Table of Content Industry Basics............................................4 Alcohol Market........................................... 4 Location of consumption & Sale...........................4 Business hours prescribed in Maharashtra.................5 Universe for selling Beer in Mumbai......................5 Beer.......................................................6 Different Strokes of Beer................................7 Alcoholic strength of Beer...............................8 History of Beer...........................................10 General History......................................... 10 History of Beer in India................................11 Overview of Indian Beer Market............................13 Market Definition....................................... 13 Market Segmentation I................................... 14 Market Segmentation II.................................. 14 Market Share............................................ 15 Comparison of Indian & US Beer Industry...................16 Indian Beer Industry.................................... 16 US Beer Industry........................................ 17 Determinants of growth of Indian Beer Market..............18 Indian Brewing industry...................................21 Breweries in Maharashtra................................21 Brewing Process.............................................22 Stages in Beer Making.....................................24 Mashing................................................. 24 Sparging................................................ 24 Boiling................................................. 24 Fermentation............................................ 25 Pasteurisation.......................................... 25 Packaging............................................... 25 Ingredients of Beer.......................................26 Water................................................... 26 Malt.................................................... 26 Hops.................................................... 26 Yeast................................................... 27 1
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Table of Content
Industry Basics...................................................................................................................4Alcohol Market................................................................................................................4Location of consumption & Sale......................................................................................4Business hours prescribed in Maharashtra.......................................................................5Universe for selling Beer in Mumbai...............................................................................5
Beer......................................................................................................................................6Different Strokes of Beer.................................................................................................7Alcoholic strength of Beer...............................................................................................8
History of Beer..................................................................................................................10General History..............................................................................................................10History of Beer in India..................................................................................................11
Overview of Indian Beer Market....................................................................................13Market Definition...........................................................................................................13Market Segmentation I...................................................................................................14Market Segmentation II..................................................................................................14Market Share..................................................................................................................15
Comparison of Indian & US Beer Industry...................................................................16Indian Beer Industry.......................................................................................................16US Beer Industry............................................................................................................17
Determinants of growth of Indian Beer Market...........................................................18Indian Brewing industry..................................................................................................21
Breweries in Maharashtra...............................................................................................21Brewing Process...........................................................................................................22Stages in Beer Making.................................................................................................24
Ingredients of Beer...........................................................................................................26Water..............................................................................................................................26Malt................................................................................................................................26Hops...............................................................................................................................26Yeast...............................................................................................................................27Clarifying agent..............................................................................................................27
Pale and dark beer..........................................................................................................29Serving...............................................................................................................................30
Draught and keg.............................................................................................................30Cask-conditioned ales....................................................................................................30Bottles............................................................................................................................30Cans................................................................................................................................30Vessels............................................................................................................................31
About APB........................................................................................................................34Corporate Profile............................................................................................................34Fraser & Neave, Limited................................................................................................35Heineken........................................................................................................................35
Members of the Asia Pacific Breweries Group.............................................................36Senior Management of APB............................................................................................37APB - INDIA.....................................................................................................................38
Core Values....................................................................................................................38Locations of Operation...................................................................................................39
