indian beer industry

5/28/2018 Indian Beer Industry

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Indian Beer Industry

EXECUTIVE SUMMARY

TRENDS

Beer sales posted a growth of 11% in terms of total volume, spurred by a hot summer of 2012 and

rising prices of competing liquor like spirits and wine. In addition, a crackdown by state governments

on illegal spirits and country liquor also caused a shift to branded beer.

COMPETITIVE LANDSCAPE

United Breweries led in 2012 with 53% market share by volume, followed by SABMiller India Ltd with

27% volume share. The third player, Carlsberg India Pvt Ltd, came in at 6%, sharply increasing its

share from 2011, but the gap still underlining the dominance of the top two players.

PROSPECTS

Beer volume sales are forecast to grow at a CAGR of 10% in the period 2012-2017. Forecast salesgrowth is expected to be more or less in tune with review period sales growth, as companies

continue to build distribution and keep introducing variants like flavoured beer or mild beer.

Imported beer is expected to show a steady increase, as is craft beer, though both will remain with

small share of overall beer volume.

Samples (FAQs about samples):

Sample Beer Market Research Report

Sample Beer Data

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Overview

Discover the latest market trends and uncover sources of future market growth for the Beer industry in

India with research from Euromonitor's team of in-country analysts.

Find hidden opportunities in the most current research data available, understand competitive threats

with our detailed market analysis, and plan your corporate strategy with our expert qualitative analysis

and growth projections.

If you're in the Beer industry in India, our research will save you time and money while empowering you

to make informed, profitable decisions.

The Beer in India market research report includes:

Analysis of key supply-side and demand trends

Detailed segmentation of international and local products

Historic volumes and values, company and brand market volume shares

Five year forecasts of market trends and market growth

Production, imports by origin, exports by destination

Robust and transparent market research methodology, conducted in-country

Our market research reports answer questions such as:

What is the market size of Beer in India?

What are the major brands in India?

How has premium lager performed in the wake of the global recession, has it lost out to economy

lager as consumers traded down?

What are the most popular flavours within non-alcoholic beer?

What are the market opportunities for healthier beers like low calorie and/or low abv beers?
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Has the implementation of a stricter drink driving law benefited sales of low/non-alcohol beer?

Has the recession benefited domestic lager over imported lager?

Why buy this report?

Gain competitive intelligence about market leaders

Track key industry trends, opportunities and threats

Inform your marketing, brand, strategy and market development, sales and supply functions

This industry report originates from Passport, ourAlcoholic Drinks market research database.

Table of Contents

Beer in India - Category Analysis

HEADLINES

TRENDS

PRODUCTION, IMPORTS AND EXPORTS

COMPETITIVE LANDSCAPE

PROSPECTS

CATEGORY BACKGROUND

Lager price band methodology

Summary 1 Lager by Price Band 2012

CATEGORY DATA

Table 1 Sales of Beer by Category: Total Volume 2007-2012

Table 2 Sales of Beer by Category: Total Value 2007-2012

Table 3 Sales of Beer by Category: % Total Volume Growth 2007-2012

Table 4 Sales of Beer by Category: % Total Value Growth 2007-2012

Table 5 Sales of Beer by On-trade vs Off-trade: Volume 2007-2012

Table 6 Sales of Beer by On-trade vs Off-trade: Value 2007-2012

Table 7 Sales of Beer by On-trade vs Off-trade: % Volume Growth 2007-2012

Table 8 Sales of Beer by On-trade vs Off-trade: % Value Growth 2007-2012

Table 9 GBO Company Shares of Beer: % Total Volume 2008-2012

Table 10 NBO Company Shares of Beer: % Total Volume 2008-2012

Table 11 LBN Brand Shares of Beer: % Total Volume 2009-2012

Table 12 Production, Imports and Exports of Beer: Total Volume 2006-2011

Table 13 Imports of Beer by Country of Origin: Total Volume 2006-2011

Table 14 Imports of Beer by Country of Origin: Total Value 2006-2011

Table 15 Exports of Beer by Country of Destination: Total Volume 2006-2011

Table 16 Exports of Beer by Country of Destination: Total Value 2006-2011
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Table 17 Forecast Sales of Beer by Category: Total Volume 2012-2017

Table 18 Forecast Sales of Beer by Category: Total Value 2012-2017

Table 19 Forecast Sales of Beer by Category: % Total Volume Growth 2012-2017

Table 20 Forecast Sales of Beer by Category: % Total Value Growth 2012-2017

Beer in India - Company Profiles

Mohan Meakin Ltd in Alcoholic Drinks (India)

