BEER INDUSTRY IN INDIA

Presented by Group 2
 HISTORY & OVERVIEW

• Beer began to be exported to India in days of the early 1700s.

•

• Led to creation of a new style of beer by George Hodgson in

his London brewery — “India Pale Ale” also known as IPA.
•

• First modern brewery in India was set up in Kasauli

•

• Today no brewer in India makes India Pale Ale. All Indian Beers
are either:
ü Lagers (4.3% alcohol)
ü Strong lagers (15 % alcohol)
ü

• Indian beer market was estimated to be 6.7 million hectoliters

in 2002 - 03
•

• Beer consumption is growing rapidly at a CAGR of 7% over

last 9 years
•
 INDUSTRY OVERVIEW
•
• Indian beer market is
valued at INR 35 bn
with volume sales of
MARKET 172 mn cases for FY
2008-09
• The market is expected to
grow at an annual rate
of 17.2% till 2011
• Foreign brewers are
eyeing the Indian beer
market which is largely
untapped and has growth
potential
•
DRIVERS & •
CHALLENGES
• Drivers :
 – Huge market potential
 – Rising income levels
 – Entry of international brands
• Challenges :
 •
• With current duopoly
situation and entry of
foreign players, beer
industry in India will
quickly witness
TRENDS consolidation
• Premium beer segment is
outpacing the
mainstream beer market
touching a growth rate
of 40-50%
• Emerging new sub-
categories of beer with
consumers in India open
for experimenting
• Growing demand for barley
COMPETITION and evolving contract
farming
•
• More than 80% of the
market is controlled by
two major players
United Breweries
Limited (48%) and
 Indian consumers prefer strong lagers which has higher
alcoholic content
Categories of beer
Lager Brewed using bottom-fermenting yeast that ferments
slowly at a low temperature to create a smoother, mellow
beer
Ale Uses top-fermenting yeast, is a more aromatic and fruity
product
Stout Dark and heavy, with roasted unmalted barley and, often
caramel malt or sugar
Mild Beer Developed as a sweeter and cheaper alternative to dark
ales
Bitter Highly hopped for a more dry and aromatic beer. It is
pale in color but strong
Dark Beer Barley is kilned for a long period of time which creates
richer flavors
Fruit Beer Fruit, usually berries, is added either during primary
fermentation or later
Wheat Beer Malted wheat and barley are used for this German style
(Weizen) beer

Indian beer market is dominated by Lager and its various shades

 HISTORY & OVERVIEW

•
•
•
•
 MAJOR PLAYERS
1)
2 ) UB ( United Breweries Ltd .) -
Market leader in the Indian
beer market with a 47.5%
market share. Its flagship
Kingfisher brand alone
commands 25% market share


2 ) SAB Miller - 38.3% market

share; has 10 breweries
located strategically across
India to serve the beer
markets efficiently
3)
4 ) Carlsberg - At the end of 2006,
Carlsberg entered into a
joint venture -
called Carlsberg India
Private Limited - to build a
green field brewery in the
state of Rajasthan, India. 
•
UNITED BREWERIES
GROUP ( UB )
 UNITED BREWERIES

• Based in Bangalore, is a conglomerate of different companies with

a major focus on the brewery (beer) & alcoholic beverages
industry.
• India's largest producer of beer - market share of 48% by volume;
headed by Dr.Vijay Mallya
• UB Group today controls 60% of the total manufacturing capacity
for Beer in India.
• Brands:
– Kingfisher Blue
– Kingfisher Strong
– Kingfisher Premium
– Kingfisher ultra
– Zingaro
– Sand Piper
– UB Premium Ice
– Kalyani Black Label Premium
– Kingfisher Draught
• Kingfisher, most visible and profitable brand, made a modest entry
in the sixties.
–
 PORTER ’ S FIVE FORCE MODEL

• Model developed by Michael Porter, this model analyzes the

nature and intensity of competition
•

• In an industry through five forces (rivalry, customers,

supplier, new entrants, and substitutes). These five
forces are explained as below –
•

1 ) Bargaining Power Of Suppliers

2)
• With increasing cost of raw material and
decreasing cost of barley suppliers
bargaining power was high
• Shifting their production of beer on malt
company has achieved a hold on its raw
material and considerable reduced the
supplier strength and dependency
2 ) Rivalry Among Existing Firms - Means through which
competitors fight for position by using tactics such as
price, competition, advertisement battles, and new product
introduction, to lower the profits of competitors in the
industry.
•

– CAGR of 11% is expected for beer in the next 5 years

–

– Currently the major rivalry for kingfisher premium is

Budweiser, Carlsberg, Foster and Tiger and for
kingfisher strong it’s Hayward 2000, Hayward 5000,
Palone.
–

