Indian beer market set for strong growth

Globally revenue in the beer segment amounts to $13.95 billion in 2022. The market is expected to grow annually by 11.41 per cent (CAGR 2022-2025). In global comparison, most revenue is generated in China ($121.40 billion in 2022). In relation to total population figures, per person revenues of $9.92 are generated in 2022. By 2025, 26 per cent of spending and 18 per cent of volume consumption in the beer segment will be attributable to out-of-home consumption (e.g., in bars and restaurants).

The volume is expected to amount to 5,852.2ML by 2025. The market for beer segment is expected to show a volume growth of 9.2 per cent in 2023. The average volume per person in the beer segment is expected to amount to 3.39 lakh in 2022.

The India beer market was stood at a value of nearly Rs 371 billion in 2020. In 2021 the India beer market reached a value of Rs 350 billion. Conservative figures suggest that the Indian beer market reached a value of Rs 350 billion in 2021 and expects to reach Rs 580 billion by 2027, exhibiting a CAGR of 8.3 per cent. More optimistically the industry is further expected to reach approximately Rs 662 billion by 2026, exhibiting an estimated CAGR of about 9.2 per cent during 2022-2027.

The growth in the India beer market can be attributed to the increasing preference for alcoholic beverages among consumers, especially millennials, during celebrations and social and cultural gatherings. In line with this, the changing lifestyle of consumers, along with rising brand consciousness regarding imported and premium beers, is favouring the market growth. Moreover, the increasing adoption of canned beer, due to convenient transportation, handling and longer shelf-life, is positively impacting the market growth.

Various product innovations, such as the introduction of freshly brewed and on-tap beers, are providing a thrust to the market growth. Micro and craft breweries are offering beer to their customers in customized and tropical flavours, including peach, strawberry, apple, lime and pineapple. Other factors, including easy availability of products through online platforms and rising expenditure capacities of the consumers, are anticipated to drive the market across the country.

Innovation in products and packaging is further expected to drive the market growth in India. Low alcohol carbonated drinks like Seltzers, Breezers, RTDs, Canned beer, draught beer, and craft beer are luring customers.

The India beer industry is highly concentrated among a few significant players. United Breweries Limited (UBL) is one of the leading companies in the beer market in India. Heineken is now a majority promoter shareholder and owns a 61.5 per cent stake in UBL.

However, it also added the industry's potential is yet to be fully unlocked owing to factors such as a relatively limited outlet universe, various government regulations and high taxation policies in most States across India.

While spirits like whisky, vodka, brandy, and rum are highly preferred by consumers in India, a rising segment of consumers is shifting towards beer owing to its lower alcohol content. The industry growth is also reinforced by the decrease in the selling and distribution costs in India.