In a strategic shift mirroring broader industry trends, Allied Blenders and Distilleries Ltd is aggressively courting premium customers as tax increases and a slowdown in middle-class spending dampen demand for mass-market alcohol brands. The Mumbai-based spirits giant is now channeling investments into high-end tequilas, whiskeys, and gins to secure future growth.
The Premium Push: ABD Maestro Takes Center Stage
Central to this new focus is ABD Maestro, a premium and luxury spirits subsidiary launched in March in partnership with Bollywood actor Ranveer Singh. Managing Director Alok Gupta revealed the company expects to close the current fiscal year (FY26) with an annualized run rate (ARR) of ₹100 crore from this venture and aims to double that figure to ₹200 crore ARR in FY27.
ABD Maestro's portfolio includes small-batch gin brands Zoya and Pumori, vodka brand Rangeela, and the recently launched Yello whiskey. Gupta emphasized the company's strategy is to anticipate future consumption trends. "We are trying to stitch up a portfolio which is future-ready," he said, noting work is focused on how drinking habits will evolve over the next three to five years. The subsidiary has already crossed ₹40 crore in annualized revenue.
The company is targeting a growing segment of Indian consumers who are opting for high-quality domestic spirits over imported ones. "People are drinking premium white spirits, but they are also buying into the stories and want to know what makes the product unique," Gupta added, highlighting a shift in 'sipping culture' towards tequilas, rums, and crafted gins.
Capacity Expansion and a Focus on Margins
To support this premiumization drive, Allied Blenders is undertaking a significant capital expenditure. The company plans to invest ₹525 crore to expand capacity between FY25 and FY27. This includes ₹72 crore spent on acquiring an extra neutral alcohol plant in Aurangabad, Maharashtra, and ₹75 crore earmarked for a single malt whiskey plant in Rangapur, Telangana, with its first single malt slated for launch in 2029.
Despite the push upmarket, the company maintains a sharp focus on profitability for its legacy mass brand, Officers' Choice. Gupta stated the company is determined to achieve single-digit volume growth for the brand while protecting a gross margin of over 40%. This has involved tough choices like exiting the CSD (canteen stores department) channel and certain markets like Uttarakhand. "We can pick up market share, but it will impact the gross margin," he explained.
Industry-Wide Trend and Market Realities
Allied Blenders is not alone in this premium pursuit. Rival Radico Khaitan, known for mass brands like 8PM whiskey, has also launched premium products, including a tequila with actor Shah Rukh Khan. For Allied Blenders, the 'Prestige & Above' segment now accounts for over 46% of its volumes in the first half of FY26, a significant jump from just over 37% in FY24.
This growth comes against a stark decline for its mass-market flagship. Volumes for Officers' Choice have plummeted from approximately 9 million cases in FY19 to 3.6 million cases in FY25. Brokerage firm Choice Institutional Equities estimates the company's mass brands will grow by a mere 2% annually until FY28, compared to a 15% compounded annual growth for the prestige segment.
However, the company has found some success in upgrading mass consumers. Its Iconiq White Whiskey, launched in September 2022, sold 5.7 million cases in FY25 and is considered one of the fastest-growing spirit brands globally. It competes directly with brands like Royal Stag and Blender's Pride.
On the stock market, Allied Blenders shares have risen over 24% in the last year, outperforming the Nifty 50's 10% gain but trailing rival Radico Khaitan, which saw a rise of more than 29%.
