CRAFTY BREW
If the first wave
of craft beer was led by brewpubs, the action is now shifting to canning and
bottling it to reach more people
Your first sip of craft beer is like meeting your
first girlfriend or boyfriend — it’s the same energy, the same awesomeness,”
says Narayan Manepally, 55, pausing to inhale the aroma of the Kamacitra, the
new IPA (India pale ale) from his craft brewery, Geist, before he takes a swig
of it at a pub in central Bengaluru on a rainy Wednesday evening. While the
story of how Bira 91 was brewed initially in Belgium and bottled and sold in
India is familiar, Geist had trodden the same path almost a decade ago.
“We were probably the first to do reverse outsourcing
in 2008-09,” says Manepally, who worked with Intel in Oregon, US, as an
electrical engineer before returning to Bengaluru. There came a point in 2013
when a spiralling rupee meant it was no longer viable to import and sell their
brews. In 2017, they revived Geist, setting up a full-fledged brewery in
Karnataka where they brew small batches of craft beer and distribute it to over
55 locations in the state, with plans to eventually bottle and sell it — the original
dream.
While the Geist team’s dream is currently on the
drawing board, across the country, entrepreneurs and brewpubs are rolling up
their sleeves to make it happen: they are pouring flavourful brews into cans
and bottles and kegs so that you can sip on them at a party, a beach or your
couch. In Mumbai, White Owl has wound up its four-year-old brewpub in Lower
Parel and will focus solely on just selling packaged craft beer, while
Independence Brewing Co in Pune is looking at the third quarter of 2019 to get
their beers into bottles. In Bengaluru, the original beer capital of India,
three of the best known brewpubs — Arbor Brewing Company, Toit and Windmills
Craftworks — are preparing to launch packaged craft beer. Meanwhile, those
already in the packaged craft beer business are looking to expand their reach,
such as Delhi-based Simba, which launched in Bengaluru last week, and White
Rhino, which is looking at having their beer in all major Indian cities over
the next two years.
Admittedly, the craft beer market remains small, at
less than 1% of India’s beer market, pegged at 4.7 billion litres in 2017 by
Business Monitor International. For comparison, in the US, where craft beer is
considered to have originated, there are over 6,000 craft breweries and 12% of
beer sales is from craft.
But change is afoot in India. Over the last five
years, the number of microbreweries in India has jumped from 20 to 120,
according to the Craft Brewers Association of India, while a Deloitte report
estimates the craft beer segment to be growing at over 40% a year, aided by a
young, well-travelled population with higher disposable incomes. If the first
wave of craft beer in India was about setting up brewpubs, the action has now
shifted to selling packaged craft beer.
“The brewpub model has worked in the metros. So it
makes sense to take it to the next level, which is production in the form of
kegs, bottles and cans,” says brewing consultant John Eapen. “We saw this
happening in the US, which is a more mature market. Home brewing inspired many
brewers, some of whom set up brewpubs while others moved on to packaging. With
the latter, you can reach more people.”
Gaurav Sikka, managing director of Arbor Brewing
Company, agrees, as he explains the rationale behind the company’s new foray.
“We started thinking about what to do next and were exploring different
options. We finally decided to launch our beers in cans because it would give
us a wider access,” says Sikka. On October 1, Arbor will be launching three
varieties of its canned craft beer in Goa, brewed at a new plant there, before
entering Bengaluru and Maharashtra. The brewpub sells close to 3 lakh litres a
year and is looking at selling under 10 lakh litres from its Goa plant.
Arun George, founder of Toit, one of the first brewpubs
off the block, says packaging their beer had been on the cards from the
beginning. “This was always the plan — Toit craft beer in bottles/cans
available in retail shelves all over the country and possibly abroad. It’s
taken us longer than we initially expected, but in a way this probably worked
in our favour. We get to learn from mistakes others have made and fine-tune our
plans accordingly.” Toit is building its production facility in Bengaluru but
George declined to share the timeline of the launch just yet.
For Javed Murad, founder of Mumbai-based White Owl,
it was about focusing 100% on selling his craft beer, which is why he is
planning to wind up his four-year-old brewpub in Lower Parel in the coming
months. “We have started selling bottles in Goa and Bengaluru, and multiple
geographies are in the pipeline in the coming few months,” says the 36-yearold,
who was introduced to craft beer while he was living in the US. The numbers
speak for themselves: Murad says White Owl now sells at over 600 points-of-sale
through bottles and kegs, a huge leap from 90 in December 2017, when it was
only on tap in Maharashtra. Independence Brewing cofounder Shailendra Bist,
too, confirms that bottling is the next push for the company which is set to
open its third brewpub next month. “We want our beers to be widely and easily
accessible and bottling is the way to go. We would try markets like Goa,
Mumbai, Pune and Bengaluru.”
