Indian Whisky: Country at a Crossroads

Diageo’s purchase of Indian drinks group United Spirits once again puts the spotlight on a true sleeping giant. Dominic Roskrow on a divided sector

The market for whisky in India is so vast, complicated, obscured and diverse it’s all but impossible to do it justice in any snapshot or soundbite. Last year, though, I was given a tiny taste of its extremes while a guest of Indian whisky maker Amrut in Bangalore.

We had toured the distillery, tasted rich and wonderful new Amrut whisky, and were heading out for dinner when my host asked me if I’d like to experience ‘happy hour’ Indian style by heading downtown. So, as dusk fell, we negotiated the chaos that is any Indian city at rush hour – or any time, come to think about it – and headed for a drink. Or at least that’s what I thought we were doing. I assumed we were going to a bar. We were not.

Our destination was what is loosely referred to as an off-licence: a concrete and glass building with a serving window on to the street. Here a steady stream of men – always men – would approach, pay about 35 rupees (35p) and be handed a quarter-size bottle of whisky. To the side of the off-licence was a concrete structure which looked a bit like a bus shelter. It had no seats, no fittings, and it stank of urine. 

Along the walls ran a shelf on which each visitor placed his glass, filled it with his quart of whisky, drank it down in one, then left. No smiles, no chat, just a deflated and hurried appointment with a hooch whisky. As is the Indian way, our hosts found this sub-life a source of great merriment, openly pointing and laughing at the wretchedness before them.

We didn’t stay long and half an hour later, in one of the wealthy suburbs of the city, we went for dinner at one of the most stylish restaurants I have ever been to. 

The attention to detail and service would not have looked out of place in The Ritz, the decor would have contented a Russian oligarch, and the food was of Michelin-star standard and then some. Then there was the bar – with an impressive range of Scottish malt whisky as its centre piece. 

Here there was some Amrut but it isn’t common to see it in such places anywhere much further than Bangalore itself (though it is being rolled out to some degree in India now). No, this was all about single malt Scotch, presented in the most lavish way. 

The two experiences were worlds apart from each other, of course, linked only in the loosest possible way by the word ‘whisky’, though the respective drinks involved had little more than yeast and water in common with each other. Those two worlds can never be reconciled and they represent two extremes, but they serve to illustrate why trying to get a grip on the market for whisky is like trying to plant a flag in the middle of the Atlantic.   

If you’re like me and find a blitz of statistics about the drinks industry a baffling confusion of litres, cases, bottles and percentages, then India is an X-rated horror film. India consumes 260 to 270 million cases of whisky a year, we’re told, only it doesn’t because not all the whisky is whisky, it’s ‘whisky’ – or in euro terms, rum, and made with sugar molasses. 

Very little Indian whisky is exported, demand for whisky is in double-digit growth, and in the tiny premium drinks sector single malt Scotch enjoys the biggest growth of all. 

India makes and consumes the biggest whisky brands on the planet, although you probably  haven’t ever seen them, even if you’ve heard about them, and unless you’ve been to India you more or less certainly haven’t tasted them. 

For the record, Officer’s Choice, from Allied Blenders & Distillers, has overtaken Bagpiper, from United Distillers, which Diageo has just bought controlling shares in. The two whiskies sell 18.1 million cases and 14.1million cases respectively. All of which begs the question: outside of India, who cares?

That’s being facetious. The question is actually, does any of this really matter? The answer is yes, and for two reasons: one, because the two extremes outlined above are not the only games in town and there are a number of other options in between. And two, because while the expression ‘sleeping giant’ doesn’t quite cut it as a descriptor for India, it’s certainly a huge tiger, somewhat detached now, but with the capability to pounce powerfully if and when the time is right.

It’s the sheer size of the market that interests the big drinks producers – and the fact that, without trying and with a series of obstacles in its way, India is still growing as a spirits market and can already lay claim to being the largest whisky market on the planet. 

Just think of the opportunities from this market if it ever resolved its differences with Europe and elsewhere, or simplified the bureaucratic nightmare of having so many individual autocratic states, or agreed to reduce the still astronomical levies on imported spirits.

Please indulge me for a minute while I throw in a few more statistics. The total population of India is a little over 1.2 billion, but of those only about a quarter – 300 million – are benefitting from the Indian Tiger economy and the subsequent boom. We say ‘only’, but 300 million people is roughly the size of the US.

And because information about the whisky market in India has been sketchy and vague, and because it’s virtually impossible to find out exactly what goes into many of the country’s whisky brands, we are only just now starting to appreciate that India is like no other whisky market in the world and is behaving like no other whisky market in the world. 

So, while the likes of China, South America and Africa may follow the standard path from domestic spirits to imported ones – and eventually premium imported ones such as Scotch whisky – India is in a totally different place, having embraced whisky at the time of the British Empire. 

Its educational needs when it comes to the finest single malt are out of sight when compared to the likes of China.

For a big drinks company such as Diageo, the route to servicing such a huge country’s growing spirits-drinking needs isn’t necessarily to encourage more single malt whisky consumption – it simply hasn’t got the stocks – and it may not be to grow its Scotch blends much further. 

After all, Johnnie Walker’s Indian sales are so important as part of gifting and at celebratory festivals such as Diwali that, when an illegal fake batch resulted in several deaths a few years back, Diageo put ads in the British drinks trade press, written in a number of Indian languages, to reassure Indian customers that the official blend was safe.

Perhaps a clue to the future lies in the launch of Diageo’s latest spirit release, Rowson’s Reserve. Described as a new brand of Indian grain whisky, it contains Scotch whisky and is aged locally in American oak barrels. The company has also talked of launching other premium spirit drinks, designed specifically for the Indian middle classes. There has even been talk of innovatory new spirits – so could this be a case of ‘when in Rome’ as the big producers go into unknown terrain which is forbidden to them in Europe? 

Diageo’s latest investment in the Indian market could well be a game changer. On the early evidence it would seem that the likes of Indian single malt whisky companies such as Amrut or Paul John are nothing more than a sideshow as the big drink companies wrestle to win the hearts and palates of the emerging middle classes. 

If you want to extrapolate, we could be witnessing the start of a new and distinctly Indian drinks category, which might not be about cheap and bad blends made with molasses, nor about expensive Scottish single malt consumed for prestige. And not even about fine quality Indian single malt competing head to head with the world’s finest whiskies.

The future of the Indian whisky  market could actually be about large-scale, but premium, production of a type that is currently no more than a twinkle in some drinks strategist’s eye.

But only time will tell. Watch this space.