2025: The year premiumisation moved into mainstream

2025 marked a decisive shift in India’s consumption story. What was once seen as a niche, urban-led phenomenon turned into a broad-based behavioural change as premiumisation moved firmly into the mainstream. Across categories as diverse as beauty, automobiles, fashion, FMCG, beverages and technology, Indian consumers demonstrated a growing willingness to pay more, not merely to trade up, but to buy into value, experience, trust and identity.

Industry watchers say the year stood out for how premiumisation cut across income cohorts and geographies. From mass brands introducing elevated product lines to premium-first players widening their reach, the narrative moved beyond affordability versus aspiration. Consumers were no longer upgrading just because they could, but because the proposition felt meaningfully better.

This behavioural shift has had a cascading impact on how brands approach the market. Marketing strategies were recalibrated to prioritise storytelling, provenance and purpose over discounts and price-offs. Premium cues increasingly came through design, packaging, collaborations and content-led engagement, while influencer partnerships and experiential marketing gained prominence.

Pricing strategies evolved in parallel. Instead of aggressive undercutting, brands leaned into value-based pricing, confident that a clearly articulated premium would find takers. This shift, in turn, influenced media spends, with marketers allocating higher budgets to digital, content platforms and immersive formats capable of conveying brand depth and differentiation.

Also read: On India visit, Unilever chief pushes HUL toward premiumisation

Premiumisation key for middle class now: WPP Media’s Sairam Ranganathan & Ritika Taneja

Print rides on premiumisation & political ads in 2024

Anil Shankar, Managing Partner, Starcom India, said, “Premium choices today influence everyday purchase decisions across categories, not just occasional upgrades or aspirational spends. Consumers are not simply trading up on price. They are consciously choosing brands that deliver superior quality, credibility, experience, and alignment with personal values.” He added that premiumisation has become a mainstream expression of value in India. This, he noted, requires brands to respond with sharper audience understanding and media strategies that reinforce relevance, confidence and long-term brand value at every touchpoint.

The shift is visible across sectors, playing out in distinct but consistent ways. According to Shankar, in FMCG, accessible premium, health-led and science-backed products are outpacing mass offerings. In entertainment, urban millennials and Gen Z are increasingly paying for ad-free, premium content experiences that prioritise quality and control over free access. The automotive sector, meanwhile, is seeing buyers move beyond entry-level options towards feature-rich trims, advanced safety systems, connected technologies and electric vehicles that promise performance, reassurance and design.

Brands on the ground echo these trends. 

Nikhil Doda, Co-Founder and COO of Lahori Zeera, said regional beverage brands have traditionally competed on price, with volumes driven by entry-level products. He added that 2025 marks the start of a gradual shift towards premiumisation through better formulations, improved packaging and larger pack sizes. “This premiumisation is a gradual change and not an abrupt one; nevertheless, it is supported by changing consumer preferences. Better global exposure and renewed pride in regional flavours make consumers, metros as well as Tier 2 and Tier 3 cities, willing to pay more for high-quality, sophisticated regional products.”

New regional players, particularly those leveraging D2C and quick-commerce platforms, are seeing stronger uptake, as these channels are less price-sensitive and more open to premium trials. At the same time, several national players are pushing lower-priced offerings to protect volumes, underscoring a market in transition where affordability still drives scale but premium regional beverages are gaining ground. For Lahori Zeera, premiumisation has come from both higher spends by existing consumers, driven by larger pack sizes, and the addition of new users. Expanded presence in institutional channels and premium A-category stores is further helping the brand tap new segments, deepen engagement and fuel incremental demand.

The shift is not limited to product categories alone. Lifestyle and F&B brands such as Lyfe Hotels and Impresario Entertainment & Hospitality Pvt Ltd, which operates SOCIAL, antiSOCIAL, Smoke House Deli, Mocha, Salt Water Café, and Slink & Bardot, along with cloud kitchen players like BOSS Burger, are also witnessing the impact of premiumisation.

“Today’s consumers are value-conscious, digitally informed, and expressive about identity. In F&B especially, choices are driven as much by energy, design, narrative, and emotion as by the food itself. People want to feel part of a moment,” said Divya Aggarwal, Chief Growth Officer, Impresario Entertainment & Hospitality Pvt Ltd. 

