Professional Documents
Culture Documents
Of
Kingfisher Beer
Submitted by:
Anket Gupta
10P128
Table of contents
1. Introduction
3
3. SWOT Analysis 7
3.1 Strengths
7
3.2 Weaknesses
8
3.3 Opportunities
8
3.4 Threats
8
2
References
9
1. Introduction
Though the Indian beer market is primarily dominated by Kingfisher, there is
chiefly one main competitor - SAB Miller. SAB Miller has premium beer brands
in the market with the likes of Haywards, Royal Challenge and Fosters. Another
strong regional beer is Indus Pride, again owned by SAB Miller. SAB Miller has a
35 % market share and has expanded strategically to take control of beer
markets at most places in the country. Mohan Meakin, which launched India’s as
well as Asia’s first brewery with popular beer brands such as Lion and Golden
Eagle, also competes with the UB Group.
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2. SAB Miller India
2.1 Vision & Mission Statement
“Our mission is to own and nurture local and international beer brands that are
the first choice of the consumer.”
SABMiller has operated in India since October 2000, when it acquired Narang
Breweries, followed by the acquisition of Mysore Breweries Limited and Rochees
Breweries Ltd in 2002. In May 2003, it entered into a joint venture with Shaw
Wallace & Company to form Shaw Wallace Breweries Limited, thereby adding the
popular brand Haywards to its portfolio. The management control rested with
SABMiller. Over the years, SABMiller has cornered nearly one third of the Indian
beer market with brands such as Haywards 5000, Haywards 2000, Haywards
Black, Knock Out, Royal Challenge, Castle Lager and Fosters. With eleven world-
class breweries strategically located across India, SABMiller is well positioned to
easily access and efficiently service the beer markets across the country. The
market share of SAB Miller in India currently stands at 36 %, way ahead of its
nearest competitor and inching closer to the leader Kingfisher.
New Entrants - SABMiller operates in ‘challenging’ markets, which in the past has
limited the threat of new entrants. These markets tend to have a fragmented
brewing industry and given the capital and knowledge required to setup a brewing
enterprise; this creates high barriers to entry meaning that the threat of new
entrants is low. However, in developed markets the industry is consolidated and
dominated by a few, larger players. As such, these large companies, like SABMiller
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tend to own multiple brands with different market positions. In this market, it is
much easier for competitors to launch rival products that compete directly on price
and thus eroding market share. SABMiller has experienced this problem in North
America with its rivals entering into a price war with SABMiller.
Suppliers - SABMiller is the second largest brewer in the world by volume. As such,
they are able to leverage their global reach to benefit from economies of scale. In
this event it means that the bargaining power of suppliers is unlikely to be too great.
Substitutes - Premium brands have been identified as the fastest growing segment.
However, if disposable incomes fall, customers may decide to switch to lower cost
brands. The switching costs within the industry are low and so this could have a
negative impact on SABMiller, who have positioned themselves to take advantage
from the growth in premium brand sales.
SAB Miller India has a rich repertoire of premium beer brands, each being a preferred
choice of the masses and having created a niche demand for itself. The various
brands are as follows:
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Haywards
Haywards 5000 is India's largest selling strong beer brand, which perfectly
combines strength with quality credentials that meet the high expectations of
today’s demanding consumers. Launched in the year 1983, Haywards 5000 is
synonymous with strong beer in India. Haywards 5000 is brewed with the
choicest of malts and hops lending itself to a unique flavour profile to suit the
Indian taste and preference. Haywards 5000 is the hallmark of original and
authentic strong beer which other beer brands aspire for. With such
credentials, it is not surprising to see men get together over Haywards 5000.
It is the language of friendship amongst men who are proud of their
masculinity and look forward to a great time with their friends and peers.
Haywards is the most successful beer brand in the stable of SAB Miller India
contributing to bulk of its revenues. It enjoys a market share of 23 % of the
Indian beer market.
Knock Out
Knock out is a strong beer in circulation mostly in the southern India region
with leading market share in the state of Andhra Pradesh. The beer is
distributed in Andhra Pradesh, Maharashtra and Karnataka. Ever since its
launch in 1984, Knock Out has grown from strength to strength to establish
itself as one of the leading strong beers in India. The popularity of Knock Out
is also evident from the fact that despite being available in limited markets,
as many as three lakh beer bottles are guzzled by consumers every day.
Knock Out enjoys an 8 % market share in the Indian beer market.
