In Indore, an inland city in the central Indian state of Madhya Pradesh, "Atelier V," a casual fine-dining restaurant that opened in 2024, has introduced six new fully realized non-alcoholic cocktails built around 0% ABV. Using house-made tonics, fruit foams, and even scented "airs," the restaurant has drawn attention from local media for insisting on no compromise even without alcohol. What's worth unpacking here is the idea that inland Tier 2 cities — where the psychological and cultural barriers to drinking run higher than in big cities — offer more room to design "choosing not to drink" as a positive experience. For Japanese companies considering non-alcoholic beverages or food for the India market, this offers a clue about which cities to target and how to present the products on the shelf.
The new menu features six items, each with a playful English name: "The One That Wanted Mezcal," "What the F* Is a Virgin Colada?," "This Would've Been Bourbon's Finest Hour," "The PG-13 Paloma," "Lowkey Needs Tequila," and "Be a Darling, Order the Gin." The names themselves tell the story of a deliberate attempt to recreate, without alcohol, classic cocktails that would normally star a spirit.
On the technical side, the drinks combine house-made shrubs (fruit vinegar syrups), tonics, sodas, brines, tinctures, fruit foams, and scented "airs." For example, "The One That Wanted Mezcal" pairs a guava-and-celery tonic with chili-coriander salt and is served with a spiced guava tart. "What the F* Is a Virgin Colada?" uses coconut, pineapple, and saffron and is served alongside a tres leches cake. Each drink is designed to be paired with a food item, going a step beyond a simple "sweet drink" to satisfy through flavor, technique, and texture.
Founder and chef Vedant Newatia argues that what supports a quality cocktail is not alcohol but balance, technique, and texture, and emphasizes that the same effort goes into zero-proof drinks. Atelier V has always been a restaurant with an alcohol menu spanning 101 classic cocktails and offerings like "Around the World in 12 Cocktails"; the key point here is that it has now placed alcohol-free options on equal footing as an extension of that lineup.
Indore is the largest commercial city in Madhya Pradesh and is classified as a Tier 2 city, where drinking culture is not as visible as in Tier 1 metros. In January 2025, the state banned alcohol sales in 17 religious cities including Ujjain, Omkareshwar, and Maheshwar. Indore itself is not a dry city, but the state as a whole has a cautious attitude toward drinking, and resistance to "drinking in public" tends to remain stronger there than in big cities, given the ties of religion, family, and workplace.
This environment is not a disadvantage for non-alcoholic drinks — it can actually work in their favor. The reality is that when people who don't drink, can't drink, or don't want to drink look for "a proper drink an adult can order" rather than a bland soft drink, the options are thin. Atelier V has inserted 0% ABV drinks there, served in the same glassware, with the same care, and at a comparable price point to its alcohol menu. The design lets people who drink and people who don't share the same table and the same experience without feeling out of place.
The market as a whole also shows tailwinds. According to several industry surveys, India's mocktail, premium mixer, and zero-proof segment is growing at a pace of more than 20% annually and is projected to reach roughly 185 billion rupees by 2027. Converted at approximately 1 rupee ≈ ¥1.8, that is a market in the ¥300 billion range (the exchange rate fluctuates, so this is only an approximation).
The driving force is said to be millennials and Gen Z, who value "experience" over drinking itself. A distinctive feature is that Instagram-worthy visuals, a wellness orientation, and the value of "enjoying the night while staying sober" are spreading in Tier 1 and Tier 2 cities in parallel. At some premium establishments, zero-proof cocktails are reported to have grown to account for roughly 10 to 20% of beverage sales, a clear increase from under 5% before the pandemic (figures vary by survey and by outlet, so these should be treated only as directional trends).
Local media have praised Atelier V for separating its zero-proof drinks from "just sweet beverages" and treating them on equal footing with the alcohol menu. One food and beverage industry figure has said, in essence, that in India's premium dining scene there is strong demand to raise average spend per customer even at venues that don't serve or can't easily serve alcohol, and that elaborate non-alcoholic drinks can be the answer to that.
