India’s beer boom is pouring beyond affluent cities and nightlife districts

AB InBev India is widening distribution of its more expensive brands as premium beer consumption accelerates across semi-urban and rural markets, with Jharkhand, Rajasthan and Madhya Pradesh emerging as unexpected growth centres, a top executive at the maker of Budweiser and Corona said.

“What has caught us completely by surprise is the rural growth,” Kartikeya Sharma, president of AB InBev India, told ET, pointing to rising premium consumption in places that were traditionally considered unlikely markets for higher-priced beer.

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At the same time, policy changes in states such as Maharashtra and Karnataka are providing a fresh tailwind to demand, he said.

But the world’s biggest brewer is also drawing a sharper line on where it will invest in India-.

While Maharashtra, Karnataka and West Bengal are emerging as markets where AB InBev India sees a sustainable and predictable policy environment, the company is holding back fresh investments in states where pricing or payment uncertainty is making business economics difficult.

“We don’t want to encourage taking investments to a state where the fundamental business case collapses because we can’t cover inflation,” Sharma said.

In Uttar Pradesh, the company has held back investments after not being allowed to raise prices for three years despite rising costs, while in Telangana, outstanding dues owed to the brewer reached close to $50 million between December and May.

On the other hand, Maharashtra’s beer market is growing about 40% this year, while Karnataka has expanded by more than 50% in the past three months after changes in alcohol taxation improved beer’s competitiveness against spirits.

The Karnataka shift is also producing an unexpected change in what consumers are drinking. Mild beer, which accounted for about 10-11% of beer consumption, has doubled to 21-22% in three months, Sharma said.

“This could be very interesting for India because this could drive the moderation agenda even further because now you will get better beverages with more moderate ABVs,” he said.

The premium opportunity

India’s premium beer segment grew more than 20% in the first half of 2026, while AB InBev India’s premium share reached 60%, its highest level in several years. It also crossed 20% share of the overall beer market for the first time, Sharma said.

Premium beer growth in Madhya Pradesh was close to 30%, Rajasthan about 35% and Andhra Pradesh nearly 40%, he added.

In Jharkhand, a largely non-urban market that would not traditionally be associated with premium beer consumption, the Belgian brewer’s premium volumes rose from virtually zero to about 60,000 hectolitres, or roughly six lakh cases, according to Sharma. The company estimates that it now leads the premium segment in the state.

The premium trend is also visible across semi-urban and rural markets in Maharashtra, Karnataka, West Bengal, Odisha, Andhra Pradesh, Rajasthan and Madhya Pradesh.

This is forcing AB InBev India to rethink how it sells its premium portfolio. Corona, earlier focused on five priority markets with another five under development, will now be developed across all 10 states. Hoegaarden distribution is also being expanded beyond its traditional urban strongholds.

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Premium and super-premium brands now account for about 65% of AB InBev’s volume mix in India and nearly 75% of topline. The company has also put its broader “Beyond Beer” strategy on the back burner as it concentrates resources on the beer opportunity.

“Our whole focus now is on meeting the moment on what we’re calling an inflection point for beer with some of these policy wins,” Sharma said. “This is a point where you can’t take your eye off the ball, because that would mean gifting somebody your breakfast, lunch, and dinner.