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It’s going to be a summer of fancy beers for thirsty Indians

India-beer
Reuters/Eric Vidal
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Published This article is more than 2 years old.

This summer, brewers in India are stepping up their game to lure tipplers away from rum and whisky.

United Breweries (UB), the country’s largest beer maker, and the global giant AB InBev both plan to make more foreign beers available in India in the coming months, according to The Economic Times newspaper.

“We need to strengthen our portfolio because consumers want to choose, and we want to be a part of their choice,” Shekhar Ramamurthy, managing director at UB, told the newspaper. The company, known for its Kingfisher beer, is set to launch Mexican variants such as Sol and Dos Equis, Austria’s Edelweiss wheat beer, and the tequila-flavoured Desperados from the Netherlands. The brands are part of the portfolio of Heineken, one of the world’s largest beer makers, which owns a 43% stake in UB.

AB InBev, which sells Budweiser beer in India, also plans to push its popular Hoegaarden and Stella brands beyond Delhi, Mumbai, and Bengaluru, The Economic Times reported.

However, both these companies have a long road ahead.

Despite the proliferation of bars and microbreweries across urban India, the country still has one of the world’s lowest per capita rates of beer consumption at just 4.6 litres. In contrast stands the Asian average of 57 litres, according to research agency BMI Research. After all, hard spirits like whisky and rum still account for most of the alcohol (pdf) consumed here. So, launching imported and premium beer brands may help by appealing to the growing segment of young and urban consumers with cash to spend. Companies are also keeping a close watch on home-grown brewers, including Bira and White Rhino, which are now competing with foreign brews.

India’s Rs43,000-crore beer market isn’t growing fast enough for big brewers. For the nine months ended Dec. 31, 2016, sales by volume actually fell by 2% (pdf), hit by the cash crunch caused by the demonetisation of high-value currency notes in the country. Annual growth in the last few years hasn’t been great either.

Business is likely to suffer further in the wake of the supreme court of India’s recent ban on the sale of alcohol within 500 metres of highways. This has hit a third of the country’s liquor shops.

Beer makers, hence, have to double their efforts to do well in India. The bar has been set much higher.

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