The chief innovation officer of Diageo India believes vodka and Tequila have “massive opportunities” for growth while gin is expected to see a “consolidation phase”.
Diageo revealed its Indian single malt brand Godawan in 2022
Speaking to The Spirits Business last month, Vikram Damodaran, chief innovation officer of Diageo India, believes vodka presents the larger opportunity due to its big base.
On the other hand, he expects Tequila to see the fastest rate of growth due to its “very small base”, adding that the category benefits from its perception of being a low-calorie, “cleaner drink”.
Damodaran notes an “appreciation for Tequila” and its agave profile but says it has a perception of causing fewer hangovers, “though I don’t personally believe in it”.
IWSR data shows double-digit growth figures for both vodka and Tequila in India last year, with agave spirits forecast to continue rising by double digits.
Diageo’s Indian arm, United Spirits, has a gin portfolio that includes local labels Hapusa and Greater Than, as well as international brands Tanqueray and Gordon’s.
In terms of its agave portfolio, Diageo focuses on Don Julio and recently appointed its first brand ambassador for Don Julio in India. Diageo also owns a minority stake in Indian agave spirit brand Maya Pistola.
Diageo took ownership of Hapusa gin last year
Despite taking control of Hapusa and Greater Than owner Nao Spirits last year, Damodaran notes that gin is “not a big growth category” when compared with vodka and Tequila.
“It is growing, yes, but at a much lower rate,” he explains. “However, the penetration of gin is far lower compared to, let’s say, vodka. Therefore, as repertoire increases, as occasions increase and as consumption grows, gin will have a role to play.”
Regarding Indian gins, he recalls a “flurry of activity” in the craft space but “over the last few years, there’s a lot of consolidation that has started happening because at one point in time, [there were] about 108 different gin brands from India. I think that’s fallen down to about 80 now because people have realised that not everybody can scale at the same rate. And I think this consolidation wave will continue for a bit as new gins start coming into the country because of the [UK-India] trade deal with better pricing.”
He foresees a “two- to three-year cycle for gin to come back” after a period of consolidation and the “advent of new gins in the country” that will “drive new trials and therefore growth in consumption”.
IWSR data shows gin sales by value in India grew by 11% last year and volume increased by 3%. Looking to 2030, its five-year CAGR projection puts gin at a 5% volume gain and a 7% value increase.
Indian single malts versus Scotch
Whisky remains the leading spirit in India, where Diageo focuses on international Scotch Johnnie Walker, alongside Black & White, Signature, Royal Challenge and McDowell’s.
The business also tapped into the Indian single malt segment when it created the Godawan brand in 2022.
Scotch whisky is expected to grow slightly ahead of Indian whisky over the next five years. IWSR data shows a 6% CAGR volume rise for Scotch (2025-2030) versus the 4% gain for Indian whisky. In terms of value, Scotch is set for a 5% increase and Indian whisky is forecast to grow by 4% over the same five-year period.
“To give you a perspective, the total volume of single malts sold in the country is somewhere between 850,000 cases to a million cases,” says Damodaran. “The total volume of spirits sold in the country is about 400 million cases. So we’re talking about a million cases out of 400. It fundamentally tells you that the category itself is nebulous, so there is so much runway up ahead in terms of people beginning to appreciate a single malt.”
As such, Damodaran believes the growth for single malts has a “very, very long trajectory” that will “continue to grow”.
He says Indian single malts have slightly “taken the lead” compared with Scotch single malts, but there is “growth happening on both ends”.
For Indian single malts to continue growing, Damodaran cites the importance of “consistency and quality” as they lack a “long history” and must “stand up on their own feet” to rival Scotch.
His second point also points to how there will be “far more offerings in terms of pushing the boundaries on what Indian single malts truly stand for”.
He says these Indian examples currently only come from “four or five players” when compared with Scotch, which has “200 different distilleries with 1,000 different offerings”.
“I think there’s so much more for Indian producers to do in order to establish Indian single malts as a category to contend with. So I think Indian single malts have their work cut out in front of them in order to be able to grow their growth momentum,” he adds.
“Scotch will also continue to grow because as more and more people start appreciating what a single malt stands for, again discovery [is] at the core of a single malt consumer, and therefore [they] will want the best of what the world has to offer as well.”
