Late on Wednesday evening, at a stylish pub on Vittal Mallya Road in the pub-capital of India, Bangalore, just yards away from UB Group's towering headquarters, music blares to celebrate the start of Oktoberfest, the legendary beer festival. Elsewhere across the globe in London, SABMiller, earlier in the day, finally moved into acquire arch rival Foster's in a $10.2 billion deal. It certainly is a time to celebrate, especially if you are beer lover in India. You are spoilt for choice.
India is among the few markets in the world in which the beer market is growing rapidly, and as Heineken management said - it is the last frontier. Around 220 million cases of beer was consumed in the last fiscal in India and United Breweries, controlled by the flamboyant Vijay Mallya, has a majority 52 per cent market share followed by SABMiller in India with close to 30 per cent share. The beer market in India during the past decade grew at an average of around 13-15 per cent and the rate has accelerated further to around 17 per cent in the recent past.
Rahul Kanwal, who was one of the revellers at the pub in Bangalore, is a happy man. Just days after United Breweries launched the legendary beer brand - Heineken in India, now comes the news of SABMiller acquiring Foster's globally. Even though SABMiller had acquired Foster's India operations during 2006 in $120 million deal, the latest global consolidation is expected to further strengthen SABMiller's operations in India.
United Breweries MD Kalyan Ganguly is not perturbed though. "We have faced many battles from global brands during the past two decades and we have come out in flying colours. I do not see much impact on our operations due to this global deal," Ganguly said. He must know better. For the past two decades, United Breweries has entrenched itself in the Indian market with unmatched distribution muscle and has innovated with some of the best marketing and branding strategies.
SABMiller, entered India during 2000, and has made two major acquisitions in the Indian Market - Narang Breweries and Mysore Breweries, through which it got access to breweries and to some established brands such as Haywards 5000 and KnockOut. SABMiller in India has a clutch of six brands and has been trying to bring in it's global product lineup. After Peroni, the company is understood to be looking at other brands. Next in the lineup may be another famous brand Victoria Bitter, the brand which sponsors the England cricket team.
Officially though there was no confirmation of the product roadmap in India. A SABMiller global spokesperson from London told Business Standard: "We support consumer choice of beer brands and those that do the best job of explaining to the consumer their benefit most will prosper. We, believe, Foster's is a brand that continuously tries to better understand our consumers and improve our offer to meet their needs."
With Heinken set to make inroads in the Indian market and UB's Kingfisher brand franchise showing no signs of letting up, the SABMiller-Foster's new combine may just have to think hard on how to make its product reach where other beers cannot reach.
