Page 51 - Forbes - India (January 2020)

bira 91

nishal lama for forBes india
and super premium segment. From 0.8
million hectolitres in 2013, the volume
pole-vaulted to 2.4 million hectolitres
in 2018 and is pegged to almost double
in three years, which in value terms
would be equivalent to $2.7 billion.
Last month, United Breweries
(UB), India’s largest brewer, launched
Ultra Witbier, its first non-lager
beer, in Karnataka and Goa. Ultra
Witbier 330 ml is priced at par
with Bira White and Simba Jungle
Wheat in Bengaluru. Last year, UB
added a non-alcohol variant called
Radler under the Kingfisher brand.
Last October, AB InBev—the
world’s biggest beer maker with
brands such as Budweiser and Corona
under its belt—inked a deal with The Boom is helping Bira 91 establish its presence in smaller cities and towns
Indian Hotels Company Limited to
launch a chain of 15 microbreweries became a victim of our own success,” have been the death blow. It was a
over five years to sell craft beer. It recalls Jain. The company couldn’t painful period,” says Jain, sharing his
also plans to invest `1,000 crore into predict the overwhelming demand. In biggest learning: The need to have a
its Indian subsidiary. In 2015, AB the business model pitched to Sequoia five-year strategic plan rather than
InBev acquired SABMiller for $107 for funding, the company had done its quarter-on-quarter execution. “We
billion, but it took it over two years math on the assumption that it would decided to expand our capacity,” 51
to complete the full acquisition of the be able to sell one case a week or four he says. B9 Beverages now has four
British-South African beer maker. cases in a month at least. B9 Beverages plants; the most recent one in Mysore
Last year, the Belgian-Brazilian ended up selling 500 cases a month. started shipments a month back.
brewer launched Budweiser 0.0, Poor anticipation in demand was The second mistake, Jain says, was
a non-alcoholic beer in India. made worse by a rickety supply in delaying the foray into Tier II and
Though the fight is getting intense network. While the company was beyond markets. “I had this bias of
in the premium segment, Jain is initially dependent on imports, a south Delhi kid that outside Delhi,
focusing on the mass (strong beer) transition to domestic production Mumbai or Bengaluru there are no
market. “We have an opportunity was set to start by early 2016. It takers for great products,” he says.
to define what beer means for this didn’t happen. While an agreement The faulty assumption delayed the
generation,” he says. The redefining with a supplier in Rajasthan feel expansion plan. “Had we started a
journey, though, has had its fair share apart, an Indore plant—which was year earlier, we would have been in a
of mistakes and learnings. In fact, the scheduled to open by April 2016—got much better position today,” he says.
brand had a near-death experience delayed by six months. “The entire What spoils Bira 91’s report card
after a heady summer of 2016. “We season was gone. It might well are its mounting losses: From `12.32
crore in fiscal 2016 to `202 crore
How they Stack Up Still in the Red (Losses) three years later. Jain is keen to fix
(Market share by volume) 250 the problem. In the beer world, one
`202 needs to have a long-term approach
United Breweries 52% crore
200 to business. “And this can’t be driven
AB InBev and 18% by consistent losses over multiple
SABMiller
150
Carlsberg 14% `101 years,” he says, adding that the
crore company plans achieve breakeven
Som Distillery & 3% 100
Brewery at the Ebitda level by fiscal 2022.
Bira 91 2.7% 50 `12.32 `55.06 What keeps Jain on his toes is a
crore
crore
Mohan Meakin 2% four-letter ‘F’ word. “Fear of failure
0 FY16 FY17 FY18 FY19
0 10 20 30 40 50 60 is constant. The larger the business,
source Budweiser ipo prospectus and analyst reports source filings and reports the bigger the fear,” he says.
january 31, 2020 • forBes indiA