Royal Challenge
Launched in the year 1993, Royal Challenge Premium Lager is the second
largest selling mild beer in India. Royal Challenge is brewed with the choicest
6 malt barley. Its long brew duration provides it with a distinct, smooth taste
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and rich flavour. It has all the hallmarks of a great beer - Color that is golden
honey, taste that is smooth and crisp, lace that sticks to the wall of the glass.
This is the beer for the discerning who have the confidence to make their
choices based on their superior taste and knowledge rather than just following
the crowd.
The brand has moved from strength to strength since its re-launch by
SABMiller in 2004, and has set itself on a growth momentum that is well
ahead in the mild beer industry. It has now become the largest selling mild
beer brand in many large beer markets, including Andhra Pradesh, Uttar
Pradesh and Orissa. Besides being available across most states in India, Royal
Challenge Premium Lager is also exported to USA, Europe, Middle East,
Australia and Hong Kong. Brewed from select malts and imported hops, on a
specially developed recipe by the brew-masters from SABMiller, one of world’s
largest brewers with over a hundred years of heritage, Royal Challenge
symbolizes a perfect harmony between the high art of brewing and the
assurance of modern technology. Royal Challenge Premium Lager offers a
difference with an edge. Besides its international class packaging, premium
image and path breaking advertising, what sets the brand apart is the long
brew cycle which lends it a distinctly smooth and easy flowing taste. It enjoys
a healthy market share of 6 % of the Indian beer market.
Foster’s
Foster's Lager is a uniquely brewed Australian beer. Brewed with the finest
sun-dried malted barley and the purest water Foster's has always been at the
forefront of brewing technology and the Foster's Lager brewed today is the
result of over a century of attention of the brewing art. Quality has been the
strength of Foster's since its earliest days and remains a paramount concern
at every stage of the beer's journey from brewery to consumer. Foster's crisp,
clean flavor won it immediate international acclaim when it was first brewed
in Melbourne in 1888. Today, more than one hundred years later, it is still
recognized as one of the world's best beers. SABMiller India now brews &
markets Foster's in various parts of the country. Foster’s enjoys a market
share of 3 % of the Indian beer market.
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Some of the other beers belonging to the SAB Miller India
are Indus Pride and Peroni.
3 SWOT Analysis
3.1 Strengths
In a span of just 10 years SABMiller India has been able to corner one-third share of the Indian beer
market. It has performed remarkably well in strong beer segment with Haywards 5000 and Knock Out.
Together they constitute 31% market share of the strong beer market in India. Royal Challenge and
Fosters are also very popular in the mainstream mild segment and together constitute a market share of
28%.
SAB Miller India hosts a range of premium and popular beer brands that
have created a niche market for themselves and command a dedicated
and loyal customer base. The brands include Royal Challenge, Peroni,
Foster’s, Indus Pride, Knock Out and Haywards.
With 10 high quality breweries located strategically across 9 states in India. SABMiller India has a
market capacity of 5.7 Million HL. The company’s brewery in Andhra Pradesh is India’s first brewery to
have a capacity of 1.5 Million HL, which is twice the size of the second largest brewery in India.
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• Constant upgradation of brewing facilities in line with global
standards
SABMiller India, as a company recognizes HIV/AIDS is a major threat to the world of work. In 2007 it
started its HIV/AIDS internal workplace programme jointly with International Labour Organization (ILO).
The programme has been extended to supply chain (truckers) and trade (liquor retail outlets)
Water is one of SABMiller India’s top Sustainable Development priorities. This is reflected in the “5R”
water management strategy which has internal measures to Reduce, Recycle, Reuse and external
measures to Replenish and Redistribute.
3.2 Weakness
• Each state has its own excise laws, whereby movement of goods
from one state to another is time consuming and costly
• Missed Opportunity in TN
SAB Miller has no plant in Tamil Nadu, thereby its inability to participate in
the second biggest beer market in India has hampered its sales figures
3.3 Opportunities
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• Per capita consumption of Beer is one litre, way below the world
average
• India has the highest number of young people who are the
potential consumers for the Company
3.4 Threats
With prices of almost all the commodities rising, maintaining the margins
is a great challenge for the brewery.
In the last few years, the attrition rate at SAB Miller has climbed upto as
high as 22% (Source: SAB Miller website)
During the recent years, Government has enforced tough regulations and
raised the taxes for this sector. Therefore, the high costs of doing business
in this sector act as a significant threat to SAB Miller India.
• Prohibition on advertising
10
The advertising restrictions placed on alcoholic beverage industry in
recent years make it harder to achieve brand loyalty.
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