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Wednesday, July 24, 2024

India prepares for scorching summer with cheers from beer makers

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In Short:

Breweries are hopeful for a better year in 2024 after a 10% drop in sales last year due to rains. Increased production tie-ups in different states are expected to increase capacity. Challenges include state-specific duties and high freight costs. Despite supply disruptions, beer makers like United Breweries remain optimistic about the upcoming season, with expectations of revenue increase and stable raw material prices.


Breweries Cheers to a Brighter 2024!

After a 10% dip in industry volumes last year due to unseasonal rains affecting sales during the summer months, breweries are now looking forward with optimism for the upcoming year.

Positive Outlook by DeVANS Modern Breweries Ltd

DeVANS Modern Breweries Ltd, known for brands like Godfather and Six Fields beers, is upbeat about the year ahead. According to the Chairperson and Managing Director, Prem Dewan, last year’s demand was impacted by rains. However, with limited rainfall expected this year until the summer, they are hopeful for a turnaround.

Expansion Plans and Production Tie-ups

The company has recently inked two production tie-ups in Uttar Pradesh’s Barabanki region and in Assam, expanding its presence to six states. This move aims to boost their production capacity from six to 10 million cases by the end of 2025.

Challenges in the Industry

One of the major hurdles faced by breweries is dealing with state-specific duties and high freight costs. To combat this, many beer manufacturers are setting up local production units to lower expenses.

United Breweries Ltd Remains Hopeful

United Breweries Ltd (UBL), the company behind popular brands like Kingfisher and Heineken beers, anticipates a positive outlook for the upcoming season despite potential supply disruptions.

Positive Growth Forecast for the Industry

A recent report by rating agency Icra suggests a 9-11% year-on-year increase in revenue for beer companies in 2024. The industry is expected to witness good sales in the April-June quarter, primarily due to anticipated hot weather and stable raw material prices.

Challenges Ahead for Hospitality Sector

The hospitality sector may face uncertainties due to election-related dry days, impacting on-premise alcohol sales. However, industry experts like Rahul Singh, the founder of The Beer Café chain, remain cautiously optimistic about consumption patterns during the peak summer season.

Continued Expansion and Sales Expectations

Companies like Kimaya Himalayan Beverages are also gearing up for robust sales in 2024. With increased production capacities and strategic partnerships, they are ready to meet the demands of the market.

Despite challenges, the industry is set for a promising year ahead with innovative strategies and a positive outlook.

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