Beer was able to grow in spite of additional regulation as it becomes a more socially acceptable beverage, particularly amongst the youth in metros. The market experienced increasing premiumisation as strong and imported beers became more affordable. Despite these growth factors beer still only accounts for a small amount of total alcohol consumption in India, however beer still only represents a small amount of total alcohol consumed.
- Beer recorded a growth despite regulatory hurdles in 2014
- Increases in disposable incomes, youth population, and changing lifestyles resulted in social acceptance
- Increasing affordability for strong and imported beer are the key factors driving the growth in premium brands
- Demand for beer is expected to increase further in 2015 with plenty of room for more licensed outlets
- Innovation and packaging are the key points which the beer companies are focusing on
Canadean's India Beer Market Insights 2015 Report provides a complete overview of the India beer industry structure offering a comprehensive insight into historical background trends, 2014 performance and 2015 outlook. Covering total market (on and off-premise) the report details:
- 2010-2014 actual detailed beer consumption volume data by segment, brand, brewer, packaging and distribution (on-/off-premise), with 2015 forecasts
- Top line production, import, export and consumption volume from 2004-2014 with forecasts for 2015
- Value by distribution channel 2010-2014, with 2015 forecasts
- 2013-2015 selected on-/ off-premise retail prices
- Details of key beer new product launches in 2014 by company
- Overview of the competitive landscape in the beer market, with analysis of key company performance
- Insightful and valuable analysis of the drivers behind both current and emerging trends in the beer market
- Data is also available in excel format
- Gain an in-depth understanding of the dynamics and structure of the India beer industry, from the latest competitive intelligence of both historical and forecast trends to enhance your corporate strategic planning
- Evaluate the current emerging trends and future growth opportunities in the India beer market to support your brand development and marketing initiatives
- Understand volume vs value trends and identify the key growth opportunities across the super-premium, premium, mainstream and discount segments to best target profitability
- Analyse domestic and imported beer brand performance and determine the key trends driving consumption preference to develop a competitive advantage
- Interrogate the unique granularity of our data to analyse the market on a variety of levels to make well-informed decisions on future threats and growth prospects in the marketplace for your company
- Use our new powerpoint add-on to quickly absorb a succinct summary of the key trends in the India beer market
- View a selection of the key 2014 product launches and identify competitor activity and product innovation and differentiation prospects
2 EXECUTIVE SUMMARY
3 MARKET CONTEXT
3.1 Market Context
3.2 Market Parameters Tables
3.3 Legislation and Taxation Tables
4 MARKET BACKGROUND BRIEFING
5 MARKET UPDATE
5.1 Market Commentary
5.2 New Products and Photo Shots
5.3 Packaging Trends
5.4 Beer Pricing Tables
5.5 Beer Data Tables
6 BREWER PROFILES
7.2 Methodology and Product Definitions
LIST OF FIGURES
Figure 1: Beer Leading Brewers/Importers, 2014
Figure 2: Beer Consumption by Pack Material/Type, 2014
Figure 3: Beer Distribution by Channel, 2014
Figure 4: Beer Consumption by Price Segment, 2014
Whilst the Indian beer market no longer enjoys the double-digit growth exhibited until 2010, 2012’s growth of almost 9% represents a marked improvement on the previous year, where tax increases precipitated higher prices.
The Indian market continues to be dominated by strong beers, which are steadily surpassing the growth rate of regular lagers, and leave virtually no market for other types of beers such as stout, pilsner and white beer. Indeed, a telling theme in the premium segment is that the producers in this segment originally offered regular beers, and have subsequently launched stronger, premium products, such as Carlsberg’s Elephant and Budweiser’s Magnum.
The beer market, according to consumer specialist Canadean’s new report – India Beer Market Insights 2013 – is set to continue steady growth from a low per capita base, driven by the trend amongst younger generations of consuming alcoholic beverages as social restrictions ease.
For organizations that have a stake in the Indian beer market, a proper understanding of the broader context of life in India, and beer’s place in it, is paramount to successfully capitalizing on the opportunities the market presents.
The Indian economy is under stress as GDP growth has slowed to a record low, whilst the country is suffering with a high fiscal deficit, adverse exchange rates, and high costs of oil. This has led to current account deficit and
inflation. Despite this, GDP growth is a still-respectable 6%, and although the manufacturing sector may be experiencing a slowdown, the rural sector offers some stability.
Early rains in 2013 could affect sales, as whilst India is predominantly tropical, its north does suffer cold in winter, and this could have a detrimental impact on beer sales during the colder months. Heavy rains can also plague the west coast and north-east, and so beer sales may suffer here as well.
Despite these factors, growth in per capita beer consumption is almost inevitable thanks to its currently low levels.
The tropical climate demands a diet rich in salt and starch mixed with fluids for rehydration, and in many parts of tropical India, rice, spices and salt are staples. In the colder north however, where there is significantly less rainfall, there is greater dependence on wheat.
The dominant combination of salt and spice in the consumer palate does not encourage sweet and syrupy beverages as accompaniment to a meal, and consequently, beverage brands must cater their flavors to local needs.
Beer is seen as exotic to Indian consumers in comparison to spirits, which have a local history. Moreover, as beer should ideally be chilled, its popularity suffers in rural areas where this is difficult. Interestingly, in India, the alcohol content tends to take precedence over taste in light of its emerging as an alternative to spirits; beer is expensive in this respect – relative to spirits – and so beer consumption has shifted to strong beers.