Another view holds that Tier 2 city consumers tend to strongly want "the same experience as the big city," so value is created simply by being able to try a talked-about big-city menu item locally. At the same time, there is a more cautious view that sweet drinks close to home consumption need to be sold as a distinct category from the "adult drink" ordered while dining out, suggesting the importance of managing expectations through presentation and naming. Atelier V's practice of presenting twists on classic cocktail names in English can be read as exactly this kind of expectation design.
The takeaway for Japanese companies here isn't a broad market overview — it translates into a concrete move. One is the idea that, when bringing non-alcoholic products into India, inland Tier 2 cities with a thin drinking culture should be targeted first not as a "weak market" but as a "market where non-alcoholic drinks can take the lead role." Rather than competing with alcohol on a big-city bar shelf, filling the gap for "a proper drink" in a city with a high barrier to drinking is easier to enter on both the differentiation and retention fronts.
The other is to compete on "designing the experience" rather than on flavor alone. Just as Atelier V raises average spend and satisfaction through food pairing and playful naming, if Japanese companies bring in non-alcoholic beer, sugar-free or functional drinks, or mocktail ingredients based on amazake or other Japanese ingredients, an effective setup is to partner with restaurant chains and hotels and build them into the menu as "a drink that satisfies when ordered." The dividing line is whether a company can propose not just wholesale bottles but a full package including a recipe and a story that the local venue can serve with pride. Along the same lines of reading non-alcoholic drinks as an opportunity, the move by Ahmedabad's Middle Eastern restaurant Saffatein and an approach that adapted to local drinking habits rather than importing an alcohol menu as-is, an example of tapping into drinking-party culture with highballs— read alongside these, it becomes clear that India's beverage opportunity is driven not by "the presence or absence of alcohol" but by "the quality of the experience."
A single-restaurant move like Atelier V's can ripple out to menu design across the entire dining industry. If zero-proof drinks are elevated from "a sweet drink tucked in the corner of the menu" to "a flagship item that drives average spend," demand will also emerge on the supply side for premium ingredients designed for pairing and for semi-finished products that are easy for a restaurant to finish in-house. For beverage makers, two paths become realistic: competing with finished RTD (ready-to-drink) products, or supplying ingredients, syrups, and foaming agents wholesale to the dining industry.
Also, in India's dining-out drink scene, which had looked like coffee's territory alone, an effort built around tea, spices, and fruit —Encalm's push to promote Indian tea— the search for "a lead role beyond alcohol" is happening in parallel across various places. The maturing of non-alcoholic drinks is part of the same continuum as this move away from monotonous soft drinks.
For companies considering rolling out non-alcoholic beverages or food ingredients for India, the practical first step is to identify potential partners: independent fine-dining restaurants and hotel F&B departments in Tier 2 cities that are ambitious about menu design. Atelier V is an independent restaurant located at Scheme 54 along AB Road in Indore, and venues like this — capable of generating local buzz — tend to make good partners for co-developing recipes locally, starting small. In India's non-alcoholic market, what works is not just market research but a sales approach that goes restaurant by restaurant, proposing specifically which drink a company's own ingredient could be worked into.
Atelier V's six 0% ABV drinks show, through the example of a single restaurant, that non-alcoholic drinks can take the lead role precisely in inland Tier 2 cities with a high barrier to drinking. The next actions for Japanese food and beverage companies are clear. First, target the non-alcoholic gap in Tier 2 cities with a thin drinking culture before going after big cities. Second, rather than wholesaling bottles, prepare a proposal to partner with restaurants and hotels and build the product into the menu as "a drink people order," including food pairing. Third, approach real, ambitious independent restaurants one by one and co-develop local recipes starting from small quantities. Before talking about the market as a whole, starting from the specifics of which drink at which restaurant a company's own ingredient can be worked into is the shortest route to India's non-alcoholic opportunity.
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