Picture Priya, a 28-year-old Mumbai marketer, racing through her morning commute on a crowded local train. No time for a proper breakfast – she grabs a chilled protein shake from her bag, its quick sip fueling her until a midday kombucha break during back-to-back meetings. By evening, a quick app order brings Aam Panna to her door, a nostalgic nod to summer afternoons without the fuss.
Priya’s routine captures India’s RTD shift: Ready-to-Drink beverages aren’t just drinks anymore. They’re the easy blend of convenience, health, and a touch of home for a generation juggling long hours and wellness goals. In a country where urban hustlers and young families crave on-the-go options, RTDs are turning everyday thirst into a simple lifestyle upgrade, faster-growing than even the protein wave.
The opportunity is clear: With low per capita consumption compared to global norms, and quick commerce making premium sips accessible even in smaller towns, this market is set to expand rapidly. Legacy brands like Coke and Pepsi are adapting with healthier twists, while startups revive regional flavors like Jaljeera in modern bottles. It’s where tradition meets today’s pace.
India’s Consumer Landscape is Undergoing a Macro Shift Toward Convenience and Health-Focused Beverages
India’s consumer preferences in beverages are realigning toward formats that prioritize functional health benefits alongside everyday convenience, propelled by escalating chronic disease burdens and evolving generational attitudes.
This transition is particularly pronounced among urban millennials and Gen Z, who seek options mitigating long-term health risks while maintaining social and lifestyle compatibility. The non-alcoholic beverages sector is witnessing a reallocation from traditional carbonated staples to fortified still variants, reflecting a deliberate pivot to nutrient-enriched RTDs.
Key drivers include heightened awareness of metabolic disorders and cultural shifts in consumption norms:
Diabetes affects approximately 90 million adults, with prevalence at 10.5% overall and rising to 19.8% among those aged 45+, underscoring demand for low-sugar, probiotic-infused alternatives.Among millennials and Gen Z (65% of the population), 85% favor non-sugary options, with 66% prioritizing RTDs for gut health and sustained energy.
Motivational factors behind this surge in low and non-alcoholic adult beverages include a desire for a healthier lifestyle, changing attitudes toward alcohol, and the aim to avoid long-term health risks.
This foundational shift positions RTDs as a strategic growth conduit, enabling brands to capture value through health-aligned innovation amid low per capita consumption in India of 30-35 liters annually, versus global averages of 180-200 liters.
The Ready-to-Drink Beverages Market is Experiencing Robust Growth Amid Urbanization and Rising Disposable Incomes
Source: Redseer
Sustained urbanization and income stratification are accelerating RTD penetration, elevating the segment rapidly. This expansion is anchored in demographic inflows to cities and the broadening middle-income base, which together amplify discretionary spending on portable, premiumized formats suited to compressed urban routines.
Source: Redseer
Critical enablers of this trajectory encompass population dynamics and economic layering:
Urban dwellers number 542 million in 2025 (37% of total), with 10-12 million annual migrants fueling out-of-home RTD demand.Middle-income households total 165 million in 2024, expanding at 4% CAGR through 2027 and driving RTD expenditure growth, particularly in Tier-2 hubs.
Household income segmentation further illustrates this momentum, with the middle tier surging from 135 million in 2022 to 199 million by 2027 (4% CAGR), while the top tier grows from 23 million to 46 million (10% CAGR), enabling premium RTD uptake.
Evolving Consumer Preferences are Diversifying the RTD Portfolio with a Blend of Functional and Indulgent Options
Source: Redseer
Shifting priorities are broadening India’s RTD landscape, blending functional hydration and nutrition with indulgent refreshment. In the non-alcoholic RTD market, retail water has gained prominence as a staple for everyday use, while value-added dairy products endure through fortified milkshakes and yogurt-based drinks.
Sparkling beverages, encompassing carbonated soft drinks and energy mixes, face moderation due to health considerations; yet, juices remain resilient, offering natural flavors without compromise. This hybrid mix supports sustained expansion in a maturing segment where utility and enjoyment coexist.
Source: Redseer
Online channels hasten diversification, amplifying access to premium blends. Sparkling leads for social impulses and convenient e-commerce purchases, as retail water and dairy gain traction among digital users seeking health-oriented variants. RTD tea and coffee, though nascent, hold potential for elevated indulgence through artisanal formats.
These trends build a versatile ecosystem, enabling brands to innovate across functional-indulgent axes for daily wellness or celebratory use, driving resilient growth.
