Diageo Bets on India as ‘Consumer Market of the Decade’

India’s liquor market has long been described as both enticing and complex. High excise duties that vary from state to state, restrictions on advertising, and a limited network of approximately 80,000 retail outlets create formidable hurdles. Yet, global giants like Diageo see opportunity where others may see roadblocks. 

At its media meet held at The Good Craft Company in Bengaluru, Diageo India’s leadership team, led by Managing Director and CEO Praveen Someshwar, laid out a clear roadmap for the company’s next phase of growth. The event brought together the company’s top brass, including its Chief Commercial Officer Jagbir Singh Sidhu, Chief Marketing Officer Ruchira Jaitly, HR Head Shilpa and Production Head Jitendra Mahajan, who discussed the brand’s strategy, performance and ambitions in the Indian market. 

India: The Whisky Powerhouse

Whisky dominates India’s alcobev landscape, accounting for nearly twothirds of the total spirits consumed. It is the largest whisky market in the world, with India alone making up half of the global consumption. For Diageo, which entered India in a significant way with the acquisition of United Spirits in 2014, this market is nothing short of pivotal. Its current portfolio includes household names such as McDowell’s, Royal Challenge, Johnnie Walker, Signature, Black Dog and Black & White.

The company has also rationalised its Diageo Bets on India as ‘Consumer Market of the Decade’ offerings. In September 2022, Diageo sold 32 brands from its “popular” segment, including Haywards, Old Tavern, Honey Bee, White Mischief, and Romanov. This move was aligned with its global strategy of concentrating on premium and prestige brands while exiting lowervalue categories.

Three Key Pillars

Praveen emphasised that Diageo’s approach is anchored in three key pillars: portfolio re-shape, organisation of the future, and Diageo in Society. At the core of this strategy is a focus on consumers of legal drinking age, growing the repertoire of offerings, and steadily trading consumers up the value chain.

The numbers tell the story. For FY25, Diageo India reported a total income of ₹27,612 crore and a net profit of ₹1,582 crore, with volumes rising by 3.5 million cases. Notably, the share of luxury and premium brands in the company’s net sales value rose to 33 percent in FY25, sharply up from 22 percent in FY21. In contrast, the popular segment declined to 33 percent from the previous 41 percent, a clear sign of the company’s success in driving consumers toward higher-value offerings.

India’s spirits penetration currently stands at 40 percent, compared to 62 percent in the United States. That gap, Diageo believes, represents both headroom and a long-term growth story.

Innovation Story

Between 2015 and 2021, Diageo admits innovation was at a slow pace, but recent years have marked a shift. The company has rolled out McDowell’s Double Oak Barrel Whisky, McDowell’s Single Malt Whisky and the X Series premium rum, along with Royal Challenge American Pride whisky. In the white spirits segment, Smirnoff has been infused with new India-inspired flavours such as Minty Jamun, Mirchi Mango and Zesty Lime in order to appeal to the youth seeking fresh and playful experiences. 

“Our diverse portfolio today has three ₹1,000-crore brands, three ₹500-crore brands and four ₹100-crore brands,” Praveen pointed out, underscoring the scale and breadth of Diageo’s reach in the Indian market.

Analysts Take Notice

Analysts are also bullish on Diageo India’s trajectory. A report by Motilal Oswal Financial Services following the company’s Q1 FY26 results highlighted steady earnings projections for FY26 and FY27. It cited margin improvements driven by premiumisation and tight cost controls, with EBITDA margins estimated at around 18 percent for both years.

The report also noted that the broader liquor industry in India is experiencing an “upgrading trend,” where consumers are steadily moving to higher-end spirits. This aligns perfectly with Diageo’s renewed emphasis on P&A (prestige and above), positioning the company to ride the long-term premiumisation wave.

The Road Ahead

At the media meet, discussions went beyond numbers. The leadership team spoke about Diageo’s peoplefirst culture, the role of sustainability in its supply chain, and the importance of building aspirational brands that resonate with India’s evolving consumer base. From creating job opportunities and upskilling employees to investing in cutting-edge production facilities, the company is positioning itself as more than just a liquor manufacturer; it aims to be a growth partner for the Indian alcobev ecosystem.

As Praveen aptly summed it up, “India is not just a market; it’s the consumer story of the decade”. With an expanding middle class, a young demographic, and an appetite for premium experiences, the stage is set. For Diageo, the challenge lies in balancing regulatory complexities with consumer aspirations. And if its premiumisation journey so far is any indicator, the company appears determined to stay ahead of the curve.

But the journey will not be without challenges. Regulatory frameworks remain complex, and infrastructure bottlenecks continue to test resilience. Yet, if Diageo’s current trajectory is anything to go by, the company is prepared to navigate these hurdles with a mix of innovation, strategy and consumer-first thinking.

For now, Diageo is raising the bar, literally and figuratively, on what the future of India’s spirits market can look like.