Market Research India - Beer Market in India 2009

7/31/2019 Market Research India - Beer Market in India 2009

1/29

September2009
http://www.netscribes.com/


2/29

ExecutiveSummary

Market

Indianbeer

market

is

valued

at

INR

35

bn

with

volume

sales

of

172

mn

cases

for

FY

2008

09

Themarketisexpectedtogrowatanannualrateof17.2%till2011

ForeignbrewersareeyeingtheIndianbeermarketwhichislargelyuntappedandhasgrowth

Drivers&

potent a

Drivers: Hugemarketpotential

Challenges: RegulatoryEnvironment

Entryofinternationalbrands

Withcurrent

duopoly

situation

and

entry

of

foreign

players,

beer

industry

in

India

will

quickly

witness consolidation

Trends

Premiumbeersegmentisoutpacingthemainstreambeermarkettouchingagrowthrateof

between4050%

EmergingnewsubcategoriesofbeerwithconsumersinIndiaopenforexperimenting

Competition

Morethan80%ofthemarketiscontrolledbytwomajorplayersUnitedBreweriesLimited(48%)

andSABMillerIndia(35%)

WithInBevacquiringAnheuserBusch,ithaspotentialtoemergeasthethirdmajorplayer

2BEERMARKET INDIA.PPT

Themarket

is

set

to

flourish

with

15

new

breweries

and

10

international

brands

in

next

3

years


3/29

MarketOverview

CharacteristicsandTrends

KeyDevelopments



4/29

Indianconsumerspreferstronglagerswhichhashigheralcoholiccontent

Categoriesofbeer

La erBrewedusingbottomfermentingyeastthatfermentsslowlyatalowtemperaturetocreatea

smoot er,me ow eer

Ale Usestop

fermenting

yeast,

is

a

more

aromatic

and

fruity

product

Stout Darkandheavy,withroastedunmaltedbarleyand,oftencaramelmaltorsugar

MildBeer Developedasasweeterandcheaperalternativetodarkales

Bitter Highlyhoppedforamoredryandaromaticbeer.Itispaleincolourbutstrong

DarkBeer Barleyiskilnedforalongperiodoftimewhichcreatesricherflavours

FruitBeer Fruit,usuallyberries,isaddedeitherduringprimaryfermentationorlater

WheatBeer

(Weizen)MaltedwheatandbarleyareusedforthisGermanstylebeer

Indianbeermarketisdominatedb La eranditsvariousshades



5/29

Withtheglobalbeermarketbecomingstagnant,theinternationalfirmsarefocusingonuntappedIndianmarket

Indianbeermarkethaswitnessedasteadygrowthof10%overadecade

MarketOverview Market

size

&

growth

48+17%INR bn

termsofexpectedgrowthrates

Thereare

56

units

manufacturing

beer

in

India

under

licensefromtheGovernment

Themarketissettoflourishwith15newbreweries

41

35

30

20

30

40

and10internationalbrandsinthenext3years

ForeignbrewersareeyeingtheIndianbeermarketwhichislargelyuntappedandhasgrowthpotential

0

10

2008 2009 2010e 2011e

Segmentshare(volume wise,2009)Growthinpercapitabeerconsumption

Mild beer

172mncases

1.0131.097

1.1631.200

900

Population (mn)

1,5

Consumption (litres)

74%

26%

300

600

,

0,5


Strong beer2000 2005 2010

0,0


6/29


7/29

MarketOverview


KeyDevelopments



8/29

Drivers&Challenges Summary

DriversChallenges

Hugemarketpotential

Entryofinternationalbrands

Hightaxstructure

Risingincomelevels



9/29

YoungpopulationandlowpercapitaconsumptionwillboostthebeersalesinIndia

ImpactHugemarket

potential

ThepopulationandcurrentconsumptiontrendsareexpectedtoboostthebeersalesinIndia

Nearly28%ofIndianpopulationliveinurbanareaswhichcomesclosetothepopulationofUSA

Urbanizationishappeningataveryfastpaceandabout40%ofthetotalpopulationisexpectedtolivein