Tiger Beer.......................................................................................................................41Baron's Strong Brew......................................................................................................42Cannon 10000 Super Strong Beer..................................................................................42
APB International Brands...............................................................................................44Heineken....................................................................................................................44ABC Extra Stout........................................................................................................44Anchor........................................................................................................................44
Marketing Mix of Tiger Beer..........................................................................................45Product...........................................................................................................................46Price................................................................................................................................49
Factors affecting pricing decisions.............................................................................49Primary considerations in price setting......................................................................49Pricing in Mumbai......................................................................................................50
Place...............................................................................................................................52Distribution Network.................................................................................................53Distributors of APBI..................................................................................................54
Promotion..........................................................................................................................55Major Tools in Marketing Beer..................................................................................55Marketing Activities at APBI.....................................................................................55
Various sales promotions techniques adopted at APBI.............................................61Permit Room Activation............................................................................................62
Tracking Effectiveness of sales promotion....................................................................63Designing a Powerful Sales Promotion......................................................................63
Surrogate Advertising in liquor industry........................................................................67Surrogate for Tiger Beer - Tiger Translate.....................................................................68
Why Tiger Translate in India.....................................................................................68Competitors of Tiger Beer in Mumbai...........................................................................70
Health effects....................................................................................................................74Community & Environment...........................................................................................75
A Responsible Beer Company.......................................................................................75Asia Pacific Breweries Foundation................................................................................75Responsible Alcohol Consumption................................................................................76
SWOT Analysis of APBI.................................................................................................77Why Beer better than Milk.............................................................................................78Top 10 Reasons Beer is Good for your Health..............................................................80The Future........................................................................................................................82Conclusion.........................................................................................................................83Questionnaire....................................................................................................................84Bibliography & Webliography........................................................................................86
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Industry Basics
Alcohol Market
1. Spirits –Whisky, Rum (Dark, White) Vodka, Brandy, Gin, Ready To Drink (RTD)
2. Beer – Mild, Strong
3. Wine & Champaign – Red Wine, White Wine, Champaign
4. Country Liquor
Location of consumption & Sale
ON PREMISE OFF PREMISE
Clubs Hyper Marts
Restaurants & Bar Super Marts
Permit Room Wine Shops
Modern on Trade (MOT): Pubs, Beer Shoppee
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Business hours prescribed in Maharashtra
Business hours for Policy
FL-III (Permit Room)
11.30 a.m. to 1.30 am in Mumbai & Thane11.30 a.m. to 11.00 p.m. elsewhere
FL-II (IMFL Retail Shops)
10.00 a.m. to 10.30 p.m. in Mumbai & Thane
10.00 a.m. to 9.30 p.m. elsewhere
CL-III (CL Retail shops & Permit room)
10.00 a.m. to 12.00 Midnight in Municipal Area
10.00 a.m. to 10.00 p.m. elsewhere
E & E – II (Beer Bar & Wine Bar) 9.00 a.m. to 12.00 Midnight
Universe for selling Beer in Mumbai
Name of Location Number
Institutions 450
Permit Room 1172
Retail Shops 570
Beer Shoppee 60
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Beer
Beer is the world's oldest and most popular alcoholic beverage. Some of the
earliest known writings refer to the production and distribution of beer. It is produced by
the fermentation of sugars derived from starch-based material—the most common being
malted barley; however, wheat, corn, and rice are also widely used, usually in conjunction
with barley.
The starch source is steeped in water. Enzymes in the malt break down the starch
molecules, producing a sugary liquid known as wort, which is then flavored with hops,
which acts as a natural preservative. Other ingredients such as herbs or fruit may be
added. Yeast is then used to cause fermentation, which produces alcohol and other waste
products from anaerobic respiration of the yeast as it consumes the sugars. The process of
beer production is called brewing.
Beer uses many varying ingredients, production methods and traditions. Different
types of yeast and production methods may be used to classify beer as ale, lager or
spontaneously fermented beer. Some beer writers and organizations differentiate and
categorise beers by various factors into beer styles. Alcoholic beverages fermented from
non-starch sources such as grape juice (wine) or honey (mead), as well as distilled
beverages, is not classified as beer.
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Different Strokes of Beer
LAGER Brewed using bottom-fermenting yeast that ferments slowly at a low temperature to create a smoother, mellow beer
ALE Uses top-fermenting yeast, is a more aromatic and fruity product
STOUT Dark and heavy, with roasted unmalted barley and, often, caramel malt or sugar
MILD BEER Developed as a sweeter and cheaper alternative to dark ales
BITTER Highly hopped for a more dry and aromatic beer. It is pale in colour but strong
DARK BEER Barley is kilned for a longer period of time which creates richer flavours
FRUIT BEER Fruit , usually berries, is added either during primary fermentation or later
WHEAT BEER (WEIZEN)
Malted wheat and barley are used for this German style beer
A great many beers are brewed across the globe. Local traditions will give beers
different names, giving the impression of a multitude of different styles. However, the
basics of brewing beer are shared across national and cultural boundaries.