– SABMiller’s who came to India by acquiring small

breweries and made its hold as Best-selling strong
beer brand
–

– Still kingfisher being largest-selling strong beer

brand (29%market share) is currently being supplied
in 55 country.
–

– There are also some small local players that are in

the market but does not provide much threat to
kingfisher.
3 ) Threat Of New Entrance
4)
– CAGR of 11%; sure makes attractive for the new players. But
strong brands like kingfisher and haywards which already
have their brand recall and extensive advertisement, new
entrants are expected to struggle to expand their consumer
base as they try to penetrate the beer market in India
–

– Several international brewers have currently built brand

associations and are marketing their brands aggressively
through various point-of-sale promotions throughout their
distribution networks.
–

– But with strong players in the market the new entrant will
face problems as following:
 a) Economies of scale For example benefit associated with
bulk purchases and sales
 b) Cost of entry For example investment in technology
 c) Distribution channel For example ease of access for
competitors
 d) Government Legislations introduction of new laws might
weaken companies position
 e) Differentiation For example certain brands that cannot
be copied
 f) Supplier power Possibility of forward integration by
supplier
4 ) Bargaining Power Of Customers
5)

– It is the extent to which customers are successful in

forcing prices down, or securing high quality or more
service at the same price
– Customers tend to be powerful when the quantities they
purchase form a large portion of the seller's total
sales.
– Buyer do not understand the quality of the beverages
and as there are not many players in the market the
customers has less command over price.
–
7 ) Threat Of Substitute
8)

– India is predominantly a spirits market and beer is a

minority preference for those who consume beverage
alcohol. So substitute is biggest threat as
preference for beer among beverage drinker is less
– But the low penetration in beer consumption in
comparison to international levels offers the
expectation of substantial and sustainable growth in
demand for beer in years to come, particularly given
the youthful age of India’s population.
 SWOT ANALYSIS
STRENGTHS WEAKNESS
 Strongest Worldwide Distribution  High Concentration on Strong Beer
System Market
 Huge Finances backing from UB  Too much diversified
Group
 Oldest & Largest Player In India
 Worldwide known Brand

OPPORTUNITIES THREATS
 Beer consumption is increasing  High Taxes & Regulations
 Per capita beer consumption in  Prohibition on Advertising
India -0.5 litres which is very low  Indian Culture is a Major
 Brand Extension Benefits Hindrance
 Changing lifestyles of middle  Negative perceptions about
class alcoholic beverages widely
 Increase in disposable income prevalent
 Many International Player
Entering In India
 This is a ‘regulated’ industry
 COMPETITIVE ADVANTAGE
• Management Team
– Professional Managed
– Seasoned Professionals with Significant Industry
Experience
• Segment Market Presence
– Least Vulnerable to Policy Volatility due to Large Spread
• Local Sourcing
• Almost Completely Locally Sourced
• Manufacturing Technology
– Largest Manufacturing Space
– Maximum Capital Utilization
• Branding
– Value Chain Ownership
– Initiatives Planned for Integrating into Retailing
• Core Competency
– Strong brand image with continuous innovation and
technology along
– with good marketing and distribution channel are the core
strength of the company
CARLSBERG
 OVERVIEW
• Danish brewing company founded in 1847 by J. C. Jacobsen
•
• Entered Indian market in 2006 & operates here through a
joint venture named South Asia Breweries. Positioned itself
as a premium mild beer. With the launch of its flagship
brand, the company is trying to create a premium, all-malt
beer category.
•
• In 2009 Carlsberg is the 4th largest brewery group in the
world. Products are sold in more than 150 markets. In 2008
the Group sold more than 120 million hectolitres of beer,
nearly 100 million bottles of beer a day.
•
• Carlsberg India Pvt. Ltd. headquartered in Gurgaon, National
Capital Region, India is a Foreign direct investment
company formed to brew and market Carlsberg beer in India.
•
• Brought Tuborg and Palone brands into India. Palone is sold
as a 'strong' beer with 7.5% alcohol by volume. Strong
beers dominate the Indian market, estimated in 2008 to
total approximately 17 million hectolitres with over a
72% share.
 SEGMENTATION , TARGETING &
POSITIONING
Ø Segmentation
Ø
 International beer companies have a good enough
reason to tap markets like India. That their main markets,
North America and Europe, are either flat or in a state of
decline is no secret.


