India: Medusa Beverages aims to double its volumes through capacity expansion in Punjab

Medusa Beverages Pvt. Ltd, the company behind the Medusa beer brands, aims to double its volumes by FY26 through a capacity expansion planned in Punjab in the coming fiscal year, Qrius reported on December 4.

The company will look to raise ₹120 crore in FY26 through a combination of debt and equity issuance to set up the beer plant with an annual capacity of 4 lakh hectolitre, founder Avneet Singh, told Mint.

Medusa began operations in 2017 and has since launched three beer variants with alcohol by volume ranging from 4.5% to 5.9%. In 2023, it introduced its mild beer ‘Air’ and began operations in Uttarakhand, along with existing markets such as Delhi, Punjab, and Uttar Pradesh.

This month, the company will launch its first co-branded Warner Bros beer in India, House of the Dragon, targetting more premium beer drinkers in tier 1 cities. House of the Dragon is an American fantasy drama television series created by George RR Martin.

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At present, the company works with other beverage manufacturers and uses their facilities to produce beer across the northern markets. A majority of the production capacity currently is coming out of Uttar Pradesh and Punjab, which also serve as feeder markets for other north Indian regions like Delhi.

Medusa also plans to expand into new states like Assam, Andhra Pradesh, and Haryana and later focus on increasing its presence in the southern part of the country.

Singh said the company is starting operations in Chhattisgarh this year and setting up two new breweries for additional capacity expansion.

“We expect to sell 1.1 million cases this fiscal (FY25), with a majority of our business coming from Delhi. India sells about 350 million cases of beer annually, and the per capita beer consumption is quite low at approximately 2 litres per capita per year. In comparison, China’s per capita consumption is about 25 litres per annum. But we hope that with the demographic dividend on our side, consumption will grow at a 10-12% CAGR until 2030,” said Singh.

Unseasonal rains marred sales during the summer months last season, but this year, sales were back to normal despite some slowdown due to the elections, he said.

India’s beer market is primarily dominated by players like United Breweries, makers of Kingfisher, and Ab InBev and Carlsberg.

Industry estimates suggest that beer sales declined by nearly 15% year-on-year in FY24, reaching approximately 350 million cases. While beer is widely popular globally, its consumption in India remains relatively low compared to the country’s large population, with around 400 million cases sold in FY24. “Beer in most parts of the country, except in the colder regions, is becoming a 10-11 month business because of excessive heat conditions and prolonged summers, which is a positive sign for the industry,” he added.

“Our gross revenue will touch about ₹180 crore this fiscal year, up from ₹133 crore in FY24. The growth has primarily been driven by our ‘Air’ variant,” he added. “India has the lowest median age compared to other developed and developing nations, and nearly 20 million people enter the legal drinking age each year. This, along with other factors, will also help propel the industry.”

India’s alcohol market is mainly fuelled by distilled spirits, which represent nearly 90% of total alcohol consumption. However, within the beer category, it is strong beers that make up a large portion of consumption.

04 December, 2024