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Bira 91: Handcrafting the World's Greatest Beer Is Our Life’s Work

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[pic 1]                                             MANAGEMENT DEVLOPMENT INSTITUTE


                                                                                                                 November 25, 2017

Kaushal Kumar Rai- 3 | Ankush Mahajan | Shivansh Yadav | Anish Jayan | Shasikant Bharadwaj

BIRA 91: Handcrafting the world's greatest beer is our life’s work

"Most things that are healthy have a reputation of tasting awful We wanted to make a beer that was not just healthy but also delicious. Bira 91 Light will hopefully give non-beer drinkers another reason to consider beers when they are looking for a refreshment" – Ankur Jain, Founder of BIRA 91

It was the Summers of 2017 and Mr Ankur Jain, founder and CEO of Bira91 was busy in creating a new history in Indian Beer Industry. On a Friday afternoon, the Bira 91 office is busy, with a few millennials and a lot of liveliness. There is no post-lunch relaxed to be seen in this floor haunt of that remains pushed away in one of the antique buildings dotting the outer circle of Connaught Place. And unlike the brand's monkey that greets consumers at retail outlets and restaurants, the signature to the B9 Beverages office is hidden, subtle. 

From the day of its inception in year 2015, the Bira was brewed in Flanders region in Belgium and imported to India- to doing a #MAKEININDIA with inhouse production in MP and Nagpur- the funny Monkey with a 91 tag seems to be going places across the Globe. Earlier this year, the brand was being sold at a price point of 10 dollars for a pack of 6, was launched officially in New York, where the first-generation businessman has started an office with a small team.

Mr Jain saw a business opportunity in relatively difficult business space and was trying hard to disrupt the current Indian Beer markets. He was sure that with a significant increase in disposable income in Indian consumers wallet, there is a sufficient space for growth and a unique offering in crafted beer space will surly take the share of Wallet from Indian Beer consumers.  

Beer industry analysis

Global beer market is expected to be $690 billion industry by 2020 with a CAGR of around 6% during the period of 2015-2020. A significant increase in the consumption volume has led to thr market growth across the globe. Beer is a yeast fermented alcoholic drink made up of malted barley though wheat & rice are also used to make beer. During the brewing process, fermentation of the starch sugars in the wort produces ethanol and carbonation in the resulting beer. Fermentable carbohydrates are added to produce different flavors’ to the beer. Super premium & imported beers are increasing day by day because of increase in disposable income & changing lifestyle of people worldwide. In today’s world continuous popularity of craft beer has come up with a new industry og brewed beer.  

World’s largest brand has positioned them with light & strong beer in their portfolio domestic as well as international market. Besides this, strong beer market is expected to register a CAGR of 6.5%.   In western hemisphere taste is the primary driving factor for drinkers.Breweries are classified into macro breweries & micro breweries based on the volume and size. Craft beer companies are continuously trying to increase their capacities. In the recent time drinking preferences has demanded increase in micro breweries which is expected to increase at a CAGR of 9.3%. Large numbers of drinkers are shifting towards craft beer due to its unique taste & quality. With variety of flavors craft beer is expanding really fast.

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Premium beer segment industry is expected to grow at a CAGR of 6.4% when compared to super premium & normal beer industry. Although super premium beer segment is growing rapidly too & will grow threefold. Grocery outlets constitute the major alcohol sales. Normal beer occupies the maximum market share of 43% of the total beer industry. Packaging plays a vital role in terms of influencing purchasing decision of consumers. Beer comes in can, bottles & draught. Canned beers are giving an intense competition to the bottle as well as draught beer. And hence there is a growing demand for canned beer which can be easily stored & transported as well.

India is among the top 5 beer markets of Asia pacific region. The three large global players United Breweries, SABMiller and Carlsberg control 86% of the Indian market.

Indian beer market generated $5.2 billion in 2014 with a CAGE of 14%. The performance of market is expected to be slow down with 11.2% growth & expected to reach $8.8 billion in 2019.

The microbrewery boom started in 2008 with two brew pubs — Howzatt and Rockman’s Beer Island opened in Delhi NCR and today all major Indian cities are experiencing the presence of microbreweries. Recently, The Pint Room and The Beer Café have opened their outlets in the National capital. Microbreweries offer a huge variety of bottled as well as in-house brewed beers and it is estimated that there would be around 75-100 new 1/8 microbreweries coming up in metros and tier-II cities across India over the next two years. The rising awareness of health benefits that beer offers will further aid the growth. Beer has more health benefits than generally known and is perfect for moderate drinking because of its lower alcohol content and larger volume compared with wine or spirits. Indian populace in 2012 consumed ~20 million hectolitres of beer which translates to 1.6 litres of consumption per person. Per capita consumption of beer has grown at a CAGR of ~9% during the period 2/8 2008-12 and beer consumption rose to 256 million cases in 2012 from 170 million cases in 2008, thus registering a CAGR of ~11%. Indian beer exported stood at INR 383.1 million in 2008 and has escalated to INR 1777.8 million in 2013, showcasing a robust CAGR of 36% whereas imports registered a CAGR of 19% over the same period and stood at INR 281.6 million in 2013. Favorable demographics coupled with increasing focus of foreign brewers on product range and rising social acceptance of alcohol are expected to enable beer demand to grow swiftly in years to come.



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