![#](www.e-malt.com/images/left_top_corner16x200.gif) | E-Malt.com News article: India: Craft brewers upbeat about the future despite Covid-19 impact![Brewery news](https://e-malt.com/Images/BeerBullet2.gif)
This was to have been the summer of beer, if not for the second wave of Covid-19 tearing through India, Livemint reported on May 27.
Scottish giant Brewdog opened its first brewpub in Mumbai in February. Ironhill soon followed with “the world’s largest microbrewery” in Bengaluru, and as the now-suspended IPL got underway, Mahendra Singh Dhoni announced his association with a new beer brand, Copter 7—named for his famous helicopter shot and his jersey number 7.
India, it seems, can’t have too much beer—whether it’s the good, old bottled stuff bought from the corner store or the more upscale craft beer that’s sold as an entire experience. And there’s always room for more as United Breweries’ notes in its 2019-2020 annual report released in June 2020. “Beer industry has registered robust growth in the last one and a half decades. From a total industry consumption of about 100 million cases in 2005, the consumption crossed over 300 million cases in 2019,” observes the report from the market leader, which includes Kingfisher, Heineken and Amstel Bier in its portfolio. “Barring the covid-19 impact—both in terms of revenues and sales volume, which may last during the current year— the market is expected to further grow going forward.”
“The right target audience is here,” says Karan Jain, Co-CEO of Brewdog India (Ace Aloha Group) of the company’s India plans. The Scottish pub chain is in the process of building five more outlets “at prime locations across the nation, with plans to open 10 by December, and increase our footprint to 100 over the next 5 -6 years.”
In Bengaluru, Pawan Kumar, the bar manager of Ironhill, says they had repeat customers during the month they were open, proving that there’s always a thirst for beer. Ironhill, which opened on 27 March and is spread over two acres of an old garment factory, is currently closed due to lockdown. “Our outlet is located in Marathahalli and sees a mixed crowd. The only other option similar to ours was Byg Brewski but its location means it primarily caters to the IT crowd,” Kumar adds.
Around the time craft breweries started making their mark in India a decade ago, the food and beverage industry was seeing a few other important changes. Going out for coffee had started gaining acceptance with brands like Café Coffee Day and Barista, and international companies suddenly woke up to India’s younger demographic. “Any boardroom meeting that includes India as a market will turn heads because of our population. That’s what led to many international beer brands to look at India while craft beer was taking off,” says Abhishek Chinchalkar, co-founder and head brewer of Bombay Duck Brewing.
Jain of Brewdog, which is the latest international entrant, says, “India has seen a huge increase in craft beer sales in recent years. Consumers changing tastes and willingness to experiment has allowed them to appreciate craft beers versus mass produced bottled commercial beer. At the same time, the craft beer industry has restricted itself to a few styles, staying away from innovation in style, taste and aroma profiles. We intend to disrupt this market and fill this gap by having 20-24 beers on tap wherever we go.”
Chinchalkar says beer makers had it easy as it was a familiar drink. “The wine industry had to fight, explain grapes and wine styles, as we’re not a wine-drinking nation. On the other hand, everybody has had beer while growing up so it was easier for us to experiment and work in the craft space,” he explains.
“We have had a strong culture of beer in the country for years with brands such as Kingfisher expanding beer penetration across the country. Furthermore, with our warm climate, chilled beer is the perfect afternoon or evening drink,” Saumya Khona, co-founder of Tapped Flight, a monthly beer subscription and delivery service that covers Mumbai and Pune. Khona used to curate the Tapped Craft Beer Festival in Mumbai which started in 2014.
Craft beers are driven by the quality of the product, and that’s what brings customers back. For commercial brands, high-profile marketing does all the work. With beer festivals popping up to support the growing number of breweries, beer lovers found it easier to connect with small-batch beer makers. “At beer festivals, people were excited they could speak to a person and not an automation system that made their beer. They would ask us questions and we would try to educate them about their palate, apart from our beers,” Chinchalkar says.
To make a craft brewery work, says Nayan Shah of Drifters Breweries, a retail presence is paramount. “Every craft brewery must have a retail outlet to connect and create memories for the customer. It also helps in expansion—since opening our growler stations in Mumbai suburbs like Thane, Andheri and Powai, apart from Bandra, we’ve seen consumption go up four to five times.”
One of the challenges to entering new markets as a craft brand are the laws regarding alcohol sales in India with each state having different rules and regulations. “In India, bureaucracy restricts our growth,” Shah says.
Echoing the thought, Aditya Ishan Varshnei, co-founder and CEO of Latambarcem Brewers that makes Maka Di beers in Goa, gives the example of taxation. “Beer should be taxed on ABV (alcohol by volume) and not overall volume. Beers and wines are different from high ABV spirits and taxing them in the same category as gin, vodka or whisky needs to change.”
With such changes, “we can grow exponentially over the next 10 years. I am confident the craft industry will see double the growth of commercial beer,” Varshnei says.
Beer has a separate fanbase when it comes to spirits. “Beer remains versatile in terms of age and lends itself easily to day drinks, post-work, mid-week drink,” says Bhakti Mehta, co-founder of Tapped Flight.
Craft beer, however, will find it hard to scale up to the level of commercial beers because of the differences in production. Shah of Drifters Breweries says, “You need to find your niche and settle there if you’re a craft brand.”
Varshnei, of Maka Di beers, says that craft beers will never find crores of consumers. “We should be happy with a couple of hundred thousand people. If your beers are good and of high quality, you will find that audience.”
Beer comprises 12% of the total alcohol consumed in India, the UBL report notes, and adds that “while the alcohol beverages industry in India has been dominated by spirits, beer remains the preferred alcoholic beverage for young Indians.” Despite this, craft beer makers feel there’s scope for greater growth and the market is nowhere near saturated.
“The beer consumption in India is just 1.2 litres per person per year, as compared with China (32 litres) or Vietnam (20 litres) or the USA (35 litres),” says Jain. “This is just the beginning. India has a huge, young demographic looking for a better product as well as experience.”
28 May, 2021
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