Consumption, Growing at a Healthy Rate The Indian liquor Industry is one of the most vibrant in the world. The array of liquor sold in India is dazzling and demand for the same is growing among affluent Indians. India is one of the top markets for higher consumption and growing at a healthy rate. Alcohol, when consumed in moderation is proven to be benign and some forms of alcohol such as wine are known to be good for the heart. Among young Indians, drinking often is a prerequisite to socialising and networking. While the year gone by gave the Indian consumers access to new vintages, well-brewed beers, and matured liquors and scotch, for the Indian lover of liquor the next year will be even grander. A few trends likely to shape the Indian liquor market next year are described below, but first is an insight into the 3 segments of consumers who make up the Indian liquor market. The brand name liquor carries is crucial to its success and will remain so in the year ahead as well. Demand for branded liquor is led by the most affluent segment of society and brand name led consumption includes demand for imported scotches and single malts. Many of those who consume liquor sold in this segment are liquor connoisseurs and take pride in enjoying all the trappings of an affluent lifestyle which includes knowledge of and consumption of fine liquors. Much thought goes into purchasing liquor among consumers in this segment. People in this segment are involved in the purchase of liquor and they know what kinds of liquors are available in the market. Such consumers enjoy drinking the highest quality liquor and have the means to do so regularly. The experience led consumer purchases whiskey that is in the premium and deluxe segment. People in this demographic are usually younger than those in the former segment many being in their 20's and are employed in prestigious jobs or are college students from relatively well-off backgrounds. They regularly experiment by consuming different brands and hence are not completely won over by a single brand. Such consumers are also open to consuming brands they have not tried before and they can be won over by new brands when brands offer better value such as attractive packaging, superior blend, a better consumer experience, and other high- value offerings. Because people in this segment are younger than those in the former segment, their tastes are not as evolved or as well matured as those of the latter. Many new brands have gained traction in this segment because consumers in this segment prefer such new brands and because they are open to experimentation. Price point led consumers are very price sensitive and, unlike brand-name led consumers and experience led consumers, display no brand loyalty. Members in this segment regularly close their workday by consuming liquor and have incomes that are far lower than those of people who consume branded liquor and experience led consumers. Many such consumers fall in the lower middle class and many are also daily labourers. They don’t have any brand loyalty and will easily switch from one brand to another as long as doing so saves them money. In understanding consumers in these segments sit’s crucial to remember that consumers are not a permanent part of any one segment. In reality, as incomes grow, consumers who were motivated to purchase liquor only because of its low price grow to be motivated by experience and at even higher income levels become driven to purchase liquor because of the brand under which it is sold. New trends also reveal that younger consumers of liquor are less conscious of price and become experience led consumers directly, thereby skipping the stage where consumers are driven only by price. Trends also indicate that young consumers, who earlier may have preferred to drink beer or vodka, today are just as likely to consume whiskey. As income levels continue to increase across India fewer people will select liquor in 2019 based solely on price. Hence the demand for low margin whiskey will shrink next year while demand in the deluxe and premium segments will grow. This is to be expected as liquor whose demand is driven solely by its low price is an inferior good and demand for it will fall as income levels rise and consumers can purchase higher quality liquor. In 2019 it is expected that the demand for vodka and brandy will grow while demand for rum will fall. Next year will also mark the entry of premium rum and of artisanal gins although the expected demand for both will be low. Demand for scotch, Indian made foreign liquor (IMFL), deluxe whiskey, and regular whiskey will be between 12 per cent 3 per cent 15 per cent and -2% respectively. The drop-in demand for regular whiskey is commensurate with rising standards of living in India and signals the aspirations of Indians some of whom prefer to consume more a higher quality whiskey instead of regular whiskey. A very large number of those who consume whiskey next year will consume regular whiskey signalling once again that despite an aspirational class, low prices still have an impact on the average consumer’s decision to purchase whiskey in India. Other liquors such as rum, brandy, and white spirits share by volume in India is expected to be 15 per cent 22 per cent and 3% while their share by value is expected to be 10 per cent 12 per cent and 5%. A casual examination of these numbers reveals that in India consumers still prefer relatively inexpensive rum and whiskey while those who consume white spirits are more likely to consume a premium product. Both Premium Brandy and Beer are poised to grow in coming years while Rum will be declining along with Regular Brandy. Hence the demand for each of the mentioned categories of liquor except mass brandy will grow. The decline in demand for mass brandy is also a result of rising aspirations of Indians who will be more likely next year to opt to purchase a higher quality of liquor than a mass brandy. The rise in demand for beer is congruent with the increasing numbers of young Indians who consume beer to have a good time. More and more Indians are saying cheers among friends every evening, a trend that is likely to continue. Excitingly more Indians are willing to pay extra for a higher quality branded liquor than did in the past; this trend is likely to increase the demand for branded liquor over the next few decades at the expense of unbranded liquor brands.