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ira 91 raised Rs 38 crores from its current investors, Sequoia India and Sofina, a Belgium-based investment firm, in April 20

The world of Beverages is never-ending. It s a range so long and wide with huge product extensions that you’d ever dream of. The market for the beverage is immense and huge. The world consumers a beverage every 30 milliseconds, irrespective of the content. Even water could be a beverage, depends on how society brands it. Today we drink beverages like Pepsi, Coca-cola, Fanta, Minute maid, and so on… some beverages are segmented into certain parts of society. These segmented beverages are for those above a certain age limit and can drink; such is called alcoholic beverages. These are drunk by adults above the age of 21 across the globe.

One of the primary drivers of this market is the growing demand for premium alcoholic beverages. Efforts by producers of alcoholic beverages to strengthen distribution channels and expand purchasing channels, such as online stores and convenience stores, contribute significantly to the global market’s alcoholic beverage growth. Millennial customers, in particular, run the market for premium alcoholic beverages. Innovation in products and economic growth are attracting consumers to pursue expensive alcoholic beverages. The growth of the industry is encouraged by new product launches and innovations in alcoholic drinks. Because of evolving consumer preferences, companies are launching innovative products. For low-calorie and superior ingredients, consumers are paying a huge amount.

With few companies holding the maximum market share, the alcoholic beverage industry is considered a consolidated market. The most popular strategy in the global alcoholic beverage market is product launches, followed by new mergers and acquisitions. The alcoholic beverage market’s key players are Diageo, Bacardi, Constellation Brands, and Anheuser-Busch InBev. Beer has been known to be the most popular alcoholic beverage globally and contains about 4-7% alcohol (1). Among a large section of consumers in the North American regions, craft beer has gained popularity. The rising popularity of beer among consumers, particularly among the younger generation, is considered the main growth factor. Nevertheless, Europe recorded the highest market share as the sales of red blends, sparkling wines, and rose wines increased, with a special demand for premium wines due to an increase in the per-bottle spending pattern. Well, the beverage industry isn’t just collapsed to those top brands (2).

India is the world’s biggest manufacturer of alcoholic drinks. The market for alcoholic beverages has matured over the years in India, but it is still heavily restricted to limited varieties. The country has approximately 10 million retail outlets and around 500,000 bars and pubs. The market for alcoholic beverages has increased by 18.22 percent from 2010 to 2017 (3) over the past five years. Indian beer brands to take the cake as they are the most consumed ones in the country. Bira produced by B9 is one of the nation’s biggest brands consumed by the youth and the adults. Bira’s growth over the years has been unparalleled.

Growing a brand

With over 85 percent of India’s beer market dominated by strong beer, with alcohol content ranging from 6 percent to 8 percent, Boom helps Bira 91 transition from a craft beer brand to a player that gets most of its growth from smaller towns and cities. Boom has also allowed Bira 91 to expand aggressively from 56 cities at the beginning of the year to 386 cities now and become India’s fifth-largest beer producer with a market share of 2.7 percent in value (4). The journey was phenomenal for a brand that started its innings in Delhi in February 2015: from a paltry gross income of 50 lakh in fiscal 2016 to a run rate of 700 crores for the financial year ending through March 2020; from availability in 60 locations to reaching just under 29000 by the end of March; as well as from selling in one nation to now being available in 16.

Over the years, in robotics (5) healthcare, e-commerce, travel and tourism, food and beverages, banks and financial institutions, and so many other industries, we have seen numerous changes throughout each industry sector. Every industry is changing according to the need for time. There has been an escalated change in the liquor industry in the past few years. One of them is craft beer, and beer and its variants have seen a tremendous change globally. The Indian beer producer Bira 91, which shattered the dominant market of Kingfisher Strong and Haywards and placed the Indian market with a firm root of Craft Beer.

In 2015, under his established firm B9 Beverages Pvt, Ankur Jain introduced Bira 91, the first Indian handcrafted beer. So Bira 91 came up with a shift that millennial customers have been looking for in the past few years. In 2007, after running a healthcare start-up in New York, the founder returned to India before completing a bachelor’s degree in Computer Engineering from the Illinois Institute of Technology, Chicago. He started Cerana Beverages in 2009, importing and distributing premium craft beer brands from the US, Germany, and Belgium in Delhi, Mumbai, and Bengaluru without prior experience in the liquor business (6).

