United Breweries Reports Positive Demand Momentum in Q2, Invests ₹110 Crore in Maharashtra Facility

United Breweries Ltd (UBL) continues to record positive demand momentum in the first two months of the ongoing second quarter, supported by growth across its premium brand portfolio. According to Managing Director and CEO Vivek Gupta, the company has maintained its FY27 outlook for double-digit revenue growth.

UBL's premium brands are projected to grow by over 20 per cent this fiscal year. As part of its expansion strategy, the company has introduced Heineken Silver into three new states: Madhya Pradesh, Odisha, and Kerala. The brand is currently expanding at a rate of over 40 per cent nationally, maintaining strong market traction.

To support this growth, the owner of the Heineken and Kingfisher brands has commissioned a new canning line at its Ellora Brewery in Chhatrapati Sambhajinagar, Maharashtra, with an investment of ₹110 crore. The facility is expected to begin operations in September, with full functionality anticipated in October following necessary statutory and regulatory approvals. The new line will feature a production capacity of approximately 40,000 cans per hour, allowing UBL greater flexibility to cater to premium, mainstream, and economy beer segments in the state.

Maharashtra remains a strategic market for the company, with beer consumption growing by more than 20 per cent over the last two years following local policy reforms. UBL currently operates three breweries in the state, and the new capacity places production closer to consumers while accommodating regional brand growth.

Regarding supply chain logistics, UBL reported that bottle supply constraints were resolved last year through the addition of new suppliers and improved return rates. Can supply issues have similarly been addressed through inventory management and a tie-up with Crown Cans, which plans to establish a manufacturing unit in India. However, packaging material costs continue to present a financial challenge.

UBL estimates a ₹300-350 crore cost impact this fiscal year due to ongoing war-related disruptions. To offset these pressures, the company has pursued local production, cost optimization, and productivity initiatives, alongside engaging with state governments for pricing revisions. UBL has secured pricing adjustments in approximately 25 states and is currently engaged in advanced discussions with Telangana and Andhra Pradesh.

On the broader industry front, demand growth remains supported by progressive policy reforms. Karnataka's transition to an ABV-based taxation structure was cited as a major driver, with the category expanding by over 40 per cent in the state following the reform. Similar regulatory changes are reportedly under discussion in Tamil Nadu and other regions.

"United Breweries' investment in local manufacturing infrastructure demonstrates a calculated approach to capturing regional demand driven by favorable policy reforms. While cost pressures from geopolitical disruptions remain a significant hurdle, the company's focus on supply chain resilience, premiumisation, and targeted pricing actions provides a stable framework to protect its margins while sustaining long-term double-digit growth objectives." — Dr. Shishir Gupta, Founder & CEO, StartupLanes