urbanareasby2020

Peoplein

India

are

relatively

younger

when

compared

with

global

average

About50%oftheIndianpopulationwouldbeunder30yearsevenin2015

InthetotalalcoholmarketinIndia,beercontributesonly4%ofrevenue

Thelowpenetrationinbeerconsumptionprovidesasubstantialandsustainablegrowthin

demandfor

beer

in

future

74.080.0

60

80

Litres

ompar sono er ap ta eer onsumpt on

1.2

22.125.0

20

40


EuropeUS IndiaGlobal AverageChina


10/29

BeerconsumptioninIndiaisexpectedtogrowwithrisingincomelevels

ImpactRisingincome

levels

Indiaisoneofthemostattractiveconsumermarketsintheworldwithaboutonesixthofthe

globalpopulation

TherisingincomelevelshasadirectpositiveimpactonbeersalesinIndia

Also,urbanconsumerswhoaremoreexposedtothewesternculturesocializewithbeer

Thegrowingincomelevelsparticularlyintheurbanearningclassisapotentialmarketforbeer

manufacturersinIndia

90

AggregateAnnualDisposable

Income(INRtn)

Perhouseholdannual

income(INR000)

Coretarget2813%

TotalNo.ofHousehold(mn)

23%

24%

44

15%

Strivers

Globals

groups

>1000

5001000

34%

12%

43%

23%

2% 1%207

44%

5% 1%1%

2025

3%

15%

34%

2015

9%

33%

34%

2005

24

23%

49%13% 7%

9%

Deprived

Aspirers 90200


11/29

EvolvingbeermarketinIndiaisattractingmanymajorinternationalbrands

ImpactEntryof

International

brands

Indiaiswidelyacknowledgedasanuntappedbeermarketwithhugegrowthpotential

ManyforeignbeermanufacturershaveenteredorplantoentertheIndianbeermarketwith

theirproductline

Themarketissettoflourishwith15newbreweriesand10internationalbrandsinthenext3

years

WiththeglobalmarketsexperiencingloworstagnatinggrowthandfocusshiftingtoIndia,the

n an n us ry sexpec e ow ness as grow n ecom ngyears

InternationalPlayers Brands

Carlsberg Carlsberg,Tuborg,Palone

AnheuserBuschInBev Budweiser,StellaArtois,Becks,Hoegaarden,Leffe

AsiaPacificBreweries Tiger,Cannon10000,Barons



12/29

HighlyregulatedenvironmentisamajorchallengefacedbythenewplayersenteringIndianmarket

TheIndianbrewingindustryoperatesinahighlyregulatedenvironmentandbeeriscategorized

withotheralcoholicproductsforlicensingandtaxationpurposes

ImpactRegulatoryenvironment

MovementofbeeramongstatesinIndiarequiresanexportandanimportlicense

Exportfeesisimposedinthestatewherebeerismanufacturedandimportfeesonthestate

whereit

is

sold

FewstateslikeTamilnaduhavestrictrulesofsellingonlybeermanufacturedwithinthestate

Therearemanyotherrestrictionsonadvertising,distributioninfrastructureandretailing,varied

taxstructures,controlledpricingandlicensing

TheretaildistributionchannelsarenotcompletelyopenforsellingbeerinIndia

Regulationsarestiffwithrespecttosellingbeerthroughmodernretailchainswhereasinmost

eve ope na ons eeran w ne sava a e ngroceryorre a s ores

DistributionchannelofbeerinChinaisoneoutletforevery300persons.Whereasitisone

outletforevery21,000personsinIndia,thushinderingtheeaseofaccessibilityofbeer

Morecomplexityinoperations

Highercosts

Entrybarriersfornewentrants

RegulatoryEnvironmentLeadsto


f f b d d h h


13/29

MinoritypreferenceforbeerinIndiaandhightaxstructurearethemajorchallengesforIndianbeerindustry

ImpactHightax

structure

Oneofthereasonsforthelowpreferenceforbeerishightaxesimposedonbeerconsumption

Onabsolutealcoholbasis,beeristaxedhigherthanspiritsinmostofthestatesinIndia

Thereareabout26differentalcoholspecifictaxesthatconstitute50%oftheconsumerprice

whichisamongthehighestintheworld

InIndia,beertaxesareleviedbyindividualstatesandtaxesarealsopaidbetweenstates

0 10 20 30 40 50 60-10-20-30-40-50

%

TaxonBeer(basevalue:taxonhardliquor)

India

Global50%

60%

Tax on hard liquor



14/29

Market

Overview


KeyDevelopments



15/29

CharacteristicsandTrends Summary

Risein

barley

prices

and

emergenceofcontractfarmingIncrease

in

merger

and

acquisitionactivity

Characteristics

andTrends

Newformsofbeerbeingintroducedinmarket

Premiumbeermarketoutpacing

mainstreambeermarket


Pl i i i ll h h j i d


16/29

Playersare

growing

inorganically

through

joint

ventures

and

acquisitions

Theentry

of

foreign

players

will

expedite

the

consolidation

of

beer

market

in

India

Settingupagreenfieldbrewerytakesabout1824months,thuscompaniesarelookingatjointventuresoracquisitions

