With growing acceptability, popularity of microbreweries and evolving consumer preferences, the Indian beer market has all growth triggers in place for exceeding the projected rate
For alcohol, had any of us thought that there would be a falling graph, ever? The global data suggests that due to the ongoing pandemic, the beer market has seen a shift in consumer preferences towards low and non-alcoholic variants as well as craft beer. Well, who had thought this would change.
The report titled, India Beer Market — Industry Size, Share, Drivers, Trends, Analysis and Forecasts (2019-24), released by Niir Project Consultancy Services, provides a comprehensive analysis on the Indian beer market.
As per the data, India has one of the lowest consumption levels of beer in Asia. Currently, India consumes about two per cent of the total world volumes and has the potential to match the world leader, China, thus opening a vast pool of opportunities for the brewing companies. However, changing dynamics of Indian preferences, favourable demographics, growing awareness and acceptability of alcohol, rising per capita income and evolving cultural attitude are some of the key factors, which are likely to contribute to sales.
No more hard choices
Looking at the manufacturing process of beer, from malting till the end of process at bottling, the beer segment in India is categorised either by fermentation process (ale & lager) or by alcohol’s volume (mild & strong). The Indian industry is majorly dominated by strong beer but new flavourful mild beer are finding their feet on the ground. While strong beer has alcohol content of not less than five per cent, mild beer contains not more than five per cent of alcohol. Even though beer is being increasingly accepted as a social drink and the urban youth in particular favours it as the preferred alcoholic beverage, the Indian market has been highly dominated by hard liquor. However, consumers are now looking for choices away from whisky.
Rising acceptability & home deliveries
It is not just the male populace that is enamoured by beer but women equally enjoy the beverage today. One of the drivers for the beer industry is the rising online alcohol-delivery. A sudden spurt of such portals not only indicates the rising acceptability of alcohol in the country but also the much evolving consumer base. The consumers, who were unable to go to a liquor store earlier, especially women, now purchase their preferred drinks and are in a sweet spot with home deliveries.
However, the industry still faces moral restrictions due to great religious influences. It is still considered to be a forbidden, taboo drink in some parts of the society, detrimental for Indian culture. Drinking alcohol is culturally not accepted in most parts of the country.
Craft beer, the new rage
The Indian beer market has also been experiencing the trend of microbreweries and exclusive beer spots. The emergence of such outlets has contributed to an increased awareness and easy availability of beer in Indian markets. Today, craft beer is a rage in the industry and is booming. The market is swamped with a number of craft beer with new and innovative flavours. Beer consumers are nowadays shifting their preferences from regular mainstream bottled beer to artisanal brews, new fresh flavours and unique local ingredients. A large number of microbreweries are also selling their bottled craft beer. The surge in craft beer sales is intended to drive the beer industry sales to the bubbly top!
The Zero beer
One of the recent trends to hit the industry is emergence of zero per cent beer. Since the consumer profile for beer industry in India is evolving, so is the preference meter and hence the emergence of new varieties. Consumers are now increasingly opting for drinks that are low on sugar, carbs and hence, calories. In view of an increasing demand for such drinks, a lot of brewers have come up with their versions of zero per cent beer to tap the demand from this segment. Players have been branching out into concepts such as non-alcohol brand extensions and surrogate advertising and alignment with sport.
A recession-proof beverage
The report also scrutinises the Indian beer industry with the help of SWOT Analysis, elucidating the strengths of the industry in being recession-proof in view of the fact that alcohol consumption generally remains unfazed by the economic downturn. Also, the growing Indian population serves as a ready customer base for the beer industry. According to the United Nations, India is poised to overtake China as the world’s most populous nation around 2027. Such population growth puts the industry in a comfortable spot. Indian demographics are bound to benefit the industry in the long term with large number of people under drinkable age. With rising urbanisation, escalating disposable income and growing affluent class, there are enormous opportunities for the players to tap into. It is estimated that the urban population in India will rise to 38 per cent of the total population by 2025.
Challenges in growth
However, the industry faces challenges in the form of ban on direct advertising and derisory state of market infrastructure. The industry is also highly taxed, regulated and struggles with multiplicity of taxes. With global bigwigs like Carlsberg, Anheuser-Busch and Heineken entering the country, the competitive landscape of the domestic beer market has changed considerably. However, given the above growth triggers of beer — acceptability, popularity of microbreweries and craft beer and evolving consumer preferences — the industry is expected to reach consumption levels of 3,584 million litres or 459 million cases by 2024.
