United Breweries aims 6-7 pc volume growth in FY27 amid cost pressures, to continue premiumisation

United Breweries Limited UBL expects volume growth of 6-7 per cent in FY27, leading to a double-digit revenue growth, driven by premiumisation, network expansion and stronger consumer demand, even as the company continues to face inflationary pressures and supply disruptions arising from geopolitical tensions.

United Breweries Limited (UBL) expects volume growth of 6-7 per cent in FY27, leading to a double-digit revenue growth, driven by premiumisation, network expansion and stronger consumer demand, even as the company continues to face inflationary pressures and supply disruptions arising from geopolitical tensions. The company, which closed FY26 with a modest 3 per cent volume growth, remains optimistic that the structural initiatives undertaken over the last few years will help accelerate category growth in the coming fiscal. ''Our own forecast is somewhere between 6 per cent to 7 per cent volume growth, and it should translate to a double-digit revenue growth. We are already seeing momentum in the first quarter,'' said its Managing Director and Chief Executive Officer Vivek Gupta in the latest investors call. Gupta said demand from the market was up 8-9 per cent in FY26, while the company posted 4 per cent volume growth, and sales from the premium segment were up 16 per cent. ''I will be very disappointed with the efforts we have done if growth does not improve,'' Gupta said, adding that ''investment we have made on getting cold beer, the network, the premiumisation, the brands and innovation, we think this should be a high-single-digit category growth here.'' He expects the Indian beer category to clock high-single-digit growth, supported by favourable demographics, increasing urban consumption and premiumisation trends. UBL management also flagged mounting cost headwinds arising from global supply chain disruptions and rising commodity prices, exacerbated by tensions in the Middle East. Gupta said some contract brewers manufacturing rival brands are beginning to feel the impact of raw material shortages. ''Different players are seeing impact at different levels. Some of our contract brewers have stopped manufacturing their brands and are asking if we need more supplies because they can't source material,'' he said, adding that while the trend was not visible in April, supply pressures could intensify over the coming months. UBL Chief Financial Officer Jorn Kersten said the company is navigating ''big headwinds'' but remains committed to mitigating cost pressures through structural measures. ''There are big headwinds in the category, and we are not shying away from it. We are structurally working to mitigate what we can. Can we mitigate all of it? We don't know. It depends on how long the war impact lasts,'' Kersten said. He said that crude oil, gas prices and the weakening Indian rupee are adding to inflationary pressures, while energy-linked packaging costs are rising sharply. ''Now, of course, on the EBIT outlook, there will be an impact. We are working hard to further work on productivity programs to make sure that we convert the healthy gross margin also into EBIT margin, that we make sure that we mitigate and anticipate the cost pressure which is ahead of us,'' he said. Despite concerns over aluminium can shortages affecting parts of the beverage industry, UBL now a unit of Dutch brewing major Heineken NV, said it has not faced supply disruptions due to its global sourcing network and long-term supplier partnerships. ''We do not have a supply issue on cans. We have identified suppliers globally, and none of our results are because of supply issues. We have an inflation issue, a cost issue, not a supply issue,'' Kersten said. The company said it has also invested in bottle infusion and packaging optimisation to mitigate risks from tightening supply conditions and rising energy costs. Looking ahead, United Breweries said it will continue investing behind premium brands, optimise manufacturing and contract brewing capacity, and push category expansion, while maintaining planned capital expenditure despite macroeconomic uncertainties. ''We will invest behind the brands and behind the category and take a role as a category leader. We will also continue to optimise our network and capacity, including the contract brewers, because we believe that is what is needed in order to be there for the growth of the India beer market,'' he said.