Demand for premium beer across Indian cities fuels growth
SOM Distilleries & Breweries is set to expand in an effort to meet the growing demand for premium beers being available in India. The post Demand for premium beer across Indian cities fuels growth appeared first on The Drinks Business.
SOM Distilleries & Breweries is set to expand in an effort to meet the growing demand for premium beers being available in India.
The company recently revealed that it has planned investments of Rs 600 crore due to premium beer in the country seeing strong demand and growth in smaller cities in India. The news follows the Indian state of Telangana recently having granted calls from big brewers to raise the price of beer. Plus, Heineken’s United Breweries Limited (UBL) also recently introduced two flavoured Kingfisher beers into the Indian market to cater for demand.
Speaking to the Economic Times, SOM Distilleries & Breweries chief operating officer Diwakaran Suryanarayana said: “While tier 1 cities in the country continue to contribute heavily to the consumption, which is roughly about 35% to 40% of the total, the tier-2 towns are in many ways aping the consumer in tier- 1. The mushrooming of premium walk-in stores, premium on-premise outlets and the availability and growth of various premium beer brands is a big indicator. We are seeing a phenomenal growth in consumption of premium beers in tier 2 cities, which in many states far exceeds the state average.”
Last year, Indian authorities impounded a distillery owned by Som after children were found working at the site illegally. In a move to distance itself from the claims, the company said in a statement to the stock exchange at the time that the issue was related to a plant run by its “associate private limited company” which used labour supplied by contractors, who may not have carried out proper age checks however now these private contractors have been terminated, the company is back on the straight and narrow.
Suryanarayana pointed out that the Indian beer market is undergoing a few changes since it was traditionally dominated by mild and strong lagers, however now the sector is evolving due to consumers becoming more aware, curious, and quality-conscious and so are on the lookout for premium beers that offer more, including richer, more diverse taste profiles.
According to Suryanarayana, this shift echoes global trends that look to quality, variety, and an enhanced consumer experience. According to analysis from Future Market Insights, the premium lager category is projected to grow at a CAGR of 5.7% from 2025 to 2035, reaching a market value of US$209.1 billion by 2035 with the trend reflecting a growing interest in premium products that align with consumer lifestyle choices.
Analytics from Imarc Group recently showed that the beer market in India has been forecast to grow at a CAGR of 6.72% from 2025 to 2033, reaching Rs 802.5 billion by 2033.
Looking more closely at this, Suryanarayana explained that “this growth is fuelled by rising disposable incomes, urbanisation, and a cultural shift towards social drinking" and observed at how "the emergence of brewpubs and microbreweries in metropolitan areas has introduced consumers to a variety of beer styles, fostering an appreciation for premium beers".
To cater to this shift, SOM has revealed that it has already launched premium beers like Woodpecker Glide and Woodpecker Crest to keep up with demand for exciting new flavours and beers that hit the mark with the correct lifestyle cues.
Suryanarayana insisted: "Our approach combines industry-first innovations such as cross-malt brewing, a 30-day maturation process, twist-open bottle caps, and pre-printed bottle labels with a strong focus on both taste and convenience.”
He added that the summer and festive seasons also account for more than 50% of its business and yet the company is ready to meet the demand. Looking at how this all has a knock on effect upon the sector, Suryanarayana highlighted how “these periods consistently witness a surge in demand, as consumers are more inclined to enjoy beer during social gatherings and celebrations. Warmer weather naturally boosts beer consumption, while festivals further amplify sales. Having said that, we are seeing flattening of the consumption pattern through the year in a few cities and towns, which augurs well for a brand owner and manufacturer as the capex deployed is better utilised".
Suryanarayana also revealed that SOM is now also focusing its efforts to grow the traditional lagers—both in mainstream and premium—and ensuring there is enough capacity available to cater to the rising demand for its brands as well as eyeing other categories for their potential.
He admitted: “This will be our priority. Having said that, we are observing the presence and performance of the non-beer alcobev like seltzers, wine-based RTD etc., which in our view is extremely niche now. However, we do not rule out the opportunity for SOM to venture into it.”
To support growth, the business has admitted that significant investment is underway. The company’s subsidiary, Woodpecker Green-agri Nutrients Private Limited, is also in the process of setting up a greenfield project in Khimsepur, Farrukhabad district, Uttar Pradesh. Looking at this, the Rs 600 crore investment will reportedly include a modern brewery, distillery, and manufacturing facilities, giving the company the best possible opportunity to meet demand.
