Grab your beer mugs.
B9 Beverages, which sells the popular Bira 91 brand of beer, has just completed its largest round of fund-raising, and is now preparing to more than quadruple its production.
On May 08, the New Delhi-based company announced that it has raised $50 million (Rs336 crore) in a funding round led by Belgian investment firm Sofina, and existing investor Sequoia.
B9 will use the majority of the cash to fulfil local demand, investing in existing and new manufacturing facilities, apart from expanding in the US and southeast Asia, its founder and chief executive officer Ankur Jain told Quartz.
Bira 91 was launched in early 2015 to “fill the gap in the market for a trendy, unorthodox, fun, and smart brand of beer that could be positioned between Indian brands and the expensive imported beers,” Jain had said then. Its investors include Sequoia, TR Capital, Snapdeal’s Kunal Bahl, and Zomato’s founder Deepinder Goyal, among others, who have put in $100 million into the venture so far.
The likes of United Breweries, which sells the country’s largest beer brand Kingfisher, still dominate the Indian market, but beer consumption remains low here, leaving plenty of headroom for growth. In 2017, Indians drank a total of 4.7 million litres of beer. The number is expected to go up to 6.5 billion litres by 2022, according to BMI Research data.
Over the next 18 months, B9 will ramp up its monthly production capacity from 350,000 cases to 2 million cases. The company already has two breweries in Indore and Nagpur, which will be expanded, and a new facility in Mysuru is expected to be up and running soon.
With more production on the way, the company will expand into more cities in the states of Punjab, Uttar Pradesh, Maharashtra, and Madhya Pradesh, aside from deepening its presence in its top markets of Mumbai, Delhi, and Bengaluru. ”We did a test last year and went deep into small towns in Madhya Pradesh and Maharashtra, specifically with our strong variant… the consumer is aspiring for something new and playful,” Jain said. Bira 91 is currently sold in 15 cities.
Last year, the company expanded its portfolio to include a low-calorie beer and a strong variant with an alcohol content of 7%. The company could launch a new product in 2019, Jain said. Meanwhile, there is the possibility of a public listing brewing. ”We are not open to any acquisitions from big players but will look at an IPO in the next three to five years,” he added.