Gen Z Redefining Drinking Culture: Inside the rise of premium, functional, and non-alcoholic beverages
From kombucha to protein water, new-age brands are riding health, convenience, and identity-driven consumption as Gen Z reshapes India’s drinking habits.
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India’s beverage industry is in the middle of a generational pivot. While global reports highlight Gen Z’s declining alcohol consumption, in India the picture is more nuanced: the trend isn’t about abstinence but about “better choices.”
Clean labels, natural ingredients, sugar-free innovations, and functional benefits are increasingly edging out sugary sodas and artificial mixers - a shift that’s birthing a new premium drinking culture.
Industry veterans, brand founders, and consultants agree that this wave is less a fad and more a structural change. “What we are clearly seeing is not a decline in consumption but a shift towards better choices,” says John Royerr, industry veteran and founder of Ochre Spirits.
“Consumers are far more conscious of what’s in their drink. Functional benefits now carry as much weight as taste.”
Wellness, Authenticity, and the New ‘Sober Curious’ India
According to Research and Markets, the non-alcoholic beverages market in India was valued at Rs 1.37 trillion in 2023 and is expected to reach Rs 2.10 trillion by 2029, expanding at a compound annual growth rate (CAGR) of 7.06% during the 2024 - 2029 forecast period.
Wellness is the biggest driver shaping the category.
Studies show over 60% of urban millennials check labels for sugar content, and categories like kombucha and flavored sparkling water are growing at 15–20% CAGR. Ochre Spirits is already gearing up to launch four new non-alcoholic, wellness-oriented products by FY26, focused on sugar-free mixers, flavored waters, and functional drinks.
The shift is not restricted to metros.
“While early adoption was concentrated in metros and among Gen Z, we now see meaningful traction among young professionals and even older urban cohorts in tier-II cities,” says Royerr.
Salloni Ghodawat, CEO of Ghodawat Consumer Limited (GCL), echoes this view. “India’s non-alcoholic beverage market is undergoing a significant transformation as Gen Z leads the change towards mindful drinking and experience-driven choices. Social media is playing a big role, too, boosting demand for products that are not just tasty but also visually appealing.”
At GCL’s flagship brand Coolberg, social acceptance has emerged as a major motivator.
“Our drinks make it easy for anyone to enjoy a sophisticated, alcohol-free option at any occasion, helping everyone feel included,” says Ghodawat. Coolberg recently launched ‘Jugaaro,’ a limited edition drink aligning with Gen Z and millennials, highlighting how brands are chasing cultural currency as much as taste innovation.
Quick Commerce: The New Fridge
The boom of Blinkit, Instamart, and Zepto is reshaping how India consumes beverages. “Quick commerce is the new fridge. Consumers are outsourcing their inventory to Zepto,” says Rutu Mody Kamdar, founder of Jigsaw Brand Consultants. “We’re seeing the rise of micro-cravings - ‘I want a cold coffee now, not in my next grocery run.’ For brands, this means repackaging themselves not just for shelves but for screen scrolls.”
Coolberg is already capitalizing, with 30% of its metro-city sales coming from Q-commerce. It’s designing SKUs specifically for the channel - smaller packs, trial bundles, and visual-first packaging. Online contributes nearly 20% of Coolberg’s business, scaling faster than traditional retail.
For functional brand Aquatein, which sells protein water, Q-commerce has been a crucial trial engine. “Blinkit and Instamart serve as the ‘new refrigerators’ for young urban consumers,” say co-founders Ananth Prabhala and Mitisha Mehta. “Currently, online channels make up 30% of our early sales, with Q-commerce helping us reach impulse-driven moments like post-gym or late-night study sessions.”
From Festivals to Weddings: Premiumisation Goes Mainstream
This festive season could be an inflection point.
“Premiumisation in India is no longer confined to metros. It is fast becoming a cultural marker at weddings, celebrations, and retail occasions across key markets,” says Royerr. Ochre Spirits is targeting ₹11 crore in revenues by FY26, building on disciplined spends and a profitability-first model.
Coolberg anticipates a 40–50% spike in demand during the festive window, led by gifting, impulse purchases, and modern trade activations. “Festive indulgence is when experimentation is highest,” says Ghodawat.
Aquatein, too, is bullish. “Festivals are when indulgence peaks, but so does the consumer’s awareness of balance. People are actively seeking healthier swaps alongside celebrations,” say Prabhala and Mehta, who expect a 3x growth in FY26.
Marketing: From Products to Culture
With millennials and Gen Z consuming brands as much for identity as for taste, marketing strategies are evolving. “We’re moving from ‘thirst-quenching’ to ‘identity-defining’ moments. The beverage has become a social signal,” says Kamdar. “What you bring to a house party says almost as much as what you wear.”
Ochre Spirits has increased its ad spends by 45% in FY25, with digital-led campaigns now accounting for 64% of its marketing budget. The focus is shifting from launch-heavy blitzes to sustained cultural partnerships and experiential events.
Coolberg is adopting a culture-first approach, with influencer-driven storytelling and tie-ups like Jugaaro x Prime Video, designed to place the brand in youth conversations. Ad spends are up 30% this year, with plans for deeper OTT, music, and sports integrations.
Aquatein is doubling down on fitness-driven community marketing, collaborating with trainers, gyms, and nutritionists. “Every rupee spent has to translate into a trial, a repeat, and eventually a loyal consumer,” say its founders.
The Challenges Ahead
For all the optimism, scaling isn’t easy. India’s fragmented distribution, extreme climates, and the dominance of FMCG giants with private labels remain hurdles. “The challenge remains in scaling distribution across India’s fragmented landscape and competing against the deep pockets of large FMCG players,” says Royerr.
Kamdar warns of a different pitfall: “The market is innovating faster than consumption behavior is evolving. Not every turmeric-sparkling adaptogen is going to land. India is still largely a taste-led market.”
Aquatein adds that the saturation of products on e-commerce and Q-commerce could create unhealthy competition and strain logistics.
Still, experts say, India’s mindful drinking story won’t be a carbon copy of the West.
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“Mindful drinking here comes with baggage. For many, alcohol itself is still semi-taboo. Our version of sober-curious will be spiritual, social, and status-led, in ways uniquely Indian,” says Kamdar.
For now, the levers are clear: health, authenticity, cultural relevance, and accessibility. Whether it’s kombucha in Delhi bars, Jugaaro in streaming tie-ups, or Aquatein in gyms, the message is the same: what you sip is no longer just about taste - it’s about identity.
