India: Craft beer sector starts brewing on larger scale thanks to rising demand

The growing popularity of craft beer in India is encouraging some craft brewers to brew on a larger scale to reach out to a wider public. Many till now tended to restrict themselves to on-premise manufacturing, the Times of India reported on October 12.

Brewers such as Arbor Brewing in Bengaluru, Goa Brewing in the namesake state, and White Rhino in Delhi NCR have started beefing up their presence with retailers. Some microbreweries, including Toit and Windmills, are in the process of setting up their own manufacturing facilities.

A craft brewery or a microbrewery is one that produces much smaller amounts than large-scale corporate breweries. They are independently owned, and they tend to emphasise quality, flavour and brewing technique. "Craft beer can be bottled or canned, as in Europe and the US. Packaging gives us the opportunity to provide within a state, as also other states," Asthavinayak Paradh, co-founder of Goa Brewing, says.

Goa Brewing has a facility where it has a brew-house of 3,000 hectolitres (3 lakh litres) and a fermentation tank of 6,000 hectolitres through which it caters to Goa. It plans to make its products available in Karnataka and Mumbai in the next few months.

While India is essentially a whiskey and strong beer market, for millennials, who travel and drink for an experience rather than to get a high, craft beer is among the latest go-to drinks. Microbreweries - mostly in Delhi, Mumbai and Bengaluru - are helping Indians go global in their taste with ales, wheat and stout beer, rather than just commercial lagers.

As craft beer makers expand, their margins will drop, but they hope to make up for that with higher sales. "When you manufacture (packaged) beer and distribute it to numerous states, you have to incur overheads at the manufacturing facility, corporate overheads and regional overheads. The cost of excise licences to operate in many states is very high, and so are excise duties. Brew pubs are charged a fixed excise duty per litre of beer, whereas beer packaged in bottles or cans attract an ad valorem duty that can be as high as 150% or 175% of the wholesale price in certain states. The benefit of packaging in bottles or cans is that you benefit from huge scale that brew pubs cannot," says Ishaan Puri of White Rhino.

White Rhino has its facility in Gwalior, where about six of its beers are either bottled or kegged and made available in Delhi, Gurgaon, Chandigarh, Karnataka, Nepal and the UK. It plans to expand to Goa, Himachal Pradesh and Maharashtra.

Arbor in Bengaluru has a facility in Goa where it cans and kegs three flagship beers in small batches: American wheat, Indian Pale Ale and a honey-and-lavender flavoured strong variant. While the canned beer is only available in Goa, it will hit retail shops in Bengaluru from next month.

13 October, 2019