Research and Stats

Based on its research and stats, Ankur Jain made a clever decision to establish a craft beer platform in India. In 2014-2015, he noticed that India consumed around 270 million beer cases, including craft beers, microbreweries, and many more. For this, he observed a greater market and seized the chance. He raised seed funding of 1 million dollars from six of his college friends in 2014 to launch his own bottled craft beer before originating Bira 91, and after a year, he expanded his business, and thus Bira91 came into being. Belgian Ambassador Jan Luykx formally launched Bira 91 in India at an event attended by more than 500 guests in February 2015 (7).

Earlier, the beverage market was full of biggies such as Kingfisher, Tuborg, Fosters, Budweiser, Heineken, Carlsberg, etc. Their record was currently shattered by Bira 91, based on the need for the taste-oriented strong beer category, the start-up always wants to cover the market of those big boys. Bira 91 had nearly 50 percent sales from bars and restaurants last year, and they expected 35 percent from bars and restaurants in the future and most of the liquor sales and shops. In addition to India, the Bira 91 aims to cover the world of craft beer. The first city they targeted was New York to fulfill their goal, where they launched and received global validation (8). They aim to cover Boston and New Jersey, the world’s toughest craft beer market, after New York. As in those countries, something that attracts customers to the pubs and that specific bar is the originating craft beer of the pubs and bars under their own. Bira 91 easily covered India’s market and became a brand name within two years of its launch, but in the foreign market, the situation is vice versa.

Bira continued to grow significantly over the last year and maintained its position in the premium beer market, setting up India’s largest dispensing beer network in restaurants and bars across the nation. The Company had also come up with a different Brand-named Boom during the year and has proved an early success for the Company within eight weeks of its launch and crossed over 2 million orders for the liquid in dispatch. In the financial year 2018-19, the business clocked a turnover of 192 Crores, an increase of 20 percent from last year. As compared to 100 crores last year, the losses have nearly doubled to Rs.200 crores. Let us figure out why the losses have doubled (9).

Recent Fundings and Valuation

• The Sequoia Funding

The financing round was led by investors, Sofina, an investment company based in Belgium, and Sequoia Capital. Other existing investors were also involved in the beer brand’s fundraiser, such as Sixth Sense Ventures-Mumbai-based Venture Capital company, Neoplux, a private equity firm from Korea others. The Company had planned to use this latest influx of financial resources, according to sources, to strengthen its position by expanding the Indian market and consolidating leadership in the industry’s premium beer segment. The Company’s first formal funding round concluded in 2016 with financial resources valued at six million dollars.

  • Kirin’s 30 million dollar funding

Reuters reported in August 2020 that B9 had been in discussions with global microbrewers, including Kirin and other investors, to sell up to 20 percent in the Company. The investment would enable Bira, which has reported losses in recent years and had been hit by the COVID-19 pandemic, to break even in the financial year 2022, which commences in April 2021. Meanwhile, Kirin has historically shown an interest in independent breweries and holds a minority stake in the Brooklyn Brewery in New York. Jain said the funding would make it possible for them to explore synergies. While Bira, launched in 2015, is one of the smallest players in India’s wider beer industry, its craft beer offerings are currently becoming increasingly popular.

Bira’s Valuation

Bira 91 has raised close to 518 Crores and counts among its investors’ celebrities Farhan and Zoya Akhtar and film producer Ritesh Sidhwani and CEO Kalyan Krishnamurthy of Flipkart, Sequoia Capital. At a reported valuation of around 1470 Crores, Bira 91 last raised 50 million dollars, announced in May last year. They have raised 30 Cr from Sixth Sense Ventures in 2019, at a reported 1722 Crores valuation. Bira 91 raised Rs 38 crores from its current investors, Sequoia India and Sofina, a Belgium-based investment firm, in April 2020. Sequoia has invested a total amount of 22 Crores, and Sofina put down 15.23 Crores.