The growth of craft beer in India has opened a new growth channel for Microbrewery franchises in the Indian beer market.
Over the years, we have witnessed a change in the perception of how people perceive drinking beer. Beer has slowly become perfect indulgence after a tiresome day at work for the youth.
The majority of beer’s market growth is driven by the millennials and the consumers who consider beer a trendy drink, as compared with other traditional spirits. With globalization and western cultural influence, the younger generation favours beer consumption compared to hard alcohol.
However, there is a notable change in preferences among Indian beer consumers. They no longer desire large, corporate brands but are taking the time out to explore the amazing flavours and combinations of artisanal brews.
A brewery is one that produces freshly brewed beer. With an increasing number of upwardly mobile youngsters saying cheers to beer, the concept of breweries is rapidly gaining popularity. The freshly brewed beer has become their de-facto choice.
Brewery business is flourishing in the country because of rapid development and relatively high consumption rate among youth. The number of breweries in India has grown from two in 2008 to 80 last year. According to statistics, 500 more brewpubs would be seen popping up in India in the next five years. Beer sales in India have been predicted to grow by 6.9% in the next five years.
In fact, if recent developments are to be taken into consideration, i.e., a three-year ban on the parent company of Budweiser & Hoegaarden beers. These are one of the most popular beers in the country, unavailability of these quality beers are going to further increase the demand for craft beers.
The growth of craft beer has opened a new growth channel for Microbrewery franchises in the Indian beer market.
The Era of Millennials Driving the Market
As per statistics, 33% of the total population in India is made up of millennials (aged 20-39 years old). The young crowd is the major contributor to the sales of beer in India. The concept of brewed beer is galloping in the country especially among the millennials. They are now turning away from the mass-produced beer brands and are opting for rich-flavour freshly brewed in-house beers. Freshly brewed beers offer them the opportunity to experiment with flavours minus the glycerine.
Quality over Cost
With rising disposable incomes, rapid urbanisation & westernisation, the younger generations are seen inclining towards beer consumption and they don’t hesitate in spending some extra bucks for quality crafted beers.
Beer drinking in India is restricted to “bottled concept” and thus there is very less awareness about the beverage. Beer is best when consumed within 15 days. To extend the shelf-life of the beer for u to six months, mass-produced beer is often treated with glycerine as a preservative but the quality of the product suffers in the bargain.
Indians are now understanding beer better and thus seeking wide choices and better quality, which only craft beers can offer. There is a possibility of creating about 2,000 different varieties of beer. Youngsters are open to experimenting with various flavours of beer and are willing to shed extra money over the regular bottled beer.
Crafting Success via Franchising
With the rising demand for craft beers in India, new avenues in the franchise industry have also emerged. Realising the potential of craft beers in the country, many brands have started franchising their microbreweries such as World of Beer, The BrewMaster Micro-Brewery etc.
Not just simple, innovative concepts like Beer Cafe has also gained momentum in the franchise Industry. The Beer Cafe is India's largest beer chain which gained popularity with the merging of alcohol with cafe vibe.
While the market is favourable for a microbrewery, the investment is a bit on the higher side. To start a microbrewery franchise, the start-up investment ranges from INR 1-5 Cr, depending upon the area. The area requirements start from 3500 sq. ft. and goes up to 10,000 sq. ft. The anticipated return on investment would be 20-40% within the payback period of 3-4 Years.