 Carlsberg has segmented the Indian market in

following ways:
a ) Geographical
• Major consumer for alcoholic beverages is
Southern India.
• Consciously chosen the north, east and west
regions of the country to set up its
breweries
• Strategy adopted by Carlsberg is to
concentrate on to the untapped market of
north and west India in the initial stage
of the production. Moreover, since it has
positioned itself as a premium product, it
is only catering to the urban cities of
 b ) Demographic
• India is becoming younger. Population of youth is
high in India. With its international image as the
sponsor of a football team, it has created an
impression in young ones’ mind.
• Rise in disposable income of the urban middle class
d ) Psychographic - The culture, the lifestyle, the personality
of an Indian is changing which is good for international
brands like Carlsberg
•
Ø Targeting
– Urban cities ; It may not be called a niche marketing because
of the nature of the product but yes the product is placed
at a higher price because of the image of the brand it
wants to cash on.
•
Ø Positioning
– Carlsberg has positioned itself as a premium beer in the
Indian market. Most expensive beer compared with its
competitors Budweiser, the UB Group's Kingfisher and Tiger
beer by Asia Pacific Breweries
– Betting on the shift in urban consumers to spend on quality.
– Under the process of test-marketing its strong beer brand
Okocim Palone from Poland. As its long-term strategy for
the Indian market, it plans to deploy a portfolio
 PESTEL ANALYSIS

Ø Political


– Different states have different rules for

liquor. Some states like Gujrat are Dry
states where the sales of liquor are
completely banned. Some states have time
limits i.e., after 9 the sales of liquor
are prohibited.
•
– Even the age limit for drinking in India is
under discussion. Right now it is 25, so
Carlsberg has to be very specific when
targeting its consumer.
•
– As the advertisement of liquor is banned in
India, Carlsberg has cashed its
international image to boost its sales in
the domestic market. They have targeted
the public houses and discotheques for
their promotion which is very apt.
Ø Economic


– Disposable income of people specially living in urban

cities is also increasing rapidly. The Carlsberg
group has realized this potential and thus has
targeted only the urban cities of India in their
early stage to penetrate the market. According to the
MD of the Carlsberg Group, Mr. Gidwani, Carlsberg has
aimed to grab a market share of approx. 10 % by next
2 years, once that target is achieved, they will
expand their base to other cities and the rest of
the country.
•
Ø Social
Ø
– Per capita income is rising, but at the same time the
gap between the haves and have-nots is also widening.
Though we hope that this gap will be narrowing in
the near future, but the scenario is a bit bitter
right now. There is a school of thought against the
so called pub culture and then there are rest, but as
they say change is inevitable that’s why The
Carlsberg Group is relying on the change and has
targeted the new Indian who is open to change.
•
Ø Technological
– Importing beer attracted heavy taxes from the
government resulting in higher prices of the same.
Therefore to increase the base in the Indian market,
it was advisable to set up plant in India itself.
Carlsberg has set up four breweries in Rajasthan,
Maharashtra, Himachal Pradesh &West Bengal to reduce
the cost. According to the company sources, it is
using an advanced technology to ensure that the beer
that gets out is of better quality and great taste.
•

Ø Environmental
– Environmental factors include the weather and climate
change. As the climate here is generally warm,
Carlsberg increases the promotions during summer
time. As the company is new, we yet have to see its
effect on environment and vice versa.
•

Ø Legal
– Again The Carlsberg Group is very careful about the
steps it takes because of the political environment
which could land it in trouble. As the laws are
different for different states, Carlsberg India has
played smart in making a social networking website
so that its purpose of marketing is also solved and
it didn’t cross the line of law as well.
 BRIGHT FUTURE FOR BEER INDUSTRY

a ) Rising Income Levels

o India's 'very rich', 'consuming' and 'climbers' classes
to grow at a CAGR of 15%, 10% & 2% respectively.
b ) Changing Age Profile
o Large proportion of the Indian population is in the age
group of 20-34 years - most appropriate target for
beer marketers.
c ) Changing Lifestyles
o As urban consumers become more exposed to western
lifestyles, through overseas travel &media, their
attitude towards alcohol is relaxing. Social habits
are undergoing a transformation as mixed drinks are
becoming more popular.
o More and more women are consuming beer – the penetration
in metropolitan areas is almost twice as high as the
penetration in other large cities – implying that the
greater tolerance towards alcohol consumption in
metropolitan areas facilitates the consumption of
beer.
o
 BRIGHT FUTURE FOR BEER INDUSTRY

d ) Reduction in Beer Prices

e)
o Indian consumer typically values an alcoholic beverage on
the basis of its 'kick' factor versus its price.
o Most states do not have a differential tax structure based
on the alcohol content. As far as the Light beer
segment goes, there is no existing competition in the
market. However, a number of well-established brands,
especially lagers, have a significant market presence.
o
o
 In India the future of beer industry is very much
optimistic because :
– India has predominantly a warm/hot climate.
– The beer-drinkers in the country are much younger than the
average beer-drinker elsewhere in the world. This makes
them more likely to carry the brand with them for a
lifetime.
– Increasing exposure to beer and wine drinking, mainly due
to media and consumer mobility.
– All these factors combined make the scenario very
THANK YOU!!
 Group – 2


• Pooja Chauhan (838)

• Kritika Pande (827)
• Abhishek Arya (802)
• Ashish Khurana (811)
• Nikhil Syal (835)
• Stuti Khullar (859)
• Himani Pradhan (819)
• Rajat Budhiraja
(874)
• Vineet Sharma (867)
• Sahil Joon (851)
•