Are Indians drinking more?

The answer is a big yes. Amidst a booming economy, Indians are spending more on non-essential stuff like alcohol. While some of you might disagree with this classification and say alcohol is the lubricant that drives society, let’s agree that it comes after housing, education, etc in the pecking order :). At least for most of us.

India recently became the largest importer of scotch whiskies by volume overtaking France. Scotch is a whisky made in Scotland and is revered globally for its quality. It’s a luxury good, and Indians consume this luxury more than any other country. It also helps that we are 1.4B while there are just 68M Frenchmen. 1.4B can drink more than 68M even if they are much poorer.

As per the Scotch Whisky Association, India imported 219 million bottles of Scotch Whisky in 2022, a 60% growth over 2021. Although most of this is entry-level whisky, this is still impressive growth for any industry. India comes first by volume and fifth by value on the Scotch Whisky import list.

But isn’t this astonishing that Scotch Whisky imports grew by 60% while the economy grew by just 13% (7% real growth + 6% inflation)?

It would have been if the Indian alcohol or whisky industry had grown by 60%. But this is just a segment of the Indian whisky industry. Despite this impressive growth, Scotch Whiskies account for less than 2% of the Indian market, and the total import value is less than $1B. The USA, the largest market, imported $1.27B of scotch in 2022.

The Indian whisky industry grew between 7–8% in 2021 and is expected to grow by 7.6% every year over the next 5 years. This is volume growth. If we expect a 5% annual increase in prices (in line with the inflation), the whisky industry is growing roughly at the same rate as the economy.

What we are witnessing is a demand shift from high-end Indian whisky to low-end scotch. Scotch signifies both quality and prestige. As the Indian middle class is growing richer, many of them are moving from drinking Indian whiskies to Scotch. They might not drink Scotch every time they drink whisky, but the frequency is surely increasing. With a higher disposable income, they can afford expensive scotch whiskies more than before.

The Indian whisky industry is growing because Indians are getting richer, but the scotch whisky is growing faster because of this demand shift. It’s normal for people to consume more luxury goods or services as they grow richer. We will see this trend as the income levels keep rising.

It’s time to party. Slàinte mhath (It means cheers in Gaelic, the historical language of Scotland).

A much needed break from the typical car ads!

Most SUV ads follow a standard template: Features displayed through exaggerated cases use cases like driving through rivers, deserts, mountains, and forests. The story usually panders to the thirst for adventure and is sprinkled with some tidbits of how this particular brand’s users are a class apart from others. After all, cars are about status.

This Ad from Kia is refreshing, despite sticking to the template. The narrative shows a father who forgot the binky. Set to the score of “eye of the tiger”, he struggles to get the child’s binky as the world rallies for him. He traverses the landscape with relative ease with his KIA.

As any parent knows the importance of packing the right things for their child, the story is relatable, and spoofing the behavior of hashtags and trends further adds humor. What works for this ad is that it highlights the everyday adventures of life rather than esoteric needs.

Have you seen Ankur Warikoo claim that if you don’t see value in his course, 100% of your money back?

Now it’s easy for you to think that people selling online courses can say this because their cost of delivering one extra unit of sale is nothing, but that’s where you’re probably wrong.

This is called a “Power Guarantee” in sales, and it does something amazing for your sales. Statistically, no more than ~5% of your customers will ask for their money back but this very promise can triple your sales!!

Now I have no idea about Ankur’s numbers, but so many businesses offer money back guarantees, and it works because:

- the consumer courts anyway have the power to ask you to return the money to a disgruntled customer. If you might have to do it under law, why not make it a claim worth advertising

- it builds credibility like nothing else does, and pushes people to make the purchase right now instead of deferring it to later

- it pushes the business to provide max value to the customer and thus requires you to perform better than the competition by design

Do you have any more examples of where else you’ve seen it? Would love to know some unique ones.