The co-founder shares why India needs a homegrown go-to liquor brand and that premium alcohol doesn’t always mean imported spirits
It all started with gin—specifically, one that was homegrown and paid homage to India’s growing craft movement. When co-founders Rahul Mehra, his wife Sakshi Saigal, along with Vidur Gupta were looking at India’s miniscule craft spirits space back in 2019, they realised there was barely any exciting conversation happening around liquor brands. Mehra, with a background in hotel management and working with a distribution company in the beverage space, had been dabbling as a hobby homebrewer for several years (he went on to launch The Gateway Brewing Co. shortly after), while Saigal and Gupta brought their collective expertise in the business and food space respectively as they brainstormed launching a homegrown Indian gin. The trio pooled in their resources and bootstrapped Stranger & Sons gin, featuring nine Indian botanicals.
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“We always knew our first production had to be a gin brand,” shares Rahul Mehra, referring to their flagship product. Image: Instagram.com/shortstoryspirits
“We always knew our first production had to be a gin brand,” shares Mehra, referring to their flagship product. “The question was, how could we translate young contemporary India in a more contextual fashion and put it on a global platform?"
Mehra adds that they were seeing several international gin brands source their botanicals from India, but there was no narrative or story supporting the Indian context. Fast forward to today, Stranger & Sons has notched up market share domestically as well as internationally, with a presence in markets such as the UK, USA, UAE, Hong Kong, Singapore, Taiwan, and Thailand as well as in some duty-free channels.
In 2022, Third Eye Distillery, the parent company, launched Short Story spirits, starting with three white spirits including grain vodka, white rum, and dry gin. Later that year, Third Eye Distillery acquired Svami, known for its non-alcoholic drinks and artisanal mixers, and also acquired Countertop—an end-to-end beverage consultancy that works with bars and spirit brands across the country.
According to a report by Allied Market Research, the Indian gin market is expected to reach US$1,598 million by 2030, growing at a CAGR of 5.9 per cent. The potential is immense, as more and more homegrown spirits look to capture a piece of this pie.
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In 2022, Third Eye Distillery, the parent company, launched Short Story spirits, starting with three white spirits including grain vodka, white rum, and dry gin. Instagram.com/shortstoryspirits
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According to a report by Allied Market Research, the Indian gin market is expected to reach US$1,598 million by 2030, growing at a CAGR of 5.9 per cent. Instagram.com/shortstoryspirits
Third Eye Distillery has raised a total of US$10 million so far, from marquee investors such as Niren Shah of Norwest India, Priya Sharma, Ritesh Sidhwani, investment banker Pramit Jhaveri, and Akshay Tanna, among a few others, and plans on tapping more craft spirits with an eye on segments like whiskey and rum. Edited excerpts from the conversation with Mehra:
Tell us about the genesis of Third Eye Distillery?
When we first started brainstorming about launching a small-batch craft spirit, we noticed that the space was quite dull, and there were no engaging conversations with consumers. For the longest time, people thought premium liquor meant imported spirits. We wanted to change that narrative and make a product that Indians could not only resonate with but were also proud to consume.
When we started out, we were one of the first brands to have end-to-end control of our manufacturing and distribution. In our first year, we began with availability in Goa and Maharashtra and sold about 4,000 cases—that was just Stranger & Sons. In 2022, we launched another spirit brand in our portfolio called Short Story. For the fiscal year 2023-24, together, both our spirit brands have sold over 60,000 cases.
How did you go about expanding the product portfolio to what it is today?
I think what worked in our favour was that we didn’t lose sight of our consumer set. On the one hand, you have domestic players which are very regional in nature and then you have the international ones. We wanted to compete with both of them. We knew that we had to have a portfolio of brands, and that’s how Short Story came about, focusing on the white spirits segment. Having one brand to fight three different spirit categories was both challenging and exciting for us.
"WE’RE SEEING MORE AND MORE INDIANS PROUDLY CONSUMING HOMEGROWN SPIRITS OVER IMPORTED ONES AND MORE FOREIGNERS APPRECIATING AND DRINKING INDIAN LIQUOR BRANDS. INDIA IS A US$35 BILLION SPIRITS (NON-WINE AND NON-BEER) MARKET"
Rahul Mehra
With Countertop, we wanted to play a role in defining the cocktail culture of the country and started looking at what we were lacking. It’s an end-to-end beverage- and menu-consulting business, and we currently work with about 20-25 bars around India as well as spirit companies, helping them navigate the market.
Was it challenging to launch a homegrown alcohol brand in the Indian market?
So, to give some context—in the early days, players would typically function in the market for volumes and not for value. A chunk of a brand’s portfolio would be in the low-price segment, as that’s where volumes were. When we launched, we came in at the premium segment, a bottle of gin priced at around ₹ 2,500. Retailers told us we were off the mark but we persisted, especially doing a lot of events and experiential activities to educate the consumer. We understood what India was drinking and knew we could add to that conversation. The turning point for us was Stranger & Sons winning a gold outstanding medal and ranking among one of the top 8 gins in the world at the International Wine and Spirit Competition (IWSC) in 2021. That gave us a lot of validation to continue with our vision for India-forward spirits.
How has the landscape for craft spirits in India evolved? How are we positioned to capture this growth opportunity?
We’re seeing more and more Indians proudly consuming homegrown spirits over imported ones and more foreigners appreciating and drinking Indian liquor brands. India is a US$35 billion spirits (non-wine and non-beer) market. What is really exciting to watch is the premium-and-above segment which is now growing rapidly. Consumers are upgrading from lower-priced products to the premium space.
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Events such as India Cocktail Week and Gin Explorers Club has only helped people put money behind Indian products, opines Rahul Mehra. Image: Instagram.com/strangerandsons
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Funnily enough, some of our first few investors wrote to us via Instagram, showing their interest in our product, shares Rahul Mehra
The advent of events such as India Cocktail Week and Gin Explorers Club has only helped people to get together and put money behind Indian products. It’s great to see that brands now have personalities, and a story to tell, which wasn’t the case until a few years ago. Most markets don’t have the same level of consumer growth that India has. So, I think the next few years are a strong opportunity to capitalise on this.
What about the fundraising process?
Funnily enough, some of our first few investors wrote to us via Instagram, showing their interest in our product. We were quite lucky to have a set of investors that helped us navigate the maze of distribution and the changing landscape—right from getting into markets like London and Dubai to fine tuning our strategy. We’ve raised about US$10 million over three rounds so far. As we plan to launch our next few product lines, we might look at raising more capital.
Tell us about your revenues?
This year we will gross over ₹ 60 crore and we are looking to double this with a growth of 100 per cent year-on-year. We plan to cross the ₹ 100-crore revenue mark by next year.
What’s next for Third Eye Distillery?
We think there are a lot more white spaces to tap in the market. Whiskey is up there as a category for us and so is rum; especially dark, aged rums. We’re evaluating the seltzers and ready-to-drink market but we will make a play for it when we see it as relevant. Our goal, eventually, is to launch products in every spirit category.
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