Illustrations: Chaitanya Dinesh Surpur
Desmond Nazareth first tasted mahua, the clear liquor distilled from the mahua flower, in 2002. Impressed, he knew it had the potential to turn into a good spirit. Cut to 2019 where his company DesmondJi, has pioneered the sale of mahua as a quality spirit through its two variants, DJ Mahua and DJ Mahua Liqueur.
Craft beverages, alcoholic and non-alcoholic, all have a similar story in India. One passionate person (or a group) with the idea of using the country’s bounty to produce a beverage that is small-batch, of high quality, artisanal, home-grown, responsibly sourced and premium. Add a discerning consumer, willing to experiment with, and pay a bit extra for a home-grown quality product that is different from mass-produced commercial ones, and you have a recipe for success.
India, at the moment is seeing a growing number of such producers, eager to provide something that is different and yet familiar. “All these products are driven by passionate entrepreneurs who are bringing out products traditionally made in the West. It’s a good thing and much needed,” says Pankil Shah, co-founder, Neighbourhood Hospitality. “For the most part, the goal is getting the right product at the right price to the right people.”
The right product here could be any craft beverage. There’s gin being produced in Goa and taken across the country. Artisanal coffee is gaining ground through roasteries, vying for a shot at the cup with single estate teas. There’s kombucha as well as cold-pressed juices for the health-conscious. Elsewhere, craft beer is rapidly climbing up the popularity charts.
The India Story
In a market this crowded, how does a consumer decide what is truly a craft beverage? The definition is mutable. A craft product should ideally be one or more of the following: Organic, locally-sourced, independently produced, handmade, have an innovative take on an existing product and quality ingredients, and be made in small batches. For Shah, a craft product is anything that has love and passion put into it and is a natural consequence of its ingredients.
Besides, he says, it should also tell a story. “It’s nice to know where a product is coming from. The story has to go beyond socio-economic factors and play on your emotions, the way FMCG brands have been doing for eons.”
India’s ‘gin-naissance’ started because its creators wanted to tell the story of the country’s association with gin. “Every gin out there has some connection to India, either in the name or the botanicals sourced. We wanted to tell our story of gin but not in a culturally-appropriated manner,” says Rahul Mehra, owner of Gateway Brewery, who launched Stranger & Sons in 2018 with his wife Sakshi Saigal and brother-in-law Vidur Gupta.
Their story of Indian gin is all about mostly local botanicals sourced from farmers to create a drink that is bold but with soft, citrus notes. They employ women from a local self-help group, the merchandise is organic and fair-trade, and they are working on being sustainable in the future.
Anand Virmani and Vaibhav Singh of Nao Spirits created the first craft gin in India in 2017 to provide a quality Indian gin that was affordable and that highlighted the country’s botanicals. Greater Than was launched out of a small distillery in Goa, followed by Hapusa, which used botanicals like dried mango, turmeric and gondhoraj. Both drinks proudly proclaim their Indian connection: Hapusa is Sanskrit for juniper, and Greater Than’s name is a tribute to the country’s mathematical contribution to the world.
If gin is on the rise, can tonic water be far behind? Svami, by Foxtrot Beverages, was launched in 2018 to complement this home-grown narrative of gin. The ‘progressive drinks company’ sells tonic waters, plain and flavoured. “We are proud to make in India, but at the same time we represent a modern India and have zero colonial hangover,” says Aneesh Bhasin, who founded the company with Sahil Jatana and Mehra.
Svami launched in Maharashtra. The two gin brands meanwhile launched in Goa, a state that Mehra calls a ‘great discovery market’.
Nazareth, too, launched his mahua in Goa. He is now trying to take mahua beyond the country liquor tag and showcase its origins. “Mahua is the most widespread spirit in the country and available in over 12 states. It has deep cultural links to the tribal population and history going back a century,” he says. “It could well be our national drink.”
At the moment, the honour of being the country’s beloved drink, however, is firmly entrenched in a cup/ cutting glass. India is the second largest producer of tea in the world and one of its largest consumers. While milky sweet masala chai is beloved, a handful of artisanal brands are hoping to turn discerning consumers in a different direction.
“There has been a sudden rise in the acceptance of specialty teas in the Indian market mainly because people value healthy products with focus on fresh, natural and clean ingredients. Them getting acquainted with specialty tea culture is why the segment continues to grow at a market rate of 12-15 percent per annum,” says Bhuman Dani, co-founder of The Good Life Company (TGL Co). TGL Co, which began in 2016, sources tea leaves from across the world, mixing them with real dehydrated fruits and flowers.
Besides TGL Co, there are other artisanal and gourmet tea brands like Tea Trunk, No3. Clive Road, The Hillcart Tales, Anandini Himalaya Tea, Sancha Tea, and Exalté, offering diverse blends.
Similarly, diversity and promise to cater to differing consumer tastes are also pushing the growth of the coffee industry. The artisanal coffee wave is seeing roasteries and coffee brands experimenting with infusions, cold brews, roasts, and unique flavours that are finding appeal with a small, cult following. These offer an alternative to instant brew, and are generally fair trade, sourcing quality coffee beans directly from the farms.
