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Vodka is gaining a significant foothold in India’s liquor market, traditionally dominated by whisky, with younger consumers and women leading this change. The vodka segment’s market share has surged to 6.1% from 3.8% in just one year, indicating a pivotal shift towards white spirits. Abhishek Khaitan, MD of Radico Khaitan, noted that the appeal of vodka lies in its mixability and a variety of flavors that attract new customers.

This expansion within the vodka category represents more than just a trend; it’s a notable structural change within a market that exceeds 400 million cases annually. Notably, the recent growth in vodka sales exceeds even that of gin and tequila combined, encroaching on the traditionally dominant brown spirits like whisky, rum, and brandy, which collectively comprise about 90% of the market.

Khaitan, who previously considered selling Radico Khaitan, invested years into building the vodka brand before witnessing its current growth trajectory. The vodka category has experienced consistent annual growth of 20% over the last five years. States like Rajasthan and Uttar Pradesh report particularly quick gains for vodka, with established brands gaining ground at the expense of their brown spirit counterparts.

Globally, vodka commands around 28% of the spirits market, leaving ample room for growth in India. Radico’s leading vodka brand, Magic Moments, recorded 3.25 million cases sold in the last quarter alone, reflecting a 43% growth compared to the previous year, securing approximately 60% of India’s vodka market share.

In light of these changes, Radico also endeavors to position itself in the premium spirits segment, traditionally dominated by multinational brands. Their whisky products, like Virasat and Rampur, cater to various price segments, allowing Radico to mitigate dependence on lower-priced liquor and to adapt to market fluctuations. Their premium portfolio’s share has risen from about 40-43% to 52%, showcasing a deliberate shift away from commodity selling.

While the brand plans to maintain a stable portfolio only in jurisdictions that yield sufficient margins, it signifies a strategic repositioning within the industry to lean towards premium offerings that promise better profitability.