Beer jostles for space in the Indian fridge amid Covid-19 crisis; hard spirits gain advantage

As urban Indian homes stock up their refrigerators to battle the pandemic, food and essentials have knocked out all space leaving no room for cool beer in the tropical country. Beer giant United Breweries (UB) that controls half of India’s beer market said consumers are increasingly preferring hard spirits such as vodka, rum and regular whiskey since beer is bulkier to transport and store.

“At home consumption of liquor is easy. Beer is bulky and even after you stock beer at home, it has to find a place in the family fridge,” said Shekhar Ramamurthy, managing director at UB, that sells brands such as Kingfisher and Heineken.

While consumption of alcohol is not taboo in most Indian households, the habit of stocking beer in a family fridge is not routine. Its shorter shelf life compared to hard spirits has seen demand shrink.

“It is not that people don’t want to drink beer. But the opportunity to drink beer becomes complicated by the fact that it needs to be consumed chilled and some of that gets converted into liquor. That has impacted the industry a lot,” added Ramamurthy.

According to both beer giants, UB and Anheuser Busch InBev (AB InBev), even home delivery/ecommerce models introduced recently in states such as Maharashtra, Odisha and West Bengal has not been able to drive sales as outlets prefer to deliver spirits for ease as beer packaging is bulky and needs to be delivered chilled.

“While we laud a few state governments for enabling e-commerce/home delivery of alcohol, all the above factors, including surge in pricing due to high taxation, have created a situation where beer just doesn’t seem a lucrative option for consumers, especially at a time when the pandemic has forced them to reassess their discretionary spends. Beer is taxed 60% higher than hard spirits,” said Kartikeya Sharma, president – South Asia at AB InBev.

The world’s largest brewer and maker of Budweiser said the segment saw demand plummet 60-70%, unlike Indian Made Foreign Liquor (IMFL). Within liquor, beer segment has been the hardest hit since it also has a higher portion of on-trade or outside consumption at restaurants and bars, the latter still closed due to the Covid-19 outbreak.

The demand slide for beer also comes at a time when brewers had already expected a flat fiscal due to the overall economic slowdown and taxation policies before the pandemic spread. Worse, beer makers do not expect a recovery anytime soon.

“To talk of growth right now is impossible. We are almost half of what we were in sales at same time last year,” said Ramamurthy, adding, “From a beer perspective, the faster the Covid-19 cure is out, the quicker the recovery.”

Pre-pandemic, India was one of the largest beer markets and consumed about 340 million cases per year (at 7.8 litres per case).


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