India’s beer market has for long been ruled by three big multinationals — the Heineken-owned United Breweries, Carlsberg and AB InBev. But 38-year-old Ankur Jain’s homegrown craft beer brand, Bira 91, is brawling it out with the biggies at pubs and homes. Between challenging a mammoth incumbent, Kingfisher, in the premium category, to becoming the most sought after beer in metro pubs, the quirky monkey sold 2.6 million cases last year. With its focus on light tasting beer and unique brand positioning, it has caught the fancy of millennials, a target segment that the incumbents took for granted. In less than three years, the brand has cornered 14% share in key markets such as Delhi, Mumbai and Bengaluru. After tasting success in India, Bira 91 wants to repeat the same in Asian markets and the US. While it’s still early to predict if Bira 91 can win globally, back home it has ended up giving MNC players a hangover.
It was in June 2015, Ankur Jain invited 20 people through Facebook to a restaurant at Delhi’s Hauz Khas for a hip hop evening. The idea was to promote his three-month-old craft beer brand Bira 91. To his surprise, 200 people turned up on a Tuesday evening and that too for a party that was not even free. “People were ordering and reordering Bira 91, despite having other options at the restaurant. Soon, we ran out of beer. That night, I realised, we are on to something,” says the 38-year-old founder of the Delhi-based craft beer start-up.
More than three years later, Bira 91 with its quirky monkey logo, is now available in seven markets — Delhi, Mumbai, Bengaluru, Kolkata, Pune, Chandigarh and Goa. And it has already challenged the old market leader, at least in the premium segment. In Delhi, Mumbai and Bengaluru, the key metros, Bira 91 enjoys 14% market share in the premium beer category, where the next contender Kingfisher Ultra is at 7%. Heineken overall, with its other brands has a 20% share but the playful Bira 91 has a story of sweat hidden under its label.
Hop, skip and jump
Ankur Jain calls himself a Delhi boy. He completed his schooling in Delhi and flew to Chicago to pursue Computer Science. As a techie, he worked at Motorola briefly at the company’s healthcare division. Leveraging on his experience, Jain founded a healthcare start-up, Reliant MD, in New York in 2002. After running it for four years, he sold out to one of his clients, a large hospital. Back home in India, he joined Reliance Fresh in 2007, which had just started rolling out its retail business. Jain was part of the supply chain team, which connected farms to the stores.
Incidentally, during his time in New York, Jain had got hooked on to an upstart beer brand from Brooklyn Brewery. “That’s where I got introduced to great flavours of beer and got converted from a cheap vodka drinker to a beer drinker,” laughs Jain. After two years of working at Reliance, Jain not just missed the beer flavours but also the thrill of running an enterprise. In 2009, he decided to take the plunge into the world of lager. It was a logical move, too. “India has a male dominated drinking culture, a young population in a tropical country. So this was a category waiting to explode,” he felt. Having seen an upstart brewer Brooklyn challenging a giant such as Budweiser, Jain believed he could replicate the model in India as well.
Jain invested 150 million from his savings and started importing and distributing his favourite beers from Belgium, Germany, and the US. Having no idea which beers would work in India, his portfolio included 20 of the world’s best beers. The local distributors warned him that importing expensive beers was crazy. Kingfisher’s cheapest beer was available at 35 in 2009, and Jain’s cheapest beer was retailing at 350. “First six months, I visited every bar and restaurant in Delhi, requesting them to keep one case or even half a case. I got my first order after six months from Hyatt Regency for two cases, but beer has a shelf life,” smiles Jain.
Jain grappled with that business for the next four-five years. He was far from becoming the challenger that Brooklyn was to Budweiser. “Such a business demands scale, but we were not able to build business of any size,” he recalls. But hard work rarely goes waste. Even in a challenging business, Jain learnt a lot about the Indian consumer. Laughingly, he remembers that phase as “the most expensive focus group study”. He figured out what kind of beers Indians liked. It proved to be a valuable insight when they later tried to target bars and restaurants with their own brand. Typically, the new flavours are first sampled in pubs and bars, where people like to experiment with new drinks. If they like it, they seek it in retail. “We also found a big gap in the brand space. We figured out that urban consumers preferred lighter beers,” says Jain. Kingfisher had become generic for beer, while other international brands such as Foster’s, Heineken and Budweiser were trending because they were highly respected in Europe and the US. “So, we thought there was an opportunity for a homegrown brand, which was premium, youthful and also flavourful,” says Jain.
