THIS REPORT CONTAINS ASSESSMENTS OF COMMODITY AND TRADE ISSUES MADE BY

USDA STAFF AND NOT NECESSARILY STATEMENTS OF OFFICIAL U.S. GOVERNMENT

POLICY

Voluntary - Public

Date: 4/18/2018
GAIN Report Number: IN8044

India
Post: New Delhi
High Hops with Market Opportunities Brewing for U.S. Beer
Ingredients
Report Categories:
Beverages
SP1 - Expand International Marketing Opportunities
Approved By:
Adam Branson
Prepared By:
Priya Jashnani

Report Highlights:
The India craft beer market is poised for tremendous growth though still considered niche. There are
more than 80 operating microbreweries and brew pubs across India – up from around 45 in 2016. A
handful are expanding production lines and adding bottled or canned, craft beers. The market holds
potential for U.S exporters supplying brewery ingredients (malt, hops, yeast) and some potential for
imported craft beers.
General Information:
The craft beer market in India is a niche market and still at a nascent stage though the sector is poised
for tremendous growth. There are more than 80 operating microbreweries across India - up from around
45 written about since 2016. (See USDA FAS GAIN Report IN6043 Un-Tapped Opportunities for
Craft Beer and Beer Ingredients). The microbrewery sector accounts for one percent of the total beer
sector and holds tremendous growth potential.

The emerging and expanding middle class population of India is spending more time and income on
socializing and networking. Beer is perceived as a casual, light drink and time in brew pubs is
considered a relaxed time with friends and colleagues. The greatest rise in the number of
microbreweries and brew pubs since the 2016 report is in the cities of Gurgaon (outside the National
Capital Region), Bengaluru, and Pune though many other cities like Mumbai, Goa, and Hyderabad
boast a number of outlets.

A handful of microbreweries are diversifying their production lines to include bottled or canned craft
beer. According to the All India Brewers Association and industry sources, the sector has captured 7
percent market share of the bottled beer business.

Glass bottles are the most popular package for beers as India has a strong glass recycling system. Too,
glass bottles have a premium image though cans are slowly gaining popularity for their durability and
portability (i.e., easier shipping and lighter weight).

Beer Ingredients Snapshot

There are only a few craft beer ingredient suppliers who supply malt, hops and yeast. The number of
malt-only suppliers is a little wider and some importers market technology and equipment. As product
consistency gains increasing importance among the craft brewers, a majority of microbreweries report to
Post that having a supplier who maintains stock levels and provides just-in-time delivery with local
warehousing options is important. Craft beer ingredients enter India through ports at Nhava Sheva
(Mumbai), Mundra, Chennai, Delhi ICD, Bengaluru ICS, and Ahmedabad ICD.

Barley
Production of barley, a relatively small winter crop in India, has been relatively steady at around 1.6-1.8
million metric tons (MMT). Traditionally, India produced six-row barley that was mostly used for food
and feed and was unsuitable for malting. Recently, a few high quality malting barley varieties have
been developed through public-private breeding programs. These varieties are steadily replacing older
varieties. Trade sources report that some malting and brewing companies are promoting the cultivation
of the malting barley varieties under contract farming through a buy-back arrangement in the traditional
growing areas of Rajasthan, Punjab, and Haryana.

The new malting barley varieties are used for brewing and amount to 650,000 to 700,000 metric tons
(MT) and are often used by large-scale commercial breweries. Trade sources report that “craft malting”
will be the new industry trend.
India imposes a zero percent import duty for barley and no special licenses are required though
fumigation is a pre-requisite. Malting barley is imported from Argentina, Canada, Belgium (Castle
malt), Germany, France, and Australia. A trade source reports that each microbrewery in the industry
annually requires around 15,000 MT to 20,000 MT. Malted barley is supplied to microbreweries in 25
kgs bags.
Yeast
Yeast strains from well-known international beer yeast providers are widely used by Indian
microbreweries. Trade sources report that brewers are gradually experimenting with locally cultured
yeast. Liquid beer yeast is in high demand; however, due to the sensitivity of the product it has to be
air-shipped and, as such, is more expensive. Still, craft brewers across India indicate to Post that they
would like to use liquid beer yeast as it enhances the flavors of the beers and may provide Indian
consumers an enhanced tasting product.
Hops
India imported $3.7 million worth of hop pellets (HTS 121020), of which $665,000 was from the United
States. Other players in the market are Germany, Australia, China, Canada, Ukraine, New Zealand,
Slovenia, and Hong Kong (largely hops from other origins that were centrally located in the area).

Direct imports of American-origin hops have grown from around 100 kgs in 2012 to 89 MT in 2017.
Pelletized hops are imported in 5 kg, 10 kg, and 20 kg bags and are transported in trucks to distributor
warehouses’ across India and then supplied to microbreweries.

In addition to hop pellets, Indian breweries and food/beverage manufactures use hop oils/extracts and
hop cones.
Bottled Indian Domestic Craft Beer Market Snapshot
India trade sources report that the country is predominantly a lager market. According to statistics
released by the Excise Department, in 2016, beer consumption fell by 0.4 percent and in 2017, fell
further by 10 percent. Sources attribute the large drop off in beer sales to the Government of India’s
prohibition on the sale of alcoholic beverages in venues that were close to highways.

