E-Malt.com News article: India: United Breweries looking to expand non-alcoholic beer offering

United Breweries Ltd (UBL) is looking to bolster its non-alcoholic beverages segment, following the footsteps of its 44 per cent owner Heineken which plans to earn 10 per cent of its portfolio revenue from non-alcoholic drinks by 2025, The Hindu BusinessLine reported on March 13.

As part of the plan, UBL will launch Heineken 0.0, a non-alcoholic beer by month-end. This is its second product in the segment.

The company, however, hasn’t yet worked out a fixed target for its non-alcoholic beverages segment, like Heineken.

UBL ventured into the non-alcoholic beverages segment with Kingfisher Radler in last October. Both Kingfisher Radler and Henieken 0.0 come under this segment — the former is a soft drink and the latter non-alcoholic beer.

Both are pegged as premium products and healthy alternatives to products currently in the market, said Visvanathan.

Heineken 0.0 is made in the Netherlands and is available in 40 countries. The product will be imported into India and will initially be launched in Delhi, Mumbai, Hyderabad, Bengaluru and Ahmedabad, with the focus markets being metros, Ramesh Visvanathan, Chief New Business Officer, UBL, told BusinessLine.

Kingfisher Radler is produced at UBL’s factory in Bihar. The company is targeting five per cent market share — only in the markets that the product is currently available and not pan-India — in the soft drinks category by the end of the next year through Kingfisher Radler. The company’s current market share is 2 per cent. The company has a market share of around 54 per in the beer category

Heineken 0.0 is pegged as a premium product and is priced at ₹70 for 300 ml .Kingfisher Radler costs ₹45 per 300 ml. While Radler is a 100 per cent natural, flavoured soft drink, with 30 per cent less sugar than in carbonated soft drinks, Heineken 0.0 is a non-alcoholic beer. It is pegged more as a niche product, which is also 100 per cent natural and has 60 per cent less sugar than carbonated soft drinks, Visvanathan said.

The rising trend of consumers’ preference for healthier options considering high levels of sugar and artificial ingredients in carbonated soft drinks is one major reason for tapping the non-alcoholic beverages segment.

The second trend that UBL is banking on is that consumers are showing a readiness to upgrade to better offerings. “Our strategy of expanding our consumer base fits into these trends and we are able to offer consumers a significant value through our products to meet these need gaps,” said Visvanathan.

When asked about the challenges of tapping the non-alcoholic beverages segment, considering that it catered to the alcobev market only previously, he said the biggest challenge is distribution.

“The challenge for us with this product portfolio is to go beyond that into supermarkets, regular stores, beverage outlets, etc. We have had to set up a completely parallel and different distribution network in order to place this product where the consumer is likely to go and buy,” he said.

The other challenge is in marketing these products as UBL is venturing into an altogether new category, with the communication that is required with the consumers also being different.


14 March, 2019