Daijiworld Media Network – New Delhi
New Delhi, Nov 20: India’s drinking landscape is undergoing a defining transformation, with premium spirits and high-end beers rapidly taking centre stage. What was once a market dominated by mass whisky and budget beer has evolved into a Rs 3.2 lakh crore industry (USD 39.30 billion) that is witnessing a clear, upward shift in consumer choices.
Across metros like Mumbai and Bengaluru, shelves that once displayed regular labels are now lined with sleeker, pricier bottles—signalling a nationwide upgrade in preference and purchasing power.
A recent JM Financial report (September 2025) reveals that the Prestige & Above (P&A) segment in Indian Made Foreign Liquor (IMFL) and the premium beer category are outpacing mainstream brands, growing in low double digits. Premium IMFL now commands 40–45% of the category’s overall value, while premium beer contributes 20–25%—a significant leap in a market that sells nearly 1.1 billion cases annually.
The spirits segment is seeing the most dramatic shift. The Prestige & Above category—featuring labels like Royal Challenge, American Pride and Magic Moments Dazzle—has grown at a robust 13–14% volume CAGR from FY18 to FY25, far ahead of the mid-single digit growth in the broader IMFL space.
United Spirits is the standout example of this change. In FY22, the P&A portfolio contributed 54% of its volumes. By FY25, that share has surged to 83% of volume and a staggering 89% of sales. Its Luxury and Premium sub-segments—growing at 27% over FY21–FY25—now deliver EBITDA per case nearly four times higher than base spirits.
Radico Khaitan too is accelerating on this path. With strong performance from Magic Moments and 8 PM Premium Black, its Prestige & Above business has expanded at 24% CAGR. The company is now poised for 18% annual revenue growth between FY25 and FY28, with EBITDA rising 26% and PAT jumping 36%.
Beer has been slower to premiumise, but the shift is now unmistakable. Out of India’s 400 million beer cases sold annually, 20–25% belong to the premium bracket.
United Breweries (UBL), which still commands nearly half the market, has leaned into this trend with labels like Kingfisher Ultra Max and Heineken Silver clocking mid-teens CAGR between FY23 and FY25. Notably, EBITDA per case in premium beer is almost double that of mainstream offerings.
UBL is expected to post a 12% sales CAGR and an impressive 29% EPS CAGR during FY25–FY28, supported by a 350-basis-point expansion in EBITDA margins. Global players AB InBev and Carlsberg India are already ahead in the race, deriving 60–70% of their India volumes from premium brands.
While premium brands bring glamour and aspiration, they also offer something more crucial—financial stability. With India’s alcobev sector navigating some of the world’s most complex state regulations and volatile input costs, premium products provide much-needed resilience.
Input cost pressures that squeezed margins between FY19 and FY23 have eased since FY24. Premium labels, with stronger pricing power, have been able to recover faster. Even when Maharashtra revised its duties in FY26, pushing prices up by 30–40%, high-end brands absorbed the blow more effectively than mass labels.
With premium products rising, analysts expect gross margins for major players to expand by 150–200 basis points between FY25 and FY28, supported by better cost absorption, operating leverage and stronger brand portfolios.
Despite strict regulation, India remains one of the fastest-growing major alcohol markets in the world. With 100 million more Indians set to reach legal drinking age by 2030—accounting for nearly 25% of global consumer growth—the premiumisation wave is only expected to intensify.
From spirits to beer, India’s alcobev industry is clearly entering a high-value era—one where aspiration, affordability, and evolving lifestyles converge to redefine the nation’s drinking culture.