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Alcoholic strength of Beer
While we all love the taste of beer, it's the alcohol content thats responsible for
beers standing in most societies. Its the alcohol content of beer that makes it the number
one social lubricant. The alcohol content of beer is generally denoted by the "percent
alcohol by volume", or % ABV. "Percent alcohol by wieght", % ABW, could also be
used. It's easy to convert between them. ABW = 0.8 × ABV.
Beer ranges from less than 3% alcohol by volume (ABV) to almost 30% ABV.
The alcohol content of beer varies by local practice or beer style. The pale lagers that
most consumers are familiar with fall in the range of 4–6%, with a typical abv of 5%.
"Low alcohol beer", also known as "non-alcoholic beer" contains less than 1% ABV. The
strongest beer ever made was the Hair of the Dog Brewing Company's barley wine named
"Dave", which was 29% ABV.
The alcohol in beer comes primarily from the metabolism of sugars that are
produced during fermentation. The quantity of fermentable sugars in the wort and the
variety of yeast used to ferment the wort are the primary factors that determine the
amount of alcohol in the final beer. Additional fermentable sugars are sometimes added to
increase alcohol content, and enzymes are often added to the wort for certain styles of
beer (primarily "light" beers) to convert more complex carbohydrates (starches) to
fermentable sugars. Alcohol is a byproduct of yeast metabolism and is toxic to the yeast;
typical brewing yeast cannot survive at alcohol concentrations above 12% by volume.
Low temperatures and too little fermentation time decreases the effectiveness of yeasts,
and consequently decreases the alcohol content.
The type of beer plays a large role in the alcohol content. While it's not exact, if
you know the type of beer you can generally estimate how much alcohol you will be
imbibing. This is an important skill to have. For instance if you go to a pub and all your
friends are drinking pale ales, and you start ordering barley wines; if you try to keep up
with them, you might not make it out of the pub without being carried. The following
chart will help in these situations:
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Beer Alcohol Content Table
Beer Type %ABV
Lager 4 – 5
Pilsner Lager 3 – 6
Wheat (Weissbier) 4 – 5
Porter 4 – 5
Bitter (ESB) 3 – 7
IPA (India Pale Ale) 5 – 7
Stout 5 – 10
Double (Dubbel) 6.5 – 9
Tripel (Trippel, Triple) 7.5 - 9.5
Barleywine 8 – 12
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History of Beer
General History
Beer is one of the world's oldest beverages, possibly dating back to the 6th
millennium BC, and is recorded in the written history of ancient Egypt and Mesopotamia.
The earliest Sumerian writings contain references to beer. A prayer to the goddess
Ninkasi known as "The Hymn to Ninkasi" serves as both a prayer as well as a method of
remembering the recipe for beer in a culture with few literate people.
The earliest known chemical evidence of beer dates to circa 3500–3100 BC from
the site of Godin Tepe in the Zagros Mountains of western Iran. As almost any substance
containing carbohydrates, namely sugar or starch, can naturally undergo fermentation, it
is likely that beer-like beverages were independently invented among various cultures
throughout the world. The invention of bread and beer has been argued to be responsible
for humanity's ability to develop technology and build civilization.
As for the close link between bread- and beer-making, women produced most beer
prior to the introduction of hops in the thirteenth century, selling the beverage from their
homes as a means of supplementing the family income. However, by the 7th century AD
beer was also being produced and sold by European monasteries. During the Industrial
Revolution, the production of beer moved from artisanal manufacture to industrial
manufacture, and domestic manufacture ceased to be significant by the end of the 19th
century. The development of hydrometers and thermometers changed brewing by
allowing the brewer more control of the process, and greater knowledge of the results.
