Crafting financial resilience: Lessons from India’s alco-bev sector

In a sector as dynamic and regulated as India’s alcohol and beverage (alco-bev) industry, crafting financial resilience is not just a goal—it’s a necessity. Over the past few years, we’ve faced economic headwinds, operational volatility, and policy unpredictability. Yet, these very instances have underscored the strategic role finance must play—not just as a guardian of numbers, but as a catalyst for growth, agility, and long-term sustainability.

Rising Input Costs

One of the key aspects has been the surge in input costs over the last few years. Grain neutral spirits (GNS)—a core raw material—and glass packaging have seen unprecedented inflation. Despite these steep increases combined with additional ongoing cost increases, price increases across states significantly lag behind inflation.

This widening gap between input costs and revenue realization puts acute pressure on gross margins. It demands that finance teams also take an active role in driving operational efficiency and promoting leaner ways of working. Whether it’s rethinking route-to-market models, optimizing supply chain footprints, or streamlining manufacturing processes, every function must operate with agility and discipline. Finance must partner cross-functionally to unlock productivity and embed a culture of continuous improvement—one that balances growth aspirations with rigorous control on costs.

Navigating the Complexity of State Regulations

Another defining feature of India’s alco-bev landscape is the constantly evolving regulatory environment. Each state operates with its own tax structure, distribution norms, and licensing requirements. Companies must be prepared to realign financial and operational strategies rapidly. Finance teams, therefore, need to be embedded close to the markets, capable of translating policy shifts into business impact with speed and clarity. Centralized control alone isn’t sufficient in a sector where state-by-state dynamics can alter outcomes.

Balancing Centralization and Local Agility

Over the years, one key lesson we’ve learned is the value of a balanced operating model—where strategy is centralized, but execution is decentralized. Finance must ensure governance, compliance, and capital discipline at a macro level while collaborating with regional teams to make informed, on-the-ground decisions.

This hybrid model not only accelerates responsiveness to market demands but also fosters ownership and accountability at every level. It enhances speed, clarity, and cohesion—vital ingredients in an industry where decisions must often be made in real time.

Efficiency Alone Is Not Enough—Premiumization Is Key

While cost discipline is critical, it cannot be the only lever. To build a financially sustainable future, alco-bev companies must also pivot toward a more premium and super-premium portfolio. Premiumization allows for stronger margins, greater brand equity, and more room for innovation. It is a strategic imperative in an environment where price increases are tightly controlled.

Finance plays a pivotal role—not just in pricing strategies, but in ensuring capital is deployed where it creates long-term value.

Building Financial Muscle Across the Organization

Ultimately, financial resilience isn’t built solely by finance teams, it’s driven by financial ownership across functions. In our industry, every commercial decision—from pricing to promotions, from capacity planning to brand investment—has financial consequences.

My vision is of an organization where finance is embedded in every conversation - where teams speak the language of value, and decision-making is rooted in both purpose and pragmatism. This is the kind of culture I believe we must nurture—where finance doesn’t constrain ambition but enables it responsibly.

In a sector as complex—and as full of promise—as alco-bev, resilience is ingrained in our people, our processes, and our portfolios. 

(Views are personal; the author is Chief Financial Officer, Pernod Ricard India)