India’s ready-to-drink (RTD) alcoholic beverage market is gaining momentum, with Diageo India launching Smirnoff ICE to tap changing drinking occasions and growing consumer interest in flavoured alcoholic beverages.
The company has launched two variants — Smirnoff ICE with 4% alcohol by volume (ABV) and Smirnoff ICE MAX with 8% ABV. The company is initially rolling out the products in Goa, Bengaluru and Mumbai.
The company says the RTD category is growing 12% in volume year-on-year in India.
“Around 100 million people are entering legal drinking age and above in India alone. Their chosen moments of socializing are different from conventional choices. We wanted to tap into three big trends — overall premiumization, gender participation. All three have been driving growth so far for us here and continue to do so globally as well,” said Ruchira Jaitly, Chief Marketing Officer, Diageo India.
Flavours drive new propositions
She added that flavours are becoming an increasingly important part of alcoholic beverage propositions. Jaitly said Smirnoff RTD, the world’s No. 2 RTD brand, is present in more than 100 countries.
The company said Smirnoff ICE is already a significant global business, with the brand present in 111 countries, including markets such as the US, Brazil and Australia.
“We thought this was a great time for us to expand our propositions on a trademark that has, over the last few years, done terrific growth and delivered a lot of success on the back of flavors,” Jaitly said.
The launch also comes ahead of the festive season, which the company expects will allow consumers to experiment with the new format.
Younger consumers broaden beverage choices
Meanwhile, Diageo India MD and CEO Praveen Someshwar said the company expects RTDs to expand the beverage repertoire of younger legal-age consumers.
“In India, I don’t think Gen Z are drinking less. In fact, in terms of value, they’re drinking more than what millennials were when they were at that age. The measure is not the number of times you drink, but the value you put out.”
He said younger consumers are also consuming different types of beverages depending on the occasion. Someshwar said different alcohol strengths across beverages can correspond to different occasions, with lower-ABV products competing more directly with beer and sparkling beverages.
“There’s an early afternoon, early evening occasion and an occasion outside. 5% will play in the early afternoon or early evening and is starting to compete aggressively with beer and sparkling. Then you get to 8% — consumers who don’t want a cocktail or a regular premium spirit. Gen Zs will participate in this space and make it a part of their repertoire.”
Diageo takes phased expansion approach
Someshwar said the category will require time to develop as consumers become familiar with the format. He added that Diageo follows a phased approach to expanding new products across the country.
India is a key market for Diageo, ranking No. 1 globally by volume and among its top three markets by value, according to Jaitly.
“India is a dynamic and strong growth market. A lot of the global growth is being driven out of India for the industry, so, it is a fantastic place to be,” she said.