From premiumisation and mindful drinking to regulatory reform, India’s alcohol and beverage sector enters a defining phase by 2026
India’s alcohol and beverage (alcobev) industry is heading into 2026 amid a profound structural reset. Once dominated by volume-led growth, price sensitivity and fragmented state regulation, the sector is now being reshaped by a more discerning consumer and a gradual maturation of brands, formats and narratives. Premiumisation, moderation and flavour experimentation are no longer peripheral trends; together, they are redefining how Indians drink, what they choose and how brands position themselves.
Industry estimates peg India’s alcobev market growth at around 6–8 per cent CAGR by value over the medium term, with premium and super-premium segments growing significantly faster, often in the low-to-mid teens. By 2026, these higher-value segments are expected to account for a materially larger share of industry revenues, even as overall consumption remains relatively moderate by global standards.
Premiumisation Moves Beyond Metros
Premiumisation is no longer restricted to urban elites or celebratory occasions. It is becoming a core feature of everyday consumption across cities and emerging markets.
“India’s alcobev market is undergoing a structural shift, driven by premiumisation, conscious moderation, and a growing appetite for flavour experimentation,” says Deepak Arora, CEO, Som Distilleries and Breweries. “By 2026, consumers particularly in urban and Tier-1 markets will increasingly gravitate toward brands that offer quality, experience, and differentiation rather than only volume.”
This shift is clearly visible in beer. Demand for premium beers, wheat styles and craft-inspired offerings is rising, alongside smoother, more sessionable formats. At Som Distilleries, Arora notes that Woodpecker Wheat Beer has found strong acceptance among urban millennials seeking approachable, craft-style beers, while Sunny Beaches appeals to consumers looking for lighter, easy-drinking profiles suited to social and festive occasions.
Importantly, premiumisation is not displacing the value segment but adding layers to it. Brands such as Mahavat continue to perform well in the value-plus space, particularly in markets such as Delhi NCR and Madhya Pradesh, catering to consumers who prefer fuller-bodied beers at accessible price points.
According to Vicky Chand, CEO and Director, Radiant Manufacturers, premiumisation itself is evolving. “Premiumisation is moving from a metro-led, occasion-driven pattern to wider adoption across tier-2 and tier-3 cities, supported by rising disposable incomes and growing familiarity with quality cues such as provenance, ageing, and craft positioning,” he says. “This growth looks less about conspicuous labels and more about reliable upgrades within regular consumption.”
John Royerr, Founder, Ochre Spirits, echoes similar sentiments. “India’s alcobev market ended 2025 with clear structural shifts beneath steady growth. Premium and craft spirits are accelerating far faster than mass categories, driven by urban, home-led consumption and decentralised discovery. With craft growing over 20 per cent CAGR, 2026 will favour brands that deliver premium experiences, innovative formats and intent-led consumption over pure volumes.”
Moderation Reshapes Formats, Not Demand
Parallel to premiumisation is a decisive shift towards moderation. Indian consumers, especially younger cohorts, are increasingly mindful about when, why and how much they drink.
“Consumers today are drinking less but choosing better, prioritising quality, provenance and experience over volume,” says Varun Jain, Founder and CEO, Smoke Lab. This mindset, he notes, is fuelling growth in premium and super-premium spirits that emphasise craftsmanship and distinctive flavour profiles rather than high alcohol intensity.
Moderation is influencing frequency and format rather than suppressing demand. Consumers are spreading consumption across more occasions while favouring beer, lower-ABV styles and smaller packs that suit social and home settings. Chand points out that this behaviour supports volume growth without increasing per-occasion intensity.
At Som Distilleries, moderation is reflected in the growing popularity of sessionable beers such as Hunter and Power Cool, where balance and refreshment matter more than strength. “By 2026, the Indian alcobev market will be more segmented and premium-led,” Arora says, “rewarding companies that can balance innovation with scale, and experimentation with affordability.”
Flavour Experimentation Matures
Flavour experimentation is the third pillar reshaping the market. What began as novelty-driven innovation is now becoming central to brand differentiation and repeat consumption.
“RTDs, flavoured beers, gins, and finished whiskies are shifting from trial products to repeat purchases as brands refine taste profiles for Indian palates,” says Chand. Younger drinkers, in particular, are driving this shift, seeking variety, accessibility and cultural resonance.
