India: Imported and local premium and craft brands increasingly dominating India’s beer market

Guinness vanishes from store shelves within days. So do Peroni and Coopers. Imported beer brands like these, as also craft beers and locally brewed premium beers, are increasingly dominating the beer market. Consumers are willing to pay significantly higher prices for a taste of newer ingredients and styles, MSN reported on December 11.

“Only a handful of cases of Guinness lands in India at a time, and these sell within 2-3 days at our stores,” says Nandish, manager of the Bengaluru branch of Tonique, a Hyderabad-based liquor chain.

Guinness is a cult stout beer brand that originated in a brewery in Dublin, Ireland, and is currently not brewed in India. Peroni of Italian origin, and Coopers of Australian origin are also not brewed in India.

Jason Holway, senior market consultant at International Spirits & Wines Association (IWSR), says microbreweries, with their craft beers, and the investments made in beer by international players such as Netherlands-based Heineken and Japan’s Kirin are changing the character of the market. IWSR estimates that the share of premium and super-premium beers (above Rs 275 for 1 litre) in total volumes in India has risen to 11.8% in 2023, from 8.4% in 2019. The share of the value segment (less than Rs 220 for 1 litre) has declined in this period from 31.7% to 28.6%.

While strong beer remains 70% of volumes in India, brewers are trying it all – lighter beers, wheat beers, newer ingredients for flavours. Companies are also trying out unique bottling styles.

Som Distilleries in September launched a new range of beer under its Woodpecker line, to capture the affluent segment of consumers in India. The bottles debuted as India's first twist-cap style. “The new generation, unlike the past ones, do not mind spending extra on a bottle for new and interesting brews. This is happening across tier 1, 2, 3 towns,” says chairman and MD Jagdish Kumar Arora says.

The new line of Woodpecker included a unique cross-malt beer with imported two-row barley and Indian malts and hops sourced from Germany, its label engraved into the bottle and its production needing 30 days of brewing.

Bengaluru-based craft beer maker Geist Brewing Co has a range of wheat beers, pale ales, stouts and lagers, and sells both through its own microbreweries, and as canned versions in other pubs.

“Craft beer, which typically costs 2.4 to 2.6 times more than mass-market options, stands out for its use of premium ingredients such as real hops, orange peel and coriander, adding a richness unmatched by standard beers. People are willing to pay more when they find genuine value,” says Geist Brewing founder and CEO Narayan Manepally.

The market share of premium beers has risen steadily over 2022 and 2023. AB InBev, maker of brands such as Hoegaarden, Budweiser and Corona, is currently the largest player in the premium beer space. United Breweries is a lot more diversified across value and premium segments, with brands such as UB Export in the former and Kingfisher Ultra in the latter.

Manepally says the super-premium craft segment is expanding by 40-42% year on year, far outpacing the 17% growth in mass-market segments,” Manepally said.

But some believe beers can’t be premiumised as much as spirits and wines. Vinod Giri, director general at alcobev industry body Brewers Association of India, says prices of premium beers may at best be 3-4x of mass-marketed beers. “You cannot do too many different things to premiumise beer beyond a point. You cannot mature it for longer. It's seen as a very unpretentious product. Price segmentations will have certain limitations,” he says.

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