Accelerated growth in premiumization most encouraging for Alcobev: Siddharth Wadia

As the year 2021 draws to a close, it is time to recap the major developments across the industry. As in the previous years, Adgully has been reviewing the year 2021 for M&E, Advertising, Digital, Marketing, PR & Communications along with leading names in the industry.

As opposed to the severe disruptions brought about by the global COVID-19 pandemic in 2020, the year 2021 was more about resilience and rebuilding.

Siddharth Wadia, Director & GM - IMENA, Brown-Forman, does a recap of the Alcobev industry in 2021, the accelerated growth in premiumization see in this industry, as well as the reasons for his optimistism on the near term and long-term outlook.

Major developments & trends in the Alcobev industry in 2021

2021 has been a very interesting year, to say the least. The pandemic-induced disruptions certainly had an impact on our industry across multiple facets, from supply chain to changes in consumption occasions.

Having said that, the latter half of the year has seen a strong turnaround with business recovering and, in some cases, surpassing the pre-Covid levels. While India has historically demonstrated a ‘V’-shaped recovery, the most encouraging aspect of the recovery this year has been the accelerated growth in premiumization.

The other notable trends have been the increase of ‘in-home’ consumption occasions, improvement of retail infrastructure & home delivery (thus improving the accessibility and shopping experience) in some key cities, increasing consumer repertoire of experiencing new categories and cocktails, and elevated consumer engagement with digital mediums.

Key challenges & new learnings

There have been few short-term challenges during the year such as restrictions around social gatherings & celebration occasions, coupled with the interim impact on the on-premises channel. While these were necessary restrictions, we are cautiously optimistic of normalcy being returned as we navigate through the Covid environment.

The mid-term impact will be on the global supply chain given the unavailability of shipping vessels and global rebalancing of demand vis-a-vis supply.

The key learning has been the need to stay agile as an organisation so that we are quick to re-calibrate our approach to respond to these disruptions whilst continuing to build a sustainable & scalable business model.

Outlook for 2022

The increased vaccination coverage and improved vaccine availability will certainly help in stabilising the new normal. Given the improving consumer confidence and healthy premiumization trends for the Alcobev category, I am optimistic on the near term and long-term outlook.

There are quite a few reasons for this optimism, to share a few:

On-premises recovery continues to normalise
Upbeat domestic tourism
Enhanced consumer repertoire towards flavoured whiskeys and low alcoholic beverages (Ready to drink formats)
Encouraging consumer behaviour to try premium & quality brands
Improved affordability of premium brands in certain key states leading to better accessibility