White spirits may grab 20% of liquor mart

Keeping in line with the trend in the international markets, the Indian market is warming up to white spirits. Consumption is on the rise, primarily pushed up by young consumers, and the category is expected to double in a couple of years.

Vodka, gin, tequila and white rum, which make up the white spirits segment, had a paltry market share of one to two per cent couple of years ago. Today they have almost 10 per cent of the liquor market in India.

Liquor industry experts predict that white spirits could make up 15-20 per cent of the liquor market in India in the next couple of years.

The spirits market currently stands at 175 million cases a year And is growing at 5-7 per cent.

White liquor, on the other hand, has been growing as a segment at 24.5 per cent. In value terms, the segment clocks sales of more than Rs 150 crore, according to data provided by the All India Distillers' Association (AIDA).

Vijay Mallya-promoted United Spirits claims to be the market leader with a more than 80 per cent share.

It's vodka brands Romanov and White Mischief have been doing very well and have captured 83 per cent of the market in the regular vodka segment, informs Assistant Vice-President (marketing) Debashish Shyam.

Radico Khaitan, which sells the Magic Moment Vodka and Contessa Extra Dry gin, has a 15 per cent market share. Jagatjit Industries, which sells vodka and gin under the Aristocrat brand, makes up the remainder 5 per cent.

"White drinks are in fashion, mostly due to the international appeal that they have. In films, actors are mostly shown having white spirits. The Indian youth likes to associate with this international image of white liquor," explains Shyam.

White liquor is considered to be lighter. Although this is not true, it has helped to increase demand for the products, says an AIDA official.

The ability to blend smoothly with juices or soft drinks is another factor for the success of white spirits.

"As the pub culture has taken over, cocktails have become popular. White spirits can be mixed with almost anything - cola, soda, water, fruit juice or other spirits. This has added to their popularity," Shyam points out.

Data provided by the International Spirits and Wine Association (ISWA) shows that in 2005, Vodka sales stood at 1.1 million cases, while gin sold 1.8 million cases. White rum, the latest entrant into India in this category, sold half a million cases.

However, not all white spirits categories are growing.

Between 1995 and 2005, vodka sales increased four-fold from 2,45,000 cases to 1.1 million cases, but gin, considered a woman's drink, fell from two million cases to 1.8 million cases.

"The growth in white spirits is being speared-headed by vodka and white rum. Sales of gin is on the decline," accepts Sunil Mehdiratta of the ISWA. For United Spirits, the growth in the white spirits segment is expected to be 20 to 25 per cent this year.

The brown spirits segment, which accounts for 90 per cent of the company's spirits sales, is expected to have a much lower growth rate of 12-15 per cent, says Shyam.

Companies are now planning to capitalise on this popularity. United Spirits has upped its investment in this segment by almost 50 per cent this year, over the Rs 15 crore investment last year.

They have also repackaged the White Mischief vodka and roped in Bollywood actor Zayed Khan as the brand ambassador.