SABMiller takes on Kingfisher
In October SABMiller launched a new national beer brand in India, appropriately named Indus Pride. The new mild beer is to crack Kingfisher’s dominance as the best-selling beer. Kingfisher is owned by United Breweries in which Dutch Heineken has a 37.5 percent stake. SABMiller is the number two brewer in India with a market share of 35 percent in its core markets.
For SABMiller, which nurses the ambition of toppling United Breweries (UB) as the largest domestic brewer, challenging Kingfisher has become an imperative. The figures tell the story. UB’s flagship brand Kingfisher Premium sold about 27 million cases (of 7.8 litres each) in the financial year 2008 (ended 31 Mach 2008), leaving SABMiller’s leading lager brand Royal Challenge way behind with just over 10 million cases.
UB’s lager portfolio, comprising Kingfisher, Kalyani Black Label, Sandpiper and UB Export, reportedly depleted around 35 million cases. India’s lager volume is estimated at 55 million cases, with SABMiller — through Royal Challenge and Foster’s — selling some 14 million to 15 million cases.
Lager volume accounts for a third of the domestic beer consumption, which is skewed in favour of strong beers with higher alcohol strength. However, the lager (or mild beer) segment is fighting back as beer increasingly becomes a lifestyle product on the back of changing preferences and economic expansion in urbanising India. If its strong variant is accounted for, Kingfisher’s combined sales cross 57 million cases in an overall market pegged at 157 million cases, giving it a standalone market share of 36 percent.
The mild beer segment of the Indian market, which is particularly popular in the major cities of Delhi, Mumbai, Bangalore and Hyderabad, has been target by SABMiller’s Indus Pride. While the beer category has seen 17 percent CAGR growth in the past five years, the mainstream segment has grown 21 percent. Within mainstream, the mild category has been growing at 13 percent.
Indus Pride, says SABMiller, is made with 100 percent barley malt, in contrast to its largest competitors in the category.
The beer was unveiled in Rajasthan in one of the biggest beer launches India has seen. Judging from the label’s gaudy colours, Indus Pride celebrates the richness and passion of India and will appeal to Indians’ innate pride in their culture using platforms such as cricket and Bollywood.
SABMiller is also launching a non-alcoholic brand extension for sale in the Indian states which have some form of prohibition in place.
With ten high quality breweries located strategically across India, SABMiller is well placed to service the markets quickly and efficiently with a workforce of over 2000 people.
UB has responded to SABMiller’s challenge by lining up two premium variants of its flagship Kingfisher beer. According to a report in The Economic Times, the new introductions – Kingfisher Blue and Kingfisher Ultra – will play in the high-alcohol-content and mild-beer segments, respectively. For instance, Kingfisher Ultra may have a cross positioning with Carlsberg at Rs 80 (EUR 1.30) per bottle in the Mumbai market. Kingfisher Blue may have around six percent alcohol content that is higher than the mild beer, but below the existing strong brew, Kingfisher Strong.
Both Blue and Ultra will be placed as premium compared to the mother brand Kingfisher and Kingfisher Strong, which account for bulk of UB’s 48 percent market share in India. In Mumbai, Kingfisher retails at Rs 70 (EUR 1.12) per bottle. UB’s move to launch premium variants of Kingfisher was widely interpreted as a way of testing the market for the Heineken brand which UB’s partner Heineken hopes to introduce soon.