STRATEGIC DIRECTION

KEY FACTS

Summary 2 Mohan Meakin Ltd: Key Facts

Summary 3 Mohan Meakin Ltd: Operational Indicators

COMPANY BACKGROUND

PRODUCTION

COMPETITIVE POSITIONING

Summary 4 Mohan Meakin Ltd: Competitive Position 2012

Mount Shivalik Industries Ltd in Alcoholic Drinks (India)

STRATEGIC DIRECTION

KEY FACTS

Summary 5 Mount Shivalik Industries Ltd: Key Facts

Summary 6 Mount Shivalik Industries Ltd: Operational Indicators

COMPANY BACKGROUND

PRODUCTION

COMPETITIVE POSITIONING

Summary 7 Mount Shivalik Industries Ltd: Competitive Position 2012

Alcoholic Drinks in India - Industry Context

EXECUTIVE SUMMARY

Positive growth for alcoholic drinks in 2012

Companies move towards premiumisation of products

Diageos acquisition of United Spirits Ltd changes ground rules

Hypermarkets and supermarkets emerging as key platforms

Sales of alcoholic drinks forecast to rise by 8% CAGR by volume

KEY TRENDS AND DEVELOPMENTS

Supermarkets and hypermarkets make their mark

Companies move towards premiumisation

Flavoured drinks find favour

Key new product launches


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Summary 8 Key New Product Developments 2012

Specialist retailer

Market merger and acquisition activity

Summary 9 Merger and Acquisition Activity 2011-2012

TERRITORY KEY TRENDS AND DEVELOPMENTS

East and Northeast India

North India

South India

West India

RURAL VS URBAN KEY TRENDS AND DEVELOPMENTS

MARKET BACKGROUND

Legislation

Table 21 Number of On-trade Establishments by Type 2007-2012

TAXATION AND DUTY LEVIES

Summary 10 Taxation and Duty Levies on Alcoholic Drinks 2012

Summary 11 Central Customs Duty

Table 22 Typical Wholesaler and Retailer Off-trade Mark-ups by Selected Categories 2012

Table 23 Selling Margin of a Typical Beer Brand in Retail Channel That Uses Wholesalers 2012

Table 24 Selling Margin of a Typical Beer Brand in Retail Channel That Does Not Use

Wholesalers 2012

Table 25 Selling Margin of a Typical Wine Brand in Retail Channel That Uses Wholesalers

2012

Table 26 Selling Margin of a Typical Wine Brand in Retail Channel That Does Not Use

Wholesalers 2012

Table 27 Selling Margin of a Typical Spirits Brand in Retail Channel That Uses Wholesalers

2012

Table 28 Selling Margin of a Typical Spirits Brand in Retail Channel That Does Not Use

Wholesalers 2012

OPERATING ENVIRONMENT

Contraband/parallel trade

Duty free

Cross-border/private imports

MARKET INDICATORS

Table 29 Retail Consumer Expenditure on Alcoholic Drinks 2007-2012

MARKET DATA

Table 30 Sales of Alcoholic Drinks by Category: Total Volume 2007-2012

Table 31 Sales of Alcoholic Drinks by Category: Total Value 2007-2012

Table 32 Sales of Alcoholic Drinks by Category: % Total Volume Growth 2007-2012


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Table 33 Sales of Alcoholic Drinks by Category: % Total Value Growth 2007-2012

Table 34 Sales of Alcoholic Drinks by Category by On-trade vs Off-trade: Volume 2012

Table 35 Sales of Alcoholic Drinks by Category by On-trade vs Off-trade: Value 2012

Table 36 Sales of Alcoholic Drinks by Category by On-trade vs Off-trade: % Volume 2012

Table 37 Sales of Alcoholic Drinks by Category by On-trade vs Off-trade: % Value 2012

Table 38 Sales of Alcoholic Drinks by Region: Total Volume 2007-2012

Table 39 Sales of Alcoholic Drinks by Region: Total Value 2007-2012

Table 40 Sales of Alcoholic Drinks by Region: % Total Volume Growth 2007-2012

Table 41 Sales of Alcoholic Drinks by Region: % Total Value Growth 2007-2012

Table 42 Sales of Alcoholic Drinks by Urban vs Rural: % Off-trade Value 2012

Table 43 GBO Company Shares of Alcoholic Drinks: % Total Volume 2008-2012

Table 44 Distribution of Alcoholic Drinks by Format: % Off-trade Value 2007-2012

Table 45 Distribution of Alcoholic Drinks by Format by Category: % Off-trade Volume 2012

