The founder of Bad Monkey Beer and Copperdrop Spirits says that shifting consumer preferences and recent favourable policy interventions will keep beer at the forefront of India’s alcoholic beverage growth over the next decade
India’s beer industry is poised to double over the next six to eight years despite margin pressures stemming from volatile input costs and regulatory hurdles, said Rohan Khare, Founder of Bad Monkey Beer, Asur Microbrewery & Bar and Copperdrop Spirits. Khare noted that the expanding consumption across emerging markets, shifting consumer preferences and recent favourable policy interventions will keep beer at the forefront of India’s alcoholic beverage growth over the next decade.
In an interview with BW Retail World, he emphasised that while India remains a difficult market for beer companies due to state-wise regulatory complexities and limited flexibility to pass on higher costs, the long-term opportunity remains strong. He said premium international brands are expanding the country’s market rather than competing for the same consumers and demand for casual dining and experience-led drinking is set to grow.
Khare said Bad Monkey beer is in discussions to enter Odisha, Assam, Meghalaya and Andhra Pradesh, while Copperdrop Spirits is working with global alcobev brands to build their presence in India and is exploring local brewing partnerships once they achieve scale.
Margin Pressure And Regulatory Hurdles
Khare said India is a great market for beer consumers, but “for the companies it is a great challenge” in the current environment. He attributed this to volatility in both imported and domestic raw materials, saying ingredients such as hops and yeast have faced supply and pricing disruptions globally, while barley and rice have also become costlier. “Prices have gone up drastically… from 10-12 per cent to even 30 per cent for a few things,” he noted.
He said the biggest challenge for brewers is that they cannot immediately pass on higher costs to consumers. “We cannot increase the prices, even if the input cost increases… it has to be approved by the excise of the particular state,” Khare said. “The margins in the beer industry are very tight, maybe in single digits sometimes,” he added, noting that margins have remained under pressure for the past two years because of raw material inflation, global volatility and state-level pricing restrictions.
On whether the cost environment is improving, Khare said packaging costs have stabilised and raw material availability has improved, although prices for some inputs remain elevated. “We may see breakeven or maybe a red in Q1 this policy year,” he said, adding that the situation should improve once governments allow “a little bit” of price increase and the supply of raw materials and packaging materials returns to normal. “We will see it stabilising… this was majorly a temporary thing,” he said.
Providing India Playbook To Global Brands
Khare said international beer and spirits brands often overestimate the Indian opportunity by assuming that a market of 1.5 billion people will translate into immediate consumption. “The ground reality is different,” he said, adding that global companies often expect consumption patterns and pricing similar to Europe, whereas India’s alcohol market is shaped by state-wise distribution systems, excise regulations and distinct consumer preferences.
He said Copperdrop Spirits works with global brands not just to distribute products but also to help them understand the Indian market, supply chain and consumer behaviour. He pointed out that imported brands cannot compete with Indian products on price, as they typically retail at a 30 to 40 per cent to as much as 200 per cent premium because of import duties and other costs.
“Their expectation is that… everything will sell. At any price it will sell,” Khare said, adding that his role is to bridge the gap between those expectations and the realities of the Indian market.
Khare, however, believes premium international brands will expand rather than cannibalise the market. “These are only going to expand the market… 70 to 80 per cent they will be expanding the market,” he said, attributing this to a growing willingness among Indian consumers to spend on new products and experiences. “Because for the top 1 to 2 per cent of the consumers which are going to probably consume these things, their willingness to spend is increasing,” he added. Drawing a parallel with the growth of coffee consumption in India, he said consumers are increasingly willing to experiment, creating room for new categories.
Local Brewing And Casual Dining
Khare said Copperdrop Spirits is already in discussions with several international brands to move beyond distribution and support local manufacturing once they establish themselves in India. He said Lion Brewery Co., a 250-year-old beer brand, is entering the Indian market through Copperdrop Spirits, and the partners plan to begin local brewing through a joint venture after the brand gains scale. “Once established in a couple of years… we will be starting out local brewing, with their SOPs only,” he said.
He added that the same model could be extended to other entry-level imported brands once volumes justify local production. According to Khare, the immediate priority is to help brands build awareness and understand the Indian market before looking at manufacturing. “The target remains that the brand at least reaches out to the consumer… and they are satisfied with the market,” he said, adding that positive consumer feedback and sustainable volumes would be the trigger for local brewing.
On hospitality, Khare said casual dining will be a major growth opportunity over the coming years as more consumers seek social drinking experiences outside retail. He estimated that only 20 to 25 per cent of India’s adult population currently consumes alcohol, leaving significant headroom for growth. “They would want to sit at a bar, enjoy with friends, casual drinking,” he said, adding that while concepts and branding matter, good food and service remain the foundation for retaining customers. “The casual F&B is a big thing,” he added, while noting that the Indian alcobev market is still in the phase of growth.
“I feel that the Western world has stopped or there has been a plateau in alcohol consumption, beer consumption, and probably in a few countries in Europe, it has gone down. India seems probably on the other side of the spectrum,” he added.
Gen Z’s Experimentation Expands The Market
Khare said Gen Z’s willingness to experiment with brands should be seen as an opportunity rather than a challenge for the alcobev industry. “It is not a concern. It’s also exciting,” he said, adding that younger consumers are more willing to try new bars, new bottles, new categories and new experiences, creating room for international products and entirely new segments in India.
According to Khare, staying relevant is more important than chasing brand loyalty. “I just have to be relevant… I need to understand what he wants, what you want, what I want, so that I stay relevant,” he said. While acknowledging that loyalty has become weaker, he argued that consumers experimenting across brands ultimately benefits the industry by keeping them engaged with the category.
Khare added that evolving consumer behaviour will also push companies to keep innovating. “Extreme loyalists also do not grow the industry,” he said, adding that changing preferences encourage brands to introduce new products instead of relying on existing portfolios.
