Getting your hands on a bottle Bira 91 White in any of the 7 cities it is available in India, is a matter of luck. Such is the fan following of the two-year-old craft beer that it even after production was more than doubled last year, it goes out of stock in most places within hours.
Buoyed by the success of the white, and to a lesser extent the Blonde, Bira91's other product in the market, 36 year old Ankur Jain, the founder director of B9 beverages, last month launched two more products, a wheat based strong beer Bira91 Strong aimed at taking the battle to the Kingfishers and Tuborgs of the world, and a low calorie beer Bira91 light for those who wish to avoid the notorious beer belly. On a hot summer afternoon, Jain speaks to BT's Sumant Banerji at his funky Connaught Place office about his vision to not only capture the beer market in India, but take it global.
BT: Bira is known for its premium frothy light beers. What made you launch a Bira Strong?
Jain: The logic behind strong was not just that it is the biggest market in the country, but also that the consumer that picks up a strong beer in India does so on the basis of how high the alcohol content is. We wanted to add the element of taste to that mass market. Bira strong is completely different from what everybody else is doing in the market. It is a wheat beer.
BT: Is it a departure from what you have been doing-graduating from the high growth yet niche craft beer category to the mass market segment where you will compete with the big boys of the market like Kingfisher, Tuborg or Fosters?
Jain: We always wanted to take on the big boys in the market. But at the end of the day it is really about the consumer and what he likes. So what we figured out with the premium consumer is equally applicable in my view to the mass market consumer too. We feel there is a big gap in the market for beers that are taste oriented in the strong beer category.
BT: So it is a result of a number of blind tasting sessions in the market?
Jain: It is based on a mix of research and intuition. We felt this is what the consumer will gravitate towards.
BT: How do you achieve scale because that is a challenge for any start-up?
Jain: We are looking for acceptance in the first quarter. If we find that then the world opens up for us and we can build on that. With the strong, we are expanding into 15 cities in the first quarter and the light version into four cities in the same time frame. So with the strong beer, we are starting with 7 cities that we are already present in and ending with 15. We do plan to be available pan-India but probably not this year but end of next year.
BT: Where do you stand today?
Jain: Last year we sold about 5 lakh cases. This year, like I mentioned, we are targeting sales of 20 lakh cases, which is a four-fold increase. We don't have a fixed break up for which beer will sell how much. But right now, Bira White is the largest selling beer for us. It is a 2:1 ratio between White and Blonde. I would assume Bira strong will have similar sales to that of the blonde. And the low-calorie beer will be niche. So at the end of the year, our existing portfolio-White and Blonde-will probably account for 60-65 per cent of our sales while the new beers would account for the rest with the strong out selling the low-calorie version.
BT: How do you avoid a repeat of last year when there was an acute demand-supply mismatch and consumers were left high and dry especially for Bira 91 White?
Jain: We have learnt our lesson and now know how to plan ahead of time. Our projection for sales in 20 lakh cases this year on a production capacity of 45 lakh cases. Unless we are a victim of our own success and beat our own estimates by two to three times-which is the kind of situation that happened last year, we should be able to serve our customers well. If we end up repeating that mistake, then basically it would mean we would have to re-look at our production capacities and be even more aggressive.
BT: Most premium craft beer brands enjoy a premium pricing and hold on to that price as a differentiator. But you did just the opposite.
Jain: We did reduce prices in 2015, as we were initially importing the beers from Belgium. When we started brewing them in India we passed on the benefit to the market and cut the prices. We want to give a product that is well designed, tastes good, and at a pricing which is accessible. We do not want to be a luxury brand but an accessible Indian brand.
BT: Your strong beer customer will typically be very different from your existing consumers.
Jain: Strong category has a very wide profile of consumers, from a 19-20-year-old college going kid to a 50-55-year-old. My consumer is someone who is open to new brands. Somebody who has a young mindset and it is not about the age. From an identity standpoint, the competitors in the strong category today is like a pack of 'beedi' to a pack of cigarettes for a Bira Strong.
BT: Which is your biggest market in India and how do you plan to expand production?
Jain : The biggest market for beer in India is Maharashtra. We are there in Bombay, Thane and Pune. But we are going bigger in the state this year. We are building our new brewery, which would be our second in the country, in Nagpur. It would be open in another 2 weeks. The other one is the one that is operational in Indore. Another one in Karnataka is in the plans but it is a greenfield facility which would be operational only sometime in 2018.
BT: What was the rationale behind venturing into the US market? Are you importing beer from Belgium there like you initially used to in India?
Jain: Our ambition is to become the first global brand from India. In that ambition, New York City was the first city we got into because it gives us international validation. We will be adding Boston and New Jersey to the list in July. It is the toughest market in the world for craft beer. We are shipping the beer straight from India.
BT: How much do you sell through bars and restaurants versus liquor vends across the country?
Jain : Last year. Around 70 per cent of our sales came through bars and restaurants which should become 50 per cent this year. Going forward, I think bars and restaurants should contribute 35 per cent of our sales while a majority should come from liquor vends and shops.
BT: What is your current market share?
Jain: We have a 2-3 per cent market share in the overall beer market in India. But we are a premium beer brand-a 330 ml bottle costs over Rs 80-and we are a strong no. 1 or no. 2 in premium category across the country. In fact in bars and restaurants, we are two times bigger than any of our competitors-Kingfisher Ultra, Budweiser, Heineken, Carlsberg etc.
BT: How many new beers would you bring into the market in future and how do you decide which beer to launch?
Jain: Our intent is to bring in at least 1 new beer every year. This year we have added two. There are gaps in the market that are very obvious to even an objective consumer. For example, there is no low-calorie beer available in India so a consumer who loves to have a beer but is health conscious does not have a choice. So with our low-calorie beer, which actually has less than 100 calories per bottle, we are targeting people like him.
BT: There are so many stories in the country on liquor mafia in states controlling the distribution and retail of liquor and not allowing newer players to enter. As you seek to move beyond the metros and tier I cities how would you counter that?
Jain: It used to be a challenge about 10 years ago. The consumer today is so evolved that a shop cannot stock only 3-4 types of beers. Even tier II and III town markets have seen a lot of evolution. Earlier there were a number of small regional brands that used to dominate these markets. A few years ago for example, if you walked into a shop in a small city in Rajasthan, all that you would get was a Godfather or a Golden Eagle for beer. Now, the consumer would not be happy with those brands and would go to the next shop where he would get a Kingfisher or a Tuborg. So this way, the other shop loses business and the voice of the consumer prevails. The consumer defines what gets stocked and so these regional players have all died ceding market share to a Kingfisher or a Tuborg.
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