Demand for spirits and beer has reached to the pre-Covid levels in the last quarter on a low base and consistent recovery in the out-of-home consumption category.
Covid 19 hit beer and spirits manufacturers and retailers and pubs across the country due to pandemic-related restrictions.Now situation has changed in India due low number of Covid cases and rise in vaccination has enhanced the confidence in general public.
Spirits firms Diageo and Pernod Ricard, which account for nearly three-fourths of the market, grew 14% and 27%, respectively, in the quarter. “Beer has almost emerged as semi-essential. Now, on an ongoing basis, we are seeing a steady flow of orders and demand. That is the key indication for us in terms of recovery,” said United Spirits managing director Hina Nagarajan.
Rival Pernod Ricard’s finance director Helene de Tissot said India is growing at 27%, with a very strong rebound from the year-ago, last year base is very low though.
According to the International Wine and Spirits Research (IWSR) data, the overall India spirits market fell 20% in the last calendar year with volume dropping to 277 million cases. The beer segment saw the sharpest dip by 39% to 193 million cases.
With people drinking at home, spirits companies saw higher sales at retail stores. Brewers, which get a significant chunk from out-of-home outlets such as bars and restaurants, saw a more gradual recovery.
Beer companies in India have been facing low demand for three summers now. In 2019, the Indian Premier League (IPL) cricket tournament and summer months, which have both historically boosted demand for beer, failed to revive the segment, which also faced a setback due to the general elections and consequent dry days. Last year, the segment was declared non-essential amid lockdowns to contain the spread of Covid-19, halting retail operations for nearly six weeks. Even this year, the second Covid has impacted the bar sales
Heineken, which owns India’s largest brand beer Kingfisher, said beer volume in India grew by close to 50% in the September quarter.