For Kimberly Pereira, Chief Operating Officer, Maya Pistola Agavepura, this reflects a deeper consumer maturity. “India’s alco-bev consumer is maturing rapidly, with decisions now driven by intent rather than impulse,” she says. “Drinking occasions are becoming more considered, and that’s changing what people are reaching for and why.”
She notes growing interest across Pistola’s agave portfolio. Whisky drinkers are gravitating towards aged expressions such as Añejo and Extra Añejo, while cocktail-oriented consumers prefer the layered complexity of Reposado and Joven. “Premiumisation with moderation at its core will continue, and flavour exploration will deepen as consumers discover spirits across categories,” Pereira adds.
Similarly, Adarsh Gadvi, Founder, Davana Vermouth Indica, sees flavour innovation becoming more contextual. “Premiumisation will continue, but it won’t just be about price. It will be driven by quality, provenance, and storytelling,” he says. “Flavour experimentation will move closer to food and culture with regional ingredients playing a bigger role.”
Indian Whisky And Confidence In Provenance
One of the most striking developments heading into 2026 is the confidence with which Indian spirits, particularly whiskies, are asserting global relevance.
“In whisky specifically, Indian single malts have established themselves strongly over the past few years,” says Sanaya Dahanukar, Marketing Manager, Tilaknagar Industries. This growing confidence is changing how categories evolve, encouraging innovation in blending, ageing and expression.
She cites Seven Islands Pure Malt Whisky, which brings together four distinct single malts into a contemporary Indo-Scottish blend designed for curious, premium-leaning consumers. This philosophy underpins Tilaknagar Industries’ House of TI, a luxury vertical conceived with a long-term view to support premiumisation and category building.
“As preferences continue to evolve, sustainable growth will come from aligning portfolios and distribution with this more deliberate, experience-led way of drinking,” Dahanukar says.
Regulation Remains The Decisive Lever
While consumer trends provide strong tailwinds, industry leaders are unequivocal that regulatory reform will determine how much of this potential can be realised by 2026.
“Regulatory clarity and stability will be the most critical factors in unlocking sustainable growth and long-term investment,” says Arora. While acknowledging that state-level regulation is intrinsic to the sector, he argues that greater consistency in taxation, pricing mechanisms and distribution norms would significantly improve planning visibility and capital allocation.
“A balanced taxation framework that supports premiumisation without disproportionately impacting affordability or margins is essential,” he adds, particularly for premium and craft-led brands. Faster product approvals, timely price revisions and streamlined compliance would encourage innovation across beers, spirits and ready-to-drink categories.
Varun Jain echoes this need for predictability. “India needs more predictable and rationalised taxation, streamlined state-level regulations, and modernised distribution frameworks,” he says. Wider access to organised retail and digital channels would materially improve ease of doing business and help Indian spirits compete globally.
Distribution Reform And Investment Confidence
Distribution remains another critical friction point. According to Chand, state excise policies are “the single biggest variable”, with frequent changes in fees, quotas and retail structures making long-term planning difficult. Greater predictability in taxation and licensing would lower risk, encourage capacity expansion and support formal employment.
“Faster, time-bound approvals for labels and variants would allow brands to respond to consumer demand for new flavours and formats without long delays,” Chand says, adding that consistent enforcement against illicit trade is essential to protect compliant players.
From a broader ecosystem perspective, Vikram Achanta, Founder and CEO of Tulleeho and Co-Founder of 30BestBarsIndia and India Bartender Show, stresses predictability as the cornerstone of sustainable growth. “Consistent and transparent approaches to taxation, pricing and distribution will make long-term planning easier, allowing brands and retailers to invest in innovation and premium offerings with greater confidence,” he says.
He points to encouraging dialogue led by industry bodies such as the CIABC around policy alignment and clearer category recognition, including for indigenous spirits. “As consumer behaviour continues to evolve toward quality and experience-led drinking, regulation will need to align more closely with how the market actually functions,” Achanta adds.
