About four years ago, Suraj Shenai met his first India Pale Ale—a Goose Island brew aboard a United Airlines flight on his maiden trip to the US. “The flavour,” he says, “just blew me.” And an idea fermented like a hoppy coincidence. Soon after, Shenai, 34, was in Goa—an unlikely port of call for craft beer then—to distil his stuff.
Goa, beer experts say, sat out the first round of the brew-pub frenzy across India’s big cities for nearly a decade. But it is ringing in the second flush of these strange brews. Last month, Shenai’s Goa Brewing Company dispatched to the local supermarkets bottles of its oat-cream India Pale Ale (IPA) called Eight Finger Eddie—it’s named after Goa’s best-known hippie who, in the late 1960s, made Anjuna beach his home; an ode, so to speak, to free-spiritedness. “We are opinionated and speak our mind,” says Shenai. “You could expect an interesting phase for beer in India.” Indeed, beer is hot in India—or cool, of course, depending on whether you’re making it or drinking it.
At last count, there were 18 new beer labels in the Indian market or heading here, says Rahul Singh, who keeps a tab on new entrants from his perch at Beer Cafe, one of the biggest beer chains in India. They include all varieties from the mass-produced flavours of Bira 91, which has squeezed its way into an industry dominated by global giants in just over three years, to the avant-garde saison and milk-shake IPAs—terms the average beer drinker isn’t even familiar with. There’s something for everyone, purist or beginner. Singh too has a brand of his own in the works, called Indie 18.
“Craft beer is the new wine. Pair with food, pair with cheeses...it’s happening with beer too,” says N. Manepally.
So how did India’s beer market become this frothy, at least in its major cities? Clearly, craft beer has tickled the taste buds in a country that had been starved of variety for long. So, there’s a rush to bottle brews that taste different. “Craft beer is the new wine. Think about it: what do wine people tell you? Pair with food, pair with cheeses...this is what is happening with beer too,” says Narayan Manepally as he tastes an orange-coloured brew served in a bell-shaped hurricane glass at a tap room in downtown Bangalore. The ale called Kamacitra—a wordplay on the Citra hops used for bittering, with a hint of mango and other fruit flavours—is one of the four varieties of fresh brews that his brewery supplies in kegs under the label Geist to about 58 restaurants and tap rooms in Bangalore besides a few in Mangalore and Mysore. “It’s not what you’ve been used to for the past 30 years and it’s not your dad’s beer,” he says.
Manepally, however, isn’t rushing to bottle these beers yet—it’s tricky to keep the beer fresh—but the plan is on the horizon. He was a techie working with Intel in Portland, Oregon, when he took up brewing as a hobby in the mid-1990s. Sometime in 2009, a few years after he returned to Bangalore, he launched Geist—getting the beers produced in Belgium and then shipped in bottles to be sold in India. He had to stop in 2013 as importing costs mounted. By then microbreweries were catching up, and he too put his money into two brew-pubs. He remembers telling his partner that their “break-even point” was Rs 44 lakh. In the fourth month, the revenue was double that figure and the pace, he says, hasn’t slackened. Now, he’s on phase three of his beer journey—as the taste caught on and more hoteliers warmed up to the idea of stocking craft beer. Last year, he set up a 30-hectolitre (a hectolitre is 100 litres) brewery outside Bangalore to supply them kegs of Geist. His business proposition to restaurants is simple: you don’t need to set up a microbrewery to serve craft beer.
A couple of buildings away from where he’s chatting with Outlook is Arbor Brewing Company, one of Bangalore’s early brew-pubs. It’s now the first craft brewer in India to sell their beer in cans—available only in Goa at the moment, where Arbor has built a new brewery that will also supply kegs to local restaurants. Over time, it wants the cans to reach store shelves in Maharashtra and Karnataka. “As the palate evolved and people started demanding craft beer, we had to broaden our reach,” says Gaurav Sikka, who runs Arbor. “Microbrewing is here to stay, and it’s serious business.”
“The palate evolved and people began demanding craft beer, so we had to broaden our reach,” says Gaurav Sikka of Arbor.
However, it’s also minuscule compared to India’s beer industry, estimated at 2.4 billion litres in 2017 by market research firm Euromonitor. The bulk of the beer sold in India is made at large breweries that would dwarf these new 30-hectolitre craft beer facilities. Broadly, here’s the trend playing out at various different levels: a brew-pub cannot sell outside its premises or bottle its beer, so some of them are now setting up their own breweries to either keg or bottle small batches. Then, there are new beer labels that get their brews contract-manufactured and bottled on a larger scale, just like the big players do. Bira 91, for instance, was initially made in Belgium, but is now being bottled locally. Wheat, gently hopped (so, less bitter), is the taste that’s catching on here, brewers say.
