Not only is it tightly regulated but also restricted widely to be marketed using traditional media like Television and newspapers.
Moreover, there are complexities across the entire supply chain:
- Each State functions differently since it is a State-governed/regulated industry.
- So a brand launch in each State functions differently with differently priced MRPs and differently designed packaging labels (remember cheap alcohol in Goa ;).
- Some States have privately owned liquor shops, while some have govt and some states have a mix of both. So your go-to-market has to incorporate this variable and build the pricing strategy accordingly.
- Given the above, you have to plan differently for distributors/retailers/consumer schemes for different states. They can get pretty daunting at times.
- Manufacturing is a different ball game altogether – different states will offer different incentive schemes if you own manufacturing in the respective State.
- Alco bev is an expensive affair – there are licenses involved in every stage of the value chain and the cost of doing business is quite hefty for each stakeholder involved.
- It’s a supremely competitive industry where you will have to fight competition not just in consumer marketing but also aggressively in the Sales and distribution channels.
- Since the marketing avenues are heavily restricted – you have to think differently to position your brand in the consumer’s life cycle vis-a-vis the competition.
But on the flip side, the industry has become quite exciting in the last decade with an impressive Y-O-Y growth rate. Here is why it’s promising now to launch an alco bev brand in India:
- 70-75% of the total alco bev business comes from only 5 states – Maharashtra, Karnataka, Goa, Delhi and Hyderabad
- Premiumization is driving the top/bottom for existing players – consumers are upping their consumption game and spending more on fine wine, finer whiskeys, craft beers et al
- Recruitment of new franchises and target audiences is driving increased consumption. Let’s catch up over “coffee” has now changed to Let’s catch up over a “drink” for Gen Z.
- This offers immense opportunities to the brands to “catch them young” and get younger consumers hooked on to their brand pretty early on
- Marketing to Gen Z is exciting – they are flirtatious and experimental and open to trying newer things and experiences. Talk about concepts like wine-in-a-can, hard seltzers, RTD cocktails, craft beers, new-aged spirits, and unique concepts that India did not witness 5 years back.
- B2B space exploding with out-of-home consumption rising in the HORECA segment, post-pandemic.
- The ever-increasing interest of Angel, VCs, and PEs in the new age also bev startups and categories