Industry Analysis

For
All About Beer ( A2 B)
 Industry Background and Overview
• The brewing in industry is a global business, consisting of several dominant multi-national

companies and many thousands of smaller producers. Ranging from Brewpubs to regional

breweries.

• More than 133 billion liters (35 billion gallons) are sold per year – producing total global

revenues of $294.5bn (147.7bn pounds) in 2006.

• A microbrewery or craft brewery, is a modern brewery which produces a limited amount of

beer.

• The maximum amount of beer a brewery can produce and still be classed as a microbrewery

varies by region and by authority, though usually around 15,000 barrels (18,000

hectorliters/475,000 US gallons).

• A brewpub is a type of microbrewery that incorporates a pub or other eating establishments.

Cropton Brewery, North Yorkshire, UK
• SABMiller became the largest brewing corporation in the world when it acquired royal
Grolsch, brewer of Dutch premium beer brand Grolsch.
• InBev was the second-largest beer-producing company
in the world, and Anheuser-Busch held the third stop.
But after the merger between InBev and Anheuser-Busch,
the new Anheuser-Busch InBev company in the largest
brewer in the world today.
 The Indian Beer History
• In modern times, beer began to be exported to India in the early days of the British empire –
the early 1700s.
• The demand for beer in the hot climate of many parts of India by the British administrators
and the troops were so great that it led to the creation of a completely new style of beer by
Gorge Hodgson in his London brewery – India Pale Ale also known as IPA.
• IPA is a strong, highly hopped ale designed to survive the
5 month ocean voyage so India without spoiling. India Pale Ale
was shipped with every voyage for over a century and became
very popular in Britain and North America.
• The first modern brewery in India was started in Kasauli, in the Himalaya mountains near
Shimla, in the late 1820s by the Englishman Edward Dyer. Dyer’s brewery produced Asia’s first
beer, called Lion.
• The brewery was soon shifted to near by Solan (closed to the British summer capital Shimla),
as there was an abundance supply of fresh spring water there.
• The Kasauli brewery site was converted to a distillery which Mohan Meakin Limited still
operates.

• Dyer set up more breweries at Shimla, Murree, Rawalpindi and Mandalay.

 Significant Trends
• Although the growing popularity of wine, wine bars and “designer drinks” has nudged beer
drinking statistics a bit lower in recent years, some emerging trends are breathing new life
into the beer industry.
• Breweries that produce fewer than 15,000 barrels of beer per year, otherwise known as
microbreweries are part of a growing craft industry that includes homemade and specialty
beers.
• The brewpub is also a growing industry; this is an institution that brews its own beer, mainly
for consumption on the premises.
• Ironically, this is really a return to the earlier days of brewing, when English pubs brewed
their own beer, or earlier still when monasteries brewed for nearby villages and towns.
• Smaller batches tend to result in tastier, more interesting beers with more concentration paid
to detail and to the equality of the ingredients also, smaller breweries result in regional
specialties, creating a more varied landscape overall.
• Cooking with beer is another growing trend.
• Beer can be tasted as an ingredient in sauces and batters, while books and internet sites
proclaim that a good beer is the ideal accompaniment to hearty beef dishes, seafood and fish
entrees.
• But the traditional beer and pizza dinner is not dead. People still treasure their beer and pizza
– or in some cases a bit of pizza with their beer.
• Another popular trend in the beer industry is the light beer. When light beers were first
introduced in the 1970s, consumers were attracted to the smooth, mild taste. The lower
number of calories didn’t hurt either. Now, light beers have become more popular than the
original premium beers.
 Growth Rate
• The Indian beer industry has been witnessing steady growth of 10-17% per year over the last
10 years.
• The rate of growth has increased in recent years, with volumes passing 170m cases during
the 2008 – 09 financial year. With the average age of population on the decrease and the
income levels on the increase, the popularity of beer in the country continues to rise.
• The Indian beer industry during the last 5 years.
• The industry was previously dominated by competition between the Vijay Mallya controlled
United Breweries Group and the Manu Chabbria controlled Shaw Wallace.
• The scenario changed, however, with the entry of SABMiller in India. The international beer
giant started by acquiring small breweries in the south but then completely changed the
landscape with the acquisition of Shaw Wallace’s beer portfolio for a report US $264m in
2003.
• This gave SABMiller ownership of strong brands like Haywards 5000 along with existing
brands.
• After the acquisition, SABMiller focused on spreading its footprint across India, including
opening new breweries in states where Shaw Wallace did not have a presence.
• On the other hand, rival UB bolstered its presence in the country in 1999 by creating sister
company Millennium Alcobev, which produces beer brands like Zingaro and Sandpiper.
• Today, this is a joint venture between the UB group and Scottish and Newcastle (S&N).
• The company started as 61:39 joint venture between UB Group and Ravi Jain, a friend of
Mallyas’.
• In January 2002, this was expanded to accommodate Scottish and Newcastle (when it
became a 40:40:20 joint venture between UB, S&N, Ravi Jain).
• In early 2006, Ravi Jain ceased to be an equity partner and Millennium Alcobev became a
50:50 joint venture.
 Key success factors in the Industry
• United Breweries Ltd. & Mohan Meakin Ltd. are two of the largest breweries in India.
• Mohan Meakin are the pioneers of beer in India and also the masters of brewing.
• Mohan Meakin Ltd. today, has 6 distilleries and 5 breweries from the vanguards of the house,
with 6 more units waiting in the wings.
• The three main divisions of Mohan Meakin Ltd. are the brewery division, the spirits division
and the foods division.
• United Breweries Limited started brewing 5 decades ago starting with 5 breweries in South
India in 1915.
• The beer business has gone on to become the ‘undisputed king’ in the beer market.
• Here innovative, creative and aggressive marketing is complimented by a strong distribution
network.
• A management focused on building brand equity on one hand and exploiting it the hilt on the
other with concerted emphasis on quality.
• UBL today, boasts an impressive spread of own and contract manufacturing facilities
throughout the country.
• Its flagship brand Kingfisher has achieved international recognition consistently and has won
many laurels in international beer festivals.
• Kingfisher premium lager beer is currently available in 52 countries outside India and leads
the way amongst Indian beers in the international market.
• It has been ranked amongst the top 10 fasting growing brands in the UK.
 Outlook for the future
• The Rs 8,000-crore plus domestic beer market is mainly controlled by United Breweries and
Mohan Meakin, who together have about 25 breweries under their fold.
• Breweries such as Mount Shivalik, Yuksom Breweries, Devan Modern Breweries and Asia
Pacific Breweries control nearly 18 per cent of the domestic market.
• With the entry of global beer majors such as Heineken, Anheuser-Busch and others, who plan
to launch their products in India, beer consumption in the country is set to rise in the future.
• Microbreweries are also an upcoming trend in the Indian market. It is an easier and more
accessible way of manufacturing and processing beer and in the future one might see more
microbreweries being setup.
Thank You for your attention!

Done By:
Ankita Chawla
Saurabh Kumar
Ishira Bubber