Here’s how the Indian beer market looks: United Breweries Ltd (UBL), which sells Kingfisher and Heineken, controls half the market, while the other half is sliced up by three other top beer-makers—Anheuser-Busch InBev (which now also owns SABMiller India), Carlsberg and Molson Coors. In the ring with these giants are the raft of start-ups led by Bira 91, eyeing large volumes with their new flavours winning them a fan following overnight in the big cities. “Bira has taken the wheat beer...very fruity, flavoured beer space in India, and just kind of created a demand,” says Shenai.
If you walked into a liquor store in Bangalore or Delhi, you’d see refrigerators stacked with dozens of brands—with snazzy logos and attitude—in pint bottles, some locally made and others homegrown-but-brewed-abroad. India is still a strong beer market so the eight per cent ales muscle out the rest on the shelf. Even then, there’s plenty of choice. There’s solid competition in the sub Rs 100 (per 330 ml) category of lagers; Bira 91 and Simba cost a bit more and an imported Thirsty Simona retails at about Rs 275 (all prices in Bangalore), about the same as a global Stella Artois that’s been in India for years.
“The lion’s share of growth will come out of these newer beers as the newer consumer is having those,” says Rahul Singh of Beer Cafe. Naturally, one can argue, because volumes are relatively small. Nobody is expecting the market to change overnight—the big players are still leagues ahead on reach and pricing. “It’s like saying, can I fight with Maruti?” Singh says. Also, India’s low per capita consumption isn’t likely to change dramatically, either because beer is still expensive owing to duties and levies or has limited access—there are roughly 75,000 outlets of all kinds in the country. But these new beers have opened up some urban pockets, especially the young consumer who can afford a higher priced beer that tastes different.
“The lion’s share of growth will come out of the newer beers as the newer consumer is having those.”
Rahul Singh, Beer Cafe
Even market leader United Breweries plans to introduce its range of craft and variety beers early next year. “Though the size of this market is very small at present, compared to the overall size of the beer market, it is growing at a rapid pace,” says Shekhar Ramamurthy, managing director, UBL. “This segment comprises opinion leaders of society and is, therefore, important.” Over the years, UBL has been importing many premium labels it owns globally—Desperados, Sol, Edelweiss, Dos Equis and Affligem. So have many independent importers—for instance, the Mediterranean beer label Estrella Damm, which has been in India for about four years, is looking to broaden its reach. Now, the buzz is that Inedit—a super premium created by Ferran Adrià, among the world’s best known chefs—will soon start retailing in Delhi.
“Indian consumers are increasingly opting for beer with a smooth, light taste, finding it easy to drink when socialising. Light-tasting beers are also becoming popular among those drinking for the first time,” notes a recent Euromonitor’s report. “It hasn’t reached the point of dark ales and stouts yet. IPA is like really far-fetched,” reckons Singh, who is eyeing a piece of the action with Indie 18 next quarter. It will be contract-brewed. “In fact, we are not even calling our beer craft because craft is an abused word,” he says.
Beer Cafe, with 50 outlets across 16 cities, will exceed Rs 100 crore in revenue this year—a good time to launch its own brand of beer to sell in-house. Singh explains his plan with a fashion analogy, a hangover from his previous stint in the apparel business. “It’s a private label basically, like it was done by Jabong or Myntra. At the moment, at Beer Cafe we are selling everybody’s beer...we are an aggregator of beer basically. We have reached that point where we can manage minimum order quantities,” he says. But nearly every day, says Singh, he also gets sounded out by youngsters who want to start a beer brand. “No exaggeration. People meet me saying, ‘what Bira has done, I can do too’.”
But beer is tough business—the brew is perishable so there’s a distribution challenge that’s only made more complex with various state regulations. Even brew-pubs are allowed only in a handful of states. “It’s a slow burner, but at the end of the day it’s all worth it,” says Shenai. “We are happy that the beer is good.”
- 2.4 billion litres Size of the Indian beer industry in 2017, which was worth Rs 48,000 crore (Euromonitor)
- 7 per cent Average annual growth of volumes over the past five years
- 30 per cent Rise in per capita consumption of beer in India during the past five years
- 2 litres Current annual per capita consumption in India; in other Asian countries, it’s about 21 litres
- 85 per cent Percentage of beer sold in India that is categorised as strong (6-8 per cent alcohol); this would probably stay that way for much longer, owing to alcohol taxing policies
- Rs 1,000 cr to Rs 4,000 cr Projected growth in craft beer as a category during 2016-20
(Source: Company annual reports, interviews)
Top Beer Cos In India
- UBL (makers of Kingfisher claim 52 per cent marketshare)
- Anheuser-Busch InBev (makers of Budweiser, Corona and more than 200 brands)
- Carlsberg (Danish multinational)
- Molson Coors (US-Canadian company)
- Bira 91 (claims 5 per cent marketshare in Delhi, Mumbai and Bangalore)
- New labels on shelves or in the works: White Rhino, Simba, Witlinger, White Owl, Arbor, Thirsty, Six Fields, Goa Brewing Co, Kati Patang, Happy Head, Hopper, Witty Bro, Bierdo
By Ajay Sukumaran in Bangalore