United Breweries aims to lead India's beer boom with entry-level and premium beers

Beverage maker United Breweries expects continued mid to high single digit growth in India in the beer category, Managing Director and CEO Vivek Gupta said on December 6. He sees vast opportunity for growth, considering the current low penetration of beer in both urban and rural India.

“My goal is to lead the category growth in India. We are fortunate to delight almost 60% of the consumers in this category, and we continue to expand our lead, bringing great innovation," he he told CNBC-TV18 in an exclusive interaction.

United Breweries welcomed competition as it helps improve market penetration. He believes the more the number of players entering the category, the more people will talk about beer and the category’s penetration will grow.

Addressing the market dynamics, Gupta identified an intriguing opportunity to introduce entry-level beer to the market. He explained, “India still has a spirits-dominated market, with 80-85% consumers drinking hard liquor. There is an opportunity to have an entry-level beer, a premium beer, and even more aspirational beer and global brands in India."

Gupta expects the premium business to grow around 40 to 45% next year. His remarks come as his company, which competes against industry rivals like United Spirits and Radico Khaitan, recently launched Heineken Silver Draught beer in India with an aim to provide consumers with a premium, smooth-tasting beverage tailored for social occasions.

Avendus Capital Public Markets Alternate Strategies pointed to a notable shift towards high-end beverages, both alcoholic and non-alcoholic. The brokerage firm’s CEO Andrew Holland reflected on the rising popularity of luxury drinks, particularly in travel and entertainment, and said he expects the trend to persist over the next three to five years.

United Breweries shares traded nearly a percent higher at Rs 1,716.65 on BSE at 11:22 am. In the past six months, the firm has given a return of nearly 20% to its investors as against benchmark Sensex which rose more than 10% during the period. The Bangalore-based company market cap has risen to ₹44,960 crore.