Flavors, innovations and trends in alcohol

India’s alcohol industry is one of the largest and fastest-growing in the world, driven by increasing consumption, rapid urbanization, and changing social norms. There is a notable shift toward premium and craft alcoholic beverages, especially among the younger urban population. Consumers are increasingly seeking high-quality and unique experiences, leading to a surge in demand for premium spirits and flavored alcoholic drinks.

The growing food shows in India feature an extensive portfolio of Indian-made alcohol. Vinexpo India, Sial, and Indusfood events showcased products from Portugal, Chile, the USA, Canada, France, and India. The Meghalaya pavilions are usually bustling with tasters. The Meghalaya companies aim to make the state the fruit wine capital of India. They make innovative wines from Soh Brap (Meghalaya passion fruit), Soh Trun (Meghalaya pineapple), Sohiong ( Meghalaya prune), and Soh Lyngdkhur (Meghalaya mulberry).

Sake culture and premiumization

Sake culture in India is also an emerging trend, gaining momentum as Japanese cuisine and lifestyle experiences grow in popularity. Sake is an integral part of Japanese culture and is consumed often during celebrations or sacred rituals. The beverage is made from fermented rice and water and can also be called rice wine or saki. Like many alcoholic beverages, it is an acquired taste. The alcoholic version tastes a little bitter while non-alcoholic Sake has a sweet flavor.

Premiumization, the biggest trend, of the Indian single malts in packaging designs and user convenience has been growing. Even the printing technologies that are shaping the current era of liquor packaging are built with luxury effects in mind. Premiumization has also been a contributing factor to the growing Indian exports.

According to a Statista report in 2024, India consumed more than 12 billion liters of alcoholic beverages. The market is valued at US$ 52.5 billion and is projected to grow at a CAGR of 7.2%, reaching a valuation of US$ 112.3 billion by 2034. India is the third-largest alcohol market globally after China and the US, the report said.

Consumers are shifting towards premium and craft spirits. Indian distilleries are innovating with local flavors. Many brands are focusing on sustainable packaging and production. While strong beer (above 5% alcohol) still dominates 85% of the market, consumers are noticeably shifting to craft breweries to explore more flavors with reduced bloating after drinks.

Craft breweries and BYOB

IndiFoodBev has captured several growing cultures in different Indian cities. Dehradun’s The Brew Estate is the most recent. In Noida, we started with the city’s first microbrewery, Noidawery, part of Masterchef Sanjeev Kapoor’s restaurant chain Yellow Chilli. Launched in March 2021, Noidawery serves and delivers craft beer in two-liter glass containers.

Ghaziabad, too, got its first microbrewery, Hit A Pint, in the city’s upscale Raj Nagar. The brewery, which produces 3,000 liters of fresh beer in a month, has got brewing machines from Brew Force India, a processing and equipment solutions provider. In India, microbreweries are allowed to keg their beer for sale in other nearby bars and pubs. Bars purchase these kegs from microbrewers at wholesale rates and sell them at retail prices at their premises.

Brewing is the amalgamation of basic chemistry and temperature regulation and anything sweet can be turned into alcohol. The technology of brewing is not limited to sweet stuff; many breweries in Delhi and Gurgaon make beer from popcorn and so the versatility in beer is increasing. With a rise in demand for ‘specialty beers’, microbreweries are also slowly growing ground.

The Indian gin industry is booming with around 30 new brands such as Greater Than, Hapusa, and Stranger & Sons, incorporating indigenized flavors and botanicals. Distilleries are experimenting with local ingredients such as Himalayan juniper berries, Darjeeling tea, and Indian spices, creating unique products that have gained both domestic and international acclaim. Vodka and rum also hold a significant share in the market, reports Food & Wine.

BYOB (bring your own booze) is also a trend gaining limelight in several metropolitan cities. A culture more popular among Gen Z and college students in Delhi NCR. It enables one to just buy alcohol from outside and get snacks and other beverages with an ambient sitting space. In some cities, while clubs or bars are more welcoming to youngsters, BYOB is more suited for mature audiences who prefer to have a few drinks in a cost-efficient and peaceful manner.

On the regulatory side, the Indian government is planning to introduce stricter advertising regulations for liquor companies, aiming to ban surrogate advertisements and event sponsorships that indirectly promote alcoholic products. Penalties for violations may include fines and endorsement bans, reflecting efforts to reduce alcohol consumption and improve public health.

Regulatory complexity doesn’t end there as each state has its own liquor laws, making distribution difficult. Liquor is heavily taxed, contributing significantly to state revenues.

A great export potential

As the global demand for Indian spirits increases, the government plans to promote both Indian alcoholic and non-alcoholic beverages in the international markets with a target of US$ one billion (about Rs 8,000 crore) exports in the next few years.

According to the Agricultural & Processed Food Products Export Development Authority (APEDA), India ranks 40th in the world for alcoholic beverage exports with a huge unrealized export potential. The authority, as part of the ‘Make in India’ initiative, seeks to increase exports of Indian spirits to major foreign destinations.

“It is potentially eyeing US$ 1 billion in export revenue over the next few years,” it said. The country’s major destinations include UAE, Singapore, Netherlands, Tanzania, Angola, Kenya and Rwanda. The export volume of alcoholic products in FY24 was 262,778.43 MT worth US$ 375.09 million, according to the APEDA website.

APEDA said Diageo India will launch ‘Godawan‘, a single-malt whisky made in Rajasthan, in the United Kingdom. The Godawan Single malt whisky had participated in the International Food and Drinks Event (IFE) in London last year.

Vinod Giri, director general, the Brewers Association of India, has been quoted as saying by the media that there is a huge potential in different countries for Indian products.

“While single-malt will play a greater role in making India’s reputation as a high-quality whiskey producer, the volumes will come from beverages, which are more palatable taste-wise and price-wise, such as premium Indian whiskeys and premium rum,” he said. He said the US, Africa and Europe have great potential.