Table 46 Forecast Sales of Alcoholic Drinks by Category: Total Volume 2012-2017

Table 47 Forecast Sales of Alcoholic Drinks by Category: Total Value 2012-2017

Table 48 Forecast Sales of Alcoholic Drinks by Category: % Total Volume Growth 2012-2017

Table 49 Forecast Sales of Alcoholic Drinks by Category: % Total Value Growth 2012-2017

Table 50 Forecast Sales of Alcoholic Drinks by Region: Total Volume 2012-2017

Table 51 Forecast Sales of Alcoholic Drinks by Region: Total Value 2012-2017

Table 52 Forecast Sales of Alcoholic Drinks by Region: % Total Volume Growth 2012-2017

Table 53 Forecast Sales of Alcoholic Drinks by Region: % Total Value Growth 2012-2017

DEFINITIONS

Published data comparisons

Table 54 Consumer Expenditure 2007-2012

SOURCES

Summary 12 Research Sources

This market research report includes the following:

Beer

o Dark Beer

Ale

Weissbier/Weizen/Wheat Beer

o Lager

Premium Lager

Domestic Premium Lager

Imported Premium Lager

Standard Lager

Domestic Standard Lager

Imported Standard Lager


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Economy Lager

Domestic Economy Lager

Imported Economy Lager

o Lager by Origin

Domestic Lager

Domestic Premium Lager

Domestic Standard Lager

Domestic Economy Lager

Imported Lager

Imported Premium Lager

Imported Standard Lager

Imported Economy Lager

o Low/Non- Alcohol Beer

Low Alcohol Beer

Non-Alcoholic Beer

o Stout

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1. What is the Product?

The product is a beer in the light beer category. It is by

definition, extremely light in colour and body, and mild inflavour.

It is essentially a variant of one of the Carlton & UnitedBreweries (CUB) Groups revolutionary beers FostersLightIce. Developed using the innovative process of ultra-high gravity brewing, Foster's LightIce quickly claimed thenumber one post in the low alcohol beer market withinmonths of its debut in Australia in 1995 and has steadfastlyremained a popular choice in the light beer segment since

that time.


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Light beer has is beer with a low alcohol content (between 1 and 4% vol), or fewercalories (-30%), or both. Fosters LightIce has an alcohol content of 2.7% V/V, incontrast with the already established brands in India like Kingfisher Lager whichhas an alcohol content of 4.8% V/V and our own Fosters Lager with 4.9% V/V.

The Indian market does not have a beer in this category. The light beer segmentpromises to grow at an extremely fast rate with a widening consumer base, takinginto account that as of Sep. 26, 2001, Budweiser, long the No. 1 selling beer inAmerica, has been toppled by its low cal sibling, Bud Light (both Anheuser-Busch,St. Louis beers). The September 2001 Market Watch, a spirits industry

publication, reported that Bud Light has eclipsed Budweiser for the first time sincethe light beer was introduced in 1982. In 2000, light beer accounted for 44% of allthe malt beverages consumed in the United States. Also, low alcohol beer saleshave doubled in volume in the past 10 years in Australia and low alcohol beers

now account for over one in four beers sold. We at Fosters see this change as partof an overall trend.

As none of the other leading international brands in this categoryBud Light,Carlsberg Light, Coors Light, Old Milwaukee Light or Miller Lite are planninglaunches in the Indian sub-continent in the near future, we envisage this as anexcellent opportunity and are keen to get the first-mover advantage.

2. Who do we regard as our immediate competition?

As far as the Light beer segmentgoes, there is no existingcompetition in the market.However, a number of well-

established brands, especiallylagers, have a significant marketpresence. ChieflyKingfisher -India's celebrated malty draughtlager since 1857; voted TheWorld's Best Lager in Stockholm

and Chicago.

UB (United Breweries Ltd.)isthe market leader in the Indian beer market with a 40% market share. Its flagship

Kingfisher brand alone commands 25% market share. The company has howeverbeen focussing on strong beer, which has driven growth. The company introduced


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its strong beer,Kingfisher Strongduring the year 2000 in the selected market ofMaharashtra and Karnataka. The move came as a reactive move followingincreasing shift of consumers towards strong beer, a trend started by ShawWallace. While the overall market grew marginally by 2%, the strong beer market

grew at 8-10% during the year at the expense of lager beer. The market is nowskewed towards strong beer with more than 60% of the market being strong beermarket. Other major developments in FY00 have been the entry of a few biginternational players in the domestic market and the opening up of the beer marketin Tamil Nadu.

