India: Craft brewer B9 Beverages almost doubles losses in FY2018

B9 Beverages, the maker of Bira craft beer, almost doubled its losses to Rs 101 crore in FY18 as it bolstered nationwide marketing to boost sales five-fold in a crowded market dominated by mainstream brands such as Carlsberg and UB’s Kingfisher, the Economic Times reported on February 12.

Sales at B9 Beverages climbed to Rs 161 crore from Rs 32 crore in FY17, in which the company had reported a net loss of Rs 55 crore, data sourced from research platform Veratech showed.

Since its launch about four years ago, the company has managed about a 5% share in key markets despite the dominance of Kingfisher, AB Inbev’s Corona and Budweiser, and Carlsberg, which together control 80%.

“We expect to break even in India business in FY21," said Ankur Jain, founder of B9 Beverages that raised $50 million from Brussels-based investment firm Sofina a year ago.

The beer segment expanded 6% to 2771.5 million litres in 2018, according to GlobalData forecast. But India still favours strong beer brands that have an 80% share, and global companies have been producing stronger variants of their flagship beer brands, a segment where Bira has no presence at all.

B9 sells in a dozen top cities, and Bengaluru and Delhi are its best-selling markets. The company has launched in the US and Singapore.

B9 wants to expand geographic footprint to cash in on rising popularity of craft beer. "We are still not active in many geographies, but we expect to expand in the upcoming fiscal on the back of new capacity and a mass market product that we will be launching this summer," added Jain.

While Bira has a 30% higher price tag compared to Carlsberg and Budweiser, its ale or blonde lager still costs less than half of the imported brands. “Bira’s growth has shown the potential in the Indian beer sector .. It is worthy to see an indigenous home-grown brand shaking the might of established behemoths,” said Rahul Singh, founder, The Beer Cafe.

10 February, 2019