Beer is closing in on spirits in India, but brewers are increasingly looking to premium and super-premium brands to drive their next phase of growth as drinkers trade up.
Beer volumes grew at about 12% annually between 2021 and 2025, more than twice the pace of spirits, narrowing the volume gap between the two categories from 9.15 million hectolitres to 1.25 million hectolitres, according to data from drinks consultancy IWSR accessed by Mint.
While beer volumes rose from 21.29 million hectolitres in 2021 to 36.9 million hectolitres in 2025, spirits volumes increased from 30.44 million hectolitres to 38.15 million hectolitres, a compound annual growth rate of about 5.8%, Brewers Association of India (BAI) said, citing IWSR data.
But premium beer is growing much faster than the broader market. Its share of total sales has risen from 12% in 2021 to 20% in 2025 and 22% in 2026, while volumes have grown at an estimated 30% annual rate, more than twice the pace of the overall beer market, according to IWSR data.
The momentum is expected to continue this year. “(Beer) volumes are estimated to reach 41-42 million hectolitres, or about 530 million cases, with premium beer accounting for 22% of the market, up from 20% last year,” said Vinod Giri, director general of the Brewers Association of India.
Pan-India beer sales grew 17% year-on-year in the June quarter of fiscal year 2027 (FY27), the strongest growth in five quarters, compared with 11% in the previous quarter. A year earlier, sales had declined 0.2%. BAI told Mint that beer will see healthy growth this year, notwithstanding any drastic events.
Premium takes the lead
The shift to premium beer is becoming central to brewers' growth plans.
United Breweries Ltd (UBL), maker of Kingfisher, expects its premium portfolio to grow 20-25% annually over the next three to five years, significantly ahead of overall beer-market growth. Cans are also growing faster than bottles in some states, aided by premiumization and affordability.
Anheuser-Busch InBev, whose portfolio includes Budweiser, Corona and Hoegaarden, expects premium and super-premium brands to contribute about 75% of its India business within three to four years, up from 60% currently, the company told Mint recently. Brewers are also investing in canning capacity as premium demand rises.
The shift is extending beyond the largest players, as the economics of a market long dominated by mass-market and strong beers begin to change.
“India’s beer market has historically incentivized consumers to seek the highest alcohol content at the lowest price rather than pay for quality,” said Shantanu Upadhyay, cofounder of premium beer brand Kati Patang.
Karnataka's shift to an alcohol-content-linked duty structure means lower-ABV beers, which use less alcohol per litre, face a lower tax burden than stronger beers. That should improve the economics of premium, lower-ABV products, Upadhyay said.
Kati Patang's premium portfolio grew more than 50% in volume between Q4FY26 and Q1FY27, Upadhyay said. Its beers are priced 30-50% above peers and mainstream beers, and the company focuses entirely on premium and craft beers.
Medusa Beverages expects premium products to account for 20% of its portfolio by the end of this year, compared with 11% last year, said Avneet Singh, founder and chief executive.
Simba co-founder Ishwaraj Singh Bhatia also sees premiumization as an important growth driver as consumers seek more differentiated products and experiences. Its portfolio is currently 30% premium, and Bhatia expects that to become an equal split between premium and non-premium products in the next three years. The company is expanding its range with products such as the recently launched Simba Wild.
“There is no one particular amount that premium consumers are willing to pay, since beer pricing and taxation vary a lot from state to state. But we see that they will pay a meaningful premium over mainstream beer when the product offers an elevated taste,” he added.
Growth has limits
The national growth numbers mask sharp differences across markets. Maharashtra and Karnataka were among the fastest-growing states in the June quarter, with beer sales rising 42% and 35%, respectively. Andhra Pradesh recorded 33% growth.
Sales, however, declined 9% in Madhya Pradesh, 8% in Himachal Pradesh, 4% in Uttar Pradesh and Chandigarh, and 1% in Haryana. In Madhya Pradesh, BAI attributed the decline to a 30-40% supply cut rather than weaker underlying demand.
Maharashtra's growth is also expected to moderate as its comparison base rises. Giri expects growth in the state to taper to 18-20% after September, while industry-wide growth could hold at 13-14% for the full year, assuming there are no unforeseen disruptions.
For brewers, however, faster volumes do not automatically mean stronger profits. Glass bottles, aluminium cans, barley and logistics are pushing up costs, while government-controlled pricing in several states can delay payments and force companies to pass on discounts to consumers.
Giri said cost pressures could weigh on margins, with some markets delivering volume growth that could nevertheless hurt the bottom line. “Companies' toplines are good but cost pressure is expected to hit bottomlines badly. So the healthy growth also has unhealthy patches.”