From Tradition to Innovation: Evolving Indian Liquor Industry

Prem Dewan, Chairman and MD of DeVANS Modern Breweries, believes that experimentation and innovations are the fundamentals of the alcobev industry

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The Indian liquor industry has come a long way since its inception, witnessing significant shifts in consumer preferences and market dynamics. From being a market primarily known for light beer and limited spirit offerings, the industry has undergone remarkable transformations over the years. In this exclusive interview with Prem Dewan, Chairman and Managing Director of DeVANS Modern Breweries, we explore how the Indian liquor industry has evolved and thrived, even amidst the influx of multinational giants.  

Excerpts:  

How has the Indian liquor industry evolved since its inception? 

India was historically a market for light beer with the first homegrown beer brand Golden Eagle, introduced by the country’s first brewery in Solan in the 1850s. After the partition, a few well-known companies entered the market, including United Breweries in Karnataka and Kalyani in West Bengal but the market was largely static for a long time. The Indian beer market didn't really take off till the 1970s coinciding with the launch of strong beers in the market by Indian companies. In fact, breweries have now come up with strong beers in the premium segment even as several global breweries compete for the premium lager market. With regard to spirits, the market is again gradually shifting to the premium segment which is gaining market share. The abnormal increase in costs during the last couple of years has sped up this process for the liquor industry.  

How have the Indian liquor brands in the market fared vis-à-vis the multinational giants? 

The international journey of Indian Single Malts started about 25 years back when an Indian Single Malt met with excellent response even in Scotland. In fact, the consumers were pleasantly surprised to learn after blind tastings that what they had tasted was not Scotch but Indian Single Malt. Single malt manufacturers across India are ramping up their production capacities in order to be ready with increased production of their matured products in the near future keeping in view the growth projections as it takes a minimum of at least three years to come up with a good product. Our own GianChand Single Malt has received widespread adulation in India as well as globally. 

As for the beer market, the past decade has seen increased influx of several multinational brands, but it has failed to dent the demand of homegrown beer brands. In fact, local is the new buzzword in many circles. 

What strategies can be employed to create brand loyalty and build a community of dedicated consumers? 

Alcobev companies have traditionally relied on surrogates in order to promote their brands due to the huge restrictions on advertisement of alcoholic products in the country. However, the rules for surrogate advertisements are now being tightened with the result that companies have to now look for other avenues. Social media has come as a big relief for the companies. Companies are now spending huge budgets on promoting their brands in social media in order to create brand recall and promote their brands. Short films, influencers, Youtube videos, reels etc. are all being used in order to create premium imagery for the liquor brands. On a larger scale, companies are building properties, investing in music festivals, sponsoring events and even investing in social projects in order to promote their cause. 

What role does innovation play in the brand's product offerings? How to create a balance between traditional methods and modern trends? 

Experimentation & innovations are the fundamentals of the alcobev industry since its inception, and that is the reason why you see the widest variety of beers and other spirits around. The emergence and success of Indian Single Malts is the biggest example of innovation, considering how meticulous a process it is to manufacture alcoholic beverages. Our Kotputli brewery had many firsts to its credit in the Indian brewing industry: it was the first in the country with a brew house energy saving system leading to huge savings in energy costs, the first in India with a German caning line and to receive malt in bulk, not in bags. 

What challenges have you encountered while expanding into new markets and how do you navigate them? 

A major challenge while expanding into newer territories in India is the lack of uniformity in taxation. Additionally, each state enshrines that the labels meant for sale within its geographical territory should be particular legends specific to that state with verbatim that the liquor is meant for sale within that state only. However, things are changing and several states have online systems in place for the same. Furthermore, the ex-distillery price is required to be approved in each state with a validity of just one year. Even if there’s any spike in input costs for unavoidable factors such as even pandemic-induced lockdowns or Russia-Ukraine War, the price is never reduced by state governments. There are, in fact, a number of factors that impede the prospects of the market, including excise department permits with extremely short validity, call by states for mandatory mother godown in the region of supply and added transportation costs due to closed containers in many states. 

How important is being updated on industry trends and changing consumer preferences in the ever-evolving liquor industry? What is the future? 

The new world is moving and evolving at a very fast pace and industry has to keep up with the latest trends as consumers evolve and change their preferences at short notice. The new consumers are not jogged down by tradition and love to experiment with new products. As such innovation is the key to the future and companies need to be constantly on their toes in order to take the benefit of the ever-changing demands of the consumers and come out with innovative products. 



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