Bira 91 was the first manufacturer of locally bottled craft beer. The company states it experienced 700
percent growth in 2017 compared to 2016 and expects 3x in 2018 over 2017. The All India Brewers
Association notes that Bira 91 has captured 6 percent of the bottled beer business. According to
Euromonitor International, with the bottled craft beer segment largely underdeveloped, many new
players are expected to emerge.

Bira 91 is found at retail stores, hotels, and restaurants. It has five varieties: Bira 91 White (low-bitter
wheat beer), Bira 91 Blonde (craft lager), Bira 91 Light (lowest calories), Bira 91 Strong (high alcohol
wheat beer), and it’s most recently launched Bira 91 IPA. Bira is offered in bottles and currently the
only domestic craft beer available in 330 ml cans though industry sources report that other brands are
moving into canning and bottling in addition to keg lines. Other new entrants to the Indian domestic
craft beer bottled market are White Owl Brewery, White Rhino, and Simba. White Owl Brewery,
headquartered in Mumbai, has recently diversified into bottled craft beer with a production facility in
Madhya Pradesh. It comes in two variants: Belgian Wit and Diablo Irish Red Ale and its bottled
products can be bought only in the states of Goa and Karnataka. White Rhino Brewing Co.,
headquartered in New Delhi, has a production facility for bottled beer in Malanpur, Madhya Pradesh.
The company currently has distribution licenses currently for New Delhi, Haryana and Chandigarh.
They brew three varieties: Wit Beer, India Pale Ale, and Lager. Simba with its wheat, stout, and lager
beers is head-quartered in Goa and is going to launch its bottled beers soon in New Delhi. Other market
entrants are expected to come into bottling and/canning soon and at least one new entrant is exploring
the market for cider.
Retail prices of bottled craft beer vary from state to state. The average price for a 330 ml bottle ranges
from INR 65 ($0.98) to INR 100 ($1.56) in Goa, INR 100 ($1.56) to INR 125 ($1.95) in Karnataka, INR
100 ($1.56) to INR 150 ($2.34) in Haryana and Chandigarh, INR 100 ($1.56) to INR 160 ($2.50) in
New Delhi and INR 110 ($1.72) to INR 175 ($2.73) in Mumbai.
Regulatory Policies and Additional Challenges
The Food Safety and Standards Authority of India (FSSAI) published its Alcoholic Beverages
Regulations 2018 on April 5, 2018. The regulations specify the standards and classification of alcoholic
beverages and specific labeling requirements for alcoholic beverage. These standards are scheduled to
enter into force on April 1, 2019. A copy of the Gazette notification is hyperlinked.

India’s Plant Quarantine Order lists hop pellets under Schedule VII of the order which means that an
import permit is not necessary. However, the Order language specifies that the products be for
medicinal use. If the GOI amends the language, craft brewers indicate that they may look to import
larger volumes of pelletized hops directly.

Market Development and Awareness Opportunities

A number of food and beverage events, festivals, and education conventions have taken place over the
past year that have been designed for the participation and promotion of craft beers and microbreweries
to Indian consumers. Post is aware of two trade shows taking place that may present opportunities for
U.S. beer and beer ingredient exporters. Please note that USDA does not endorse these shows and the
following is for informational purposes, only.

Bengaluru will showcase “Craft India 2018”, from July 4 to 5, 2018 at the White Orchid Convention
Center. Craft Drinks India is jointly organised by the NuernbergMesse India and PDA Trade Fairs Pvt.
Ltd. NuernbergMesse are the organisers of the BrauBeviale in Nuremberg and several other shows
under the “Beviale Family” such as Craft Beer Italy, Beviale Moscow as well as Craft Beer China etc.
The two-day show is being called a high-quality event for brewers, microbrewers, craft brewers, traders,
and those with brewing aspirations. The show reports to provide inspiration and practical advice where
visitors can learn about the latest trends, challenges, and opportunities in the alco-beverage industry.
More information can be found on http://www.craftdrinksindia.com/home
Mumbai will hold “Drinktech India 2018,” from October 24 to 26, 2018 at the Bombay Convention and
Exhibition Center. The show is organised by Messe Munchen International and Messe Dusseldorf. The
3-day exhibition will showcase companies offering soft drinks, water, fruit juice, beer and brewery
items, wine and spirits, milk and liquid milk products, and liquid food. In addition to the trade show,
seminars on current and future trends in the beverage and liquid-food industry and food safety and
licensing and registration rules and regulations, will be held. More information can be found on
https://www.drinktechnology-india.com/

POST CONTACT AND FURTHER INFORMATION

For further information about the craft beer sector and beer ingredients market, please contact:

Office of Agricultural Affairs, Consulate General of the Unites States of America

C-49, G-Block, Bandra Kurla Complex, Bandra (E), Mumbai - 400 051

Phone Mumbai: +91-22-2672-4863

E-Mail: agmumbai@fas.usda.gov
Twitter: @USDAIndia