Date DealType Targetcompany Stake(%) Buyer Value(USDmn)

04Aug09 Acquisition RhinoBreweries 100% YuksomBreweries,India 8.38

19Jan08 Acquisition IcebergIndustriesLtd 76% CobraBeer,India NA

14Sep07 Acquisition ParagBreweries 52% Carlsberg,Denmark 8.14

28Feb07 Acquisition CrownBeersLtd 50% AnheuserBuschInternational,USA NA

Date DealType Targetcompany Stake(%) Buyer Seller Value(USDmn)

02Feb09 Minoritystake Kyndal Lucal NA LucalBolsDistilleries KyndalIndia 1.02purc ase o s

,

e er an s v

25Jan08 Minoritystakepurchase

UBGroup 37.49% Carlsberg,Denmark;

Heineken,

Netherlands

Scottish&

Newcastle Plc

(S&N)

1530.00


P i b t i t i th i t b


17/29

Premiumbeer

segment

is

outpacing

the

mainstream

beer

markettouchingagrowthrateofbetween4050%

Premium Beer

Overview Marketshare

of

premium

beer

(volume)

TheIndianbeerindustryismovingtowardspremium

categoryofbeer

Lifestylechangesandincreasingwesternculturein

Indiaaresomeofthefactorsdrivingthepremium

segment

Manydomesticandforeignpremiumbrandsare

95%

Mainstream Beer

GrowthrateofpremiumbeerPremiumbrandsinIndianbeermarket

Premiumbeersarepricedabout30%higherthan

regularbrands

40

0 10 20 30 40 50

50Premium

%UnitedBreweries

Limited

KingfisherPremium,UBPremium

Ice,KalyaniBlackLabelPremium

15 20Mainstream

beer Minimum

Maximum

er

n a os er s,

eron ,

oya

a enge

OtherPremium

Brands

Cobra5.0%Premium,Budweiser,

Carlsberg,StellaArtois,Tiger,

Becks


N b t i f b i i


18/29

Newsub

categories

of

beer

are

emerging

as

consumers

in

Indiaarenowopentoexperimentation

WithIndian

consumers

open

to

experimentation,

many

multi

national

firms

are

introducing

alcohol

free

and

flavoured

beersinthemarket

Craftbeers,whichareavailableinuniqueflavours,isexpectedtopenetratethelagerdominatedIndianbeerindustry

CobrabeerisbullishonalcoholfreebeerandflavoredbeerinIndia.Ithasrolledout:

regularlagers

o ra g : owca or esan owcar o y ra es; o ra ero : co o ree; o ra e:

Flavoredbeer(Includes Lemongrass,BloodOrange,SweetLimeandFreshGingerflavours)

TheUB

group

also

sees

an

opportunity

for

new

beer

sub

categories

and

segments

in

India

o ra eer

threenewvarietiesofbeerincludingfruitflavoredandlowalcoholbrands

Dalmia Dalmia

Continental

Pvt.

Ltd.

is

the

exclusive

importer

and

distributor

of

Clausthaler,

a

non

Continental alcoholicbeerfromGermanbasedRadebergerGroup

Hema HemaConnoisseurCollection,hasintroducedaGermanpremiumwheatbeerErdinger


onno sseur WeissbierinIndia


19/29

Growingdemandforbarleyandevolvingcontractfarming

Barleyaccounts

for

one

sixth

of

the

cost

of

making

beer

Increaseindomesticconsumptionandexportdemandhaspushedthebarleypricesupby20%fromJan08 June08

Increaseinbarleypriceshasletto10%increaseincostofbeer

TheproteincontentinbarleycropinIndiais1315%comparedto710%indevelopednations

ThehighproteincontentinIndianbarleyisnotsuitableformakingbeer

Rajasthanisanidealplacewherebarleycanbegrownundersuitableclimaticconditionsforhavinglowerprotein

contentrequiredbythebeerindustry

SABMillerIndiaisencouragingfarmersinRajasthantocultivateatypeofmaltbarleyrequiredbytheindustry

ThecompanylaunchedaprogrammecalledSaanjiUnnatiforeducatingfarmerstosowtherighttypeofcertifiedseedsandpractices