Beer was also known by Slavic tribes in early 5th century.
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History of Beer in India
Modern beer brewing began for India in the early days of the British Empire —
the mid-1700s. The demand for beer in the hot climate of many parts of India by the
British administrators and the troops was so great that it led to the creation of a
completely new style of beer by George Hodgson in his London brewery — India Pale
Ale also known as IPA. IPA is strong, highly hopped ale designed to survive the five
month ocean voyage to India without spoiling. India Pale Ale was shipped with every
voyage for over a century and became very popular in Britain and North America.
In the late 1820s Edward Dyer moved from England to set up the first brewery in
India at Kasauli (later incorporated as Dyer Breweries in 1855) in the Himalaya
Mountains, near Shimla, producing Asia's first beer called Lion. The brewery was soon
shifted to nearby Solan (close to the British summer capital Shimla), as there was an
abundant supply of fresh spring water there. The Kasauli brewery site was converted to a
distillery which Mohan Meakin Ltd. still operates. Dyer set up more breweries at Shimla,
Murree, Rawalpindi and Mandalay.
Another entrepreneur, H G Meakin, moved to India and bought the old Shimla
and Solan Breweries from Edward Dyer and added more at Ranikhet, Dalhousie,
Chakrata, Darjeeling and Kirkee. In 1937, when Burma was separated from India, the
company was restructured with its Indian assets as Dyer Meakin Breweries, a public
company on the London Stock Exchange. Following independence, in 1949 N.N. Mohan
took over management of the company and the name was changed to Mohan Meakin Ltd.
The company continues to produce beer across India to this day and Lion is still available
in northern India. Lion was changed from an IPA to a lager in the 1960s, when due to
East European influence, most brewers in India switched from brewing Ales to brewing
lagers.
Today no brewer in India makes India Pale Ale. All Indian beers are either lagers
(5 % alcohol — such as Australian lager) or strong lagers (8 % alcohol - such as the
popular MAX super strong beer). International Breweries Pvt. Ltd. have recently
announced an intention to work with Mohan Meakin to produce and launch an India Pale
Ale called Indian IPA from India's first brewery at Solan. Kingfisher, Haywards, Kalyani
Black Label, Soumitree, Jaguar, Foster's, Castle Lager, Royal Challenge, Max, Kings and
Belo are popular Indian beer brands.
11
In various parts of north-eastern India, traditional rice beer is quite popular.
Several festivals feature this nutritious, quite intoxicating, drink as part of the
celebrations. The rice is fermented in vats that are sometimes buried underground.
Elephants are known to attack villages, with the primary agenda of drinking from these
vats. Following one such raid in north-eastern India, a police officer in Dumka was
quoted in the press as saying: "Tribals who love rice beer brew the liquor at home.
Elephants too are fond of this beer. Often it is found that, attracted by the strong smell of
the liquor, wild elephants tear down the tribal houses where the brew is stored."
12
Overview of Indian Beer Market
Market Definition
The beer market consists of ales, stouts & bitters, low/no alcohol beers, premium
lager, specialty beers and standard lager. The market is valued according to retail selling
price (RSP) and includes any applicable taxes. The Indian beer market delivered strong,
stable growth over the last five years. Looking forward, this trend is expected to persist
through to 2011.
The Indian beer market generated total revenues of $874.2 million in 2006, this
representing a compound annual growth rate (CAGR) of 6.6% for the five-year period
spanning 2002-2006. Standard lagers proved the most lucrative for the Indian beer market
in 2006, generating total revenues of $760.3 million, equivalent to 87% of the market's
overall value. The performance of the market is forecast to follow a similar pattern, with
an anticipated CAGR of 6.8% for the five-year period 2006-2011 expected to drive the
market to a value of $1,213 million by the end of 2011.