Key Trends are Reshaping the RTD Sector Through Innovation in Flavours, Sustainability, and Regional Adaptations
Emerging trends in India’s RTD sector are redefining product development, with brands leveraging flavor innovation, eco-friendly practices, and localized adaptations to meet diverse consumer expectations. As urban and semi-urban drinkers seek experiential variety alongside ethical alignment, these shifts are accelerating category maturity, blending global influences with domestic roots to enhance appeal and loyalty.
Central to this transformation are advancements in sensory and sustainable elements, enabling RTDs to transcend mere refreshment into purposeful indulgences.
Flavour fusion: Brands are experimenting with tropical fruits, exotic spices, and desi infusions like kokum or jamun, creating complex profiles that evoke authenticity while incorporating wellness boosters such as adaptogens.Sustainability imperatives: Eco-conscious packaging, including recyclable cans and plant-based bottles, is gaining traction, driven by consumer demand for reduced plastic footprints and transparent sourcing.Regional tailoring: Adaptations like millet-based energy drinks in Rajasthan or coconut water variants in Kerala are democratizing access, extending premium RTDs to Tier-2 and Tier-3 markets via quick commerce.
These trends collectively fortify the sector’s resilience, positioning innovators to capture premium margins through differentiated, inclusive offerings that resonate across India’s varied palates and priorities.
A Wave of Emerging Players is Disrupting the RTD Space with Niche Offerings and Agile Go-to-Market Strategies
Emerging entrants are catalyzing a vibrant disruption in India’s RTD ecosystem, carving out specialized niches that legacy players have overlooked, from gut-health boosters to zero-cal detoxes. These innovators deploy agile, low-friction go-to-market tactics, rooted in quick-commerce integrations and social media co-creation, to achieve rapid validation and scale, often attaining market traction in months rather than years.
By emphasizing hyper-local relevance and functional differentiation, they are fragmenting the category, compelling established firms to rethink portfolio breadth and accelerating overall premiumization as consumer trials diversify beyond mainstream carbonated staples.
This wave is marked by a strategic pivot to underserved subsegments, where startups blend global trends with Indian sensibilities to foster habitual consumption. Digital channels serve as their proving ground, enabling iterative launches of small-pack formats that test demand in urban pockets before broader rollout, while sustainability threads, like plant-based enhancers, enhance brand equity among eco-aware youth.
In energy and functional drinks, hydration aids with probiotics or herbal detoxes build daily rituals among fitness enthusiasts through subscription models and on-demand deliveries, emphasizing calorie-free flavor profiles for guiltless indulgence. Similarly, ready-to-drink coffee innovations, such as cold-brew cans and single-origin lattes, target remote workers via pop-up collaborations and e-tail exclusives, evoking artisanal cafes without the wait.
Non-alcoholic beers and mocktails follow suit with fruit-infused, herb-laced alternatives mimicking spirits, propelled by event-tie-ins and hyperlocal drops to appeal to sober-curious socializers seeking impairment-free sophistication. Even in alcoholic beers and flavored malts, craft lagers with regional grain inspirations scale through influencer-led tastings and quick-mart partnerships, bridging traditional brewing with modern, low-ABV portability for casual gatherings.
In essence, these disruptors are not merely competing on price but redefining accessibility, turning RTDs into versatile extensions of lifestyle choices and setting the stage for a more inclusive, innovation-led sector evolution.
Significant Barriers, Including Supply Chain Constraints and Regulatory hurdles, are Challenging RTD Entrants
While India’s RTD beverages market brims with promise, aspiring entrants often grapple with entrenched obstacles that test resilience and resourcefulness. Supply chain vulnerabilities and regulatory intricacies stand out as the most pressing, creating a steep learning curve for startups and smaller players eager to scale. These hurdles not only drive up initial costs but also complicate distribution across the country’s vast urban-rural expanse, where timely delivery can make or break market traction.
At the core are supply chain strains rooted in India’s diverse climate and geography. Seasonal demand fluctuations, peaking sharply in summer for hydrating formats, can overwhelm inventory planning, while underdeveloped cold storage networks risk spoilage of fresh ingredients like fruits and dairy. Fragmented logistics further compound this, making it harder to reach non-metro consumers efficiently.
On the regulatory front, FSSAI’s rigorous standards for labeling, safety testing, and nutritional claims demand meticulous adherence, often delaying product launches. Layered with state-level variations in packaging rules and taxes, these requirements can feel like a labyrinth, particularly for innovators pushing bold flavor or functional claims.
