India Might Finally Be Swapping Its Desi Daru For Premium Whisky

India’s liquor industry is trading quantity for quality as whisky makers shift focus from mass-market bottles to premium labels. Leading players in the alcoholic beverages space are exiting mass segments to chase higher margins.

In other words, cheap booze is out and premium whisky is in. ICICI Securities, in a recent note, said the evolving Indian consumer and stronger profitability are tilting the market in favour of sleeker, pricier pours.

The brokerage has maintained a ‘buy’ rating on Radico Khaitan and Allied Blenders, citing their strong positioning in the premium segment. It expects the premiumisation trend to continue, especially as companies navigate high taxes, raw material inflation and regulatory complexity.

In the five years to 2024, the regular segment shrank at a compounded rate of 5%, while mid and upper prestige categories grew at 11% and 6%, respectively, according to the note.

The prestige and above, or P&A, segment grew 6% year on year in 2024, driven by robust demand in the mid and upper prestige tiers. Their combined share in overall volumes of the top four players rose from 27% in 2019 to 39% in 2024.

The fastest movers include Iconiq White, launched by Allied Blenders in late 2022. Volumes surged 181% in 2024, reaching 4.5 million cases. Radico Khaitan’s After Dark whisky posted a 78% volume jump during the year.

Meanwhile, mass-market brands are rapidly losing fizz. Pernod Ricard’s Imperial Blue remained flat in 2024, but posted a 3% annual decline over five years. Allied Blenders’ flagship Officer’s Choice whisky saw a 9% drop, while Radico’s 8PM and 8PM Premium Black declined 19% and 27%, respectively.

That shift is triggering strategic exits. Pernod Ricard is reportedly looking to divest Imperial Blue to focus exclusively on higher-margin brands like Royal Stag and Blender’s Pride, both of which reported solid growth last year. United Spirits, too, has been refreshing its lineup, with revamped versions of Royal Challenge, Signature and Black Dog, all of which posted double-digit compounded growth over the past three years.

Although in a country like India, the age of low-priced liquor may not be completely over, but it’s clearly past its peak.