Ep #18 | WTF, Alcohol is a $70B Business in India? | Nikhil Kamath explores Gaps & Opportunities
Jul 4, 2024
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In a podcast exploring the liquor industry in India, guests share diverse insights on brand-building tactics, challenges in the market, and success stories. Topics range from cultural impact on alcohol consumption to opportunities for entrepreneurs in the industry. The conversation also delves into strategies for starting a liquor brand, the rise of flavored beverages, marketing tactics, and challenges faced in the industry. Guest speakers bring a wealth of experience from the beer, gin, and vodka sectors, shedding light on evolving market trends and potential for growth.
India holds the third-largest market for alcoholic beverages globally, facing challenges like red tape-ism and varying excise duties.
Reflects on the potential for brand-building tactics for Indian products using patriotism as a selling point.
The episode explores career opportunities in the alcohol industry, including owning a bar, starting a liquor company, and working with liquor brands.
Insights into consumer behavior and preferences in the Indian alcohol market are discussed, focusing on hard liquor consumption and societal impacts.
Emphasizes the importance of innovation and unique positioning for liquor brands to succeed in a competitive market.
Discusses the complexities of registering a liquor brand in different states, requiring meticulous planning and compliance with varying regulations.
Deep dives
The Podcast Host Introduces Opportunities in the Alcohol Industry
The podcast discusses the vast opportunities available in the alcohol industry, focusing on owning a bar, starting a liquor company, working for a liquor brand, and engaging in liquor-related advertising. It emphasizes the potential for young individuals to explore careers in these areas.
Transition from Hotel Management to Bartending
The episode delves into a personal journey of transitioning from hotel management to bartending, highlighting the passion and inspiration found in creating and serving drinks. The speaker's experience in college bartending and the realization of a calling in the bartending profession are shared, emphasizing the social and enjoyable aspects of mixology.
Innovation in Liquor Brands and Premiumization
The discussion centers on the speaker's innovative approach to creating premium liquor brands, such as a successful vodka brand and a high-end single malt whiskey. The importance of packaging, quality, and consumer pride in displaying these brands is highlighted as significant factors driving success.
Market Insights and Consumer Behavior in the Alcohol Industry
Insights into the Indian alcohol market dynamics are provided, focusing on the over-indexed consumption of hard liquor and limited beer consumption. The psychology behind drinking habits, including post-work relaxation and socialization, is explored, reflecting varying consumer preferences and behaviors in different segments.
Exploring Alcohol's Impact on Society
Alcohol's societal impact is debated, with moderation praised for health benefits like in the Kennedy era. Banning alcohol can lead economies into distress. Younger generations are drinking less, exploring alternative highs but caring about health and calorie intake.
Market Insights and Trends in Liquor Industry
The hard liquor and beer market insights reveal UB's 25% market share dominance. Brands need strategic emulation to succeed, with innovation and unique positioning influencing market trends.
Opportunities in Crafting Liquor Brands
Starting a liquor brand requires differentiating with a unique product like a Bengaluru bourbon or Mahua-flavored drinks rooted in India's cultural heritage. Focusing on premiumization and marketing innovation can attract varied consumer segments and boost brand recognition.
Distribution Strategies for Liquor Start-ups
For liquor start-ups, engaging with bartenders, building trusted distributor partnerships, offering incentives, and prioritizing experiential marketing can drive brand visibility, shelf placement, and consumer adoption. Prioritizing regional demographics and consumer preferences can enhance market penetration.
Registering a Liquor Brand in Different States
Understanding the complexities of registering a liquor brand in different states, such as the varied excise policies and taxation rates, highlights the need for meticulous planning and compliance with state-specific regulations. The process involves engaging with the excise department, handling label registration, and navigating unique pricing requirements that differ across states, emphasizing the importance of thorough understanding and adherence to individual state laws.
