"The maturing beer market combined with the support of government incentives on exports will positively open up higher export potentials for Indian beer brands," said UBL in its Annual Report 2019-20.
It said that for the last three years the company has been directly exporting to Singapore, UAE and a few other countries along with its existing licensing arrangements for brewing in UK (including supplies to European market), Australia, New Zealand and Nepal.
Barring the COVID-19 impact -- both in terms of revenues and sales volume, which may last during the current year -- the market is expected to further grow going forward, the report said.
While talking about the Indian market, UBL said that per capita beer consumption here is still very low compared to other countries in the Asia Pacific region and therefore the market could witness "huge growth in the coming years".
This would be led by factors such as the shift from hard liquor to beer consumption by consumers in India, increase in disposable income, change in societal perspective and others, it added.
"Attitude towards alcohol consumption is evolving particularly amongst youth, working women and other urban population who are gaining an appetite for beer as social drinking has become a more adaptable lifestyle in metros and tier-2 cities," it said.
Over 30 per cent of the total population in India comprises youth, and beer consumption is increasingly becoming part of their social interactions.
Beer is gradually becoming a perfect after-work companion for corporate India as well, said UBL, in which Heineken has a majority stake.
"Except for the current financial year where sales and revenue may be adversely impacted due to the after-effect of this force majeure circumstance, the opportunities for beer growth would stay northbound," it said.
Moreover, online delivery of liquor, permitted in some states after the market opened after lockdown, has augmented easy availability of beer, the report said.
"While excise policies across states do not allow online supply or delivery of alcohol, the COVID pandemic has given the alcohol industry an opportunity to pursue home delivery and online sales which are likely to augment easy availability of beer, it said.
According to UBL, the industry may witness further acquisitions, entry of new players and brands, and tie-ups which will drive this market further towards growth.
"It is expected that the demand for premium beer will continue to rise in the future with an increase in personal disposable income and higher living standards," it said.
However, there are some challenges also as the distribution of beer in India is still largely controlled by the state or state-owned corporations, resulting in stricter regulations across various states so as to have better control over prices, consumption and excise duty.
"This is a challenge. During the year under review, the state of Andhra Pradesh introduced a new alcohol policy, which cancelled existing bar licences and reduced the number of retail outlets by about 40 per cent," it said adding that "such a conservative and anti-industry approach in a few states poses a challenge for the company".
Beer industry has registered robust growth in the last one and a half decades. From a total industry consumption of about 100 million cases in 2005, the consumption crossed over 300 million cases in 2019.
The current industry size is estimated to be over 320 million cases per annum.
"Three leading players contribute over 85 per cent of the total industry sales with our company being the market leader having a market share of about 52 per cent," said UBL.
However, the Indian beer market shrunk in FY20 on account of several factors such as COVID-19 and some dry days in April and May due to general elections.
Sales of liquor products including beer were banned in India for almost 40 days during the lockdown and window sales started from May 4.
(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)
Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.
We, however, have a request.
As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.
Support quality journalism and subscribe to Business Standard.