Market Value
Year $ million INR billion % Growth
2002 677.7 29.9
2003 722.5 31.9 6.60%
2004 769.4 33.9 6.50%
2005 819.4 36.1 6.50%
2006 874.2 38.6 6.70%
CAGR 2002-2006: 6.6%
Source: Datamonitor
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Market Segmentation I
Sales of standard lager form the most lucrative sector of the Indian beer market,
with an 87% share of the market's value. In addition, sales of premium lager generate a
further 6.2% of the market's revenues.
Category % Share
Standard lager 87.00%
Premium lager 6.20%
Ales, stouts & bitters 3.20%
Low/no alcohol 2.90%
Specialty beer 0.70%
Total 100.0%
Market Segmentation II
India accounts for 1.3% of the Asia-Pacific market by value. In comparison, Japan
generates 45.5% of the market's revenues
Geography % Share
Japan 45.50%
China 36.40%
South Korea 9.50%
Rest of Asia-Pacific 7.30%
India 1.30%
Total 100.0%
14
Market Share
United Breweries is the leading company in the Indian beer market, with a 50.3%
share of the market's volume. In comparison, SAB Miller accounts for 34.2% of the total
market's volume.
Market share in volume
Company % Share
APB 4%
United Breweries Limited 50.30%
SAB Miller India 34.20%
Mohan Meakin 10.10%
Other 5.30%
Total 100.0%
15
Comparison of Indian & US Beer Industry
Indian Beer Industry
The Indian beer industry has been witnessing steady growth of 7-9% per year over
the last ten years. The rate of growth has remained steady in recent years, with volumes
passing 100m cases during the 2005-2006 financial year. With the average age of the
population on the decrease and income levels on the increase, the popularity of beer in the
country continues to rise.
The Indian beer market was estimated to be 6.7 million hectoliters (hl) in 2002-03.
Beer consumption has been growing rapidly at a CAGR (Compound Annual Growth
Rate) of 7% over the last 9 years, while growth in 2002-03 was 11 per cent. Indian
growth rates compare favorably with the global beer industry, which grew by about 2.6
per cent in 2001-02 Apart from providing strong growth; India also provides attractive
profit margins due to the consolidated nature of the industry.
A comparison between China and India, for example, reveals that the Chinese
beer market is marked by intense competition, with several players being marginalized.
In China there are about 400 brewers, of which the top 10 account for only 45 per cent of
the market. This has resulted in low profit margins for the Chinese beer players.
In contrast, the top two beer players in India account for about 75 per cent of beer
sales in India and the industry stands a chance to see more consolidation in the near
future. The effect of this consolidation can be seen in the fact that beer prices in India
rarely go down with the competitive pressures of new product or brand launches. In the
past, whenever beer prices have gone down, it has been due to either the lowering of
duties by the government or the deregulation of distribution (leading to lower margins for
the distribution channel partners). In neither scenario have the margins or revenues of
beer manufacturers been affected.
Per capita consumption in India is hovering around a measly 1 litres per annum.
These figures pale into insignificance if one compares them with those of Czech Republic
that has the highest per capita consumption of 156.9 litres per annum. Per capita
consumption is directly related to the taxation, according to an industry observer.
16
US Beer Industry
The U.S. brewing industry is dominated by three firms – Anheuser-Busch, SAB-
Miller, and Coors – who together account for about 80% of beer shipments. Anheuser-
Busch has been the leading firm in the industry every year since 1957. Miller joined the
top three in 1976, following the introduction of Lite beer. Coors became one of the top
three brewers in 1989 after it expanded nationally and displaced Stroh. However, despite
a high level of industry concentration, the real price of beer has been stable or declining
since 1963. In recent years, a number of marketing concerns have affected the industry
leaders, including growth of beer imports to an 11% share; a decline of sales of leading
premium brands (Budweiser, Miller High Life, Miller Genuine Draft); competition from
new products and marketing methods (flavored malt beverages, direct shipments of beer
and wine); competition from specialty-craft brewers; and continued attempts by neo-
prohibition groups to demonize the industry, especially its advertising and marketing
practices.