UB is in the process of strengthening its core brands. UB has formed a newsubsidiary, Millenium Alcobev, to develop strong regional markets for its beer

brands. It launched a new brandKingFisher Goldduring the year. The companyhas also tied up with some of the breweries of Mohan Meakins for beer

manufacturing. Recently it has also acquired 31% stake in Inertia Industries,manufacturers of Sandpiper beer. UB also sponsors and organizes a number ofevents in the fields of football, fashion etc to increase awareness about its brands.

Beer mix today is approximately 60 percent lager beer and 40 percent strong beer.This ratio was very different 4 years ago. Over the last four years strong beer has

been the fastest growing segment. This was the segment in which UB was nothaving any significant position. This was completely usurped by Shaw Wallace.Mr. R K Jain of Shaw Wallace really did a brilliant job of that. But now the tableshave been turned. As of today while Shaw Wallace has approximately 28 to 30

percent of the strong beer market, UB already has achieved 14 to 15 percent of thatstrong beer market and is growing very fast. It launchedKingfisher Strongonly inMay of 2001. And once it is able to takeKingfisher Strongnational, it will try tomatch Shaw Wallace's market share overthe next few years.

Apart fromKingfisherand our ownFosters Beer, the other brands in theIndian market areCarling Black Label,

Carlsberg, Dansberg, Golden Eagle,Guru, Maharaja Premium Lager, Haake

Beck, Haywards 2000 Beer, Haywards

5000, Haywards skol, Flying HorseRoyal Lager, Taj Mahal, Heinekin, Hi-Five, Ice, Kingfisher Diet, Kingfisher

Strong, Kirin, KnockOut, Legend, London Diet, London Draft, London Pilsner,

Royal Challenge, San Miguel Lager, Sand Piper, StrohsandZingaro.

The major brands which belong to large groups in the industry (apart from

UB) are


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Shaw Wallace-Royal Challenge Premium Lager, Haywards 2000 PremiumLager, Haywards 5000 Super Strong, Hi-Five and Lal Toofan.

South African Breweries India Ltd. -Knock-Out, ContinentalandThree Lions, anew brand that was launched in the autumn of 2001 by SAB in Uttar Pradesh,Chandigarh and Himachal Pradesh.

3. Analysis of competition in the market.

United Breweries Ltd.Executive Summary

UB is the market leader in the Indian beer market. The company

has however (as mentioned above) been focussing on strong

beer, which has driven growth. The company introduced its strong

beer, Kingfisher Strong during the year 2000 in the selected

market of Maharashtra and Karnataka. The move came as a

reactive move following increasing shift of consumers towards strong beer, a

trend started by Shaw Wallace. While the overall market grew marginally by 2%,

the strong beer market grew at 8-10% during the year at the expense of lager

beer. The market is now skewed towards strong beer with more than 60% of the

market being strong beer market.

The UB group has chalked out a major restructuring plan under which it hasmerged all its spirits companies under the McDowell umbrella. The company has

also decided to split its operations into beer business and investments business. Thecompany would also be productively utilizing its real estate in the city ofBangalore to set up a Software Technology park. The UB Group has alsoannounced its intention to extend its well-known spirit brands Mcdowell andBagpiper to beer to leverage on the strong brand equity.

The UB management has gone on record saying they will actively look attrifurcation of the company into the real estate portion, the investments and the

breweries, with proportionate share holdings, in order to ensure that there's noshareholder value damage. They are, in essence, losing the Focus, which Al Ries

preached integral for the survival of a company. UB thus is diversifying itsoperations and does not focus solely on the beer market any longer. Even in the


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beer market, they are moving towards strong beer and essentially feeding off theirown share in the lager beer segment.

On the core beer business, UB claims to make a return on capital employedexceeding 20 percent and may be closer to 25 percent. But figures are not availableto really back this up given that all the numbers are consolidated.

Background

The UB Group commenced its brewing operations as early as the 19th Century

(1857) with five small breweries in South India. In 1951, a Scotsman named

Thomas Leishman combined the five breweries to form United Breweries. The

company was taken over by Vijay Mallya in 1947. In 1952 the Company shifted its

registered office from Madras to Bangalore. In 1988 the name of the Company

was changed from United Breweries Ltd. to UB Ltd. In 1989 as a measure of

diversification, the Company started manufacture of bulk drug, and

pharmaceuticals on a priority basis. In 1992, 11 different breweries were

amalgamated with the parent company. In 1994 the company launched its

`Kalyani Premium Strong' and started exporting `Kalyani Export Special' to UK. The

company presently has 21 breweries under its direct or indirect control. Recently

the company has started implementing restructuring exercise under which it has

decided to split its businesses into two

the core beer business and the groupinvestment business. The company has decided to focus on core businesses and

to hive off non-core businesses.

