American Brew Crafts exploring options to expand in India, abroad

American Brew Crafts Pvt Ltd (ABCL) is a modern and authentic beer manufacturing company driven to serve the market with an authentic taste for beer. It is set up with an objective to introduce innovative brewing practices in the country. Its BlockBuster beer is a result of rigorous research on the supreme quality beer brewed with carefully selected finest malts and hops to ensure the perfect flavour. The Hyderabad-based company is currently operating its businesses in Telangana, Andhra Pradesh, Pondicherry, Goa, Kerala and the Andaman & Nicobar Islands and is aiming for expansion in Karnataka and Delhi soon. In an exclusive interview, its Chief Executive Officer Nagendra Tayi tells Bizz Buzz about their wide range of products and expansion plans in India and abroad

How is the brewing business doing in Telangana and AP? How is the demand for your beers in both the States?

The brewing industry in Telangana and Andhra Pradesh is growing steadily, with an increase in demand for regular and craft beers. We are looking to significantly increase our market share by expanding the geographies of operation this year. This season is an ideal time for consumption of beer and we are observing a commensurate trend in the market, with a steady increase in demand.

India has a total of 80 breweries, and only 10 of them are independent – out of which ABCL owns two breweries in India. In 2017, we launched Blockbuster beer in AP and two years ago in Telangana. The brand has a 10 per cent share of the market in two Telugu States.

In terms of volume, the beer is expected to be 37.8 million hectolitre in 2023 as compared to 27.4 million hectolitre in 2018. The beer sales are expected to grow at a CAGR of 11 per cent over the next five years. The per capita consumption of beer in India is about 2 litre as of 2019 which is much lower compared to the US (78 litre), Russia (76 litre), and China (36 litre). This is expected to grow as more variants and brews are made available to beer lovers.

How many brands do you have right now? What is the USP? What are the new products in the pipeline?

BlockBuster was launched with the objective to offer an unparalleled experience for connoisseurs and satiate the taste buds of the beer-drinking population in the country. It is our mission to infuse the market with more and more variants of beer, so that beer lovers are able to experience the best and most innovative beer brews in India.

ABCL is a modern-day independent brewing company making the highest quality products with the best ingredients. Blockbuster is available in Lager, Strong, Ultra Lager, and Ultra Strong. These variants are available in 650ML, 330ML, and 500ML cans. The fresh new look and attractive packaging for all the variants is done to appeal to the modern-day customer.

We have introduced a fresh new look for the flagship Blockbuster beer. The new attractive packaging of the bottle in a sleeve comes in vibrant colours and designs that help Blockbuster stand out in the retailer’s shelf. The new sleeve is made from a high-quality resin that enhances the look and feel. It is easy to hold for customers and beer will have protection from sunlight and retain the flavour. Even if the bottle falls or slips breakage will not be chattered around, therefore providing extra protection to the bottles during transportation and storage.

Blockbuster draught is also available in 60 outlets across Telangana. We aim to expand the presence significantly over the next few months. We will be starting our draught operations in AP this year. We intend to launch multiple variants like wheat, India pale ale (IPA) and fruit-based brews in the near future. We intend to constantly evolve with changing market trends and tastes.

Where do you have the manufacturing units? What is the current capacity and utilisation? Are you planning to enhance the capacity in the near future?

In India, we have two breweries, one at Sangareddy in Telangana and the other is at Kakinada in AP. We purchased these breweries and upgraded the infrastructure as per the global standards with German machinery. We are presently using 75 per cent capacity.

We are looking for suitable investment opportunities for acquiring and upgrading the infrastructure of breweries in strategic markets to improve servicing the demand for Blockbuster beer as we are expanding our operations. We are planning to expand the operations in India to the States of Karnataka, Kerala, Odisha and NCR.

Do you see any regulatory challenges in any State?

Blockbuster is available in AP, Telangana, Jharkhand, Goa, Andaman and Karaikal (Puducherry). The regulations related to the sale and distribution of alcoholic beverages varies from State to State, and some States have stricter regulations than others. Therefore, it is important for brands to be aware of the regulations in each State and comply with them. We comply with all regulatory requirements of the States in which we operate.

How is the demand for your brands in other countries? What are the further expansion plans?

We have a brewery named St Patrick's Brewing Company in the US. We have a range of blends for the US market servicing Colorado, Kansas and Missouri in the US. We are also exploring the option of expanding the operations to the emerging markets of Africa, middle-east and Europe.

What is the size of the craft beer market in India and across the globe? What is the present and projected growth rate?

India is one of the fastest-growing alcoholic beverages markets globally, with an estimated market size of $52.5 billion in 2020 and the market is expected to grow at a CAGR of 6.8 per cent between 2020 and 2023. According to the Ministry of Food Processing Industries, the production of alcoholic beverages in the country increased 23.8 per cent during the period between 2015-16 and 2018-19.

Moreover, over 20 million people enter the legal age for drinking every year in the country. The Indian beer market size is Rs 38,360 crore in 2022. According to IMARC Group, the market size is likely to reach Rs 62,240 crore by 2028 with a growth rate of over 8 per cent in 2023-28. The beer accounts for just 10 per cent of the spirits market, with per capita consumption of 2 litres.

Craft beer market is an attractive segment globally as well as in India. The size of the craft beer market in India is currently around 2-3 per cent of the total beer market, with a projected growth rate of around 20 per cent per annum. The global craft beer market size was valued at $41.6 billion in 2020 and is projected to grow at a CAGR of 12.8 per cent from 2021 to 2028. The increasing popularity of craft beer and the growing number of microbreweries and brewpubs are driving the growth of the craft beer market both in India and globally.

Telangana, AP and other markets we function within are predominantly high alcohol by volume (ABV) markets with the consumer preferring products that are deemed value for money. Telangana and AP are strong markets with a fair share of lager in the towns and cities. Goa on the other hand is primarily a larger market for us.

What was the turnover of the company last financial year? Have you set any business goals for this fiscal and the coming years?

We presently have a market share of 10 per cent in the States of AP & Telangana, and receiving a very encouraging response from the other geographies of operation. We are targeting a share of 20 per cent by 2025. This will be accelerated with the more vibrant branding initiatives and introduction of new variants like Flying Monkey and Matinee.

Are you open to contract manufacturing/packaging for other beverage brands? Where do you see such opportunities coming from?

Yes, we are open to contract manufacturing and packaging for other beverage brands. We see opportunities coming from small-scale beverage companies that are looking to outsource their production and packaging. We have the necessary infrastructure and expertise to provide high-quality contract manufacturing and packaging services to such companies.

What are the latest trends in the alcoholic beverage manufacturing industry?

The latest trends in the alcoholic beverage manufacturing industry include the use of sustainable and locally sourced ingredients, the rise of low calorie and low alcohol options, and the adoption of innovative packaging solutions. There is also a growing interest in experimental flavours and unique brewing techniques.

What are the brand promotion activities for the year?

We have several brand promotion activities planned for the year including collaborations with local restaurants, participation in beer festivals, carnivals, sporting events etc. We have planned new social media campaigns to increase brand awareness and engagement with our customers.