Smirnoff introduced three flavours for Indian palates last summer
Vodka drives white spirits growth
Looking at the main alcohol categories, Damodaran says spirits, wine and beer are “all growing consistently” in India, based on Diageo’s own research every five years.
“Beer is recruiting faster than spirits and wine,” he notes. “But having said that, the world of spirits is changing a lot from what used to be a whisky-dominated market to now a market that is seeing growth across the spectrum, driven by white spirits.”
He cites the likes of vodka, Tequila and gin, but pinpoints flavoured vodka as “driving tremendous growth” in India.
“Tequilas are fundamentally powered by premium Tequilas, luxury Tequilas and on the gins, it’s fundamentally the Indian craft gins that are driving growth,” he says.
Vodka is being driven by its versatility in cocktails. Damodaran says consumers “don’t want just another regular flavour”, believing it’s “more about flavours with a twist that tell a story or go back to the roots of your origin”.
Last summer Diageo launched three flavoured Smirnoff vodkas designed for the “evolving tastes of modern India”. It comes in three flavours, the ‘nostalgic’ Minty Jamun, the ‘sweet-spicy’ Mirchi Mango, and Zesty Lime, which was made for ‘group occasions and cocktail starters’.
Damodaran explains that ‘jamun’ is an Indian word which translates to ‘java plum’. “It’s a fruit that is extremely popular in multiple parts of India,” he says. “As kids, that’s what you’d eat in the afternoon. It’s astringent and sour as hell, but it just gave you that tang. It woke you up, and it’s something that people carry as a memory.”
Alongside the nostalgia effect, Damodaran says Smirnoff Minty Jamun vodka went viral on social media with its “beautiful purple colour – imagine drinking it out of a Martini glass with crushed ice”.
He adds: “It ended up creating an entire industry around ‘jamun’ as a category,” noting that it’s everywhere from sodas to non-alcoholic drinks and Spritzes.
“So I think flavours are here to stay,” Damodaran emphasises. “But it’s not just about launching a flavour for flavour’s sake. You need to have the right taste profile, but more importantly, a flavour that has a story to tell.”
In terms of the wider trends driving spirits consumption in India, Damodaran highlights three areas: young population, wealth generation, and demand for differentiated experiences.
“India is home to one of the world’s youngest populations,” he explains, adding that the market “isn’t ageing anytime soon for the foreseeable future”.
Diageo India’s Vikram Damodaran
He adds: “At least for the next 10 years, the median age is set to drop by another year and a half, and that fundamentally means you’re going to have a burgeoning set of young people with good levels of disposable incomes, looking for new experiences, also spending their money on a variety of beverages that cater to different occasions and motivations.”
Damodaran also points out that wealth generation is rising across all income levels, driving domestic consumption of “services, experiences and lifestyle”.
His final point notes that consumers are seeking more differentiated experiences, including unique packaging and brand interactions.
As a country, Damodaran believes the “penetration of economic growth and the fact that this is growth is now not just limited to large cities and metros is beginning to play a very important role”.
He also notes that country is seeing more investment in terms of roads and electricity, boosting consumer access to services and experiences more locally, meaning they are “no longer dependent on their capability to travel to a large town and then spend money there”.
Damodaran is also seeing consumer demand for both “locally differentiated offerings” and “affordable global propositions”.
Could India become a major RTD market?
When asked about the growth potential of the ready-to-drink (RTD) category, Damodaran says the main factor holding it back is the regulatory environment – but even this is starting to change.
He explains: “Building RTDs in the country is like launching Uber where Uber didn’t exist, where you had to overcome regulatory hurdles, route-to-market hurdles in order to make it work, and I think it’s going to be a question of who’s willing to take the challenge of creating this category, building it at scale, so that you’re able to derive the right kind of economic efficiencies in order to drive growth for RTDs.
“So two things that I would leave with you: one, the consumers are absolutely ready for RTDs. Second, I think states are beginning to realise that the more categories open up, the better it is for the state’s exchequer. So I think gone are the days when regulatory policies used to be a hurdle.
“Now, states are more progressive when it comes to bilateral discussions in order to open up policies that drive better consumption of better propositions. And I think it’s a matter of time before you start seeing a big play in the RTD spectrum.”
In other Diageo-related news, the Food Safety and Standards Authority of India recently lifted its ban on certain United Spirits products.
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