Suryanarayana added: “The project is a key part of our expansion strategy to strengthen our presence across India. Uttar Pradesh offers strong market potential and a supportive business environment, making it an ideal location. Along with enhancing our production capabilities, the project is expected to contribute to local economic development and job creation.”
The company recently revealed that it has planned investments of Rs 600 crore due to premium beer in the country seeing strong demand and growth in smaller cities in India. The news follows the Indian state of Telangana recently having granted calls from big brewers to raise the price of beer. Plus, Heineken’s United Breweries Limited (UBL) also recently introduced two flavoured Kingfisher beers into the Indian market to cater for demand.
Speaking to the Economic Times, SOM Distilleries & Breweries chief operating officer Diwakaran Suryanarayana said: “While tier 1 cities in the country continue to contribute heavily to the consumption, which is roughly about 35% to 40% of the total, the tier-2 towns are in many ways aping the consumer in tier- 1. The mushrooming of premium walk-in stores, premium on-premise outlets and the availability and growth of various premium beer brands is a big indicator. We are seeing a phenomenal growth in consumption of premium beers in tier 2 cities, which in many states far exceeds the state average.”
Last year, Indian authorities impounded a distillery owned by Som after children were found working at the site illegally. In a move to distance itself from the claims, the company said in a statement to the stock exchange at the time that the issue was related to a plant run by its “associate private limited company” which used labour supplied by contractors, who may not have carried out proper age checks however now these private contractors have been terminated, the company is back on the straight and narrow.
Suryanarayana pointed out that the Indian beer market is undergoing a few changes since it was traditionally dominated by mild and strong lagers, however now the sector is evolving due to consumers becoming more aware, curious, and quality-conscious and so are on the lookout for premium beers that offer more, including richer, more diverse taste profiles.
According to Suryanarayana, this shift echoes global trends that look to quality, variety, and an enhanced consumer experience. According to analysis from Future Market Insights, the premium lager category is projected to grow at a CAGR of 5.7% from 2025 to 2035, reaching a market value of US$209.1 billion by 2035 with the trend reflecting a growing interest in premium products that align with consumer lifestyle choices.
Analytics from Imarc Group recently showed that the beer market in India has been forecast to grow at a CAGR of 6.72% from 2025 to 2033, reaching Rs 802.5 billion by 2033.
Looking more closely at this, Suryanarayana explained that “this growth is fuelled by rising disposable incomes, urbanisation, and a cultural shift towards social drinking" and observed at how "the emergence of brewpubs and microbreweries in metropolitan areas has introduced consumers to a variety of beer styles, fostering an appreciation for premium beers".
To cater to this shift, SOM has revealed that it has already launched premium beers like Woodpecker Glide and Woodpecker Crest to keep up with demand for exciting new flavours and beers that hit the mark with the correct lifestyle cues.
Suryanarayana insisted: "Our approach combines industry-first innovations such as cross-malt brewing, a 30-day maturation process, twist-open bottle caps, and pre-printed bottle labels with a strong focus on both taste and convenience.”
He added that the summer and festive seasons also account for more than 50% of its business and yet the company is ready to meet the demand. Looking at how this all has a knock on effect upon the sector, Suryanarayana highlighted how “these periods consistently witness a surge in demand, as consumers are more inclined to enjoy beer during social gatherings and celebrations. Warmer weather naturally boosts beer consumption, while festivals further amplify sales. Having said that, we are seeing flattening of the consumption pattern through the year in a few cities and towns, which augurs well for a brand owner and manufacturer as the capex deployed is better utilised".
Suryanarayana also revealed that SOM is now also focusing its efforts to grow the traditional lagers—both in mainstream and premium—and ensuring there is enough capacity available to cater to the rising demand for its brands as well as eyeing other categories for their potential.
He admitted: “This will be our priority. Having said that, we are observing the presence and performance of the non-beer alcobev like seltzers, wine-based RTD etc., which in our view is extremely niche now. However, we do not rule out the opportunity for SOM to venture into it.”
To support growth, the business has admitted that significant investment is underway. The company’s subsidiary, Woodpecker Green-agri Nutrients Private Limited, is also in the process of setting up a greenfield project in Khimsepur, Farrukhabad district, Uttar Pradesh. Looking at this, the Rs 600 crore investment will reportedly include a modern brewery, distillery, and manufacturing facilities, giving the company the best possible opportunity to meet demand.
Suryanarayana added: “The project is a key part of our expansion strategy to strengthen our presence across India. Uttar Pradesh offers strong market potential and a supportive business environment, making it an ideal location. Along with enhancing our production capabilities, the project is expected to contribute to local economic development and job creation.” 
