Nothing more needs to be said.
Beer has traditionally been marketed as a macho man’s drink. If you recall, Haywards was marketed as a strugglers drink, a macho drink but never a sophisticated drink. That market was always for wine and scotch. No wonder then 85% of the beer market in India is still strong beer. But that is set to really change fast. Another analogy that comes to mind, is how the Honda Activa which was once considered for the lack of a better word a “pussy” bike, is now really making the commuter bike run for its money.
Here is a list of 330 ml prices of various beer brands in the State of Telangana. For this discussion, I am ignoring local brands of beer like Haywards, Kalyani, Hunter etc.
- KF Premium – 60
- KF Ultra – 80
- KF Ultra Max – 90
- Budweiser – 80
- Carlsberg – 80
- Heineken -100
- Bira Blonde – 120
- Bira Strong – 120
- Bira White -150
- Amstel – 140
- Corona – 210
- Sol – 240
- Hoegarden – 280
- Edelweiss – 300
- Stella – 310
- Leffe – 320
If you notice the Pre-Bira Era had a 60-80 rupee beer market and a 200-300 rupee beer market with a huge gap in between. Much like the gap in motorcycles, which Royal Enfield has filled. The Mid-Luxury Market. At 120-150, Bira costs 2x as much as a KF Premium/ Ultra. Taste wise, it isn’t really 2x better, but at the current state, it definitely is a 2x cooler brand than Kingfisher.
Kingfisher kind of changed the beer scene in India and became synonymous with beer. With its de-facto address in Goa no one has been able to challenge the brand, until NOW. It reminds me of the apple ad, where apple was rebelling against IBM.
Brand wise, i really think Bira is doing really well. Buttttt, the balance sheet is in deep red. They are likely to close this year with about 225 cr sales in India and have decided to go to NRI populated cities like New York, London, Singapore, HK and Dubai. Apparently, they are taking “Made in India” a bit too seriously 😉 But really, it is good beer and I think with the current level of Patriotism, an NRI will drink Bira with pride. To me, ignoring the finances, it is a great strategy.
Bira, is an uber metrosexual brand that actually looks down upon the strong beer. It’s a clear expression of “Brains over Muscles”.
While I’m sure Bira has a huge share of voice currently, and if they move with the same gusto, they will have a huge share of wallet too in the future. But, they seem to forget that just because they’ve discovered a gap in the market, they will get to keep it forever. The market isn’t the moon.
Re-Enter Kingfisher.
While Bira currently sells about 225 cr of beer this year, Kingfisher is about to close this year with about 6000 cr sales. Not too much difference, just about 30x 😉 My point here isn’t that the sales of the past cannot be disrupted, but its about how Bira will benefit Kingfisher.
Kingfisher is an elephant, and elephants can’t really dance due to their sheer size. But, when they begin to run in a particular direction, there is little that can stop them.
Till now, a common man thought of Ultra as an expensive beer as it was 33% more expensive than KF Premium. Suddenly the base rate for expensive beer is now 120, making it a 100% more expensive. KF Premium which was the base case for a branded beer, has now been moved up to KF Ultra. Bira has unknowingly brought inflation into the KF brand stable. KF Premium is moving to KF Ultra and KF Strong is moving to KF Ultra Max. Both which have at least a 30% mark-up.
Kingfisher will be the biggest beneficiary of BRAND INFLATION.
Another point that has been missed out is the effect of Heineken. The parent is a huge company with so many brands that all it needs to do is plug and play. Europeans have been diluting beer with lemonade to make it more refreshing and Heineken has introduced this across the world singing its way merrily to the bank. Now Heineken has introduced Radlers in select markets in India as a Kingfisher Radler. Watch how Heineken has used its ad for Heineken 0.0 ( a non alcoholic drink ) as inspiration for the Kingfisher Radler.
Summing it up, Bira has paved way for a new price category of beer in India and has highlighted a new set of customers. While they should do really well in india and abroad, it would be foolish to assume that the incumbent players would allow Bira to dominate this new found market. As for UBL, the premiumisation in its stable is happening across its strong beers as well as its light beers. KF is growing 2-3% faster than the market and is getting pricier.
You know where to place your bets !