Financial Analysis

Gross Sales recorded a negative growth

of 3% over the last 5 years. In FY00, sales

dropped by 7.3%yoy to Rs2.63bn. Thedrop in sales can be attributed to a flat

market growth, increase in competition

and higher prices resulting from a high

level of taxation on beer. In volume

terms, sales dropped by 8%yoy to

1.23mn hectolitres. The company

however increased its share in the lager

beer market from 48% to 53% in FY00.The company introduced its strong beer,


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Kingfisher Strong during the year in selected market of Maharashtra and

Karnataka. The strong beer sold more than 2mn cases in the first 10 months of its

launch. The company earned other income of Rs1.22bn during the year, which

registered an increase of more than 90%. The increase in other income has come

from one time sale of company's investment to the tune of Rs891mn.

The company made an operational loss during the year. Excluding other incomethe company incurred an operational loss of Rs628mn. The increase in operationallosses can be attributed to increase in selling and promotion expenses, employeecost and other expenses. Raw material costs too increased marginally during theyear. Employee cost increased by 2% points during the year, while selling and

promotion expenses increased by 7% points. In absolute terms the selling andpromotion expenses increased by 25%yoy to Rs738mn.

Interest burden was higher by 14.4%yoy at Rs290mn, as the company raised fixeddeposits during the year. The company redeemed all its debentures and alsoreduced its debt from bankers but it raised debt from other sources.

Business

UB sold 1.23mn hectolitres of beer in FY00 in comparison to 1.33mn hectolitres in

the previous year. The revenue generated from beer sales was at Rs2.6bn out of

the total income of Rs 3.7bn. Other income including services income wasRs1.22bn. The company also earned a one-time income from sale of its

investments to the tune of Rs891mn.

UB has taken a number of steps in view of the increasing competition in order tomaintain its stronghold in the domestic market. The company launched its Flagship

brand KingFisher in Strong variety. The move came as a reactive move followingincreasing shift of consumers towards strong beer, a trend started by ShawWallace. Kingfisher Strong has sold more than 2mn cases in the first 10 months of

its launch. The company roped in one of the major persons from Shaw Wallace andCompany, Mr. Ravi Jain and floated a new company, Millenium Alcobev Limited,as UB's subsidiary to focus on regional brands. The company has transferreddistribution and marketing rights of its regional brands, Sun Lager, Flying horse,Kalyani Black Label, Bullet and Charger to MABL in order to focus on its nationaland core brands of KingFisher, Ice Beer etc.

Packaging of the flagship brand, KingFisher Lager premium beer has beenupgraded. The company won first prize for best brew at the New ZealandInternational Beer Competition. And also first prize for packaging at Asian Grand

Prix Cyrel 2000 award. The company increased its share in the lager beer market


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from 48% to 53% during the year.

UB major developments in the past few years

1997

Kingfisher entered into a contract with Ajay Jadeja and Saurav Ganguly, thesuccessful duo of Indian Cricket United Breweries Ltd. emerged as the largest exporter of beer in the country

1998

United Breweries launched the country's first premium Ice Beer to be introducedin Mumbai and selected cities of Maharashtra United Breweries, the holding company of the UB group, will be bifurcated into

two companies: a beer company and an investment holdings/property entity United Breweries Ltd. (UBL) proposes to enter into a joint venture with UgarSugars of Belgaum to produce high-quality barley, which it will use to produce

beer

1999

United Breweries Ltd. (UB), has launched www.kingfishernetshop.com, anInternet shop for the complete range of Kingfisher beer and Kingfisher line ofclothing & accessories.

2000

United Breweries Ltd. launched its fast growing brand Kingfisher Strong on theNet in Bangalore. Kingfisher, major lager beer and flagship brand of United Breweries, wasadjudged the best beer in class `A' category at the International Beer Awards 2000. The United Breweries Ltd. and its subsidiary Millennium Alcobev Ltd. haveentered into a contract agreement with Mohan Meakins to brew beer at the latter'sfacilities in Maharashtra, Uttar Pradesh, Andhra Pradesh and Daman.

Mr. Ravi Jain's Millennium Alobev Ltd., a subsidiary of United Breweries, is innegotiations with an international beer company for an equity joint venture to


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market a super premium beer in India. UB Ltd has carried out a reorganisation of its businesses by hiving off foursubsidiaries and making seven companies its fully owned arms, apart fromacquiring the sorghum business of South African Breweries Ltd.