A Portfolio-Led, Occasion-Driven Market Emerges
According to Hasan Bakhtawar, Chief Operating Officer—Cased Business, Angus Dundee India, India’s alcobev market by 2026 will look far more segmented and “menu-like”, with brands building portfolios for distinct drinking moments rather than relying on a single hero product. Premiumisation, he notes, will increasingly take the form of smarter trading-up, with consumers choosing better quality within familiar categories, guided by cues such as ageing, ingredients, provenance and credible craftsmanship. Importantly, this behaviour is no longer confined to metros. Discovery is now travelling through social media, modern trade pockets, e-commerce adjacencies, travel retail and stronger on-premise programmes in smaller cities, broadening the premium funnel.
Moderation, Bakhtawar adds, will influence product design as much as consumption behaviour. Sessionable offerings, smaller pack sizes and formats suited to home-hosting and casual socialising will gain prominence. Brands will compete on taste, finish and convenience rather than sheer strength, supporting steady value growth while keeping drinking occasions lighter and more frequent. At the same time, flavour experimentation will accelerate innovation cycles. RTDs, flavoured extensions, gin botanicals, cask-finished whiskies and limited-edition drops will move from novelty to repeat purchase as profiles better align with Indian taste preferences and accessible price steps.
He also sees a renewed role for premium blended Scotch, with consumers increasingly viewing it as a reliable step-up—valued for consistency, smoothness and global brand cues—without fully transitioning into higher-priced single malts. The cumulative outcome by 2026, Bakhtawar argues, will be faster launches, variant-led growth, sharper regional assortments and a stronger role for on-premise as the primary trial engine converting consumers into loyal buyers.
On the policy front, Bakhtawar identifies state-level stability as the single biggest unlock for sustainable growth. While the industry can absorb high taxes, frequent and unpredictable changes in pricing, licensing, fees and route-to-market mid-cycle significantly undermine investment confidence. Multi-year excise roadmaps, predictable revision schedules and clearer licence renewal rules would materially reduce risk and enable practical capacity planning. He also highlights the need for cleaner, more transparent distribution frameworks, stronger safeguards against illicit trade, and time-bound approvals for labels, variants and emerging formats such as RTDs and low-ABV products. Alignment on input taxation and smoother movement of raw materials, he adds, would remove avoidable friction and free capital for brand-building and quality upgrades.
Drinking Better, Not More
Paritosh Bhandari, Advisor at Three Brothers Distillery, believes the defining shift by 2026 will be a move towards drinking better rather than drinking more. Premiumisation, he says, will accelerate as consumers trade up within familiar categories, seeking authenticity, consistency and a clearly articulated taste narrative. This will be accompanied by moderation-led changes in occasion design, with consumption gravitating towards paced, social formats such as highballs, long drinks and cocktail-led experiences—preserving value without increasing intensity.
Flavour experimentation, Bhandari notes, will move firmly into the mainstream, playing to India’s natural affinity for spice, botanicals and citrus. As a result, growth will increasingly come from premium, mixable and flavour-forward spirits, driven more by occasion relevance than by volume expansion.
From a regulatory standpoint, Bhandari underscores three imperatives: policy predictability, simpler compliance and cleaner distribution. Stable and transparent taxation frameworks are essential for long-term planning and capital investment, while fully digitised, time-bound licensing and label approvals could significantly improve ease of doing business. Modernising distribution by reducing friction and increasing accountability would support stronger brand-building, enhance consumer experience and drive higher-quality growth across the sector.
Over the longer term, he argues that the industry would benefit from greater national alignment. While acknowledging alcohol’s status as a state subject, Bhandari points to the fragmentation it has created. A harmonised framework—potentially under a broader GST ambit—that better aligns Centre and State interests, he suggests, could be a decisive step towards a more efficient, transparent and globally competitive alcobev ecosystem.
Towards A More Mature Market By 2026
Despite challenges around regulation, input costs and supply-chain complexity, the direction of travel is clear. India’s alcobev sector is moving from opportunistic expansion to structured, measured growth.
At Som Distilleries, Arora notes that Q2 FY26 saw improved margins driven by a better channel mix and stronger traction in southern and central markets, underlining how regulatory alignment can directly support performance.
By 2026, India’s alcobev market will likely be more segmented, more premium and more intentional. Consumers will drink with greater purpose, brands will compete on quality and narrative, and policy—if it evolves in step—could unlock the sector’s full potential.
As Gadvi succinctly puts it, the industry is moving “toward more experience-led drinking rather than volume-led consumption”. For a sector long defined by constraint and contradiction, 2026 could mark the beginning of a more mature, globally confident chapter.