After spending almost five years importing and distributing beer, Jain decided to launch his own brand under B9 Beverages in 2015 by brewing it at a unit in Belgium. Consciously, a brand name was chosen, which was easy to say and remember. “We felt the brand should be playful, young, cool and Indian. A monkey was all of these things and ubiquitously Indian too,” says Jain. A quirky monkey’s face was chosen as the logo, giving life to Bira 91 the brand.
Even before launching the flagship brand Bira 91 (India’s country code), Jain had coffee with Abhay Pandey of Sequoia Capital India. Eight months post the meeting, Sequoia agreed to back Bira 91 as the first investor in November 2015, investing $6 million. “We were enthused by the early feedback on the product and believed in Ankur’s passion and vision to build a large business. There was a belief that the consumer was ready for a new young and vibrant craft beer, a concept that has worked in most advanced markets,” says Pandey.
The very first task for Jain and his sales team of four was to convince around 25 of the 50 restaurants in Delhi’s Hauz Khas, an upmarket eateries hub in South Delhi. Jain’s four years of legwork and connections paid off.
“We were able to place our product and started getting great attention from both bars and consumers.” There were three selling points. One, it was a new brand. Jain feels “many people underestimate the power of a new brand, it can get lot of attention”. The second, it was available on draught, ensuring constant supply to pubs, and the third was the taste. It was priced at 300-350 per mug against 250 per mug for Kingfisher at that time. But people were asking for repeats. Hauz Khas was won in a matter of weeks. “That’s when we knew, if we can own the most competitive neighbourhood in Delhi, nobody can stop us from adding a Connaught Place or a Gurugram soon.” And Bira 91 would be unstoppable over the next few months.
Jain’s projection was that they would sell 2,000 kegs in the first summer. But the demand overwhelmed them. They ran out of beer. In 2016, a plan was drawn up to make the beer locally at an Indore-based brewery. The second brewery came on stream in July 2017 in Nagpur. Through the two breweries, the brand can now produce 420,000 cases per month.
“The biggest challenge was ensuring a smooth transition of production from Belgium to Indore. The team was anxiously monitoring the ‘taste match’, ensuring it went up from about 80% to close to 100% over a few weeks. What was amusing, was to watch bars pushing Bira 91 as an imported beer many months after the transition to domestic manufacturing,” chuckles Pandey.
Just like in Delhi, Bira 91 has followed the same strategy in other markets. In any new city, the company focuses on a few strategic accounts (key restaurants), installs a draught machine, and builds the brand. Cities where draughts from outside the state are not allowed by law, Bira 91 starts with bottles. Bengaluru is one such city where law doesn’t allow you to supply draught beer if it hasn’t been brewed within Karnataka. After Delhi, Mumbai and Bengaluru are the second and third largest markets for Bira 91. “One thing has been common across the cities in India. Consumers really wanted something new, both from the perspective of brand and taste. That void existed and still continues to exist in several cities,” says Jain.
Once the company owns key restaurants/pubs in the cities, it usually retails its cans and bottles. In Delhi, three months after succeeding at Hauz Khas, the bottled beer was available at select retail outlets around the area. “The demand from retail channel started rising almost immediately. Our expectation was that it was going to take a lot longer to build the retail channel.” Today 75% of sales happen at retail outlets and 25% via draught. In the first year, Bira 91, managed to sell 50,000 cases and since then sales have skyrocketed, touching 2.6 million cases in 2017.
With laws restricting direct advertising of alcohol, brands often take a surrogate route. Interestingly, Bira 91, for the first 12 months, didn’t have any marketing strategy to talk about, except to get consumers to try their draught beer.
