India Beer Market Outlook to 2028

India Beer Market Overview

• The India beer market was valued at USD 13 billion, driven by a growing preference for premium and craft beers, along with increased consumer spending on alcoholic beverages. Factors such as the rising demand for low-alcohol content beverages and an expanding young urban population are key contributors to this growth. Innovations in beer flavors and packaging have also propelled the market forward.

• In India, South India dominates the beer market due to its established beer culture and relatively lenient regulations compared to northern regions. Cities like Hyderabad and Bengaluru stand out for their flourishing craft beer scenes, driven by a rising number of microbreweries and an increasing demand for diverse beer options. The relaxed consumption norms and increasing disposable incomes contribute to this region's prominence in the market.
• Various state governments have begun relaxing the regulations surrounding liquor licenses for bars and restaurants. In Maharashtra, for instance, the government issued over 1,000 new licenses in 2023. This relaxation is expected to further boost beer sales in 2024, with more restaurants and bars offering beer on tap.

India Beer Market Segmentation

By Product Type: The market is segmented by product type into Standard Lager, Premium Lager, and Specialty Beer. Standard lagers dominate the market due to their affordability and strong presence in the urban and rural markets. Major brands like United Breweries and Anheuser-Busch InBev focus on this segment, offering products at competitive prices. Premium lagers are gaining traction, especially among young professionals in metro cities who seek more sophisticated options.

By Packaging Type: The market is segmented by packaging into Glass Bottles, Metal Cans, and PET Bottles. Glass bottles hold a dominant share due to their long-standing market presence and association with quality among Indian consumers. Despite the higher cost, many consumers prefer beer in glass bottles over alternatives. Metal cans are increasingly becoming popular, especially in urban areas where portability and convenience are key drivers.

India Beer Market Competitive Landscape

The market is characterized by a few major players, both global and local. Companies such as United Breweries and Anheuser-Busch InBev dominate the landscape due to their expansive distribution networks and product portfolios.

India Beer Market Analysis

Market Growth Drivers

• Rising Youth Population: India's population is projected to reach around 1.45 billion by 2024, with over 50% under the age of 30. This demographic shift has spurred an increased demand for beer as it is often preferred by younger consumers. According to government sources, this youth segment, estimated at approximately 720 million, plays a pivotal role in driving beer consumption in urban and semi-urban areas.
• Shift in Consumer Preferences Toward Premium Beer: There has been a notable shift toward premium and craft beers, driven by the increasing exposure to global brands and changing lifestyles. The premium beer market is growing due to rising disposable incomes and the development of sophisticated taste preferences. Data from industry reports indicate that by 2024, premium beer could account for a substantial portion of the overall beer consumption, especially in Tier 1 cities, where consumers are opting for higher-quality brews.
• Expansion of Microbreweries: The number of microbreweries in India has increased rapidly, especially in metropolitan areas like Bengaluru, Pune, and Mumbai. As of 2023, there are over 200 microbreweries in operation, with many more planned for 2024. This growth is supported by state-level policies promoting craft beer production, and the microbrewery industry is expected to create employment opportunities, boosting the local economy.

Market Challenges

• Stringent Alcohol Regulations: Despite the growing demand, the Indian beer market faces regulatory hurdles. Each state in India has its own excise duty structure, resulting in price variations and supply chain inefficiencies. For instance, high taxation in states like Tamil Nadu and Kerala has kept per capita beer consumption lower than the national average. Government data indicates that excise duties contribute up to 50% of the retail price in certain states.
• Seasonal Sales Fluctuations: Beer sales in India are highly seasonal, with peak demand occurring during the summer months. Industry reports suggest that during monsoon and winter seasons, beer sales can drop by as much as 40%. This presents a challenge for manufacturers, as they must manage inventory efficiently and reduce wastage during low-demand months.

India Beer Market Future Outlook

Over the next five years, the India beer industry is expected to experience growth, driven by increasing demand for craft beers, premiumization of products, and the introduction of innovative beer flavors. This period will likely see further expansion of microbreweries across metro cities.

Future Market Opportunities

• Increased Demand for Low-Alcohol and Non-Alcoholic Beers: Over the next five years, the demand for low-alcohol and non-alcoholic beer is expected to rise. In 2024, this segment is projected to grow, with approximately 10 million liters of non-alcoholic beer expected to be sold annually, driven by health-conscious consumers and government campaigns promoting responsible drinking.
• Growth in Premiumization: The trend of premiumization will continue to shape the future of the Indian beer market. By 2028, premium and craft beers will dominate the market, accounting for a large portion of the total beer volume sold. With an increasing number of premium beer brands entering the market, the segment is expected to cater to affluent consumers who seek premium experiences.