Challenges in Liquor Retailing
Exploring the intricacies of liquor retailing, including the impact of state excise policies on pricing and margins, sheds light on the multifaceted challenges faced by liquor brands. Issues such as the minimum quantity requirements for purchasing Indian brands, differential pricing regulations, and constraints in stocking and selling products in various states underscore the complexities and constraints inherent in the industry.
Online Alcohol Sales and E-Commerce Challenges
Delving into the realm of online alcohol sales and e-commerce challenges underlines the regulatory and logistical hurdles faced by the industry. Despite the potential expansion of distribution channels through e-commerce platforms, concerns over legalities, age verification, and taxation impact the feasibility and operational dynamics of online alcohol sales. Balancing compliance with ease of accessibility remains a critical aspect for a successful online presence in the liquor industry.
Investment Opportunities in Young Startups
Engaging in dialogue about investment opportunities in young startups within the liquor, bar, and events sectors emphasizes collective support for innovative ventures. Committing financial resources towards fostering budding entrepreneurs underscores a collaborative effort to empower and nurture new talent, enabling seed funding for aspiring individuals to kickstart ventures and drive innovation and growth in the industry.
India has had a long, colourful, and mixed history with Liquor over the centuries, with ancient fermented drinks and traditional liquors like feni and toddy. India today, holds the third-largest market for alcoholic beverages globally, which is remarkable given the challenging business environment of red tape-ism, varying excise duties across states and much more.
In episode #18 of “WTF is” Podcast, we have Founders of different sectors in the Liquor Industry of India. Abhishek Khaitan, MD of Radico Khaitan, One of the oldest and largest manufacturers of Indian Made Foreign Liquor (IMFL) in India; Minakshi Singh, Co-founder of SideCar, India’s only entry in the top 100 of the World’s Best Bars; Shuchir Suri, Co founder of Gin Explorer’s Club, India’s biggest gin festival with a footfall of over 100,000 people per edition; and Suraj Shenai, Founder of Goa Brewing Co, crafting ‘non-conformist, modern’ beers that challenge the traditional dominance of German and Belgian flavours.
If Euphemism for patriotism is outrightly sold to people, across the world in different pockets, can the same brand-building tactics work for Indian Products too?
For additional insight into this industry, here’s a link to explore some of the resources provided by the guests of this episode
https://nksqr.notion.site/Additional-Resources-0e194bb2bb4d407bb5dfd63051a84416?pvs=4
#NikhilKamath Co-founder of Zerodha, True Beacon and Gruhas
Host #wtfiswithnikhilkamath #wtfispodcast
Twitter: https://www.twitter.com/nikhilkamathcio
LinkedIn: https://www.linkedin.com/in/nikhilkamathcio
Instagram:https://www.instagram.com/nikhilkamathcio
Facebook: https://www.facebook.com/nikhilkamathcio
#AbhishekKhaitan MD of Radico Khaitan
Twitter - https://x.com/radicokhaitan
LinkedIN - https://www.linkedin.com/in/abhishek-khaitan-95098bb4/
Instagram - https://www.instagram.com/abhishek40/
Facebook - https://www.facebook.com/abhishek.khaitan.12
#MinakshiSingh Founder of SideCar, Cocktails & Dreams
Instagram - https://www.instagram.com/min.drinks
#ShuchirSuri Founder of Jade Forest, Anthem, Gin Explorers Club
LinkedIN - https://www.linkedin.com/in/shuchir-suri-058251b/
Instagram - https://www.instagram.com/shuchirsuri
Facebook - https://www.facebook.com/shuchir
#SurajShenai Founder of Goa Brewing Company
Twitter - https://x.com/goabrewingco
LinkedIN - https://www.linkedin.com/in/surajshenai
Instagram - https://www.instagram.com/surajshenai/
Disclaimer:
Alcohol consumption is injurious to health. No participants in this video promote alcohol consumption and strongly discourage underage, binge, and careless drinking. All panelists in this show express their own personal views, which do not necessarily reflect the views of the producers or promoters. Please drink responsibly.
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