However, over the past 24 months, Jain and his team tried a variety of things before nailing it for good. Given its positioning, the brand decided to go digital first. Apart from activating their social media presence, it has tied up with digital brands such as Zomato and Saavn. “That’s where our consumer lives, decides to eat, or listen to music,” says Jain. The second approach has been to align around ‘spice’ as a brand. To this end, a Bira hot sauce was launched recently. Hot wings contests have been organised in restaurants and in 2017, it did a web series with travel show hosts Rocky and Mayur, which was called ‘Hot stuff’.
The third leg of the marketing strategy was associating Bira 91 with the hip hop genre. “We believe this genre is emerging in India where we have a lot of local artists creating music in their local language. It is also a very playful form of music,” says Jain. Bira 91 organised, what it claims to be, India’s largest hip hop festival ever, in Delhi in April 2018.
Pradeep Gidwani, founder and director of The Pint Room, believes the brand was bang on in filling a void in the premium craft beer space. “The global and local players didn’t focus on the premium end as sincerely as Bira 91. They focused on the market of today rather than tomorrow. They forgot that’s an opportunity, and rather made their brands more mass oriented.”
Having ended FY18 with sales of 1.65 billion, up from 300 million in FY17, the company is now targeting sales of over 4 billion by entering new cities, deep mining existing markets and tapping overseas markets. With a third brewery coming up in Rajasthan, the production capacity will go up to one million cases a month. Jain, owns 35% in the company after having raised till date a total of $100 million, including $35 million from Sequoia, $50 million from the Brussels-based investment firm Sofina and individual investors such as Kunal Bahl and Rohit Bansal, (founders of Snapdeal) Mayank Singhal (RNT Capital) and Deepinder Goyal (founder, Zomato). The latest round of funding from Sofina valued the company at $210 million.
While the domestic beer market is dominated by UB (owned by Heineken), Carlsberg and AB InBev, craft beer has emerged as a new segment. An All India Breweries Association report suggests the craft beer market is growing at 20%. While there are several microbreweries, packaged craft beer is not a large segment yet. With the minimum drinking age ranging from 18 to 25 years across different states, India has close to 704 million people of legal drinking age and over roughly 10 million more will be added by the end of this year. Besides, the concentration of millennials (20 million) in the top six metros makes it a lucrative market for Bira 91.
As a new brand, consumers had little expectation from Bira 91 but now expectation is sky high. With scaling up of production and markets happening at a hectic pace, managing growth is going to be a challenge for Jain. “It is very important that we fulfill the promise of the freshest and best tasting beer. That takes a lot of systems and processes. We are trying to ensure that we are able to deliver at a very large scale,” says Jain.
Even as it is looking to convert millennials in India, Jain has set his sights overseas on markets such as the US and Singapore. “The idea is to create a brand, which speaks the language of today’s generation and is playful and flavourful. We see an opportunity in overseas geographies, specifically in the APEC market,” says Jain.
Bira 91 started selling in Singapore two months ago. In the US they produce and sell in four cities, New York, New Jersey, Boston and Philadelphia. “It has been received well in New York and there are plans to expand in key international markets including more cities in the US, UK and Southeast Asia,” reveals Pandey. But the US is an extremely competitive market with 6,000-plus breweries and 10,000-plus brands. “Our strategy is almost the opposite of what it is in India but with the same identity. Choice of beer has become very complicated in the US, and we are simplifying the choice,” adds Jain. The highest selling beer in the US is Budweiser. At the other end, there are many craft beers, which are a little too special. “Probably, the consumer is tired of too many choices. He would like something simpler, but he doesn’t want to go back to Budweiser,” explains Jain. He feels Bira 91 can fill in the void. When the brand launched at the Tribeca Film Festival in New York, it sold more beer in two weeks than it usually sells in New Delhi in a month. Bira 91 currently sells a blonde lager, white ale and an IPA in the US. Given that the US is also home to two million Indian consumers, Jain feels the brand gives them “a craft option to call their own.” Gidwani, too, sees merit in Bira 91’s move to enter mature markets. “Regulation provides you a fair playing field in these markets. Moreover, the beer segment is evolving world over. Just like there is this craze for Corona (imported Mexican beer brand) or a German beer, people may like to try Indian beers.” If that, indeed, turns out to be the case, Jain could well end up being called the prince of craft beer.