America’s Whiskey

The idea for this post (other than being apropos just before New Year’s Eve party time) actually came from an edition of NY Times this week which has a feature story on America’s liquor. Which one, you say? Why, bourbon of course.

What was really interesting is the closing paragraph…I’ll get to that in a minute. But, essentially, of all liquors, this one is homegrown American, and its popularity appears to be soaring. It’s a whiskey by another name, no? Exports of bourbon comprise a whopping 70% of all distilled American spirit exports each year. And its volume is expected to grow even further.

Back to that closing paragraph and in relation to growth was a telling  statement, as seen in the following excerpt from this story:

In five to 10 years, will their products be in such high demand? The industry is banking on big growth in India and China, said Charles K. Cowdery, author of “Bourbon, Straight: The Uncut and Unfiltered Story of American Whiskey.” “If those markets develop as has been anticipated, no one will have made enough,” he said. “If they don’t, everyone will have made too much.”

That kind of begs the question (since I’m here on the ground)…

What does India drink?

You may have already heard my angst about having to spend an arm and a leg for the “economy variety” of imported wines (cheap, in other words)…for example, Yellow Tail! That’s because the government here taxes imported alcohol at the rate of 150%. Apparently, there are moves underway that will reduce this import duty to a mere…50%.  An improvement, anyway.

Actually, India has a history of Prohibition from the last century. Mahatma Gandhi wanted to ban the sale of alcohol across India and today there are four states, including one of the more prominent one – Gujurat (also Gandhi’s home state) that impose Prohibition.

Alternatively, I wonder if the youth of Mumbai and most other metros in India even know what the word means!

Alcohol consumption is absolutely and visibly on the rise in India (part of India Shining?). Yet, the untapped market is huge because only 22% of men and 2% of women in India consume alcohol. Therefore, the foreign and domestic liquor companies see huge potential here.

The most popular alcohol by far are distilled spirits (rum, brandy, whiskey), followed by local liquor such as palm wine or arrack.  Trailing the pack are beer and finally, wine. Spirits make up a massive 88% of what Indians regularly drink, beer is 10% and wine only 2%.

All these numbers point to one overriding factor: untapped market.

In fact, according to a TIME magazine article last year, India’s market size of $14 billion in 2009 was projected to grow at 10% per year, exceeding the market growth for alcohol of China, US and Europe combined! One that smart liquor, wine or beer companies anywhere in the world would be foolish to ignore. And, they aren’t.

The Other Side (There’s Always One)

On the other, murkier side of the equation, there are definite concerns of alcoholism as a disease, with a disturbing impact on the health of Indians.

An article on this topic in The Lancet, one of the world’s leading medical journals, expresses this major issue:

What is of particular concern—and an important indicator of health risks—is that the signature pattern of alcohol consumption in India is frequent and heavy drinking. More than half of all drinkers fall into the criteria for hazardous drinking, which is characterised by bingeing and solitary consumption to the point of intoxication.  Moreover, spirits account for 95% of the beverages drunk in India.

According to the World Health Organization (WHO), India saw a solid increase in recorded adult per capita consumption of alcohol over the past few years. What is probably most troubling is the age at which alcohol consumption begins. Over a decade of time, this age has dropped from 28 to 19 – almost nine years!  Therefore, the prediction is that that age will drop even further, to an alarming 15 years in just a few years time.

Never the Twain Shall Meet? You wish.

What is perhaps most disturbing is that the country that is yet to be able to provide basic human needs and necessities to its population is also eyed as one of the most attractive markets for liquor in the world. How does the country balance the two?

This is just one more reason why India with all its dichotomies is one of the most difficult and complex countries to understand…or govern.

With respect to liquor, now you have accessibility and affordability combined with ‘permission’ from a much more liberalized society. In this country more than any other, I think, it really begs the question…is the glass half-empty or half-full?

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