2001

United Breweries will re-launch San Miguel and London Pilsner, the new beerbrands in its portfolio. United Breweries (Holdings), a wholly owned subsidiary of United Breweries,has entered into an agreement to acquire up to 75 per cent of the paid-up equitycapital of Mangalore Breweries and Distilleries Ltd. The United Breweries (UB) group has signed reseller and licence agreement tomarket SeeItFirst interactive streaming media solutions in Asia.

UB Ltd has increased the borrowing limit of the company by Rs 200 crore to Rs700 crore to fund its various plans including acquisitions. United Breweries Ltd. (UBL), the largest beer manufacturer and marketingcompany, has launched two more premium brands - London Pilsner premium beerand London No.1 strong beer - in Hyderabad.

2002

United Breweries Ltd has informed that their ultimate subsidiary McDowellAlocbev Ltd (MAL) has concluded an agreement arising out of which MAL have

acquired 100% shareholding in Empee Breweries Ltd which has two breweries,one in Kerala and one in Tamil Nadu.

UBs advertising, promotion expenses have been Rs 488.3 mn, Rs 590.9 mn,

Rs 737.6mn, Rs 779.4 mn, each year respectively over the period March 1998

to March 2001.

With theban on surrogate advertisingin the coming and the governmentclamping down on alcoholic beverage companies, added to the analyses fromUnited Breweries March 2002 quarterly results, which show adjusted profit aftertax have fallen 77.2% from a loss of Rs 128.0 mn in March 2001 to a loss of Rs226.8 mn in March 2002,we do not expect UB or any of the other brands in themarket to go in for new campaigns. Thus, in this regard as well we hope to bethe only visible player in the market at least as far as advertising goes as we plan tolaunch with the gusto of a new entre and so have a much higher advertising

budget than any of the other brands at this juncture, most of whom will be pullingout ads at this time.


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South African Breweries (SAB) India Limited

SAB is the world's leading brewer in

developing markets, with major brewing

and distribution operations in Africa,

Central and Eastern Europe, and Asia. It

is the world's fifth largest brewer overall

by volume with 86 breweries in 22

countries and over 31,000 employees. In

the year to March 31 2001, SAB

generated US$646 million pre-tax profit

from a turnover of US$4.184 billion. SAB is listed on both the London and the

Johannesburg stock exchanges.

SAB has operated in India since October 2000, when it bought the Narangbrewery, located near Lucknow in the state of Uttar Pradesh. The brewery, whichhas a capacity of approximately 120,000 hectolitres, has recently been modernizedand commenced full production in April 2001.

In June 2001, SAB acquired a controlling interest in Mysore Breweries Limited(MBL), listed on the Bangalore Stock Exchange. MBL operates two breweries,with a combined capacity of 480,000 hectolitres, situated in Southern India atBangalore and Aurangabad.

SAB India has set up its Corporate Office in Gurgaon, which is near New Delhi.

In July 2001, South African Breweries revamped and re-launched Knockout beerbrand, which it has acquired following its takeover of Mysore Breweries.

Speaking to The Financial Express South African Breweries managing director

Roy Bagattini said, Knockout has a strong market down in southern India. Nowthat we have acquired this brand, we plan to launch it on an all India basis.Knockout is a strong beer and there is a growing market for this segment.

On Thursday, 7 February 2002, South African Breweries plc (SAB) announced theroll-out of its international award winning Castle Lager brand into India.

Richard Rushton, managing director of SAB India, speaking at the launch in Delhi,said: "We have identified Delhi as the best entry point for Castle Lager because itis primarily a lager beer market, an international gateway to the rest of India andthe city is also one of the key influencers of taste and fashion for othermetropolitan areas within India. Castle Lager will be brewed locally and the

company has undertaken significant technology upgrades in its breweries to retainCastle Lager's taste and flavour. We aim to achieve over 10% of the markets where


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the brand is available within in the first year. Our strategy is to gradually increaseour depth of distribution of Castle Lager as awareness increases in citiesthroughout the region. This will be supported by ongoing marketing initiativesaround the Castle Lager brand to the trade and consumers to build up their brand

awareness. Castle Lager has been in existence for over one hundred years and has astrong South African heritage.

"Our investment in India is focused on building a national presence. SAB India'sgrowth strategy is built around the acquisition of production capacity in keymarkets, upgrading and modernising breweries and the introduction ofinternationally proven brands, as well as developing local brands, for consumers inIndia. Today's launch is evidence of our commitment to this strategy and to ouroperations in India. "

"Our entry into India is a further extension of our strategy of investing indeveloping markets. We are in India for the long term and will balance theimmediate demands of the market with our long-term duties to stakeholders - toinvestors, a fair return; to employees, a safe and rewarding job; to suppliers, fairdealing; to governments which tax and regulate us, open and honest relations; tolocal communities and wider society, a commitment to enhance and work for thecommon good."

