NEW DELHI, (Economy India): Premiumisation emerged as a major growth driver for India’s alcoholic beverages industry during the first quarter of 2026-27, helping leading liquor companies increase revenue and support margins despite rising input costs and policy-related challenges in some states.
Major alcoholic beverage makers, including United Spirits Ltd (USL), Radico Khaitan and Allied Blenders and Distillers Ltd (ABDL), reported strong growth in their prestige-and-above (P&A) segments. These categories include higher-end products such as premium and luxury whisky, vodka, gin and rum.
The P&A segment recorded 10 per cent to 36 per cent growth among the major spirit companies, highlighting a growing consumer preference for premium alcoholic beverages.
Premium Brands Gain Consumer Interest
The shift towards premium products has become an important trend in India’s liquor market. Consumers are increasingly showing interest in higher-quality and more expensive brands, allowing companies to improve their product mix and potentially generate better revenue from premium offerings.
United Breweries Ltd (UBL), India’s largest beer maker, also reported a 17 per cent increase in premium volumes during the quarter. Its premium portfolio includes brands such as Kingfisher Ultra, Kingfisher Ultra Max, Heineken and Amstel Grande.
Rising Costs Remain a Challenge
Despite strong demand for premium products, liquor companies continue to face pressure from higher input costs. Rising expenses can affect profitability even when sales and revenue continue to grow.
Policy changes and regulatory developments in some states also created additional challenges for the industry. Since alcohol taxation and regulations vary significantly across Indian states, changes in local policies can have a direct impact on pricing, sales and margins.
Premiumisation Could Support Future Growth
The continued movement towards premium products is expected to remain an important trend for the Indian alcoholic beverages sector. Companies are increasingly expanding their premium portfolios and focusing on products aimed at consumers willing to spend more.
The June quarter performance suggests that premiumisation is helping liquor companies offset some cost pressures while strengthening their revenue growth. However, managing input costs, taxation and state-level regulatory changes will remain important for sustaining profitability in the coming quarters.
(Economy India)
