From wild honey ales to tea-infused pints, a new wave of flavour-driven experimentation is reshaping how urban India is pushing the craft beer market into a growth phase.

It’s a shift that brands like Goa-based Maka Di (Konkani for “Give Me One”) are riding hard, blending local ingredients like citrusy wheat beer with notes of tea, and stone fruit, crafted as much for the experience as the refreshment, taking the segment to approach the $1 billion mark by FY27, up from around $600 million in FY26, said Ishan Varshnei, co-founder of Latambarcem Brewers, speaking to businessline.

Craft and premium beers now account for nearly half of all incremental growth in the market despite making up less than 3 per cent of volumes, expanding at over 20 per cent annually, compared with 4–6 per cent for traditional lagers. “What we’re seeing is not just growth in beer, but a shift in how people are drinking,” Varshnei says.

The innovation playbook

What’s emerging isn’t just new products; it’s new formats, new ingredients, and new occasions to experiment with, giving the consumer combos that legacy brands like Tuborg, Kingfisher, or even Budweiser can’t ever match.

Spice-infused wheat beers are brewed with coriander, cumin, and citrus peel; honey ales with a subtle floral sweetness; and heavier European-style brews developed with international partners. The Gen Z audience is lapping up rosé-style IPAs made with Nashik grapes, and low-alcohol “lager-ade” variants aimed at moderate drinkers.

Beyond beer

But the more striking shift may be happening beyond beer entirely.

The company’s Borécha range reflects the parallel rise of functional beverages: probiotic kombuchas in fruit-forward flavours, zero-sugar seltzers inspired by cocktails, sparkling iced teas, and reimagined Indian staples like shikanji and masala cola.

A key differentiator is shelf stability; these drinks move seamlessly from retail shelves to cinema counters to airline trolleys without losing their character.

Underpinning all of this is a layer of technical credibility: imported malts, global hops, and locally sourced inputs. Ingredient provenance has become a way to justify and hold a premium price point.

Speed matters too. New-age brewers are operating with remarkable R&D agility, launching limited-edition flavours and iterating quickly on consumer feedback.

A new way of drinking

More than 60 per cent of urban Gen Z consumers now prefer premium or flavoured beers over traditional lagers — a signal that taste, identity and experience are replacing price and familiarity as the key purchasing drivers.

The trend shows up across the broader ecosystem. Established craft brands like Bira 91, Simba, and White Owl have gained early traction. Microbreweries, particularly in Bengaluru, are emerging as the primary discovery venues for new flavours.

Non-alcoholic is now much more than surrogate advertising

Non-alcoholic formats, kombuchas, sparkling iced teas, and low-sugar functional drinks are becoming growth drivers in their own right, moving much ahead of legacy brands using such products for surrogate advertising.

Borecha, a Goa-based breweries retail brand, is getting stocked across quick-service chains like Haldiram’s, multiplexes including PVR Inox, and airlines such as Air India Express and Akasa Air.

Meanwhile, Maka Di is gaining ground in premium hospitality chains like IHCL’s Taj Group hotel properties, a sign that craft beer has moved well beyond the niche taproom.

Large brewers are paying attention. United Breweries, AB InBev, and Carlsberg have collectively committed over ₹3,500 crore in capital expenditure to expand premium capacity, and also mirror and ride the craft boom, industry experts said .

How craft is reshaping the beer economy

Young craft companies already contribute close to 15 per cent of industry value and are expected to add around $200 million in incremental growth between FY25 and FY27. The numbers tell a clear story.

The overall Indian beer market is a ₹50,000-crore (~$6 billion) industry still dominated by mass-market lagers. But the craft segment has grown from roughly ₹4,500–5,800 crore in FY25 to an estimated ₹7,000–8,000 crore in FY26, a jump of nearly ₹2,000 crore in a single year.

Craft is now growing at 25–30 per cent annually, against 7–10 per cent for the broader market. Despite accounting for just 5–7 per cent of what the industry calls “share of throat”, up from under 1 per cent a decade ago, craft beer is expanding its footprint through premium pricing, wider retail distribution and growing presence beyond major urban centres.

Varshnei sees a consumer increasingly at ease moving between categories. “The same person who chooses craft beer on a Friday evening is looking for a light, low-sugar drink on a Tuesday,” he says. That dual behaviour, social drinker and wellness-conscious consumer — is exactly the overlap his company is building for.

The distribution question

One of the most consequential structural shifts is in how craft beer reaches consumers. Until recently, it was largely confined to microbreweries and taprooms. That’s changing as brands scale bottling and canning operations and push into retail and modern trade.

The economics are shifting too, from a volume-led model to a value-led one. Where mass-market beer depends on scale across hundreds of outlets, craft brands can match revenue with far lower volumes by focusing on premium channels, where margins are substantially higher.

The barriers haven’t disappeared, though. Cold-chain requirements, fragmented state regulations, and uneven distribution infrastructure continue to slow the pace of expansion.

For Varshnei, the direction is settled regardless. “Consumers today are willing to pay more, but only when there’s a clear difference in experience.”

Published on April 17, 2026