Director – Marketing, Carlsberg India, Mahesh V Kanchan talks about the trends and developments in the beer market and how Carlsberg India is well-positioned to tap into the available and emerging market opportunities…
Tell us about Carlsberg’s journey in India so far. What has been the growth and progress so far?
We have been in India for not too long. We came here in 2007 but it was from 2010 onwards that Carlsberg in India started on its forward trajectory with our emphasis and focus on markets across India. Whenever you come to a new market, setting up a brewery takes time. We have set up most of our breweries and it takes time setting them up. But since 2010, we have been in full flow in India. The good news is that we have been able to gain a good share of the consumer mind space in a very short span of time. Another heartening thing as far as our presence in the Indian market is concerned is that we are the fastest growing beer company in the country.
Which are the brands that are giving you the traction in volumes and sales?
We have two power brands – one is our flagship Carlsberg and the other is Tuborg. Both of them are international premium brands. While Carlsberg is a super-premium brand, Tuborg belongs to the premium category. Both these brands are growing fairly ahead of the industry.
What is it about these brands that is helping you to grow ahead of the industry average?
The product is what makes a huge difference and ultimately gives you the advantage. Carlsberg Green is a very differentiated liquid and has 100 per cent malt and it gives you a very rich, crisp and an all-malt taste. This is our USP – a 100 per cent malt beer. We put the best possible ingredients in it to ensure that you get the best liquid and never compromise on the raw materials that go into making it. Talking of Tuborg, it is a very smooth beer and very easy to consume. We keep looking at consumer needs to understand areas where we can grow. We were the pioneers when it came to the strong segment. Carlsberg Elephant is the market leader in the super premium strong segment. We were the ones to pioneer the ring pull caps and also the third generation contoured bottles on Tuborg.
What is the size of the beer market in India and what is your share of the pie?
In terms of volumes, the beer market in India is approx. 24 million hectoliters and is growing. We have grown ahead of the industry. The industry is growing in single digits, while our growth rate over the past five years has been in high double digits. We are the No. 1 player in some markets, which clearly shows that there is significant traction for our offerings. Some of these markets are pretty big and key states. Pan India, we are strong No. 3 player in terms of volumes.
Who do you believe is the competition and who are the players?
If you look at beer as a beverage, then the competition is not just with any other beer brand but any other alcobev and other beverage that refreshes the consumer. But if you look at the competition from the point of view of only the other beer brands, then there are players like United Breweries, SabMiller, AB InBev, who are the three national competitors. There are also lots of strong local players who have a good presence in some of the states with varying footprint across the various geographies.
How do you see the beer market in India vis a vis the other markets?
Though India is in the top five markets in Asia Pacific by volume but as compared to countries like China and the United States, the industry in India is quite undersized. The universe of outlets in which the category is available is far less than some of the other countries. For instance, in China beer is treated as an FMCG product and is available in every nook and corner. Similarly, in the US, it is available in every supermarket and it is not classified as an alcoholic product. Even in some of the developing Asian countries like Thailand and Vietnam, beer is an absolutely freely-available product.
What do you think is coming in the way of unleashing the market potential of beer as a product category?
Apart from being a highly regulated product in India, there is also a lack of accessibility to the category. So, consumers don’t get it at an arm’s length unlike the carbonated drinks, which is widely available. Also, from the affordability point of view, there is a fair bit of price premium because of the taxation it attracts. So, both from the point of view of accessibility and affordability, the category size of beer in India is restricted. It’s a highly taxed category and India is the only BRICS country where beer is more expensive than a Big Mac.
As a premium beer manufacturer, how do you see the segment growing and developing in India?
People are upgrading from the economy segment upwards. There is a lot of upgradation taking place. As a result, the premium and super-premium segments are growing the fastest.
Typically, what percentage of beer sales takes place through wine outlets and F&B channels?
Typically 75 per cent + of beer sales in the country is through the off-trade channel. But, in the metros, on-trade channels contribution goes up. Saying this, both the channels are important. While the off-trade channel is critical for getting the volumes, on trade is important for driving the brand image and trials.