KOCHI : Inebriation on a budget, that too with entry-level brown spirits, seems to be the mantra of Malayalis, as they defy the national trend of increasing demand for premium liquor.
A report by the International Spirits and Wines Association of India (ISWAI) says the share of premium liquor (priced over Rs 1,000 per 750 ml) consumed in Kerala is a measly 4%, with inexpensive liquor dominating the scene with a staggering 96% share.
In the neighbouring states of Karnataka and Tamil Nadu, premiumisation (trend of consuming premium liquor) shares are notably higher at 6% and 10% respectively. States like Uttar Pradesh and Rajasthan boast a 12% share, with the proportion in poorer states such as West Bengal and Odisha even touching 20.5% and 22% respectively. Telangana leads with an impressive 52% share of premium liquor to total liquor sales among Indian states.
Despite being prosperous, the alcohol beverages (alcobev) industry in Kerala faces challenges due to low levels of premiumisation, says Nita Kapoor, chief executive officer of ISWAI.
ISWAI guess-estimates IMFL volumes in Kerala at approximately 3.3 crore cases per year, with beer accounting for 33%, brandy 35%, and rum 27%. Imported products make up a small fraction of the market, roughly around 4,000-5,000 cases per month.
Nita noted that a significant 96% of the volume sold in the state consists of beer, brandy, and rum. “The entry-level prices are relatively modest, with beer starting at Rs 110 (650 ml), and brandy and rum priced at Rs 140 a nip (180 ml) and between Rs 450-750 for the larger 750 ml bottle,” she said. She added that this behaviour is in sharp contrast to the state’s penchant for luxury cars and other items like big-screen televisions. Nita attributed this trend to high taxes, limited access to retail outlets and substandard retail infrastructure, resulting in a poor consumer experience.
“Kerala has the lowest ratio of retail liquor outlets in the country at 0.8 per lakh of population. In comparison, Uttar Pradesh has 2.9 retail outlets per lakh of population,
Tamil Nadu has 6.8 outlets, and Karnataka has seven,” she said.
‘Kerala slow to explore market potential’
Nita said comparatively, Kerala has only 0.8 retail outlets per 100 sqkm of area, which is also one of the lowest in the country. While states with higher premiumisation levels offer walk-in stores and better consumer experiences, Kerala lags behind due to its outdated retail infrastructure.
Despite having one of the highest per capita incomes in India and significant tourist inflow, Kerala has been slow to explore its potential in the premium spirits market, Nita pointed out.
While other states are witnessing a surge in demand for scotch, single malt, and ready-to-drink beverages, Kerala’s consumption remains predominantly at the entry level.