Spectators in stadiums from London to Melbourne may soon be sipping on an Indian craft beer brand as they soak in a game of cricket.
B9 Beverages, which owns and markets Bira 91 beer, has signed a five-year global partnership deal with the International Cricket Council (ICC), according to a joint statement issued on Nov. 28.
As an official partner of ICC, the New Delhi-based brewer will have broadcast, digital, and in-stadium advertising rights during international cricket tournaments, Ankur Jain, founder and CEO of Bira 91, said on the sidelines of an event in Delhi to make the announcement.
“It (the deal) is pretty comprehensive,” Jain told Quartz about the agreement. Estimates from industry experts peg the deal upwards of $5 million per year.
The “multi-million-dollar” deal, he said, will also give his company the rights to serve Bira 91 in stadiums across—but not in India. For in its home country, the Board for Control of Cricket in India prohibits serving alcoholic drinks at the match venue.
The sponsorship will kick off with World Cup 2019, to be hosted by England and Wales. However, Bira, unlike Nissan or Oppo, will not be a title sponsor. The deal covers key international tournaments, including the ICC World Test Championship (the UK, in 2019), ICC U19 Cricket World Cup (South Africa, 2020), and the ICC Women’s World Cup (Australia, 2020).
For B9 Beverages, which harbours dreams of making Bira 91 a global brand, the deal is an opportunity to leverage cricket’s mass appeal. ”For a brand trying to establish itself on a national and international level, there cannot be a better platform than cricket that cuts across all demographics,” said Ashish Bhasin, chairman and CEO for south Asia at media company Dentsu Aegis Network.
The restrictions in India on advertising alcoholic beverages aside, the ICC deal can be a boon for B9 Beverages, Bhasin said. In any case, the company also has a range of non-alcoholic beer. In fact, it recently launched a hot sauce that could potentially be used for surrogate advertising.
In high spirits
Launched in 2015, Bira 91’s light lagers and strong ales quickly found favour among India’s urban millennials.
Over the years, the locally brewed beer, with its unique taste, has managed to carve a small, but loyal, share out of India’s over Rs50,000 crore beer market dominated by ABInBev’s Haywards, the United Breweries-owned Kingfisher, and Carlsberg’s Tuborg.
Besides nine Indian states, Bira 91 has also expanded to the US, Bahrain, Singapore, Hong Kong, and the UAE. The ICC deal will help it cement its international reach.
The company is also strengthening its brewing capacity before the ICC deal kicks in. In addition to its two existing microbreweries, in Indore and Nagpur, B9 Beverages plans to open two more, in Mysuru and Visakhapatnam, in the first half of 2019. The new plants will require capital expenditure of $25 million each and boost the company’s capacity by five times to 20,00,000 barrels per year from the current 3,50,000.
While Jain is looking at exporting beers from India for the ICC tie-up, he is also exploring third-party contracts in the UK before the World Cup.
The ICC deal is also likely to bolster B9 Beverages’ plans to go public. “Everything that we are doing right now, whether be it this partnership or expansion is aligned to a strategic goal of an IPO (initial public offering),” Jain said.
For all its popularity and global expansion, B9 Beverages is still a loss-making company. For the year ended March 2017, B9 Beverages posted revenues of Rs30 crore, according to data sourced from research firm Tofler. Its losses stood at Rs55 crore, widening over four times from 2015.
Some analysts are sceptical if the ICC deal, which Jain says will be funded “internally,” can turn around the company’s finances. ”This deal isn’t the best way to ramp up sales. It might help with the brand’s global ambition but they have far more ground to cover in India when it comes to gaining better distribution footprint and market share,” said an industry executive on the condition of anonymity. He added that competing brands could possibly eclipse Bira’s presence during key tournaments.
Proving that the company has scale is important to B9 Beverages, whose investors have collectively poured over $77 million into it. On May 08, B9 announced raising $50 million (Rs336 crore) in a funding round led by Belgian investment firm Sofina, and existing investor Sequoia. Its other investors include TR Capital, Snapdeal’s Kunal Bahl, and Zomato founder Deepinder Goyal.