Whilst legislation on beer is made and implemented at the local state level (with the exception of legislation giving approval to foreign investment in the industry), beer companies must cope with a plethora of rules and regulations in India, none of which follow a uniform pattern. With the exception of two states, this has seen relentless year-on-year tax increases on beer across India, with the resulting high prices having a direct impact on sales.
Beer companies are subject to state-imposed controls, which serve as an entry barrier: because of the strict and complicated system of regulation in the Indian beer industry resulting from the patchwork of laws brought about by differences at state level, very few companies can successfully enter the industry. This therefore protects existing players from competition, with Carlsberg the only company to have entered the market and managed to cope with the environment.
The rate of excise duty on beer in India varies by state, but typically varies from between 20% and 70%. However, there are exceptions: in 2011, the excise duty for strong beer in Maharashtra rose from 150% to 175%, and from 125% to 150% for regular beer. Sales taxes also tend to lie between the 20-70% band, and overall, taxes account for around 200% of the cost of beer manufacture – but this does not include collections on other sources, such as the licensing of shops and bars.
Import duties are set at a prohibitive 150% of CIF (Cost Insurance and Freight), and is collected by the central customs; states also levy charges, so imports are low.
With the challenging cultural and economic environment for Beer in India, brewers must be highly sensitive to current and emerging trends in the market in order to capitalize on revenue boosting opportunities.
Strong Beer Drives Growth
Indians are customarily spirit drinkers, with beer only being introduced to the country by the British a few hundred years ago at most. Until quite recently – a decade or so – beer was an urban and fairly exclusive beverage, drunk by the higher income population groups; the launch of strong beers has, however, seen beer consumption spread to non-urban areas. The high levels of tax have acted as a serious impediment to growth however, and per capital consumption is extremely low.
Resistance to New Beverages
Indian flavor preferences are difficult to change, and this change is apparent in the beer market: SABMiller has been unable to position any of its international brands within the market, whilst multi-national entrants are having to launch strong beer brands in order to build business. These include Budweiser, Heineken and Carlsberg, but they have been driven to enter the economy segment as well to sustain business.
New Investment in Breweries
Recent developments in the beer industry are rooted in the Indian government’s liberal policy towards foreign investment. Whilst SABMiller had to take the route of acquiring a series of Indian breweries, newer entrants such as AB-InBev and Carlsberg have invested in ‘greenfield’ (newly constructed) breweries. Meanwhile, a number of regional brewers are investing in capacity expansion.
The material was prepared in August, 2013.
Table 1: Data Revisions Summary
Table 2: India Population Size and Growth, 1986-2017F
Table 3: Asia Population Size and Growth, 2004-2015F
Table 4: India Economic Indicators, 2006-2016F
Table 5: Asia Commercial Beverage Consumption - Per Capita, 2004-2015F
Table 6: Asia Commercial Beverage Consumption - Per Capita % Share, 2004-2015F
Table 7: Asia Commercial Beverage Consumption - Per Capita Growth, 2005-2015F
Table 8: Taxation
Table 9: Beer Key Facts
Table 10: Top 10 Beer Brands - Volume, 2012-2014
Table 11: Top 10 International Premium and Superpremium Beer Brands - Volume, 2012-2014
Table 12: Licensed Brand Owners and Licensees
Table 13: Beer Market Valuation (Local Currency), 2013-2015F
Table 14: Selected Consumer Beer Prices: On-Premise, 2013-2015
Table 15: Selected Consumer Beer Prices: Off-Premise, 2013-2015
Table 16: Beer Production/Trade/Consumption 000 HL, 2004-2015F
Table 17: Beer Production/Trade/Consumption - Growth, 2004-2015F
Table 18: Consumption of FABs and Cider (000 HL), 2004-2015F
Table 19: Beer Foreign Trade By Country (Imports), 2011-2015F
Table 20: Beer Foreign Trade By Country (Exports), 2011-2015F
Table 21: Beer Market Valuation (Local Currency), 2013-2015F
Table 22: Beer Consumption by Local Definition, 2011-2015F
Table 23: Beer Consumption by Standard Price Segmentation, 2011-2015F
Table 24: Beer Consumption by Alcoholic Strength, 2011-2015F
Table 25: Beer Consumption by Type, 2011-2015F
Table 26: Beer Consumption by Geographic Scope, 2011-2015F
Table 27: Beer All Trademarks, 2010-2014
Table 28: Beer Brands by Local Definition, 2010-2014
Table 29: Beer Brands by Standard Price Segment, 2010-2014
Table 30: Beer Brands by Alcoholic Strength, 2010-2014
Table 31: Beer Brands by Type, 2010-2014
Table 32: Imported Brands by Origin, 2010-2014
Table 33: Beer Licensed Brands, 2010-2014
Table 34: Beer Trademark Owners, 2010-2014
Table 35: Beer Local Operators, 2010-2014
Table 36: Beer leading Brewers/Importers, 2010-2014
Table 37: Beer Consumption by Pack Mix: Refillability/Pack/Size, 2011-2015F
Table 38: Beer Distribution: On vs Off Premise, 2011-2015F
Table 39: Mohan Meakin Brand Volumes 2010-2014
Table 40: SABMiller India Brand Volumes 2010-2014
Table 41: United Breweries Ltd, India Brand Volumes 2010-2014