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How in the second wave of craft beer, the action is shifting to canning and bottling



Your first sip of craft beer is like meeting your first girlfriend or boyfriend — it’s the same energy, the same awesomeness,” says Narayan Manepally, 55, pausing to inhale the aroma of the Kamacitra, the new IPA (India pale ale) from his craft brewery, Geist, before he takes a swig of it at a pub in central Bengaluru on a rainy Wednesday evening.

While the story of how Bira 91 was brewed initially in Belgium and bottled and sold in India is familiar, Geist had trodden the same path almost a decade ago.

“We were probably the first to do reverse outsourcing in 2008-09,” says Manepally, who worked with Intel in Oregon, US, as an electrical engineer before returning to Bengaluru. There came a point in 2013 when a spiralling rupee meant it was no longer viable to import and sell their brews.

In 2017, they revived Geist, setting up a full-fledged brewery in Karnataka where they brew small batches of craft beer and distribute it to over 55 locations in the statewith plans to eventually bottle and sell it — the original dream.

Javed Murad, founder, White Owl

Javed Murad, founder, White Owl
White Owl
Location: Mumbai

Expansion: Will close brewpub to focus on packaged craft beer; currently available in 600 points of sale in Goa, Bengaluru & Maharashtra, looking at more outlets
Fundraising plans: Looking at raising funds in end-September

While the Geist team’s dream is currently on the drawing board, across the country, entrepreneurs and brewpubs are rolling up their sleeves to make it happen: they are pouring flavourful brews into cans and bottles and kegs so that you can sip on them at a party, a beach or your couch.

In Mumbai, White Owl has wound up its four-year-old brewpub in Lower Parel and will focus solely on just selling packaged craft beer, while Independence Brewing Co in Pune is looking at the third quarter of 2019 to get their beers into bottles.

In Bengaluru, the original beer capital of India, three of the best known brewpubs — Arbor Brewing Company, Toit and Windmills Craftworks — are preparing to launch packaged craft beer.

Meanwhile, those already in the packaged craft beer business are looking to expand their reach, such as Delhi-based Simba, which launched in Bengaluru last week, and White Rhino, which is looking at having their beer in all major Indian cities over the next two years.

Admittedly, the craft beer market remains small, at less than 1% of India’s beer market, pegged at 4.7 billion litres in 2017 by Business Monitor International. For comparison, in the US, where craft beer is considered to have originated, there are over 6,000 craft breweries and 12% of beer sales is from craft.

But change is afoot in India. Over the last five years, the number of microbreweries in India has jumped from 20 to 120, according to the Craft Brewers Association of India, while a Deloitte report estimates the craft beer segment to be growing at over 40% a year, aided by a young, well-travelled population with higher disposable incomes.

If the first wave of craft beer in India was about setting up brewpubs, the action has now shifted to selling packaged craft beer.

“The brewpub model has worked in the metros. So it makes sense to take it to the next level, which is production in the form of kegs, bottles and cans,” says brewing consultant John Eapen.

Gaurav Sikka, MD, Arbor


Gaurav Sikka, MD, Arbor
Arbor Brewing Company
Location: Bengaluru
Expansion: Cans of packaged craft beer to go on sale in Goa from October; in Bengaluru & Maharashtra early next year
Fundraising plans: Eyeing external funding to expand distribution

“We saw this happening in the US, which is a more mature market. Home brewing inspired many brewers, some of whom set up brewpubs while others moved on to packaging. With the latter, you can reach more people.” 

Gaurav Sikka, managing director of Arbor Brewing Company, agrees, as he explains the rationale behind the company’s new foray. “We started thinking about what to do next and were exploring different options. We finally decided to launch our beers in cans because it would give us a wider access,” says Sikka.

On October 1, Arbor will be launching three varieties of its canned craft beer in Goa, brewed at a new plant there, before entering Bengaluru and Maharashtra. The brewpub sells close close to 3 lakh litres a year and is looking at selling under 10 lakh litres from its Goa plant.