17
Determinants of growth of Indian Beer MarketThe Indian beer market has been growing rapidly over the last 10 years, due to the
positive impact of demographic trends and expected changes, like:
Rising income levels:
India is home to nearly one-sixth of the global population and is one of the most attractive
consumer markets in the world today. Various research studies have shown that a rise in
the income levels has a direct positive effect on beer consumption. The National Council
for Applied Economic Research (NCAER) projects India's 'very rich', 'consuming' and
'climbers' classes to grow at a CAGR of 15 per cent, 10 per cent and 2 per cent
respectively. With this growth in income levels, Indian beer consumption is expected to
continue growing, at the very minimum, at the growth rates witnessed in the last decade.
Changing age profile:
As a consequence of the high birth rates prevalent until the 1990s, a large proportion of
the Indian population is in the age group of 20-34 years. This age group is the most
appropriate target for beer marketers. This population trend will give a further boost to
the growth of beer consumption in India. Many global players are planning to enter the
Indian beer sector and they realise that a partnership with a local player is important to
establish a successful presence in India in a short time frame.
Changing lifestyles:
A deep-seated traditional social aversion to alcohol consumption has been a traditional
feature of the Indian society. However, as urban consumers become more exposed to
western lifestyles, through overseas travel and the media, their attitude towards alcohol is
relaxing. Social habits are undergoing a transformation as mixed drinks are becoming
more popular. The greatest evidence of this trend is the increase in beer consumption
among women. With increasing urbanisation, this acceptance is only going to rise.
18
Reduction in beer prices:
The Indian consumer typically values an alcoholic beverage on the basis of its
'kick' factor versus its price. The following two factors therefore, affect the market for
beer. Firstly, as most states do not have a differential tax structure based on the alcohol
content, strong beer.
In India the future of beer industry is very much optimistic because:
1. India has predominantly a warm/hot climate
2. The beer-drinkers in the country are much younger than the average beer-drinker
elsewhere in the world. This makes them more likely to carry the brand with them
for a lifetime.
3. Also, as the target audience becomes younger, a light beer is expected to attract
first-time drinkers, since it is much milder than any of the other beers in the
country.
4. Increasing exposure to beer and wine drinking, mainly due to media and consumer
mobility.
All these factors combined make the scenario very promising for beer industry
and are 'in sync' with their strategy for India.
UB (United Breweries Ltd.) is the market leader in the Indian beer market with a
40% market share. Its flagship Kingfisher brand alone commands 25% market share. The
company has however been focussing on strong beer, which has driven growth. The
company introduced its strong beer, Kingfisher Strong during the year 2000 in the
selected market of Maharashtra and Karnataka. The move came as a reactive move
following increasing shift of consumers towards strong beer, a trend started by Shaw
Wallace. While the overall market grew marginally by 2%, the strong beer market grew at
8-10% during the year at the expense of lager beer. The market is now skewed towards
strong beer with more than 60% of the market being strong beer market.
19
Beer mix today is approximately 60 percent lager beer and 40 percent strong beer.
This ratio was very different 4 years ago. Over the last four years strong beer has been the
fastest growing segment. This was completely usurped by Shaw Wallace. As of today
while Shaw Wallace has approximately 28 to 30 percent of the strong beer market, UB
already has achieved 14 to 15 percent of that strong beer market and is growing very fast.
It launched Kingfisher Strong only in May of 2001. And once it is able to take Kingfisher
Strong national, it will try to match Shaw Wallace's market share over the next few years.
Apart from Kingfisher, and Foster's Beer, the other brands in the Indian market
are Carling Black Label, Carlsberg, Tiger, Baron’s, Heinekin, Budweiser, Corona,