Gen Z drinks less but spends more on premium: Diageo India CEO

BENGALURU: Diageo India chief executive Praveen Someshwar said Gen Z consumers are not cutting back on social occasions but are shifting to premium formats, resulting in higher value per outing even if volumes are lower.

“Gen Z are not consuming less. They are consuming different formats, cocktails and ready to drink. They consume less in volume but more premium,” he said during a joint media interaction.Someshwar said the company continues to orient brand building around occasions rather than demographics, with weddings cited as an example of multiple use cases that range from intimate family connects to larger reception settings.

“Socialising and connects continue to grow. It just finds different forms,” he said, adding that at-home gatherings, pubs, concerts and even concurrent streaming have become meaningful “connect” moments.On the outlook, Someshwar reiterated the premium and above guidance. “Our guidance has been double digit P&A growth. We see that comfortably coming through,” he said. He added that margins have expanded over the last five years and that the company is cash positive, with cash being reinvested into brands, innovation and people.

“Innovation is the single biggest investment. People are the second area of investment,” he said.Diageo India is also sharpening its craft strategy while avoiding massification, according to Someshwar. The company is adding a nano brewery and a nano distillery in Goa to prototype and seed small-batch propositions before scaling. Recent moves under its ventures and partnerships include agave spirits and coffee liqueurs, alongside the integration of Nao Spirits, makers of Greater Than and Hapusa gins.

“Large organisations do not do craft well if they think scale first.

For us, authenticity around ingredients, processes and story is central,” he said.On changing preferences, Someshwar said the company is tracking moderation and non-alcohol occasions but views zero-alcohol as a niche for now. He pointed to an investment in Sober and to what he called “zebra striping,” where consumers alternate between alcoholic and non-alcoholic choices in the same session.

“We are solving for it before we see that scale consistently,” he said.Someshwar described the regulatory environment as a given that requires steady execution across states with differing excise regimes. He said policy volatility is balanced by openings in other markets and that a national liquor policy is unlikely in the near term. “This is reality. We learn to deal with it in a mature and consistent manner,” he said.