The sum of all beers

Beer makers are going all out to add more fizz to the beer market.

Young chefs and food and beverage (F&B) managers of Mumbai's Taj Mahal hotel sat in attention as brewmaster Robert Knox, technical director of Cobra Beer, elucidated the subtle nuances of beer appreciation last week. This was Cobra Indian Beer's foray into the domestic market.

Brewing for the Indian market for the first time, Cobra Beer would have preferred to have used traditional advertising to build brand familiarisation. But with the ban on advertising, it had to contend with beer tasting events to establish acquaintance with consumers and the trade.

Like Cobra, all the beer players are trying to bring the fizz back into a lacklustre beer market.

Last month, South African player SAB Miller tied up with theatre director Anurag Kashyap to stage his play, When God Said Cheers in bars and restaurants across the country. It is a story of a man's conversations with god over a pint of Castle Lager. This is an unusual event sponsorship because Castle beer, here, is an integral prop in the play!

SAB Miller and United Breweries together control more than two-thirds of India's beer market. Excise findings reported the total consumption of beer at 89 million cases in the year ending 2005 and growing at 6-7 per cent annually.

Even then, the per capita consumption is a mere 0.7 litres compared to 20 litres in China and 100 litres in Britain. Industry players find this disappointing, considering the youth-skewed demographics and changing social values.

It isn't that Indians don't drink enough alcohol. The reality, says UB Group Breweries Division CEO, Kalyan Ganguly, "With the government policy of taxing one unit of beer more heavily than one unit of spirits, beer turns out to be an elitist beverage. The masses turn to hard liquor for their needs." The spirit to beer consumption in India is 7:1, making India one of the last major markets where consumption of spirits outweighs that of beer.

However, beer manufacturers are keeping optimism alive. Last month SAB Miller bought out Shaw Wallace Group's 50 per cent stake in the country's second biggest brewer, Shaw Wallace Breweries, giving them full control of over 10 breweries across the country, with brands including Hayward's 5000, the nation's top selling strong beer brand.

Despite acquisitions and expanded production capacities, beer manufacturers are having a hard time broadening their consumer base.

The UB group, like SAB Miller, is more than happy to use surrogate advertising to serve its marketing needs, promoting Kingfisher beer with ads for Kingfisher mineral water. It's now capitalising on the eponymous airline to promote its brand presence.

The 'Yella ok. Cool Drink Yaake' Karnataka campaign for UB export lager, in the guise of export soda, conceptualised to appeal to the just-turned 18-year-olds is offering beer (soda) as the cooler alternative to soft drinks. The campaign was so successful that it was even turned into a cartoon strip series.

"Our strategy has been a combination of changing pack sizes, introducing a canning line, combined with lowering pricing and effectively using distrbution channels," says Shekhar Ramamurthy, executive vice president-sales & marketing of UB. "Our drive is two-fold: one is to broaden the base of the entire beer market and to increase our market share," he adds.

Four years ago, UB revived a lagging UB export lager brand by packaging it in a 330 ml bottle and initiating a bottle-return policy for Rs 18. Today this effective pricing tactic has been extended to Kingfisher Strong as well.

With it's finger on the market pulse, four months ago, UB launched Jaguar, which they claim is a 'winey beer'. With an alcohol content of around 8 per cent, this is a sweet tasting beer without the strong flavour of a spirit. Industry sources claim that Jaguar has cornered 10 per cent of the strong beer segment in Karnataka.

Fosters, which has been a local market player for seven years now, relies on it's well-established 'Brand Australia' for good measure, with it's Formula One associated events spreading across premium bars and restaurants across the country.

During the Australia cricket tour of India, Fosters switched gears to associate itself with India's best loved sport. A spate of off-pitch media and consumer events were organised around the cricket team, from beer and barbecue afternoons to musical evenings.

Today, Fosters has a 2.5 per cent share of the national beer market. It isn't contemplating any product extensions as managing director Pradeep Gidwani explains, "It would be a cumbersome and expensive exercise to get a new product registered in every state, unjustified by low volumes."

Its focus instead remains on brand differentiation based on product quality and trade consolidation.

Cobra, on the other hand, is gung ho. For the past 15 years, it has been striving to be different in the UK and European markets as the quintessential Indian beer. The initial marketing was exclusively from Indian restaurants.

Says Perses Bilimoria, regional director Cobra, "We are looking at bringing in our non-alcoholic beer in a few months which will allow us to capitalise on surrogate advertising. We also want to import our low-calorie beer which we're hoping will be popular with the ladies. At the end of the year, we will start brewing strong beer; we cannot afford to ignore it because it is the fastest growing beer segment".

This is a wise move by Cobra. Strong beer (alcohol by volume of 5-8 per cent) accounts for 65 per cent of the total beer market. Both UB and SAB Miller have strong beers that are current market leaders in the category.

Last year UB launched the first ever 330 ml and mini 250 ml sizes for its Kingfisher Strong beer with the tagline 'Chhota size. Bada Dum', capitalising on the larger consumer base for strong beer and offering convenient sizing to boot.

Or see how the trade is being wooed. Warden Wines, a retail outlet in south Mumbai displays a massive illuminated sign for Kingfisher Strong. According to Vishnu Patel, the store manager, UB pays it Rs 10,000 for the prominent display.

"No other company comes close to this offer," he says. Shaw Wallace is known to pay for renovations in alcohol outlets in return for displaying only Haywards and Royal Challenge brands in beer coolers.

And while rookie Cobra is yet to make a dent in the beer market, Billimoria says, "With a strong beer portfolio by the end of the year, we will be positioned between Fosters and UB."

Clearly, with the beer market being one of the last bastions of government control, the players are constantly using innovative means to beat it.