In July 2001, South African Breweries is revamped and re-launched its brandKnockout, which it had acquired following its takeover of Mysore Breweries.

Speaking to The Financial Express South African Breweries managing director

Roy Bagattini said, Knockout has a strong market down in southern India. Nowthat we have acquired this brand, we plan to launch it on an all India basis.Knockout is a strong beer and there is a growing market for this segment.

On 7 November 2001, South African Breweries (SAB) announced that it hadacquired, through its subsidiary company, SAB India Limited, a 53% controllinginterest in Rochees Breweries Limited (RBL), a company listed on a number ofstock exchanges in India, including the Bombay Stock Exchange. The purchaseconsideration for SAB's interest is US$2 million payable in cash, the equivalent to97 million rupees, or 10.15 rupees per share. RBL operates a new brewery situatedin Rajasthan, approximately 100 kilometres from New Delhi, with a capacity of110,000 hectolitres, which is currently being expanded to 170,000 hectolitres. The

brewery, which currently brews under licence for United Breweries, requires nosignificant upgrading. SAB India Limited will use the brewery to produce a stableof local and international brands.

Other possible competition


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Radico Khaitan and beer international Interbrew have formed a joint venture to

distribute Interbrew's Beck's brand of beer in India. The premium lager beer

segment in India will be targeted. Radico has also announced the launch of its

international division.

Fosters A Comparative Overview

In 1886 two brothers, W.M. and R.R. Foster,stepped off the boat in Melbourne from New

York City to make their fortune brewing a newkind of beer for the colonies. They brought themost advanced brewing equipment available andthe world's best brewing expertise in aGerman/American brewer and a New Yorkrefrigeration engineer. The brothers paid almostevery penny they had, 48,000, to buildMelbourne's most modern brewery. The firstFoster's Lager prototype was brewed in

November 1888 and bottled in the classic heavybottle of the day with a wired-down cork.

When Fosters entered the Indian market our goalwas stated by Pradeep Gidwani, ManagingDirector, Fosters India Ltd. We want toestablish Fosters as an international premiumlager beer. Therefore, the international packagingand size. We came in with both sizes, though

pint-sized (330 ml) bottles were more

aggressively promoted. 70% of Fosters sales


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today come from the pint-sized market and the company enjoys 31% of the marketin Maharashtra.

Prior to July 1998, Fosters was just another of the foreign beers available in India.

In 2000, we notched up sales of Rs 25 crores with around 1.58 million cases sold.Our reading of the Indian pitch has so far been accurate. Domestic players arerealising that we are no pint-sized challenge!

4. Who is our target audience? (Demographic and Psychographic definition)

The beer-drinkers in the country aremuch younger than the average

beer-drinker elsewhere in the world.This makes them more likely tocarry the brand with them for alifetime. Also, as the targetaudience becomesyounger, a light

beer like Fosters LightIce, isexpected to attractfirst-time

drinkers, since it is much milderthan any of the other beers in the country. Even if one accounts for the fact that thestrong beer market is growing fast in India, we expect that at times whenconsumers of our product shift to stronger beers, they will restrict themselves tothe Fosters brand because of the association they have with it and the positiveconnotations from the Fosters name.

A lot of new variants promise to gain prominence, but mainly innicheurbansegments. The sophisticated consumer who drinks beer for the experienceand not to get drunk will lap up ice beer or light beer. In urban centres, apart fromfirst time users we are also targeting women, who as the times they are a

changing, are entering the market for beer. Essentially,womenshy away frombeer consumption because it is associated with calories, and has traditionally beena buddy drink, associated with pot-bellied men sitting at bars and shooting darts.

Our product however is light both in colour and body, and mild in flavour. It ishighly carbonated with low bitterness and no aftertaste. It has fewer calories loweralcohol content. It thus moves away from the traditional psychographics of thesector and toward the moreup-market, college/office going youth, male or

female, with aspirations, who sees himself as both physically and mentally fit,


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has an attitude of self-confidence and nurtures the belief that he/she can

change the world.

Maharashtrais the highest consumer of beer and has registered a rise from 100-lakh cases in '91 to 120 lakh cases in '96, an average growth of 3%. Draught beer isaround 10% of the beer market here with all three major players enjoying a similarshare. Nationally, the draught beer and canned beer shares are under 5%.

