UBL Sees Premium Beer Growing 3x Faster

United Breweries Ltd (UBL) expects its premium beer business to grow 20-25% annually over the next three to five years, nearly three times the pace of India’s broader beer market. The company's premium beer business is currently growing at more than 20% in volume, driven by investment in premium brands and expansion of canning capacity.

UBL has announced a ₹110 crore investment in a new canning facility at its Ellora brewery in Maharashtra, which will have a capacity to produce nearly 40,000 cans per hour. This investment is part of the company's strategy to step up investment in premium brands such as Heineken Silver and Kingfisher Ultra.

India's beer market is estimated to be 440-460 million cases a year, with UBL accounting for about half of the market. The company expects the beer market to grow 7-8% annually, with premium products currently accounting for about 10% of UBL’s business.

The shift towards cans is driven by both premiumization and affordability, with cans growing faster than bottles in some states. However, the company is also dealing with higher aluminium costs, which have increased 10-15% amid the West Asia crisis. UBL has secured pricing action in about 25 states so far and has maintained its FY27 outlook of double-digit revenue growth, despite an estimated Rs 300-350 crore cost impact from the ongoing war-related disruptions this fiscal.

## Why it matters The growth of UBL's premium beer business is significant, as it indicates a shift in consumer preferences towards premium products. The company's investment in premium brands and expansion of canning capacity is expected to drive growth in the premium beer segment, which is expected to outpace the overall beer market. The company's ability to navigate challenges such as higher aluminium costs and war-related disruptions will be crucial to its success in the premium beer segment.

## What happens next UBL is expected to continue to invest in premium brands and expand its canning capacity, with the new facility in Maharashtra expected to start production by the end of September. The company will also focus on addressing the cost impact of the ongoing war-related disruptions and navigating the challenges of higher aluminium costs. With the premium beer segment expected to drive growth, UBL is well-positioned to capitalize on the trend towards premiumization in the Indian beer market.