Indian beer industry looks for expansion

While economic figures and forecasts continue to paint a not so rosy scenario for Indian economy for a while, the country’s beer industry is looking for growth.

There are several factors which are strongly in favor of a healthy growth in beer consumption in coming years. India has a population of 1.21 billion, out of which more than 700 million are below the age of 25. The Indian climate is hot in 80 per cent of the country for 80 per cent of the year, and the rising disposable income, westernization and the social acceptance of beer will act as catalysts for the growth of beer industry in coming days.

With this prospect in mind, the Indian brewers are looking to expand their capacities and capabilities in the next few years. While some of the top players in Indian industry already have unveiled their expansion plans, it is now the turn of smaller players to look at their expansion options.

One of the smaller and lesser known brewers, Som Distilleries and Breweries Limited (SDBL), is in talks with European investment bank Bryan, Garnier & Co, for an investment of USD 30 million in the form of additional equity for funding its growth plans. Headquartered in Bhopal (capital of Central Most state of country, Madhya Pradesh), the company has been in operation for the past 25 years.

SDBL has a successful track record in manufacturing and marketing its own brands through its distribution network spread over 13 states in India. Hunter Beer, its flagship beer brand, is very popular in the central region. The company is present in the markets of the state of Madhya Pradesh, Chhattisgarh and parts of North India, with more than 40 percent beer market share in the state of Madhya Pradesh and Chhattisgarh and 6-7 percent in Delhi and Odisha state. The company also exports its products to African nations.

"The company is looking at increasing its footprint organically as well as inorganically in the northern and southern parts of the country. With its state of the art brewing process, technology, efficient bottling systems, and a strong brand recall, the company is leading the market across all categories and price segments. The company has plans of acquiring a plant in South India in current financial year. The company also has plans to set up a Greenfield project in the northern part of the country in FY2013-14. This plant is expected to become operational in FY2015-16”, according to a statement from the company. “SDBL will be able to complete its capex plan shortly making it one of the largest single location breweries in the country. Upon completion of this expansion, the company would be able to produce more than 1 million cases of beer monthly," the statement further added.