Hard Beer Market To Crack

Given the consumer dynamics in India, the beer industry could have been expected to take off in a big way over the past decade. Incomes in the country have increased strongly, and in many emerging economies the middle-class consumer has propelled the global beer industry just as Western markets have started to cool down. India also ticks a lot of boxes in terms of its demographics, namely its huge population. However, perhaps more so than any of the other BRIC countries of Brazil, Russia, India and China, India has posed real challenges to multinational beer companies. Per capita beer consumption is estimated at just 1 litre in India, compared with well over 20 litres in China, for example. Although India's spirits industry has boomed, the same has not been seen in the beer segment. We highlight a number of reasons for beer's underperformance below.

  • Culture: Beer consumption is not widespread, and advertising is not without its regulatory hurdles. It is difficult to advertise beer through conventional channels such as television; United Breweries Group has advertised its Kingfisher brand on its namesake airline, for example.

  • Taxation: India generally taxes beer heavily, which prices out much of the potential consumer market.

  • Low Consumption Per Person
    India Beer Sales - Historic & Forecast

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This article is tagged to:
Sector: Food & Drink
Geography: India

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