India Spotlight: Spirits in PET Becoming More Acceptable
Retail sales growth of spirits in Asia Pacific over 2007-2012 was stronger than global growth, with the region recording an increase of more than two billion litres. This volume boost also positively impacted the overall performance of spirits packaging in Asia Pacific, enabling it to post an 11% CAGR over the same period, with India playing a major role in this.
Premiumisation of brands continues to drive sales of spirits. Rising disposable incomes in India, coupled with drinking becoming more socially acceptable, are key factors behind the dynamic increase in sales of spirits.
Glass remains the dominant packaging format for spirits. Glass helps to provide a premium positioning, with consumers being extremely status conscious and tending to associate glass bottles with high quality products. However, glass is experiencing pressure from other packaging types, such as the PET bottle, which has been supported by the double-digit growth of economy and standard products. PET bottles primarily exist in economy spirits, mostly in the 60ml pack size, although 1-litre PET bottles are also very popular. The reason for this is the insignificant difference between the retail unit price of a 750ml glass bottle and a 1-litre PET bottle. Therefore, consumers seeking value for money tend to opt for the 1-litre PET bottle rather than the glass bottle when it comes to buying brands in the same price category. Spirits packaged in PET bottles are expected to post a CAGR of 5% to 2017 in India, underpinned by a good performance from both small and large pack sizes at different price points to meet the needs of different consumer groups.