India: Beer business set to grow by 20%

The Indian beer industry continues to remain in high spirits this year after a great show in 2006, India Times reported April 8. While last year there was a growth of 15%, this year it is expected to register a growth of more than 20%.

According to industry sources, while in last five years the industry registered a growth of 7% to 8 % on a year-on-year basis, the total beer sales was around 108 million cases in 2005 which crossed 130 million cases in 2006 and is expected to touch between 155 and 160 million cases this year.

Says Amit Jaiswal, director, JHV Group:” There has been an unprecedented growth as far as the beer industry is concerned in the country. Key drivers of high growth include rising gross domestic product, favourable demographics, changing lifestyles, and the opportunity to grow per capita consumption. In fact, last year there was a good growth and this year the beer industry should cross the 150-million cases mark.”

Meanwhile, in terms of segment wise growth, strong seems to be the way to go over last few years. At present it is 65% in favour of strong and 35% mild. For strong beer (alcohol by volume of 5 to 8%), key consuming states are Andhra Pradesh, Maharashtra, Tamil Nadu, Karnataka, Punjab, Rajasthan and Uttar Pradesh. Says Monish Bali, director, Mount Shivalik Group:“The percentage growth rate in strong category is much higher than the mild. Many people prefer to drink the strong beer as mild does not give them that kick which the strong will do.” Beer makers in India are upbeat because they feel that per capita consumption of 0.7 litres is low, emphasising the significant growth potential in a country with a population in excess of one billion people.

Industry experts predict that per capita consumption per annum in India may rise to around 20 litres in the next 10 years. In fact, eyeing a continuous double digit growth in the coming years, many beer manufacturers are planning a national expansion.

“With a good market share in north and many parts of central India our group’s future priority and focus is on contract bottling tie ups with breweries having idle capacities especially in western and southern states for bottling Mount Shivalik’s brand portfolio. Plans are also afoot to set up a greenfield brewery project in one of the southern states. All these measures would help in consolidating and increasing our market presence especially in the south and west,” says Mr Bali.

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