India’s alcobev makers are leaning into premiumisation this summer as input cost pressures intensify and consumers increasingly opt for higher-quality, experience-led drinking. While heat-driven demand is lifting beer and ready-to-drink segments, the bigger growth is being driven by value rather than volumes, with single malts, craft beers and premium spirits gaining traction across urban markets.
Companies are sharpening their focus on curated portfolios, limited editions, and cocktail-friendly offerings, as the industry is navigating a tough operating environment marked by rising packaging costs, supply chain disruptions, and regulatory constraints on pricing. Shortages of glass bottles and higher input costs are squeezing margins, particularly in the beer segment, even as revenue growth moderates. A report by Crisil Ratings noted that alcobev manufacturers in India are set to see their Ebitda margin decline by 150-200 basis points this fiscal due to a rise in packaging costs.
To mitigate the impact, players are recalibrating portfolio mix towards higher-margin products, taking selective price hikes, improving procurement efficiency, and diversifying export markets beyond volatile regions.
Premium, Formats and Experiences
As companies align portfolios with evolving consumer behaviour, growth this season is being fuelled by a mix of premiumisation, format innovation and experience-led consumption. From craft beers and ciders to single malts and ready-to-drinks, demand is tilting towards products that offer both refreshment and differentiation, while curated tastings, cocktail culture and on-premise experiences are expanding consumption occasions beyond traditional settings.
“Our focus this year is on accelerating growth, especially in our premium portfolio, particularly our select casks, while continuing to drive volumes in the mass segment. Overall, we are targeting a healthy growth trajectory, supported by deeper market penetration, stronger on-trade presence, and enhanced consumer engagement initiatives,” Paul P John, Chairman, John Distilleries, told BW Businessworld.
Summer is shaping up with real momentum across the premium whisky and heritage spirits portfolio for South Seas Distilleries, with Crazy Cock and Six Brothers seeing strong consumer interest. Devans Modern Breweries is focusing on consolidating its present portfolio, especially the premium Six Fields, rather than bringing new products into the market, though it would have a test launch of its dark beer during the summer in order to gauge the response of the consumers to the product.
“The beer category is performing exceptionally well and we have planned for a huge increase in our volumes this year. We have started brewing in Maharashtra, where we have a new production tie-up which would further add volumes. Our aim is to add a volume growth of over 10 per cent this year and focus on our premium portfolio,” stated Prem Dewan, Chairman and Managing Director, Devans Modern Breweries.
Occasion Play and Portfolio Rebalancing
As premiumisation gathers pace, companies are also working to make premium more accessible through sharper portfolio design. Smaller pack sizes, easy-to-mix formats and curated retail experiences are helping bring new consumers into the category, even as brands retain a strong focus on storytelling. Occasion-led consumption, from home hosting to social gatherings, is pushing companies to diversify offerings across price points and formats.
“We will launch our RTD range, ‘Vice’, this season. We are focusing on convenience-led formats, smaller pack sizes, curated tasting experiences and easy-to-mix offerings that align with summer and social occasions. We are targeting strong double-digit growth across key markets, with a sharper focus on improving throughput in experiential retail formats and on-premise channels,” Mokksh Sani, Founder, Living Liquidz and Mansionz, and Co-Founder, Cartel Bros, told BW Businessworld.
This aligns with a broader shift towards authenticity-led premium offerings, particularly in the spirits segment, where heritage and craftsmanship are emerging as key differentiators. Companies are adopting more calibrated portfolio strategy, one that blends high-growth premium labels with scalable formats and experiences.
“The idea of premiumisation is not about being fancy anymore; it is about authenticity, skilful crafting, and having something worth the occasion. At the same time, younger consumers are drinking more flexibly, moving between neat pours, cocktails, and food pairings. That is why the focus stays on spirits that feel versatile, distinctive, and relevant across settings,” explained Rupi Chinoy, Director, South Seas Distilleries.
Cost Pressures, Supply Constraints And Margins
Even as demand trends remain favourable, alcobev makers are navigating a challenging operating environment marked by rising input costs and supply-side disruptions. Crisil Ratings report pointed out that the industry margins are expected to decline by 150–200 basis points this fiscal, with revenue growth moderating to 5 to 7 per cent amid constraints such as glass bottle shortages and elevated packaging costs.
“Input costs, especially packaging, have risen up to around 15 per cent amid Middle East-linked disruptions, while state-controlled pricing limits immediate pass-through, compressing margins. To offset this, firms are shifting portfolio mix toward higher-margin premium products, driving 10 to 12 per cent revenue growth despite muted volume expansion,” said Major General Rajesh Chopra (Retired), Director General, Indian Malt Whisky Association (IMWA), adding that growth this season is increasingly value-led rather than volume-driven.
At the same time, brewers are dealing with similar pressures across raw materials and logistics, prompting a sharper focus on operational discipline. The cost of glass bottles is expected to increase 20 per cent on average this fiscal, to Rs 280 to Rs 300 per case. Given that the alcobev industry is highly regulated and manufacturers have limited ability to pass on cost escalations to customers, operating margins are expected to decline by 140- 180 bps in the spirits segments.
“On input costs, we have seen pressure across raw materials, malt, hops, packaging, consistent with broader commodity trends. Our approach has been a combination of forward planning, vendor relationships built over years, and where necessary, selective pricing adjustments that do not compromise the guest experience,” said Manu Gulati, Founder, Managing Director and Chief Brewer, Effingut.
Capacity Expansion and Market Diversification
Beyond pricing and portfolio shifts, a quieter but equally critical lever this season is capacity expansion and market diversification, as companies prepare to capture rising demand while building long-term resilience. Several players have been investing in production scale-ups, new facilities and deeper geographic penetration, ensuring they are not constrained by supply even as consumption patterns evolve.
Effingut is expanding both its physical footprint and production backbone to support future growth. “We are launching our Belapur taproom and simultaneously commissioning our production brewery, which will significantly expand our brewing, canning and bottling capacity. This allows us to scale our reach across Maharashtra and beyond,” Gulati added.
This focus on expansion is mirrored across the industry, with companies strengthening domestic distribution while also building a more diversified export playbook. With geopolitical uncertainties impacting key markets like the Middle East, players are increasingly looking at Europe, Asia and other regions to reduce concentration risks. As Chopra of IMWA noted earlier, exports are being recalibrated in line with India’s broader ambition to scale alcobev shipments globally, even as firms continue to deepen their presence in high-growth domestic markets.
John noted that the company has expanded its capacity significantly over the past five to six years and this additional production is expected to start reflecting in its inventory from next year. Brewers, too, are stepping up capacity to capitalise on the seasonal surge. Dewan also added, “We have started brewing in Maharashtra, where we have a new production tie-up which would further add volumes.”
While premiumisation, evolving consumer preferences and expanding capacity are creating strong tailwinds for value-led growth, structural challenges around costs, regulation and supply chains continue to test profitability. |
