‘Consumers transitioning to newer brands’

Independent liquor maker, B9 Beverages, a Sequoia Capital-backed start-up, which owns the popular Bira 91 beer brand, is the latest success story in the Indian liquor industry. It has taken on well-entrenched players like United Breweries and carved out a market of its own. In an interview with BusinessLine , the beer maker’s Managing Director Ankur Jain says that the industry’s narrative about itself should change to that of its usefulness in being part of the economic fabric of the country. Excerpts:

How would you rate the performance of the liquor industry during 2017?

I think, the overall regulatory uncertainty has impacted the industry in 2017. If it had not been there, we would have done far better in terms of sales, capex, revenues, and deployment. Some of them were put on hold because of this reason.

Do you think the same trend will continue in 2018 as well?

We will be entering into general elections mode. Therefore, 2018 will be highly volatile from a regulatory point of view.

Looking at the runaway success of Bira 91, do you think the market for independent beer companies like yours is growing similar to the ones in Europe and the US?

I think, consumers are transitioning to newer brands that have more flavours and which appeal to the youth. Bira 91 is probably a good example of this. The trend towards independent companies not just in liquor but also in other food companies is happening at a rapid pace.

How will the next year pan out for a company like yours?

We expect our revenues to grow three times more than in the previous year. We may not have our own breweries next year but in the future, we might. We will close at three million cases this fiscal and will have revenues of about ₹170 crore.

You did say that it will be a difficult year for the industry next year as well. What should the companies do to navigate through such a situation next year?

As an industry, we must make the case about the kind of impact we can have on the economy. We are supporting the agriculture sector because of the fact that we get our inputs like barley and grapes from the farm sector.

We create several jobs there and, according to a McKinsey report, for every employee, a beer company creates 10 more jobs.

We need to make a case for that so that the perception about our industry, which is seen more as a sin industry, changes. The government should be made to understand that we are as much part of the economic fabric as other sectors are.

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