Beer wars: The empire strikes back
UB and AB InBev are launching India-made wheat beers to take on startups like Bira, Simba.
Heineken-controlled UB and AB In-Bev, which together control three-fourths of India’s beer market, currently sell Edelweiss and Hoegaarden wheat beer, respectively, which are imported and carry price tags that are more than double that of their rivals.
AB InBev has now set up an Indian unit, 7 Rivers Brewing Co., to introduce two wheat beer variants – Machaa and Veere – in the first week of November, while UB will start selling its locally produced wheat beer by the end of the year, said two people aware of the plans.
“We see a growing trend of specialty wheat beers across the top urban centres in the country and are confident that our brewing heritage, coupled with our age-old craftsmanship of brewing the best quality beer, positions us well to curate an exciting new offering,” said Ben Verhaert, president-South Asia, of AB InBev, declining to give details on the launch.
The new products will be brewed at its Aurangabad brewery with ingredients procured from Rajasthan, Madhya Pradesh and Haryana, said officials. A 330-ml can will be priced at Rs 140, almost half the cost of an imported Hoegaarden equivalent.
“UB is gearing up for a wheat beer launch before the end of the year and will be available in select cities, with Karnataka being the first market,” said an official privy to the company’s plans.
Wheat beer has a larger proportion of wheat malt than malted barley. The number of Indian bars that increasingly stock Belgian Witbier and German Hefeweizen-style wheat beer is on the rise, helped by surging consumer demand.
India is predominantly a market for strong beer, which accounts for 85% of the overall segment, although other varieties including craft and wheat beer are catching on. About 170 microbreweries have mushroomed in India from only two over the past decade.
“The craft beer revolution has been the fastest in India as consumers have enjoyed its fresh and sweet aftertaste compared with filtered lagers.
The largest-selling beverage in any microbrewery is a wheat beer,” said Rahul Singh, founder of the Beer Cafe chain, which gets about half its revenue from wheat beer.
Bira, which launched about four years ago in the wheat segment, has managed to acquire an over 5% share in key markets despite the dominance of Kingfisher, Budweiser and Carlsberg.
“Beer giants don’t want to be late in the game. They want to build their offering, erode the edge of microbrewery territory and beat the competition with the vibe. They also have the bandwidth of large-scale distribution which will bring down the price-point of craft beer for the consumer,” said Singh.