Constant policy changes don't help make investment decisions: Bacardi MD

While tequila is a small category. Whiskey is still 70 per cent, but on a small base, tequila is growing the most rapidly

India is among the largest growth-contributing markets for Bacardi globally. VINAY GOLIKERI, managing director, India and neighbouring countries, Bacardi India, spoke to Sharleen D’Souza in an exclusive interview in Mumbai. Edited excerpts:

 

Where does India stand for Bacardi globally?

 

India, in terms of growth, is definitely in the top five. It has been among the largest growth-contributing markets for the past three years, with acceleration in 2023 and 2024. It’s a key focus market, one of our biggest bets, and a consistent priority for Bacardi as a group, given the potential we see in India and the strong foundation we have built over the years.

 

What is the growth rate of the Indian market for Bacardi?

 

If you look at 2023 versus 2022, we had a value growth rate of about 38 per cent. We grew almost three times faster than the industry. The industry growth was 8-10 per cent, and IWSR (originally International Wine and Spirits Record) estimates industry growth at 5-6 per cent, but we are comfortably growing in double digits.

 

Do you expect this growth rate to continue?

 

We are very confident about accelerating growth in India, given our portfolio. Bacardi is the leader in rum, we are also leaders in gin with Bombay Sapphire, and we lead in vodka as well. This makes us very confident about our growth going forward.

 

How is demand playing out in the industry?

 

We are seeing premiumisation. People are drinking less but drinking better. If I look at the categories that are performing well, tequila is seeing strong, fast growth, along with gin, Indian single malts, and whisky in general. These are the four categories that are thriving. Growth has normalised after the pandemic, but if I compare 2024 with 2020, it’s still at an elevated level.

 

Which is the fastest-growing category among spirits in India?

 

While tequila is still a small category, whisky accounts for 70 per cent of the market. However, on a small base, tequila is growing the fastest. I’m quite certain it’s growing north of 30-35 per cent.

 

Do you think there needs to be a revision in pricing in any states?

 

From an industry perspective, there are three key areas to consider: pricing, ease of doing business, and consistent regulatory policy.

 

One of the things that helps businesses take a long-term view and invest in states is having a consistent alcohol policy. What tends to happen is that every year, there is a policy change or a shift in the route-to-market in several states, which does not help businesses make long-term investment decisions.

 

On pricing, the flexibility to adjust prices is highly restricted in the alcohol industry across most states. I can only count a couple of states where there is true pricing freedom; in most others, pricing is controlled by the government. There should be more flexibility, particularly for premium products.

 

Pricing freedom allows us to invest in the state — whether in manufacturing, advertising, promotion, brand building, or revenue generation. At a minimum, an inflation-indexed pricing model would be ideal. As the cost of goods rises, manufacturers need some level of inflation-based pricing adjustments, and this is something we hope to see from the government.

 

Have you increased your investments in India?

 

India is a priority market for Bacardi globally. Since mid-2024, our investments have increased by over 60 per cent across advertising, promotion, and manufacturing. We have invested significantly ahead of the curve, and this will continue because Bacardi sees India as a key growth driver.