Arun George, founder of Toit, one of the first brewpubs off the block, says packaging their beer had been on the cards from the beginning. “This was always the plan — Toit craft beer in bottles/cans available in retail shelves all over the country and possibly abroad.

It’s taken us longer than we initially expected, but in a way this probably worked in our favour. We get to learn from mistakes others have made and fine-tune our plans accordingly.” Toit is building its production facility in Bengaluru but George declined to share the timeline of the launch just yet.

For Javed Murad, founder of Mumbai-based White Owl, it was about focusing 100% on selling his craft beer, which is why he is planning to wind up his four-year-old brewpub in Lower Parel in the coming months.

Ajay Nagarajan, CEO

Ajay Nagarajan, CEO
Windmills Craftworks
Location: Bengaluru
Expansion: Setting up a brewery in Goa to package and sell three varieties of craft beer across India next year; also opening brewpubs in Mumbai, Pune and Hyderabad
Fundraising plans: Looking to raise Rs 100 crore by end of October

“We have start ed selling bottles in Goa and Bengaluru, and multiple geographies are in the pipeline in the coming few months,” says the 36-yearold, who was introduced to craft beer while he was living in the US.

The numbers speak for themselves: Murad says White Owl now sells at over 600 points-of-sale through bottles and kegs, a huge leap from 90 in December 2017, when it was only on tap in Maharashtra.

Independence Brewing cofounder Shailendra Bist, too, confirms that bottling is the next push for the company which is set to open its third brewpub next month.

“We want our beers to be widely and easily accessible and bottling is the way to go. We would try markets like Goa, Mumbai, Pune and Bengaluru.”

In Bengaluru, the most ambitious plans are perhaps those of Windmills Craftworks, which is looking to sell across India and even abroad the beer brewed at the plant it is setting up in Goa. It also wants to set up brewpubs in Hyderabad, Mumbai and Pune. “We will be selling our Hefeweizen (wheat beer), coconut porter and Czech-style pilsner in cans and another two varieties in kegs,” says Ajay Nagarajan, CEO, Windmills. To fund the expansion drive, the company is in talks to mop up Rs 100 crore by the end of October.

Hops On
Rahul Singh, founder and CEO of beer chain Beer Cafe, divides the current rush in packaged craft beer into two. “There are two kinds of people do doing this: those who are brewing craft beer in South and Central India to get a national footprint, and another crop of importer-distributors, who are wholesalers of popular imported brands and have begun contract manufacturing in Europe to sell in India.” Singh attributes the enthusiasm of the latter to what he calls “the Bira effect”.

Launched by Ankur Jain, Bira 91 manufacturer B9 Beverages has raised over $100 million from venture capital funds like Sequoia, expanded to markets abroad and claims to have cornered 5% of the domestic beer sales. At this pace of growth, whether Bira can still be considered craft is contentious.

Narayan Manepally (left) and Mohan Alapatt, cofounders, Geist

Narayan Manepally (left) and Mohan Alapatt, cofounders, Geist
Location: Bengaluru
Expansion: Supplying to 55 locations in Karnataka currently and looking to enter packaged craft beer market
Fundraising plans: Intends to raise funds

According to Rohit Parwani, secretary of the Craft Brewers Association of India, a craft brewer must be small (annual production of 10 million litres or less), independent (less than 25% of the craft brewery is owned by an alcohol industry member, which is itself not a craft brewer) and traditional (with beer flavours derived from traditional or innovative brewing ingredients and their fermentation).

This is more or less like the definition in the US, but in India nothing is set in stone for the nascent industry. Hence, if beer behemoth United Breweries sticks to its plans of entering the packaged craft beer market by the end of 2018 as announced, there is no law to prevent it from using the craft beer label, which it might not have been able to in the US market.

“Craft beer is a misused term here. For some, it has come to mean beer that has a novel taste compared to what is mass-produced,” says Beer Cafe’s Rahul Singh. Bira itself, he says, now positions itself as a maker of “flavourful beers for the new world”, which certainly sounds apt.

