From Berlin to Bengaluru: Europe’s beer giants bet big on India

As Europe begins to sip its beer, India has started guzzling. French malt giant Soufflet Malt has underlined this contrast a sharp between stagnation in Europe and opportunity in India. Reuters has reported that the world’s largest malt producer will invest 100 million euros (about $118 million) in a new production facility in India, even as it shutters two factories in Germany and one in the United Kingdom to optimise costs.

Soufflet Malt Chief Executive Jorge Solis told Reuters, “We have ‌countries in which there are decreases (in beer consumption), but if there is one country where we see really a big growth ⁠coming, it's India.” The contrast captures a larger shift underway in the global beer industry. As Europe cools, India is heating up.

Also Read: French malt major Soufflet to invest $118 mln in India amid booming beer demand

Europe slows, India surges

Across much of Europe, brewers are grappling with structural headwinds such as ageing populations, health-conscious consumers, the rise of weight-loss drugs and moderation trends that are denting alcohol volumes. Dutch brewing major Heineken recently announced plans to cut up to 6,000 jobs globally and lowered its profit growth expectations for 2026 amid weak demand in several markets.

In contrast, India is emerging as a rare growth engine. Demand for beer in India rose about 10% in 2024–25, outpacing the previous financial year even as spirits sales across categories such as whisky, brandy and rum tapered off. The divergence suggests a gradual shift in consumer preference toward lower-alcohol beverages, a long-term positive for beer makers.

According to market research firm IMARC Group, India’s beer market is projected to grow at a healthy mid-to-high single-digit compound annual growth rate over the next decade. Expert Market Research (EMR) similarly estimates robust growth through 2030 and beyond, driven by demographics, urbanisation and premiumisation trends.

Also Read: Heineken bets on India’s premium beer demand for future growth

What makes these forecasts compelling is India’s extraordinarily low base. Annual per capita beer consumption stands at roughly two litres, compared with about 70 litres in the United States and 130 litres in the Czech Republic, the world’s top consumer. For global brewers facing saturated Western markets, the headroom is evident.

Carlsberg bets on its growth engine

It is not just suppliers like Soufflet Malt positioning for growth. Danish brewer Carlsberg Group is exploring an initial public offering (IPO) of its India business. Chief Executive Jacob Aarup-Andersen confirmed the plan on an investor call recently, saying: “We are today confirming the intention to explore an IPO in India,” while emphasising that discussions remain exploratory and no final decision has been made.

The rationale is clear. India has outpaced China as Carlsberg’s most important growth engine. While China remains larger in absolute terms, Aarup-Andersen underscored that India “clearly holds the key position” for the company’s future growth. The IPO exploration signals an attempt to unlock value in a market where Carlsberg is accelerating investments, adding capacity and pushing deeper into premium beer categories amid intensifying competition.

Carlsberg’s move comes as global rivals similarly elevate India within their strategic hierarchy. On a recent earnings call, outgoing Heineken CEO Dolf van den Brink described India as “such a critical strategic pillar of the company now,” adding: “I think we all agree it's probably the largest frontier market globally in terms of upsides on per capita and in absolute terms.”

Heineken and UBL doubling down on India

Through its majority control of United Breweries Ltd (UBL), Heineken commands nearly half of India’s beer market. UBL alone controls about 50% of the market, followed by Anheuser-Busch InBev and Carlsberg. Together, the three account for roughly 85% of total beer sales in India. Heineken increased its stake in UBL to above 61% in 2021 after acquiring an additional 15% without paying a control premium, cementing its commitment to India. The company has since doubled down on investments, betting that India could become the world’s largest potential beer market.

Van den Brink has pointed to deep social changes underpinning this optimism. Speaking at Heineken’s Capital Markets event, he said: “The nuclear family, that's a big change. Traditionally, in India, people grew up in multi-generational households, where three, four generations were living together. But that's also perpetuated rather traditional conservative family values. You see a massive shift to the nuclear family, which is the two-generation family as we know it in the West, which is actually creating a lot more social freedom, which is allowing now, for example, the adoption of beer.”

Vivek Gupta, chief executive of UBL, has echoed the demographic argument. “India is probably the largest potential market for beer in the world with the favourable demographics. With almost 23 million young consumers entering this category every year and 50% of the families who are going to be nuclear, India is going through a big demographic and societal change.”

India’s warm, tropical climate, rising disposable incomes and expanding urban middle class further reinforce this structural demand story.

Policy tailwinds and a shift from spirits

Regulation at the state level, historically a constraint, is increasingly turning into a tailwind. ET reported in December that regulatory changes in Assam, Uttar Pradesh, Maharashtra, West Bengal and Meghalaya have triggered significant gains in beer sales. These five states together account for roughly a quarter of India’s beer consumption. Policy changes including tax rationalisation, price adjustments and retail expansion have led to sales jumps ranging from 14% to as high as 109%.

In Maharashtra, the government raised taxes on Indian-made foreign liquor (IMFL) by 50% in July while keeping beer prices unchanged, helping beer sales expand by more than 30%. In Uttar Pradesh, relaxed licensing rules nearly doubled the number of outlets selling beer, pushing sales up nearly 14%. Assam saw beer sales more than double since April after policy changes.

Vinod Giri, director general of the Brewers Association of India, told ET, “Most countries in the world tax beer way lower than spirits to encourage consumption of moderate forms of alcohol. Many states in India, for historical reasons, have taxed beer much higher than spirits in real terms, which actually encourages consumers to shift towards harder forms of alcohol.” He added that recent reforms have improved access to more responsible forms of alcohol while increasing tax revenues.

The recently concluded India–EU free trade agreement, which will see beer tariffs cut to 50%, further enhances the attractiveness of the Indian market for European producers.

Premiumisation and capacity expansion

India’s growth story is not just about volumes; it is also about value. As incomes rise and urban consumers experiment with new brands, the premium and craft segments are expanding rapidly. Carlsberg is deepening its premium portfolio, while Heineken is positioning its global brands more aggressively in metros and emerging cities. Capacity additions reflect this optimism. From Soufflet Malt’s 100 million euros facility to Carlsberg’s brewing expansions, capital is flowing in anticipation of sustained demand growth.

For European brewers facing declining consumption at home, India offers something increasingly rare: a combination of scale, demographic momentum and low penetration. With per capita consumption at just two litres, even incremental shifts in drinking habits could translate into exponential growth over the next decade.

The global rebalancing of beer

Top brewers' turn toward India marks a broader rebalancing in the global beer industry. Europe is restructuring while India is building. Soufflet Malt is closing plants in Germany and the UK while investing heavily in India. Carlsberg is contemplating listing its Indian arm. Heineken is reorganising globally while elevating India to the centre of its growth strategy.

As Solis of Soufflet Malt told Reuters, India stands out as the one country where “we see really a big growth coming.” For European brewers squeezed at home, the subcontinent is no longer a peripheral emerging market but is fast becoming the industry’s most important frontier.

(With agency inputs)