Business Today

Brewing success

Entrepreneurs rush into the microbrewery business as Indians show a preference for fresh beer.

Kushan Mitraand Rahul Sachitanand | Print Edition: December 12, 2010

Hemant Nautiyal, who manages the microbrewery at Howzatt Bar in the upmarket Galaxy Hotel in Gurgaon, is a little vexed that a rival five kilometres away is laying claim to being India's first into the business. For Nautiyal, Rockman's Beer Island can say what it wants but Howzatt was the first to bring microbrewing to India. Maybe he should not bother. There is already a third microbrewery in Gurgaon and at least ten more are coming up in this suburb on the outskirts of the national capital.

This rush of interest in microbreweries is all thanks to a benign excise and licensing regime in Haryana and affluent beer drinkers who are tired of sucking on a bottle. Entrepreneurs in the business enjoy the benefits of lower costs by virtue of saving on bottling and logistics.

Brew Your Own Beer*

Pune recently got its first brewhouse. But most states have not been as encouraging as Haryana. In Delhi, one entrepreneur shut shop and sold the gear. In Bangalore, schoolmates and computer code-jockeys-turned-"beerpreneurs" Narayan Manepally and Paul Chowdhury have faced an unsympathetic state government.

Manepally and Chowdhury, however, have cashed in on the trend of affluent Indians wanting to experiment with their beer. Manepally, based in Portland, Oregon, in the United States, fell in love with that city's culture of home-made brews and tried his hand at making one. A chance meeting with Chowdhury at a school reunion led to the setting up of BeerWorks, Bangalore's first wannabe microbrewery. It makes its signature brew "Geist" in Belgium and imports it at a 120 per cent duty.

Plans for a microbrewery in Goa could change things for the duo. With easy licensing, the business does not have any prohibitive entry barrier beyond the cost of real estate. Equipment for malt milling and mashing, as also kettles and beer maturation tanks of, say, 6,000 litres capacity, cost around Rs1.5-2 crore if imported from China or Vietnam. German machinery costs about twice that. Almost all the malted barley and hops have to be imported from Germany.

But the challenge actually comes later. "Brewing beer is an art and not a science…it looks simple from the outside but you can make horrible mistakes along the way," says Manepally. (See Brew Your Own Beer for the brewing process.) Howzatt and BeerWorks make excellent brews and beer buffs will be pleased as punch to see more entrepreneurs in the microbrewery business. If only the states would allow more "beerpreneurs" to come along.

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