the inherent obstacles are overcome.”
India, in terms of volume, is the second largest spirits market in the world and is expected to significantly outpace developed markets due to increased alcohol consumption in the country.
The market can be split into three sectors; ‘country liquor’ comprising 55%, the IMFL sector at 44% and imported spirits making up the final 1% of market.
The IMFL sector includes spirits such as whisky, rum, brandy, vodka and gin manufactured in India and Rabobank forecasts that this sector will see a CAGR of 12% over the next five years, “fuelled by the forecast impressive growth for the overall Indian economy and rising levels of disposable incomes.”
The white spirits segment, largely vodka, due to its “gender-neutral urban image” is India’s fastest growing spirit.
“For Western players, the need to gain a strong foothold in the Indian market is clearly evident, and partnering with an Indian-made foreign liquor (IMFL) player could be one of the fastest ways to do this,” Rabobank said.
“This will immediately create a platform for the western spirits player to expand into the market,” it added.
Should a buy-out prove impossible, a joint venture would be a good alternative, it noted.
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