When Sleepy Owl launched in 2016, they became the pioneer of the cold brew movement in India. Friends Arman Sood, Ajai Thandi and Ashwajeet Singh source single-origin Arabica beans from Chikmagalur, cold brew them and sell a ready-to-drink brew (in a box, pack, bottle or bag) to be had straight-up or with milk. “We design products that make brewing coffee easy, and convenient. It gets you pure cold brew coffee, without the science. We want to redefine the in-house brewing experience,” says Thandi.
Drinking artisanal coffee is cool, but for those seeking something a little more intoxicating, there is craft beer. In the last decade, craft beer has taken the alcohol industry by storm—it has grown from strength to strength and even expanded to tier II and tier III cities. Today, craft beer is found on tap at the nearest brewpub, microbrewery or restaurant. The market has also shifted to selling packaged craft beer, in bottled or canned versions. It’s possible to walk into a store and buy bottles and cans of Simba, White Owl, Geist (in Bengaluru), Eight Finger Eddie (Goa), Independence Brewing Co and many more.
To the market
There’s a common marketing strategy that cuts across these craft beverage brands: Get as many people to sample the products as possible. It’s just the means of achieving it that differs.
India may be the fifth largest consumer of gin worldwide but it still loses out in volume to whiskey and rum. It thus isn’t enough for craft gin manufacturers to just sell in stores and restaurants. Stranger & Sons does gin and food pairings, participates in festivals and events, and are also planning a visitor’s centre and university (for drinks) at their facility in Goa.
“We don’t want to Anglicise or gentrify the drink but make people experience it and be proud that something of this quality is Indian,” says Mehra. Svami, too, relies on activations at restaurants and events. Their drinks retail in Mumbai, Delhi, Bengaluru, Chennai and Goa, at wine shops, trade stores and modern trade stores. The coming year will see new products and international expansion.
Nazareth’s mahua products are sold in Goa and Karnataka. He has tied up with local bars to sell his products—part of his promotion plan is meeting bartenders and showing them the versatility of the drink. “It is a clean drink and makes a good base for liqueur, and cocktails. It is something new and delicate. It should be part of every bartender’s arsenal,” he says.
In the coffee world, brands are working with mixologists to create coffee cocktails, and organise workshops and events to connect with consumers. Some players like Koinonia Coffee Roasters, Blue Tokai, The Flying Squirrel and Indian Bean Co have gone a step further, opening a roastery and café where consumers can learn about the process, savour a cup and purchase products. Sleepy Owl’s biggest problem was distribution (retailers were hesitant to stock their products) so they went online using e-commerce and social media to build their market. Today, they retail across 400 stores.
Similarly, TGL Co chose a different path, targeting B2B before they went B2C. Their market has now expanded to over 200 hotels, restaurants, cafes, co-working spaces, airport lounges and QSRs across nine Indian cities, and they retail at over 400 modern trade stores. “The secret to success is to make healthy products an indulgence and increase the number of repeat purchases. We thus created innovations by mimicking dessert, cocktail and candy profiles in our teas,” says Dani.
The key to staying sustainable is thus constant innovation, and remaining consistent when it comes to quality.
An eye to the future
Artisanal or craft foods are still a niche product in the Indian market, a new concept with limited demand. It’s a demand typically led by the younger generation. Thandi quotes a World Economic Forum and Bain & Co. report that says India will see a fourfold jump in consumer spending by 2030, and it will be a young consumer economy with 77 percent millennials and Gen Z. Today’s spenders have moved from being price sensitive to being value conscious. They understand the value of a good product and do not hesitate to pay extra for a healthy, wholesome, sustainably sourced, premium quality offering or a curated consumer experience.
“Increasingly it is becoming a trend for Indian consumers to try and appreciate new hand-crafted products. Our customers are early adopters who follow global trends and innovations and aren’t hesitant to experiment with products from start-ups. The trials and the repeats are very encouraging,” says Saibal Banerjee, category head at Foodhall, which retails Svami, Sleepy Owl, Koinonia, Moonshine Meadery, White Owl beer, etc. at its stores in Mumbai, Delhi, Gurugram and Bengaluru. As a policy, they promote home-grown, hand-crafted artisanal brands through properties like Launchpad and Maker’s Market. “These brands add range and newness to the beverage category and appeal to discerning customers seeking to innovate and experiment with choices,” he says, adding that the market will only grow as retailers will move focus to cater to these group of customers.
Shah believes there is a demand in major metros for high quality, craft products but it is not being fulfilled because not too many are doing it on a large scale. “You won’t find craft beverages in tier II or III cities yet, but it’s a question of time. The thought process needs to percolate down to everybody. As economy of scale increases, many will start selling it for less while still maintaining the high quality and sense of craft attached to it,” he says.
Bhasin adds that if people have the spending power and have an option for a better product, the industry will remain profitable. “If you offer good quality products at a slightly higher cost, it’s a win-win situation,” says Bhasin.
Dani, too, is optimistic. “The idea is to scale up and go the mainstream route without compromising on the values, ethics and offerings. This means maintaining the DNA associated with craft products—clean sourcing, high quality raw materials, sustainable production and innovation,” he says.
Teacup, mug, bottle, brew bag: The beverage market is ripe for the picking.
(This story appears in the 13 September, 2019 issue of Forbes India. To visit our Archives, click here.)