The Indian beer market shrunk during the FY 20. As per our estimate, a number of markets across the country remained sluggish during the second half of last Financial Year. April and May 2019 saw General Elections in India in a phased manner in each State, where dry days were imposed for a few days before and after elections and during election results which had reduced sales. Restrictions on production during this period also curtailed our ability to service market demand. Generally, high-end consumer prices dampened sales during the year.

In addition, due to COVID, retail was completely shut from March 23, 2020 with on-trade outlets being progressive closed in the weeks prior, causing a secular drop in sales for beer and spirits. The last 8 days of March 2020, when normally increased primary dispatches’ happen due to start of the peak season, such dispatches actually became negligible due to lockdown.

It is expected that the initial months of the new financial year will remain very challenging as retail only reopened in many states in India during 1st week of May. Demand is likely to only gradually recover and is negatively impacted due to increased taxation and other impediments. On basis of alcohol content, beer in India can be categorized into Strong and Mild Beers Strong beer which has alcohol content between 6% and 8% dominates the beer market accounting for over 85% of the total beer consumed in India.

The Super Premium beer segment within both the Strong and Mild beer categories has been growing faster than the overall beer industry and has grown at a Compounded Annual Growth Rate (CAGR) of almost 30 per cent over the last three years.

The Indian beer market continues to grow in line with expectations. Industry volumes grew wat a CAGR of about 7% during the last five years. However, during 2019-20, the Indian beer market shrunk slightly over the previous year, in part related to COVID. Compared to the global average per capita consumption of about 30 liters, the per capita consumption in India still hovers around 2 litres1 . However, the scope for growth in India continues to remain positive given the climate, young demographics and increasing disposable income.

Beer has become one of the most popular alcoholic beverages in the country over the past two decades. A plethora of beer brands are available in India to address the palate of various consumer segments. Majority of beer market growth is driven by young consumers, who consider beer a trendy drink, compared to traditional spirits. Brew pubs have emerged in large cities such as Bengaluru, Pune and Gurgaon over the last few years.

These outlets have introduced consumers to new types of beers for example ‘craft beer’. Beer Industry in India continues to remain traditional and is controlled by State Governments. It remains highly regulated with high taxation, restrictions on cross border movements, constraints on production, retailing and other barriers. In many parts of the country, wholesale and/or retail distribution is controlled by State Government monopolies. Also, in over 60% of the markets, State Governments directly dictate the price at which beer can be sold.

Indian beer industry is primarily dominated by strong beer which accounts for over 85% of the total beer volumes sold in India. The beer consumption in the country is inclined towards the southern states which accounts for more than half of the volumes consumed in India. Around 30% of the total consumption is contributed by western region and equally spread between northern and eastern states. India has one of the lowest per capita alcohol consumption rates globally which is an indicator of the prevailing opportunity.

The growth in the beer market is predominantly driven by young consumers and professionals who consider beer as a trendy drink, as compared with traditional spirits. Furthermore, rising disposable incomes, changing preferences and favorable demographics coupled with increasing social acceptance is also anticipated to contribute to growth of the industry in the medium term. India adds over 19 million people to the legal drinking age every year and only one in eight women consume beer, compared to one in two in more mature markets. This presents significant industry growth potential. In 2020 India accounted for consumption of 2,426 million liters or 311 million cases of beer. (1 case is equivalent to 12 bottles of 650 ml each).

The beer consumption increased by 5.4% compared to same period last year. Beer volume is anticipated to record a 2018-23 CAGR of 4.5% to reach 3,024 million or 388 million cases. In value terms, the beer industry was valued at Rs, 519 billion in 2018, which is an increase of 8.0% compared to same period last year. Beer industry is expected to reach a value of Rs. 736 billion by 2023, indicating a CAGR of 7.2% during the same period. Higher growth rate of value compared to the volume growth is an indicator of shifting preference towards premium products. (Source: Euro monitor International)

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Fast Moving Consumer Goods usually refer to non-durable products. Examples include soft drinks, toiletries, grocery items, etc. A customer usually spends a minimum of effort to procure them. However, much of astute marketing activities have evolved from this class of products, where consumers show low involvement, put wider choice and allured by a host of inducements.

Beer is an alcoholic beverage with low alcoholic content (2 to 7 % by volume) produced by the saccharification of starch and fermentation of the resulting sugar. Starch and enzymes used for saccharification are derived from cereal grains most commonly barley, malted to develop essential enzymes and produce the desired flavor, and adjuncts such as rice, sugar, cassava, and corn. Other basic raw materials include hops, which is used mainly to impart a more or less bitter taste to the beer; water, which comprises 90-95% of the product; and yeast, which is used in fermentation to produce ethanol and CO2.

All beers are brewed using a process based on a simple formula. Key to the beer making process is malted grain, depending on the region traditionally barley, wheat or sometimes rye. The beer production consist of 9 steps: Grinding, Mashing, Lautering, Wort boiling, Cooling, Fermentation, Storage, Filtration, Filling.

The basic ingredients of beer are water; a starch source, such as malted barley, able to be saccharified (converted to sugars) then fermented (converted into alcohol and carbon dioxide); a brewer's yeast to produce the fermentation; and a flavouring such as hops. Traditionally there are two styles of beer: ale and lager. Most types of beer will either fall into one category or the other.

History of Beer

History of Beer - Beer has been brewed prior to written history. But ironically, the oldest known recipe set down by man appears to be one for brewing beer, found on stone tablets in Sumer, in southernMesopotamia, the “fertile crescent” or “cradle of civilization” between the Tigris and Euphrates Rivers that includes modern Iraq, northeastern Syria, southeastern Turkey, and southwestern Iran.

Beer is the most frequently-consumed beverage in the world, after water and tea! Some scholars believe that it has been brewed since the sixth millennium B.C.E. By 4000 B.C.E., the Babylonians were brewing at least sixteen varieties of beer (when you see all of the different styles in this glossary, you won’t be surprised at that number). The Pharaohs of Egypt paid their workers with jugs of beer (later, the Romans would pay their legions in salt, leaving us with the phrase, “worth his salt” rather than “worth his beer”).

For those of you who have never been exactly clear on the difference between all the beer types—ale, pale ale, bock, pilsner, and lager.

The histories of bread and ale are interlinked as they use much the same raw materials and the English poet John Taylor called beer ' a loaf out of a brewer's basket.' And although methods of brewing have changed over the years the essential process remains the same even today.

In Europe, monks were the principal brewers of ale, then a sweet and glutinous drink. Not only was ale food but because it was boiled it was considerably safer to drink than water. Beer needed something extra and that was hops which not only added extra flavor but also acted as a preservative.

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