Indian beer industry – The year ahead
It is that time of year again, when we analysts and journalists engage in introspecting the gone-by year and try to foretell the coming year – though, just a few days into New Year, it is hard to predict the course of industry in a very unpredictable country like India. But here is our take on what will shape the Indian beer industry in next twelve months.
United Breweries and Kingfisher Liquidity Trouble
UB’s Vijay Mallya and its sister concern Kingfisher airlines have been in the news in second half of 2011 for all bad reasons. There is no denying the fact that Kingfisher is in some serious fund crunches. Although Mallya has temporarily arranged the requisite funds from another prominent industrialist, in the coming months all eyes will be on the performance of Kingfisher airlines. In case of another quarter of bad performance, India’s top brewer might be in a tight corner as currently the beer company is acting as a cash cow for other strategic business units.
Nevertheless, UB’s number one status in Indian beer industry will likely continue for a long time, but Mallya would like to take UB’s share up from current 53 percent, which in the current scenario looks an uphill task.
SAB Miller – Upping the ante
SABMiller India faced setbacks in a few of its core Indian markets due to regulatory issues, including the southern states of Andhra Pradesh (the state procurement policy of Andhra Pradesh government had resulted in losing market share in the most important state regarding beer consumption. As per the policy, the state-run wholesaler procured stock based on a company’s national market share. This policy resulted in a net disadvantage for SAB Miller as its market share was lower in comparison to United Brewery’s) and Tamil Nadu, bringing down its market share to less than 30 percent.
But the company seems confident and is working on a new marketing mix, brand loyalty and focused plans for states of Karnataka, Rajasthan and Maharashtra.
Premium Beer Jostling for more Market Share
In the last two year, many international beer brands made their Indian entry. Almost all of these brands were in the lager category. In a predominantly hard beer market, these brands have made little headways but mostly confined to big cities and selected pubs across the country.
If these brands are to make some real growths, then beer companies need some serious rethinking of their existing strategies. India is a very price sensitive market and beer is no exception. BRAUWELT International understands that it is not possible to sell these brands at a level of existing Indian brands. But some tinkering in the prices and targeting tier II cities will bring some better results in a market where beer (or alcohol ) consumption is meant to produce a ringing sensation between the ears.
