India’s fast-evolving drinking culture is opening up space for craft spirits, but for new entrants, survival hinges less on hype and more on discipline based on pricing, distribution, and increasingly, diversification into non-alcoholic beverages.

For John Royerr, founder of Ochre Spirits, the shift began with a simple observation: Indian consumers are no longer choosing bars based on price, but on the quality of cocktails and overall drinking experience. “We used to skip the cocktail pages because they were expensive. Now people look at the cocktail menu before deciding where to go,” he says.

That behavioural change, accelerated post-pandemic, is shaping a new segment - one that sits between mass-market liquor and expensive imports. Ochre is positioning itself squarely in this “affordable premium” space, building a portfolio across categories rather than betting on a single spirit.

The broader market tailwinds are evident. Globally, the alcoholic beverages market, valued at $1.6 trillion in 2024, is projected to reach nearly $2 trillion by 2033, growing at a modest 2.3% CAGR. India, already the fifth-largest market, is expanding faster, with the industry expected to grow from $39.3 billion in 2024 to $68.75 billion by 2034.

Within this, craft spirits stand out. Valued at about $2.66 billion in 2024, the segment is expected to grow at over 22% CAGR through 2033, reflecting rising consumer curiosity and willingness to experiment.

Yet, Royerr is clear-eyed about the challenges. “Craft has created conversation, but it hasn’t really dented volumes of legacy players,” he says. “What it has done is make consumers ask questions like what’s in my drink, is it better, why does it feel different?”

Financially speaking, Ochre Spirits has seen an uptick in scale over the past year, closing the current fiscal at around ₹2.35–2.5 crore in topline, up from ₹72 lakh in the previous year when it was operating only in Goa. The growth has been driven by its entry into Maharashtra and Karnataka, even though these markets contributed for just one quarter.

Looking ahead, the company has revised revenue target to ₹145 crore over the next three years, up from an earlier ₹100 crore goal, contingent on fresh funding that they will give them the bandwidth to increase production and enter new markets.

The company is planning to expand into seven states and 34 cities in the next financial year.

Beyond alcohol: the mixer strategy

Even as craft spirits gain traction, Ochre is expanding into non-alcoholic beverages - premium mixers, cocktail premixes, and packaged water - expecting them to contribute 17–19% of revenue.

The move is as much about economics as it is about evolving consumer demand.

“Liquor doesn’t have GST, but almost everything we procure does. When we add non-alcoholic products, we offset some of that cost,” Royerr explains. Just as importantly, India’s tight regulations around alcohol advertising make brand-building difficult. Non-alcoholic products offer both a revenue stream and a visible brand extension.

The opportunity here is significant. India’s non-alcoholic beverages market, valued at $30.8 billion in 2023, is projected to more than double to $64.2 billion by 2033. Growth is being driven by rising incomes, urbanisation, and a willingness to experiment, according to the Ministry of Food Processing Industries.

Royerr also sees a shakeout coming. “There’s a lot of premium players right now. In the next 18–24 months, there will be consolidation and some brands will survive, some will get acquired, some may shut down,” he says. For Ochre, the advantage lies in using the same distribution network for both alcoholic and non-alcoholic products, keeping costs in check.

Operationally, the company reports repeat orders of roughly 47%, indicating steady demand without heavy discounting, while it expects non-alcoholic beverages to contribute 17–19% of its topline going forward.

The long game in a crowded market

Unlike many startups chasing rapid scale, Ochre is deliberately pacing its expansion. Starting in Goa, the company has gradually moved into Maharashtra, Karnataka, and Puducherry, focusing on depth rather than spreading thin across India.

“It’s not about being present everywhere. It’s about going deeper where we are and making the economics work,” Royerr says.

The approach reflects a larger reality of India’s alcohol market: high entry barriers, state-wise regulations, and significant upfront costs. Shelf space is dominated by legacy brands with deep pockets, making it difficult for new players to break through without heavy spending.

But Royerr is wary of that playbook. “Spending big on marketing doesn’t make sense for a small brand. The math doesn’t work when consumers have too many choices and low loyalty,” he says.

Instead, the focus is on repeat orders and steady distribution growth. The company is targeting profitability by its third year, prioritising margins over aggressive topline expansion.

For all the buzz around premiumisation, India remains a whiskey-dominated market, accounting for over 70% of consumption. Craft players, Royerr believes, are not replacing these habits but nudging expectations higher. “People may not know the technical details, but they know when a product feels better. They’re willing to spend a bit more for that,” he says.

Bootstrapped initially with ₹1.7 crore into the business, they raised ₹1.8 crore in a seed round, and is now looking to raise around ₹8 crore in a pre-Series A round. Despite near-term losses typical of early-stage consumer brands, Ochre is targeting profitability by its third year, with a focus on disciplined growth and unit economics.