In Bengaluru, the most ambitious plans are perhaps
those of Windmills Craftworks, which is looking to sell across India and even
abroad the beer brewed at the plant it is setting up in Goa. It also wants to
set up brewpubs in Hyderabad, Mumbai and Pune. “We will be selling our
Hefeweizen (wheat beer), coconut porter and Czech-style pilsner in cans and
another two varieties in kegs,” says Ajay Nagarajan, CEO, Windmills. To fund
the expansion drive, the company is in talks to mop up ₹100 crore by the end of October.
Hops On
Rahul Singh, founder and CEO of beer chain Beer Cafe,
divides the current rush in packaged craft beer into two. “There are two kinds
of people doing this: those who are brewing craft beer in South and Central
India to get a national footprint, and another crop of importer-distributors,
who are wholesalers of popular imported brands and have begun contract
manufacturing in Europe to sell in India.” Singh attributes the enthusiasm of
the latter to what he calls “the Bira effect”.
Launched by Ankur Jain, Bira 91 manufacturer B9
Beverages has raised over $100 million from venture capital funds like Sequoia,
expanded to markets abroad and claims to have cornered 5% of the domestic beer
sales. At this pace of growth, whether Bira can still be considered craft is
contentious. According to Rohit Parwani, secretary of the Craft Brewers Association
of India, a craft brewer must be small (annual production of 10 lakh litres or
less), independent (less than 25% of the craft brewery is owned by an alcohol
industry member, which is itself not a craft brewer) and traditional (with beer
flavours derived from traditional or innovative brewing ingredients and their
fermentation). This is more or less like the definition in the US, but in India
nothing is set in stone for the nascent industry. Hence, if beer behemoth
United Breweries sticks to its plans of entering the packaged craft beer market
by the end of 2018 as announced, there is no law to prevent it from using the
craft beer label, which it might not have been able to in the US market.
“Craft beer is a misused term here. For some, it has
come to mean beer that has a novel taste compared to what is mass-produced,”
says Beer Cafe’s Rahul Singh. Bira itself, he says, now positions itself as a
maker of “flavourful beers for the new world”, which certainly sounds apt. (
Jain of Bira did not respond to multiple calls and messages from ET
Magazine.) But even rivals acknowledge that Bira’s marketing blitz has
helped in creating awareness about the category. “Bira did a phenomenal job of
scaling the brand in a few years and telling people that there’s more to beer
than lager,” says White Owl’s Murad.
White Rhino founder Ishaan Puri, a quantitative
analyst with BlackRock in New York before he donned the brewer’s hat, says one
needs to get into packaging to be able to scale. But he is emphatic that this
will not be at the cost of quality, a word that comes up often in the
conversation. “Craft can either be a philosophy or a buzzword. We promise and
deliver craft,” he adds. Apart from the National Capital Region, White Rhino is
sold in the UK and Nepal, with plans to sell it in the US and Southeast Asia as
well. “We want to be in all major Indian cities in the next two years,” says
Puri. Simba, which just launched in Bengaluru, is looking at entering Mumbai
next, which would make it the seventh state it is selling in. “We sold a
million cases last year. We are looking at doubling that this year,” says
founder Prabhtej Bhatia.
Amid this raising of mugs to the new buzz in the
craft beer market, one of the pioneers, Pune-based Doolally, remains cautious.
“It is a risky venture. There’s a lot of red tape involved if you want to sell
beer made in Karnataka in Maharashtra. Then there’s the cost of bottling and
the lack of a cold chain supply in India,” says Doolally cofounder Oliver
Schauf, adding that it has no plans to get into packaging at the moment. The
lack of a proper cold chain is a challenge, particularly when it comes to a
perishable commodity like craft beer which has a shelf life of three months at
the most, acknowledges Windmills’ Nagarajan. For instance, government-owned
warehouses, which producers have to compulsorily sell to in some states, are
not refrigerated. “But we hope to collectively change the retailers’ mindset,”
he says. Margins are also lower if one sells packaged beer than at one’s own
brewpub; volume and scale are, therefore, crucial to become profitable.
Maintaining consistency in flavours is another challenge in packaging.
Those plunging into selling craft beer in cans and
bottles are aware that it’s a gamble. And not everyone might succeed particularly
if, as Beer Cafe’s Singh says, one does not have the deep pockets to support a
business that needs a lot of working capital and cashburn for brand building.
But for those passionate about it, the goal seems to
justify the risk — to have as many people as possible swigging flavourful beer
that has not been produced at industrial scale. And for beer enthusiasts in the
country, there has been no better time to take a swig of craft from the comfort
of their own homes.
indulekha.aravind@timesgroup.com
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