The winds of change and a yearning for variety are making young Indians raise a toast to white spirits like vodka and gin even as the old generation still swears by traditional hard liquors like whisky and rum.
As part of the global trend, the consumption of white spirits such as vodka and gin is fast catching up in the subcontinent, thanks to the changing profile of drinkers, especially in the age group of 25-35 years.
"Changing lifestyle, growing consumerism, increasing purchasing power and the preference to taste something new or different are making young Indians take to social drinking and experiment with a variety of drinks as cocktails," Jayant Kapur, the Bacardi Martini India Ltd president and CEO, told IANS.
"Though whisky, rum, wine and beer continue to dominate the market, the share of white spirits has doubled to 20 percent over the last seven-eight years."
Of the 120 million cases of total spirits marketed in the subcontinent and valued at around $2 billion, white spirits like vodka account for 24 million cases in volume and 25 percent in value terms.
"As a social drink that can be had any time or on any occasion, the white spirit has come to stay. Being gender neutral and lighter than hard drinks in terms of alcohol content, white spirits offer a wide choice to sip with mixers such as martini, lime juice and orange," Kapur said, showcasing Bacardi's new Eristoff premium vodka, being launched in the metros this month.
With its 200-year-old original recipe from Georgia in Russia, Eristoff is bottled at Bacardi's production facility at Nanjungud near Mysore, about 190 km from here, and will be priced at Rs.480 for 750 ml.
Prince Nikolai Alexandrovich Eristoff first produced the authentic premium Russian vodka in Georgia in 1806 as a family recipe. With the family origins dating back to 200 BC, the recipe was passed down for generations. The prince was the last surviving descendant.
"The vodka is still made from pure grain. It is triple distilled and charcoal filtered for retaining its purity. As a neutral spirit, its clean taste leaves no after-taste but a pleasant sensation," Kapur pointed out at a preview of the product.
Among white spirits, the vodka category has been outperforming the others in terms of market growth, which stood at 2.8 million cases with a CAGR (cumulative average growth rate) of 47 percent during 2002-06.
"Thanks to a booming economy, young Indians are getting connected to global trends and are looking for new experiences. In fact, the premium segment offers huge potential for distinct brands like Eristoff," Kapur noted.
With the premium vodka growing at 20 percent and accounting for 25 percent of the spirits market, Bacardi plans to produce 400,000 cases per month at its plant, which has a total production capacity of one-million cases a year.
As a favourite drink among young adult Europeans, Eristoff is widely consumed in Austria, Belgium, Chile, France, Portugal and Spain. It continues to gain acceptance as a growing brand even in a price competitive set-up.
"High tariffs and other barriers also deter white spirits from reaching out to discerning drinkers. With import duties, excise and local taxes ranging between 200-450 percent, the vodka retail price is prohibitive. As a result, the grey market continues to thrive and deprive the exchequer of billions of rupees," Kapur said.
If tariffs are lowered, Bacardi plans to bring Grey Goose super premium vodka into the country, besides Martini and Rossi vermouths. To comply with a WTO ruling, the central government plans to lower the taxes, which are still a whopping 550 percent on spirits and wines.
Commerce secretary G.K. Pillai was quoted as saying in the media recently that the duty structure was in the process of realigning to WTO rules. According to market research firm Euromonitor International, the spirits market consisting of whisky, rum, brandy and vodka has been growing at eight-nine percent annually over the last five-six years despite high tariffs and entry barriers on foreign brands.