Growthinbarleyprices(2008)Indiasbarleycropconsumptionbreakup

1,3001,200

1,200

1,500

+20%Price per 100 Kg

25%

Beer and Malt Firms

0

300

600

900

- - -

75%

Fed to Animals



20/29

Market

Overview


KeyDevelopments


Indian beer market presents a h ge gro th potential in


21/29

Indianbeer

market

presents

a

huge

growth

potential

in

termsofvolume,categoriesandvariants

TheIndianbeermarketisdominatedbytwoplayers

controllingmorethan80%ofthemarket

Competition Marketshare

(2009)

Others

Strongbeerispredictedtogrowfasterasitis

perceivedtooffervalueformoneyalternativeto

spirits

WithInBevacquiringAnheuserBusch,ithas 48%UBL

17%

Indianbeermarket

ThefutureofbeermarketinIndialookspositivewith

theentry

of

many

international

players

Beer sales will increase alon with increasin number

35%

SabMiller India

MarketShare

(segment

wise)

ofbrandsandsubcategoriesinIndia

ExistingplayerslikeUBLandSABMillerareplanning

toexpandtheirrangeofproducts

Newplayers

like

ABInBev,

Carlsberg

are

bringing

40%30%

23%6%

theirinternationallyrenownedbrandstoIndia

Themarketissettoflourishwith15newbreweries

and10internationalbrandsinthenext3yearsSabMiller India

30% 70%


Others


22/29

MajorPlayers(1/5)

CompanySnapshot:

United

Breweries

Ltd

BusinessHighlights

Brands: KingfisherPremium,KingfisherStrong,UBExportLager,LondonPilsner,UBPremiumIce,KalyaniBlackLabel

Premium

JointVenture: 50:50

JV

with

Scottish

&

Newcastle

of

the

UK

in

Millennium

Alcobev

Pvt

Ltd.,

(MABL);

MABL

brands

include:SandPiperLager,ZingaroStrongBeer,KalyaniBlackLabelStrong

BusinessStrategy

nanc a s: ecompanyrepor e ane urnovero . mnan pro a er axo . mn

asamanu ac ur ngne wor o rewer esacross n a

Thecompanyenjoysamarketshareof48%intheindustryandplanstoexpanditssharefurther

KingfisherStrongisthesinglelargestsellingbeerbrandinIndia,whileKingfisherPremiumcontinuedtooutperformin

itscategory

p ans

ose

up

wo

new

green

e

rewer es

a

a epa y

n

n ra

ra es

an

an angu

n

arna a a

n

ordertosupporttherevenuegrowth



23/29

MajorPlayers(2/5)

CompanySnapshot:

SABMiller

India

BusinessHighlights

Brands:Haywards5000,Haywards2000,HaywardsBlack,Fosters,IndusPride,Peroni,RoyalChallenge,KnockOut

SABMillerIndiaisasubsidiaryofSABMillerPLCregisteredinIndiaasSKOLBreweriesLimited

Financials: (FY200708)ThecompanyreportedanetturnoverofINR10860mnandprofitaftertaxofINR344mn

BusinessStrategy

er as rewer es oca e s ra eg ca yacross n a oserve e eermar e se c en y

Thecompany hasamarketshareof35%andstandsinthesecondposition

ThecompanyhasinvestedaboutINR1250mninthepasttwoyearsforupgradingthebreweriestoglobalstandards

SABMillerhasleverageditsglobalexpertiseinpackaging,pricing,occasionandproductgapswhichwereimproved

ase

onconsumer

ns g s

SABMillerplanstobringtheiconicDutchpremiumbeerGrolschtoIndia.SABMillerPlchasacquiredthebrandforUSD

1.2bnin2007



24/29

MajorPlayers(3/5)

CompanySnapshot:

Asia

Pacific

Breweries

Ltd

(APB)

BusinessHighlights

Brands:Tiger,Cannon10000,BaronsStrongBrew

JointVentures

APBAurangabadLtd: 76:24JVwithVijayChougleforabreweryof5mncasescapacity

APB PearlPvtLtd: 67:33JVwithCKJaipuriaforabreweryof6 mncasescapacity

BusinessStrategy

p ans oacqu rea rewery n a as an oexpan o or n a, a sop ans oes a s presence n aryana

andPunjab

By2010,APBplanstoreachacapacityof20mncasesofbeerperannum

APBlaunchedTigerandCannon10000brandsinWestBengalandplanstolaunchBaronssoon

ecompany

s

oo ng

ormergers,

acqu s ons,

con rac

pac ag ng

e

ups

w

o er

compan es

o

expan

s

presenceinIndia



25/29


26/29

MajorPlayers(5/5)

