ABInBev T+: BUD CHALLENGE ET ES a 3 CHALLENGE | CRAFTING A NEW BREW Create a portfolio roadmap for craft beer in AB InBev IndiaThe world over, Craft Beers are loved and admired for their experimental take on the world’s oldest drink! Beer, produced using four main ingredients - Water, Malt, Hops and Yeast, can be transformed into thousands of unique styles and adapted in myriad of ways. Beer g PER CAPITA CONSUMPTION o7 07 08 08 08 08 08 08 © Total @ Beer, athome Beer, out of homeIn India, beer consumption has started gaining popularity with the introduction of microbreweries like Doolally and Toit among others. In a country where lagers and strong beer dominate the beer market, these brewpubs were the first to bring speciality beers like Belgian Wit, Hefeweizens, ‘Amber Ales or Stouts to beer connoisseurs. They have increasingly pushed the boundaries with many craft brewers now experimenting with local flavours by using ingredients like Coconuts, Mangoes, Coffee, Guavas & Kokum in their brews. INDIA CRAFT BEER TIMELINE -9-8-0-0-0-- ‘Over the last few years, Packaged Craft has also seen a rapid rise, with brands like Bira 91, Simba and White Ow! making popular craft beer styles more accessible. While some question whether these mass-produced brands are truly craft in nature, they have undeniably ‘opened up opportunities for the discerning beer drinker to discover new flavours and possibilities which never existed before. Bira 91 started out as a craft brand which imported its beers from Belgium. To meet the growing demand, it soon partnered with local breweries to produce beers locally & now manufactures mass-market lagers. ‘Simba, a family-owned business which used to produce mass-market lagers in the state of Chhattisgarh, is now available in over seven cities in three variants. White Owl, which pioneered the trend of brewpubs selling packaged beer, has quickly scaled up to over five cities in just under two years. White Owl's success story has set the stage for more small entrepreneurs to launch their own packaged craft beers in the next few years.PACKAGED CRAFT MARKET OVERVIEW terreno eect evered wheat — taper Aromatic tle PaleAle Park = owtllos & a os exon fm mn van This segment, now growing at more than 40%, is set to gain a significant volume share in the overall industry. Globally, the share of the craft beer segment is as high as 12% in US, 8% in Europe and 8-10% in markets like Australia. Despite challenges in the form of state level regulations, high taxation on beer, stipulations on alcohol advertisements, differential pricing and lack of access to great shopping experience, as compared to the western countries, the craft beer industry in India is still expected to outpace the ‘commercial lagers in the next decade, Globally AB InBev through its Investment and Innovation arm, ZX Ventures, is involved in multiple partnerships in the Craft Category and is a collective of iconic brands like Goose Island, Camden Town, Birra Del Borgo and Patagonia. ZX Ventures’ unparalleled access to AB InBev’s technology, breweries & distribution networks allows them to make these great beers easily available to consumers across the world. The goal is to keep creating and adding new brands to the portfolio that boasts of a great selection of brands, styles and experiences. So fat, AB InBev has focused on premium brands like Budweiser, Corona, Hoegaarden and Stella Artois to drive its growth in India. The company is now planning to foray into the craft beer segment and enhance its product portfolio in the country. ‘A few (directional not exhaustive) questions need to be answered before kicking-off this exercise: I Who are the potential consumers of craft? lB What should be the communication themes? lB What is the opportunity of craft in India? lm What styles of beer will be suited to the Indian taste palate? 1 Where will the growth come from in this segment for the next 10 years? 1 What organic and inorganic opportunities are available to AB InBev to build a robust craft portfolio?