United Spirits Invests in Non-Alcoholic and Coffee-Based Alcohol Companies for New Growth

United Spirits has made strategic investments in V9 Beverages and Indie Brews and Spirits as part of its plan to explore new growth opportunities. The company will acquire a 15% stake in V9 Beverages, known for India’s first distilled non-alcoholic spirits like Sober Gin, Sober Rum, and Sober Whiskey. Additionally, United Spirits will purchase a 25% stake in Indie Brews and Spirits, the creator of Quaffine, India’s first cold brew coffee liqueur.

Strategic Investments for Emerging Trends

In a statement to the stock exchange, United Spirits explained that these minority investments are strategic. They allow the company to partner with innovative startup entrepreneurs and tap into the growing consumer interest in non-alcoholic and coffee liqueur products. The company aims to help these brands expand their market reach and support their business growth.

Growing Market for Non-Alcoholic Beverages

According to IWSR, the non-alcoholic and low-alcohol segments in beer grew by 16% and 28% respectively in India. Consumers are increasingly choosing moderation for financial and health reasons, leading to long-term lifestyle changes. Regulatory pressures and government guidelines on alcohol consumption are also reinforcing these trends.

IWSR reports that the non-alcoholic segment is the only market with positive momentum, driven by a growing number of non-alcohol drinkers in key markets like India, China, the UK, and the US.

Changing Consumer Preferences

Gen Z consumers are leading the shift away from traditional alcoholic beverages, seeking interesting alternatives. This trend is not limited to Gen Z, as people across all generations are making conscious, healthy choices about food, beverages, and lifestyle. According to Deepak Poduval, co-founder of RockClimber and original founder of Cult Fitness, the era of limited non-alcoholic options like “fresh lime soda” is over. Now, zero sugar, zero caffeine, and zero alcohol beverages are growing categories.

Expanding Non-Alcoholic Offerings

Beverage manufacturers are expanding their non-alcoholic portfolios by adding functional drinks, energy drinks, and vitamin-infused water, as well as beverages with herbs that improve mood, reduce stress, and enhance clarity.

In 2023, non-alcoholic beverage categories saw significant growth. Global no-alcohol beer volumes increased by 6%, still and sparkling wine grew by 7%, and non-alcoholic spirits experienced a 15% surge in volume, according to industry data.