CompanySnapshot:

InBev

India

BusinessHighlights

Brands:TennentsSuper,Becks,StellaArtois,Hoegaarden,Leffe

AnheuserBusch(AB)wasacquiredbyInBevin2008andformedABInBevIndia;currentlyoperatesusingtradingname

InBevIndia

InBevoperatesinIndiathrougha49:51jointventurewithsoftdrinkbottlerRKJGroup

BusinessStrategy

ABstartedoperationsinIndiathrougha50:50jointventurewithCrownBeersInternationalinitiallybutlaterAB

purchasedtheremainingownershipfromCrownBeerIndiaLtd

InBevIndiahasaproductioncapacityof1.9mncasesayearthroughtwocontractbreweringarrangements:

RegentBreweriesinMadhyaPradesh

DasappaandSonsBangalore

InBev

lansto

introduce

Tennents

brand

in

North

India

either

b

findin

a

contract

brewer

or

b

settin

u

a

brewer

tookmanagementcontrolofKoolBreweryinJuly2008

ABInBevIndialaunchesBudweiserbeerinNorthIndiainAugust2009.IthasreceivedagoodresponseintheSouthern

statesandMaharashtra

Thecompanyexpectstocross2.9mncasesinsalesofBudweiserbeerbyDecember2009



27/29

Market

Overview


KeyDevelopments



28/29

KeyDevelopments

Date Development

Jul2009 SABMillerhaschosenShoppingtrip360,aretailsolutionfromInfosysTechnologiesforevaluatingitsinstoremarketingcampaigns

Jun2009 CarlsbergIndiaplanstosetupbreweriesinSouthIndiatobrewitsthreebrandsCarlsberg,TuborgandPalone.Thecompanyexpectstocapture10%ofmarketshareinayear

Mar2009 United

Breweries

Group

plans

to

sell

37.5%

stake

in

United

Breweries

Limited

to

its

partner

Heineken

NV.

Thisdoesnotinvolvesellingofkingfisherbrand

ep e g um ase rewer n ev p anstosetupanewp ant n n ra ra es ,t ecountry s argest eermarketbysales,evenasittakesitsfirstlocallyproducedbrand,Tennents Super,totheneighboringstateofKarnataka

Aug2008 Radico

Khaitan

plans

on

entering

the

beer

market.

The

company

wants

to

tie

up

with

an

international

brand

foritsbeerfora becauseitbelievesthatitwillhel ittobreakintothedomesticmarketfaster

July2008 TheUSD52bnInBevAnheuserBuschDeal wouldisexpectedtocreatetheworldslargestbreweryandcouldpotentiallyseeathirdbigplayeremerginginIndia

May2008 SABMillerIndiaplanstobringDutchpremiumbeerGrolschtoIndiawhichitacquiredin2007forUSD1.2

bn.The

company

is

also

likely

to

launch

Miller

Lite

beer

in

India



29/29

ThankyouforyourtimeForanupdatedreportoranycustomizedresearchrequirements,pleasecontact:

GauravKumar

EMail:[email protected];[email protected]

NetscribesServices:

Phone:+913340646214;+919830309715

InvestmentResearch

EnterpriseMarketResearch

PatentResearch

MarketMonitoring&Competitive

Intelligence

Sales&

Prospect

Intelligence

SocialMediaMarketing

MarcomSupportServices

ContentManagement

Services

yn ca e ar e esearc s en ng e a on or ng

BrandSurveillance

oo ac ag ng erv ces

Forfurtherdetails,visitusat:www.netscribes.com

AboutNetscribesNetscribessupportstheorganicandinorganicgrowthobjectivesofglobalcorporationsthroughacombinationofEnterpriseMarket,Investment&PatentResearch,Market&SalesIntelligence,SocialMediaMonitoring&ManagementandCustomPublishingsolution.

.report;however,Netscribes,Inc.orNetscribesisnotresponsibleforanylossordamagearisingfromuseofthisdocument.ThisdocumentisthesolepropertyofNetscribesandpriorpermissionisrequiredforguidelinesonreproduction.

Date post:	14-Apr-2018
Category:	Documents
Upload:	netscribes-inc
View:	218 times
Download:	0 times

Market Research India - Beer Market in India 2009

Documents