Radico Khaitan vodka share hits 6.1%
Vodka's share of India's spirits market grew to 6.1% from 3.8%, driven by younger consumers and women, marking its biggest jump yet.
Vodka is taking a record share of India's liquor market. According to Radico Khaitan Managing Director Abhishek Khaitan, the category's share has risen to 6.1% from 3.8%. He described this as a major structural shift towards white spirits, especially vodka, in an exclusive interaction reported by the Economic Times.
This marks the biggest jump yet for vodka in India. In a spirits market of about 400 million cases, a one-percentage-point shift represents roughly four to five million cases. The incremental volume from this latest gain is now larger than the entire gin and tequila categories combined. The share gain has come largely at the expense of brown spirits like whisky, rum, and brandy, which together account for about 90% of the overall market.
Khaitan stated that the change is being driven by younger consumers and women. The growing popularity of flavoured and more mixable spirits is also a key factor. States including Rajasthan and Uttar Pradesh are seeing vodka's share rise rapidly, with the category gaining ground from whisky, rum, and brandy.
Globally, vodka accounts for about 28% of the spirits market, which Khaitan said leaves India with considerable headroom for further growth. He noted that the category has grown about 20% annually over the past five years, with the acceleration becoming more visible as the base has expanded.
Radico's Market Position
Radico Khaitan's flagship Magic Moments vodka sold 3.25 million cases in the June quarter. This was up 43% from a year earlier. The company holds about 60% of India's vodka market.
Khaitan revealed he had considered selling the company about three times until around 2016. He spent years building its vodka business before the category's growth became visible. "It's taken that time," he said.
Strategic Shift to Premium Products
Radico's upmarket move has taken it into a part of the spirits industry once dominated by multinational brands. This shift is part of a deliberate decision taken years ago to move away from commodity selling.
The company's premium portfolio gives it less exposure to fluctuations in grain and glass costs. It also reduces dependence on state-level price increases, according to Khaitan. The shift has allowed Radico to reduce its dependence on lower-priced liquor. Its prestige & above contribution has risen to 52% of the portfolio from about 40-43% earlier.
However, the company will retain a regular-price portfolio only in states where it generates adequate margins. Khaitan noted that while lower-priced brands offer operating leverage by utilising existing distribution and manufacturing infrastructure, their margins are lower than premium products.
The company has also focused on premiumising its whisky portfolio. For instance, its Virasat whisky is aimed at the roughly ₹3,000-₹4,000 price segment, which Khaitan describes as "affordable luxury." Its Rampur whisky ranges from about ₹8,500 to as much as ₹5 lakh. Khaitan said the company had been absent from the middle of that market because of limited malt capacity.
