Business Today

Ale and hearty

Iconic beer brands go against the global grain.

Shamni Pandeand Deepti Khanna Bose | Print Edition: October 21, 2007

Carlsberg's Jensen: Taste of India
Jorn Jensen, Carlsberg

If it’s India, it’s got to be strong. That’s what some of the biggest global beer marketers have figured, as they target the domestic market. There’s a strong reason: This segment accounts for a little over twothirds of the 132 million cases of beer sold in India. So you have Carlsberg, the Danish maker of the all malt mild beer spiced with unique ‘Carlsberg Aroma Hops’ deciding to first address the strong segment by launching its east European brand, Okocim Palone. South-Asia Breweries, a joint venture between Carlsberg Breweries, the IFU (Industrialisation Fund for Developing Countries, a fund that collaborates with Danish trade and industry), and a group of investors recently acquired Himneel Breweries in Himachal Pradesh for around Rs 36 crore. The JV will also set up two breweries at Alwar in Rajasthan and Aurangabad in Maharashtra at an investment of Rs 85 crore.

Pallone will be positioned as a strong beer against UB’s Kingfisher Strong and SabMiller’s Haywards 5000. But there’s also another strong beer in the fray, this one launched by Budweiser of the US, called Armstrong. It is being brewed by Crown Beer (an equal JV between the Hyderabad-based Crown Beer and Anheuser-Busch International, the makers of Budweiser). According to Stephen J Burrows, President & CEO, Anheuser-Busch, Asia Pacific, who was recently in Mumbai to announce the company’s foray into the Indian market: “Armstrong has been brewed just for India.” Armstrong is being carefully followed up with the iconic Budweiser beer launch that will be positioned in the premium-mild segment again at Rs 70 for 750 ml and around Rs 40 for the pint.

The other global beer biggie, Heineken, has announced its entry in India via its regional arm Asia Pacific Breweries (APB), which has a joint venture with Aurangabad Breweries; APB holds 76 per cent in the JV, and Heineken holds approximately 42 per cent in the Singapore-listed APB. The deal includes an entitlement for APB to increase its stake in Aurangabad Breweries to 100 per cent by the end-2008. Via this entry, Heineken gets hold of local strong beer brands like Cannon 10000, which are sold in Maharashtra and Goa. It also hopes to introduce its Southeast Asian brands like Tiger, Anchor and Baron’s Strong Brew in the Indian market.

Another global brand that’s set to launch in India is Guinness, from the Diageo stable. But that’s a different segment, and at a different price point, of Rs 450 per can. “We have been completely blown away by the demand for Guinness, as it has outstripped our expectations,” says Asif Adil, Managing Director, Diageo India. The unique feature is the can, which the company claims is a technical innovation that has been patented. It has a widget (a nitrogen ball) in it to enable the beer to pour out with the ‘perfect, creamy head.’

There’s clearly a market out there for all these offerings. “The total beer market in India is approximately 8 million hectolitres per annum. This translates into a per capita consumption of less than 1.5 litres, whereas in Russia it is 70 litres and will soon touch 100 litres. This is amazing as the latter was known to be a vodka market, but has seen a dramatic shift. We think India, too, will move this way,” says Jorn P. Jensen, Deputy CEO & CFO, Carlsberg A/S.

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