India's alco-bev companies are betting on premium spirits to drive growth this festive and wedding season, but consumers are becoming more selective about what they are willing to pay for. From the growing interest in gin and tequila to the appeal of Indian single malts, the market is seeing a shift towards distinctive products, with quality, provenance and the drinking experience increasingly influencing purchase decisions.
“Metros are setting the pace on premium and experimentation, while smaller markets are catching up fast,” says Kunal Madan, chief marketing officer, Radico Khaitan.
Beyond metros, gin is gaining visibility in tier-2 markets, while smaller formats are helping consumers experiment with premium spirits without committing to an expensive full bottle. For companies, however, turning this curiosity into sustained sales will depend on wider distribution, appropriate pricing and the ability to navigate India's fragmented state level alcohol regulations.
“I don't think premiumisation and price consciousness are mutually exclusive. Consumers are paying closer attention to what they spend, but they're still willing to trade up when they see a clear reason to do so,” says Anand Virmani, co-founder and master distiller at Nao Spirits & Beverages.
The distinction matters for an industry catering to consumers with widely differing spending power and drinking preferences. Rather than simply buying the most expensive bottle, consumers are looking for products that offer something distinctive, whether in terms of ingredients, taste, craftsmanship or the story behind a brand.
The emerging categories illustrate the opportunity. India's gin market stands at around 2.2 million cases, according to Virmani, with growth increasingly coming from the premium end, which has been expanding at double digit rates. Vodka is a considerably larger category at roughly 14 million cases, while tequila remains relatively small at around 160,000 cases.
“What makes gin interesting is that it has reached meaningful scale while still having considerable room to grow at the premium end,” Virmani says. “For craft spirits, the opportunity is not just to charge more, but to give consumers a reason to choose differently.”
The growing interest in tequila is another indication of consumers exploring newer categories. Black Tiger Distilleries, founded by Mohnish Mehta, has introduced Bodega Suprema No. 5, a 100% Blue Weber agave tequila made in Jesús María, Jalisco, Mexico, by Productos Finos de Agave, a family run distillery that has been making tequila since 1996.
Launched in Mumbai in August, the tequila is priced at ₹4,200 for a 750 ml bottle of Blanco, ₹4,500 for Reposado and ₹5,500 for Añejo. Its 50 ml formats start at ₹400.
“Smaller formats are important because they lower the barrier to experimentation: consumers can discover the category before committing to a full bottle,” Mehta says. He adds that it is too early to draw conclusions about average selling prices or product mix following the Mumbai launch.
The premiumisation trend is also creating opportunities for established players to expand their portfolios. Tilaknagar Industries, which has a strong presence in brandy, has expanded its whisky business through Imperial Blue and is building its premium and luxury portfolio under House of TI. Its offerings include Monarch Legacy Edition, a pure grape brandy, and Seven Islands Pure Malt Whisky, an Indo Scottish pure malt whisky. Investments in Spaceman Spirits Lab, Bartisans and Black Tiger Distilleries have further widened its participation across emerging spirits categories.
For Diageo India, whisky continues to hold an important place in celebrations and gifting, while gin, vodka and rum cater to different occasions. Varun Koorichh, vice president of marketing and portfolio head for premium and luxury at Diageo India, says consumers are increasingly willing to trade up when they find something distinctive, whether in the quality of the liquid, its provenance or the experience around it. The company's Godawan, an Indian luxury single malt, is an example of its play in the premium segment.
Distribution and pricing will determine the next phase of growth
While consumer interest is opening up new opportunities, companies are also grappling with the practicalities of reaching buyers in a market where taxation, retail pricing and distribution systems vary significantly across states.
For craft spirits makers, greater visibility does not automatically translate into sales. Nao Spirits, which has faced stock and distribution challenges in the past, says its presence across more markets puts it in a stronger position this festive season. The company is seeing gin gain traction beyond metros, although Virmani says it is too early to provide a meaningful like for like comparison of festive volumes and value growth against last year.
The challenge is particularly relevant for smaller brands seeking to build a presence in emerging categories. A consumer may be interested in trying a new spirit, but inconsistent availability at the point of purchase can prevent that interest from translating into an actual sale.
“Interest in craft spirits is encouraging, but discovery alone doesn't translate into growth if a bottle isn't accessible at the point of purchase,” Virmani says.
The same emphasis on value is visible in the wider beverage market. MONIN India, which supplies flavour solutions to the food and beverage industry, has recorded 20% year on year growth since 2022 and has a presence across more than 15,000 food and beverage outlets in India. The company is seeing hospitality businesses experiment with seasonal menus and familiar Indian flavours such as raw mango and spiced jamun, alongside applications in speciality coffee, iced teas and frappés.
Germain Araud, managing director of MONIN India, says consumers are becoming more selective about where they spend, and higher prices need to deliver something tangible. For hospitality operators, this means creating distinctive menus while ensuring ingredient costs, preparation and final selling prices remain commercially viable.
Premium non-alcoholic beverages are emerging as another area of opportunity. MONIN's Trends Report 2026 to 2027, drawing on Euromonitor International and Market Xcel's Beverage Consumer Trends 2025, estimates that India's premium non-alcoholic beverage segment will grow at approximately 14% CAGR between 2025 and 2028. The company offers more than 90 flavours in India and says its upcoming facility in Hyderabad will further reinforce the importance of understanding local preferences.
How does it look going forward?
“Looking ahead, we are optimistic about the rest of the festive and wedding season. State-level pricing and distribution will keep things dynamic, but the opportunity is strong for brands that stay close to the consumer and make every occasion feel special,” says Madan.
For the remainder of the festive and wedding season, alco-bev companies remain optimistic, with brandy and whisky continuing to serve established consumer bases while premium spirits offer opportunities to build value. But growth is unlikely to follow a uniform pattern across India.
As Sanaya Dahanukar, general manager of growth and innovation at Tilaknagar Industries, points out, state level excise structures directly influence affordability, while distribution arrangements and retail access determine how effectively brands reach consumers.
The companies best positioned to benefit, she says, will be those that combine scale with innovation. In a market where consumers are willing to spend more but increasingly expect a clear reason to do so, the ability to offer the right product at the right price, and make it consistently available, could prove as important as the premium label itself.