Bacardi India rides premium spirits surge with tequila, whiskey focus

The pace of new launches from the company’s global portfolio will go up in the coming year, with a focus on spirits such as tequila and whiskey, a top executive at the company said.

The company sells Bacardi rum, apart from Patron tequila, Bombay Sapphire gin, Dewar's blended scotch, and Grey Goose Vodka; it recently launched Irish whiskey Teeling’s in India.

"What we're seeing in India is the growth in our portfolio and is all driven by premiumization. We're seeing people drinking less but drinking better. If you look at India as a market, premium spirits are growing much ahead of the global average. The opportunity here is huge because premium spirits are only 5% of the total spirits market in India versus 51% in some other markets," Vinay Golikeri, managing director, India & neighbouring countries, said.

Top brands

Bacardi is the largest selling brand for the company in India followed by its whiskey portfolio. The premium portfolio of the company comprising brands such as Grey Goose and Patron is reporting high-double digit growth.

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“Between 2022 and 2023 our overall business grew at about 38% in India. Our premium end grew at twice the rate of that. There is a really strong high-double digit growth on our premium end. However, premium is still small for us," he said.

In fiscal 2023 Bacardi India reported ₹1,766 in total revenue from operations; total profit was ₹119 crore, according to data sourced from business intelligence platform Tofler. The company has not filed its financials for fiscal 2024.

The alcoholic beverages firm is set to launch more tequila and whiskey brands in India.

“Our priorities are agave and whiskey; right now, we're focused on premium," Golikeri said in an interview with Mint. However, the company could face stiff competition as rivals Diageo and Pernod Ricard flood the market with premium spirits.

Premium’s the game

This mirrors a broader industry trend of companies shifting towards premium spirits to attract younger consumers.

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“While spirits are seeing high competitive intensity, Bacardi coming in makes sense because they have a strong recall in white sprits—this will augur well for them. Growth rates for premium remain high backed by consumer willingness to try these spirits," Karan Taurani, senior vice president, Elara Securities, said.

In 2022, rival Diageo-backed United Spirits Ltd, too exited the “popular" or mass portfolio i.e. entry-level brands, with an average consumer price of less than ₹400 for a 750ml bottle with an eye on driving premiumization. It recently launched Don Julio tequila in India.

India’s organised liquor industry is set to record revenues of ₹4.45 trillion in FY24, according to a 2023 report by ratings firm Crisil.

Bacardi's commentary arrives as the liquor market slows. Growth has moderated across most segments, except premium, according to recent commentary by large listed liquor firms.

Commenting on demand Golikeri pointed to “moderation" at the lower end of the liquor market.

Tipple upgrade

"Growth has normalized since covid; if you look at the spirit segment, the premium segment is still growing twice that of the lower end. Has growth tapered in tier 1 markets, yes. We are seeing growth continue in tier 2 and tier 3 markets ahead of the metros," he added.

India has emerged among the top contributors to Bacardi's growth globally.

“People are drinking less but better. From consuming cocktails to actually curating an experience at-home it's coming from discernment and the need to upgrade," he said.

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To capitalize on this, Bacardi has increased its investments in India by 60% since 2022, expanding its manufacturing and promotional efforts.