Ishaan Puri, founder, White Rhino


Ishaan Puri, founder, White Rhino
White Rhino
Location: New Delhi
Expansion: Currently selling in Delhi, Haryana, Chandigarh, UK and Nepal; plans to be in all major Indian states in the next two years; also planning to export to the US and Southeast Asia
Fundraising plans: None at the moment

( Jain of Bira did not respond to multiple calls and messages from ET Magazine.) But even rivals acknowledge that Bira’s marketing blitz has helped in creating awareness about the category.

“Bira did a phenomenal job of scaling the brand in a few years and telling people that there’s more to beer than lager,” says White Owl’s Murad. White Rhino founder Ishaan Puri, a quantitative analyst with BlackRock in New York before he donned the brewer’s hat, says one needs to get into packaging to be able to scale. But he is emphatic that this will not be at the cost of quality, a word that comes up often in the conversation.

“Craft can either be a be a philosophy or a buzzword. We promise and deliver craft,” he adds. Apart from the National Capital Region, White Rhino is sold in the UK and Nepal, with plans to sell it in the US and Southeast Asia as well.

“We want to be in all major Indian cities in the next two years,” says Puri. Simba, which just launched in Bengaluru, is looking at entering Mumbai next, which would make it the seventh state it is selling in. “We sold a million cases last year. We are looking at doubling that this year,” says founder Prabhtej Bhatia.

Amid this raising of mugs to the new buzz in the craft beer market, one of the pioneers, Pune-based Doolally, remains cautious. “It is a risky venture. There’s a lot of red tape involved if you want to sell beer made in Karnataka in Maharashtra.

Then there’s the cost of bottling and the lack of a cold chain supply in India,” says Doolally cofounder Oliver Schauf, adding that it has no plans to get into packaging at the moment. The lack of a proper cold chain is a challenge, particularly when it comes to a perishable commodity like craft beer which has a shelf life of three months at the most, acknowledges Windmills’ Nagarajan.

Prabhtej Singh Bhatia

Prabhtej Singh Bhatia, founder, Simba
Location: New Delhi
Expansion: Current selling in Delhi, Gurgaon, Chhattisgarh, Assam, Goa and Bengaluru; will be in Mumbai next month; looking to double sales from 1 million cases in 2017
Fundraising plans: None at the moment

For instance, government-owned warehouses, which producers have to compulsorily sell to in some states, are not refrigerated. “But we hope to collectively change the retailers’ mindset,” he says. Margins are also lower if one sells packaged beer than at one’s own brewpub; volume and scale are, therefore, crucial to become profitable. Maintaining consistency in flavours is another challenge in packaging.

Those plunging into selling craft beer in cans and bottles are aware that it’s a gamble. And not everyone might succeed particularly if, as Beer Cafe’s Singh says, one does not have the deep pockets to support a business that needs a lot of working capital and cashburn for brand building.

But for those passionate about it, the goal seems to justify the risk — to have as many people as possible swigging flavourful beer that has not been produced at industrial scale. And for beer enthusiasts in the country, there has been no better time to take a swig of craft from the comfort of their own homes.

What’s Craft Beer?
According to the Craft Brewers Association of India, a craft brewer must be:

SMALL – Annual production must be less than 10 million litres

INDEPENDENT- Less than 25% of the craft brewery should be owned or controlled by a beverage alcohol industry member

TRADITIONAL- A majority of its total beverage alcohol volume should be in beers whose flavours derive from traditional or innovative brewing ingredients and their fermentation

Cheers in India:
Alcohol Market
Per Capita Consumption of Alcohol in India 5.1 litres
Total beer sales in India (2017) 4.7 billion litres
Source: Business Monitor International
Craft Beer Market Share of craft beer in total beer sales in India: Less than 1%
Sales growth: 20%, year-on-year
No. of microbreweries: Over 120 No. of microbreweries in 2013: 20 Source: Craft Brewers Association of India



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