Yet, these challenges are navigable with foresight: Forming alliances with established logistics providers or leveraging government incentives for cold chain upgrades can smooth the path. For brands that adapt, overcoming these barriers unlocks enduring competitive edges in a sector ripe for thoughtful disruption.
Investment Activity is Accelerating in the RTD Ecosystem with Strong Venture Interest in High-Growth Subsegments
Source: Tracxn
Venture capital interest in India’s RTD beverages is surging, with inflows mirroring the sector’s growth, as investors zero in on subsegments like functional stills and value-added dairy that align with enduring wellness shifts. Key considerations center on defensible behavioral moats: VCs favor startups embedding probiotics or adaptogens to drive habitual consumption, prioritizing transparent sourcing and science-backed claims that elevate premium pricing without alienating mass appeal.
In a landscape where quick commerce serves as a low-risk discovery engine, funding flows to agile models that iterate via digital pilots, ensuring scalability from urban trials to Tier-2 penetration while mitigating seasonal volatilities through resilient supply chains.
From an outlook perspective, the thesis emphasizes viability over volume, with sustainability woven into core economics, such as eco-packaging for margin uplift, as a non-negotiable for long-term bets. Investors are increasingly selective, backing ecosystem enablers that fuse regional flavor innovations with global trends, like low-glycemic desi infusions, to capture Gen Z’s multi-variant experimentation.
This discerning approach signals a maturing frontier, where RTDs emerge as a proxy for aspirational consumption, offering high-conviction returns for those who navigate execution risks with precision.
The Future of India’s RTD Beverages Sector Promises Transformative Opportunities for Brands, Investors, and Ecosystem Enablers
India’s RTD beverages landscape is set for transformative growth, with the non-alcoholic segment dominating the current market and expected to expand rapidly.
This trajectory will be propelled by persistent demand for health-forward, convenient options that echo food sector innovations. As Gen Z’s multi-variant experimentation reshapes habits, premium still beverages will spearhead gains, evolving RTDs from episodic quenchers to integral wellness rituals.
For brands, quick commerce emerges as a vital launchpad for discovery and iteration, allowing tests of niche flavors before offline scaling. Premiumization calls for tight alignment of pricing with transparent, benefit-driven narratives to foster loyalty in a digitally accelerating ecosystem. Investors, meanwhile, should target behavioral anchors in functional subsegments, favoring ventures that build repeatable consumption through efficient supply chains and digital-first models.
Ecosystem enablers, including logistics innovators and sustainable sourcers, will be key to unlocking this potential, bridging gaps for inclusive reach across metros and beyond.
Strategic Implications for Stakeholders
For Brands: Embrace health as baseline by overhauling ingredient transparency and claims; leverage quick commerce for premium SKU trials and digital-native builds that fluidly transition offline.For Investors: Prioritize velocity in stills and dairy for lifestyle alignment; fund habit-forming scalability over volume, emphasizing unit economics and ecosystem partnerships.For Enablers: Invest in cold-chain and green packaging to resolve supply frictions, enabling broader access and regulatory ease for innovative entrants.
As Delhi’s sunset silhouettes clinking low-ABV mocktail cans among Hauz Khas hustlers, RTDs cement their ritual: Not fad, but fuel for a $64 Bn non-alcoholic surge by 2033. We’ve mapped the flow – from metro matcha to Tier-2 Aam Panna, driven by Gen Z’s multi-flavor quest for guilt-free variety.
Playbook for pioneers: Nail the “three Cs” – clean labels, cultural ties, cold-chain wins. Legacy giants blend Ayurveda with gloss to dodge over 200 upstarts; policymakers amp up PLI / AIF for steady supply. Investors: Bet on functionals – kombucha’s $3.1B global dash-signals India’s probiotic prize. RTDs don’t quench – they ignite. Priya’s sunset spritz mirrors a billion bottled dreams.
If you are a founder building a New-Age Consumer Brand and are looking to raise capital or explore M&A opportunities, please reach out to udayan@loestro.com. We’d love to have a chat.
LoEstro Advisors is an investment banking firm specializing in sell-side fundraising and M&A advisory, along with a strong consulting arm. Recognized as the #1 financial advisor in education in India, we are the advisor of choice to India’s blue-chip education businesses.
Over the last six years, we have grown to be one of India’s largest (in terms of M&A transactions) homegrown boutique investment banks, with $1.5 bn+ worth of combined deals closed across education, healthcare, consumer, and technology sectors.