Even two weeks after Diwali, its return gift—toxic, unbreathable air—still lingers. So why do I still wait for it every year? Because Delhi’s Diwali party scene is amazing. Parties with cousins, friends, ex-colleagues, and current ones… the list is endless. 

At one such party last month, a younger cousin introduced me to a non-alcoholic spirit. My reaction, along with most of the older folks in our group, was an eyeroll (obviously). Most of us were millennials, born before 1996, while a few, like my cousin, were Gen Z. 

This moment highlighted an apparent trend: a gaping gap in alcohol consumption between the generations. Gen Z seems to prefer no-alcohol drinks, while millennials are the exception. A Livemint report from May confirmed this, noting that in India, Gen X and Gen Z are more likely to choose to drink less, while millennials continue to drive alcohol consumption. 

This shift isn’t just an Indian phenomenon; it’s part of a global “sober curious” movement, evidenced by the meteoric rise of companies like Athletic Brewing in the US, which is dedicated entirely to non-alcoholic beers. 

But if this is a mega trend, why is Varun Beverages, the largest bottler of Pepsico in India, looking to add alcohol as another revenue stream? Isn’t it counterintuitive for the beverage giant to enter this category?

According to an Economic Times report from yesterday, Varun Beverages is in exploratory talks with Pepsico “to expand their partnership to distribute and sell alcoholic drinks in India”.

In fact, during an analyst call last week following its Q3 results, Ravi Jaipuria, the chairman of RJ Corp (Varun Beverages’ parent company), stated that they plan to launch into this ready-to-drink (RTD), low-alcohol category in select African countries. When asked about introducing this category in India, here’s what Jaipuria said:

Experts don’t see this move as counterintuitive. While they acknowledge the sobriety trend among Gen Z, they argue the broader market potential remains huge. 

“While I don’t discount the trend, if you look at the market from a larger lens, there is indeed a lot of scope. Gen Z in India are at a count of about 382 million, while millennials are 330 million in 2024.