Beer Market - India

September 2009
Executive Summary

Indian beer market is valued at INR XX bn with volume sales of YY mn cases for FY 20-- - --

The market is expected to grow at an annual rate of a% till 20- -
Market
Foreign brewers are eyeing the Indian beer market which is largely untapped and has growth
potential

Drivers &

Drivers:

PLE
– Huge market potential

Challenges:
– Regulatory Environment

M
– Rising income levels – High tax structure
Challenges – Entry of international brands

SA

With current duopoly situation and entry of foreign players, beer industry in India will quickly
witness consolidation
Trends
Premium beer segment is outpacing the mainstream beer market touching a growth rate of
between b-c%

Emerging new sub-categories of beer with consumers in India open for experimenting

Growing demand for barley and evolving contract farming

More than d% of the market is controlled by two major players Company 1 (u%) and Company 2
(v%)
Competition

With Company 3 acquiring Company 4, it has potential to emerge as the third major player

The market is set to flourish with W new breweries and X international brands in next Y years

BEER MARKET – INDIA.PPT 2

•Market Overview
•Drivers & Challenges
•Characteristics and Trends
•Competition
•Key Developments

BEER MARKET – INDIA.PPT 3

Indian consumers prefer strong lagers which has higher
alcoholic content

Categories of beer
Brewed using bottom-fermenting yeast that ferments slowly at a low temperature to create a
Lager
smoother, mellow beer

Ale

LE
Uses top-fermenting yeast, is a more aromatic and fruity product

P
M
Stout Dark and heavy, with roasted unmalted barley and, often caramel malt or sugar

Mild Beer

Bitter SA
Developed as a sweeter and cheaper alternative to dark ales

Highly hopped for a more dry and aromatic beer. It is pale in colour but strong

Dark Beer Barley is kilned for a long period of time which creates richer flavours

Fruit Beer Fruit, usually berries, is added either during primary fermentation or later

Wheat Beer
Malted wheat and barley are used for this German style beer
(Weizen)

Indian
Indian beer
beer market
market isis dominated
dominated by
by Category
Category XX and
and its
its various
various shades
shades

BEER MARKET – INDIA.PPT 4

With the global beer market being stagnant, the focus of
international firms is on the untapped potential in India
Market Overview Market size & growth
• Indian beer market has witnessed a steady growth of
b% over a decade INR bn
• India is currently among top three markets in Asia in 50 a% x

E
w
terms of expected growth rates 40

L
v
• There are X units manufacturing beer in India under u

P
30
license from the Government
• The market is set to flourish with Y new breweries 20

SAM
and Z international brands in the next U years
• Foreign brewers are eyeing the Indian beer market
which is largely untapped and has growth potential
Growth in per capita beer consumption
10
0
2008 2009
Segment share (volume - wise, 20--)
2010e 2011e

Population (mn) Consumption (litres) YY mn cases

q
1.200 q 1,5
p
Segment 1
900
1,0 l%
600
0,5
300
m%
0 0,0
Segment 2
2000 2005 2010

BEER MARKET – INDIA.PPT 5

Drivers & Challenges - Summary

Challenges
Drivers
Regulatory Environment
Huge market potential
High tax structure

Entry of international brands

Rising income levels

BEER MARKET – INDIA.PPT 6

Characteristics and Trends - Summary

Rise in barley prices and Increase in merger and

emergence of contract farming acquisition activity

Characteristics
and Trends

New forms of beer being Premium beer market outpacing

introduced in market mainstream beer market

BEER MARKET – INDIA.PPT 7

Premium beer segment is outpacing the mainstream beer
market touching a growth rate of between b-c%
Overview Market share of premium beer (volume)
• The Indian beer industry is moving towards
premiumization Type 1
• Lifestyle changes and increasing western culture in u%

segment

P E
India are some of the factors driving the premium

L
• Many domestic and foreign premium brands are

regular brands

Premium brands in Indian beer market SAM

finding the interests of young urban working class
• Premium beers are priced about a% higher than

Growth rate of premium beer

v%
Type 2

0 10 20 30 40 50
Company 1 Brand 1, Brand 2 and Brand 3 %

Type 1 p q
Company 2 Brand 4, Brand 5 and Brand 6

Other Premium Brand 7, Brand 8, Brand 9 and

Brands Brand 10 Type 2 r s
Minimum
Maximum

BEER MARKET – INDIA.PPT 8

Indian beer market presents a huge growth potential in terms of
volume, categories and variants
Competition Market share (20--)
• The Indian beer market is dominated by X players
controlling more than a% of the market Others
• Strong beer is predicted to grow faster as it is d%

spirits

P E
perceived to offer value for money alternative to

L
• With Company 1 acquiring Company 2, it has b% Company 3

Indian beer market

SAM
potential to emerge as the third major player in the

• The future of beer market in India looks positive with

the entry of many international players
Company 4
c%

Market Share (segment wise)

• Beer sales will increase along with increasing number
of brands and sub-categories in India
• Existing players like Company 3 and Company 4 are j%
i%
planning to expand their range of products g%
e%
• New players like Company 5 and Company 6 are
bringing their internationally renowned brands to
India
f% h%
• The market is set to flourish with Y new breweries
and Z international brands in the next U years Company 4
Strong Company 3 Mild
Others

BEER MARKET – INDIA.PPT 9