Indian travel retail offers bright spot for booze brands
Beverage alcohol sales volumes in Indian travel retail increased by 13% in 2024, far outpacing the 6% increase in volumes sold in India’s domestic market. Should home-grown and international brands be capitalising on this rising demand?
Spirits and wine experienced similar rates of growth (up 13% and 12% respectively) in India’s travel retail sector, according to IWSR, while the very small RTD category saw a significant spike in sales via the channel, up 123% in 2024.
Global travel retail (GTR) offers promise to an industry experiencing tough times. IWSR forecasts predict that global alcohol volume sales will be flat between 2024 and 2029. However, travel retail volumes are expected to be in growth, rising 3% over the same period.
At a regional level, sales volumes in Asia’s travel retail sector are set to grow at a rate of 4% in the same five-year period.
And Indian consumers are poised to increase their purchasing in the channel. Indian passenger numbers will grow by 50% over the next five years, according to the Oxford Economics Air Passenger Forecast published in June.
Charlotte Reid, IWSR Senior Insights Manager – GTR, said: “India’s disposable income and travel demands are growing faster than their global counterparts, and this will in turn reshape consumer spending and drive demand in GTR.”
Volumes are currently heavily weighted on whisky, especially Scotch.
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Whisky accounted for three quarters (74%) of Indian duty free spirits volumes in 2024 and Scotch alone took a 65% share.
Travel retail offered a bright spot for whisky brands in India against declining demand in the domestic market. Total whisky volumes in India’s duty free channel rose by 12% last year. Scotch saw an 11% increase while US whiskey was up 8%. In contrast, total whisky sales in India’s domestic market were down 8% last year.
While Scotch continues to rule the travel retail channel, IWSR has reported signs of increasing sophistication and category diversification.
Indian whisky is also seeing success in travel retail, though off a small base. The category accounts for less than 2% of total whisky volumes in Indian travel retail. However, volume sales rose by 10% in the channel last year, and value outstripped that performance with 18% growth.
“Indian whisky has relatively little shelf space in GTR – until about three years ago, it had virtually no presence in the channel – but this is beginning to change as consumers broaden their repertoires,” explains Reid.
For both domestic and international brands, the next few years offer an important opportunity for growth in Indian travel retail as consumers shift from “price- and utility-driven behaviours to brand consciousness and experiential spending, with Gen Z and Millennial consumers to the fore”.
Brands are investing in in-store duty free experiences to engage Indian travellers. International players are also focusing efforts on ‘India first’ strategies, IWSR has found. Diwali-themed packaging, individual city-themed gift packs and celebrity collaborations are being introduced to attract Indian shoppers.
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