She added that existing guests are engaging more deeply as experiences across food and beverage formats feel more refined, driving stronger repeat behaviour across the industry. At the same time, premiumisation is drawing in a younger, digitally aware audience that is meaning-led, seeking authenticity, cultural relevance and experiences aligned with identity rather than price. This dual shift is widening the consumer base while also deepening engagement with existing audiences.

Sonal Sahoo, Director and Co-Founder of Lyfe Hotels, said the brand’s long-standing focus on design and detailing is now resonating more strongly with guests who better understand the value of thoughtful service and refined experiences. She added that this has both widened the audience to include consumers willing to pay more for quality and increased spend among loyal guests, as premium pricing is increasingly justified by clearly felt value rather than perceived cost.

“Premiumisation has helped us bring forward the value of our detailing very naturally. It has allowed us to highlight why we do things the way we do and attract guests who appreciate that difference,” Sahoo explained. 

Media spends & High impact formats

As premiumisation has scaled, media strategies have evolved alongside. Media spends have risen, with brands allocating higher budgets to high-impact formats that can deliver both scale and storytelling. Investments are increasingly flowing into premium digital video, OTT platforms, experiential activations, influencer-led content and immersive out-of-home formats that reinforce brand value and visibility.

Shankar highlighted, “brands are moving away from maximising low-cost reach and instead concentrating investment in fewer, higher-quality environments where attention, context, and credibility matter.”

According to him, premium video ecosystems such as OTT and connected TV are gaining prominence for immersive, high-attention storytelling, supported by creator-led platforms that lend credibility and authenticity to brand narratives. Brands are also favouring contextual editorial environments and experiential formats to build trust and engagement. The focus has shifted from scale alone to attention, cultural relevance and credibility, positioning media as a core driver of perceived premium value rather than just a delivery channel.

For Lahori Zeera, premiumisation and larger packs remain central to its strategy, supported by a selective branding approach. With focused brand building over the past two years, the aim has been to make the brand aspirational across price points while maintaining a young, distinctive identity. “After the brand extended its reach to most of the Indian states, ATL investments become more strategic. Therefore, we are moving ahead with bigger branding initiatives, but we still remain very selective. With limited budgets, we do not have the luxury of trying multiple times; hence, every investment we make is intentional, of high impact, and very ‍ ‍‌‍‍‌‍‌ focused,” explained Doda.

Similarly, Impresario and Lyfe Hotels said increased media investments are aimed at communicating value to a digital-native audience rather than justifying premium pricing. Both are leaning into rich video, creator-led content and high-impact digital formats to showcase craft, experience and intent, reflecting how consumers increasingly discover and choose brands through visuals, narratives and social currency. Creators, they noted, help humanise the experience and build trust, while high-impact formats are reserved for key launches and moments, supported by sustained engagement through digital communities.

2026 Outlook

Looking ahead to 2026, premiumisation is expected to deepen, but brands will need to consistently earn the right to charge more through clear value, credibility and experience. As consumers become sharper and less forgiving, sustained trust and relevance will determine which premiums endure. At the same time, demand for value-for-money offerings is likely to remain strong, with consumers continuing to prioritise products that balance affordability with clear, tangible benefits.

Shankar added that premiumisation is unlikely to plateau in 2026, but it will become more discerning. Consumers will continue to pay a premium only when brands earn it through consistent and demonstrable value. The next phase, he said, will be shaped less by willingness to spend and more by rising expectations of delivery, higher standards across product, service and experience, sharper storytelling, and smarter media planning focused on attention quality and trust.

Doda said 2026 will be a pivotal year, with legacy national players pushing into entry-level pricing, particularly ₹10 SKUs, to defend volumes against regional competition. While affordability will remain critical, he said Lahori Zeera plans to grow at both ends, strengthening entry-level presence while scaling larger pack sizes and premium offerings, even as legacy players face pressure on higher-value packs.

However, Aggarwal believes that premiumisation will accelerate in 2026 especially for F&B category. “All indicators point towards acceleration. Consumers are redefining value in more nuanced ways, they’re not choosing “expensive,” they’re choosing considered. Across dining trends, social behaviour, and experiential formats, the pattern is clear: people want atmosphere, story, design, and experiences that feel distinct from the everyday,” she concluded.