The Economic Times daily newspaper is available online now.

    AB InBev wants its premium brands to have a bigger play in India's beer market

    Synopsis

    United Breweries, which owns Kingfisher brand, is by far the leader in the beer segment in India, controlling more than half the market while AB InBev is a distant second with about 20% share. However, AB InBev has more than 65% share in the premium segment, with a portfolio that includes Stella Artois, Leffe and Corona.

    Untitled-4Agencies
    India remains one of the largest beer markets, with more than 20 million people entering the legal age for drinking every year. However, the alcoholic beverages industry is heavily regulated, with excise and other taxes forming an important source of revenue for state governments.
    BENGALURU | MUMBAI: Anheuser-Busch InBev, the world’s biggest brewer, said it wants its premium portfolio to account for nearly half its total business in India, a market dominated by mass-market rivals.

    The Belgian drink and brewing company, which produces a fourth of the world’s beers, generated a fifth of its sales from premium brands in India when it took over SABMiller four years ago. The share of premium brands has now increased to more than 35%.

    “This is my singular mandate – how do we drive the right mix change?” said Kartikeya Sharma, in his first interaction after he was made South Asia president at AB InBev, which sells Budweiser and Corona. “Our strategy is firmly anchored in the premium segment that is growing three-four times the total industry. We are ready to challenge the incumbent leader in the marketplace.”

    United Breweries, which owns Kingfisher brand, is by far the leader in the beer segment in India, controlling more than half the market while AB InBev is a distant second with about 20% share. However, AB InBev has more than 65% share in the premium segment, with a portfolio that includes Stella Artois, Leffe and Corona. Rival UB too has pricier products such as Kingfisher Ultra, Storm and Heineken, and has been growing in double-digits, but these account for less than 10% of its total sales.

    Untitled-3Agencies


    Sharma said the beer category lacked innovation in the past to excite new consumers or retain consumers while spirits saw new flavours and formats, along with different styles.

    “India could truly turn the demographic and the environmental advantage we have of a tropical climate most parts of the year and the world’s youngest nation into its natural rite of passage, which is beer being the bigger volume in the alcohol category versus what has historically been the case,” said Sharma.

    India is among AB InBev’s top three focus markets globally, said Sharma. “There is no undue target based pressure for India to grow at a certain Ebitda. The expectation is to develop the category the right way and grow leadership in the right segments,” he said. The company’s focus on premiumisation comes at a time when there is a wave of new craft beer brand launches from labels such as Bira, White Rhino and Simba which count on a younger clientele seeking a more varied experience.

    From just two craft microbreweries about 10 years ago, India is home to more than 170 outlets now, mostly located in Bengaluru, Gurgaon, Mumbai and Pune.

    Last year, AB In-Bev and Tatas’ Indian Hotels Company (IHCL) announced they will open microbreweries inside Taj Hotels properties. UB recently launched Kingfisher Ultra Witbier while AB InBev has launched two wheat variants, Machaa and Veere.

    India remains one of the largest beer markets, with more than 20 million people entering the legal age for drinking every year. However, the alcoholic beverages industry is heavily regulated, with excise and other taxes forming an important source of revenue for state governments.

    In states that collectively account for 70% of the industry’s revenue, the local governments control manufacturing, distribution, retailing and pricing of liquor.


    (You can now subscribe to our Economic Times WhatsApp channel)
    (Catch all the Business News, Breaking News Budget 2024 News, Budget 2024 Live Coverage, Events and Latest News Updates on The Economic Times.)

    Download The Economic Times News App to get Daily Market Updates & Live Business News.

    ...more

    (You can now subscribe to our Economic Times WhatsApp channel)
    (Catch all the Business News, Breaking News Budget 2024 News, Budget 2024 Live Coverage, Events and Latest News Updates on The Economic Times.)

    Download The Economic Times News App to get Daily Market Updates & Live Business News.

    ...more
    The Economic Times

    Stories you might be interested in