Rank Country 1995 1996 1997 1998

1 Czech Republic 156.9 157.3 161.4 161.8

2 Republic of Ireland 138.6 145.4 152.0 150.5

3 Germany 135.9 131.9 131.2 127.4

7 United Kingdom 100.9 101.9 103.6 99.4

12 Netherlands 85.8 85.5 86.3 84.2

13 US 83.6 83.5 83.2 82.0

39 Italy 25.4 24.0 25.4 26.9

Per capita consumption in India is hovering around a measly 0.5 litres per annum.These figures pale into insignificance if one compares them with those of CzechRepublic that has the highest per capita consumption of 156.9 litres per annum (see

box)

Per capita consumption is directly related to the taxation, according to an industryobserver. For instance, in Maharashtra there is a direct 100% excise duty on Beer.An equivalent 650 ml bottle is available for approximately Rs 8 in China. Which iswhy the per capita consumption in China is a high 16 litres per annum.

Deregulation is the only way out and it should happen in the near future. The beerindustry has been united in airing its views in this regard. By de-regulation wemean that beer must be de-linked from liquor and the State must be reasonableenough to lower beer price (it must be mentioned that there is also a debate that

beer must be made part of Central Excise). If de-regulation happens, the Indianbeer market will expand 10-15 times in the next five years. I mention this becausewe have to keep this in mind asa shift in government policy such as this willbroaden the demographic base significantly.

Given the levies, illicit liquor is actually available at far cheaper prices comparedto mild beer. So, given India's economic conditions, 'kick for the buck' being the


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norm, beer standsno chance in the lower income segments. And therefore overthe last three years, we have seen the emergence of strong beer as a category,which actually satisfies this need, but, globally, strong beer is a very, very smallcomponent of the market. It is really lager beer, which is the key segment. The day

the government begins to distinguish between beer and spirits in terms of the statelevies and impositions, in terms of the restrictions on marketing and advertising,there will be a huge opportunity in the beer business. Especially given India'sdemographics and given thehuge purchasing power of the youth in India. We atFosters do not plan to wait for that day and then start moving. Once we haveestablished ourselves in the market, when the day comes, we hope to have builtsuch a strong base in the segment that we cannot be shaken from our prime

position.

In worldwide share of throat, the spirits to beer ratio is 1:7. In India the spirits to

beer ratio, taking both the organised and unorganised sector together is in thevicinity of 7:1. Which means we're talking of a 50 times differential between thetwo. We have reached this stage because brewing is a more capital-intensive

business than distilling and therefore there are greater entry barriers. However, ourproduct has the advantage of having a well-established industrial unit as well as anexcellent network of dealers and distributors thanks to Fosters Lager.

An important aspect that we must keep in mind for our launch is that the legalminimum age to purchase liquor ranges from 18 years in some state to 25 years inothers. Delhi has a minimum age limit of 25 years. So far, the efficiency of

enforcement has not been studied. It has, however, been shown that an increase inthe age of legal drinking from 18 years to 21 years achieves nearly 60 per cent ofthe effect of prohibition on alcohol consumption. Which means that, at least in thelaunch period, we would like to go the Fosters Lager way and launch inMaharashtra, expanding later to other parts.

By the year 2010, it is estimated that 47.5 billion gallons of beer will be consumedworldwide - equal to nearly 7 gallons for every man, woman and child on earth. 60

percent of consumption will occur in Europe and the United States, down from a

current 70 percent of the world market. The majority of the difference will occur inAsia, where it is predicted that consumption will increase by almost 35% duringthe period.

The US demographics have beer consumption as overwhelminglymale-dominated, with men accounting for more than 80% of the volume consumed. InIndia, men account for an even higher percentage of the volume consumed. Of allthe beer types,light beer has the strongest following amongwomenconsumers. Women beer drinkers are more attracted to specialty micro

brewed beers than they are to the big brands, possibly because of their greater

variety.


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In the US, the largest groups of beer consumers are those that are employed fulltime with a household income greater than $75,000. At minimum they havegraduated from high school and/or attended college. They tend to bemenbetweentheages of 25 to 34and most often aremarriedwithhouseholds of 3 or more.

According to the commercial psychographics profile system called VALS2, thesegroups of people are classified asaction-oriented consumers who enjoy varietyand adventure. Anheuser-Busch, the makers of Budweiser, identify this groupwith primarily focusing on the "Generation X" demographic segment.

We at Fosters have witnessed an exaggerated version of this in the demographicsin India. Beer consumers here are eithercollege going, or employed full timeand

belong to theSEC ABclasses. The consumption age however has been decreasingover the years as may be seen in Kerela, where the age at which youngsters beginto consume liquor has come down. In 1986 the age was 19, by 1990 it had dropped

to 17, and by 1994 the age was 14. Fosters of course does not in tend to targetconsumers below the legal age limit. I merely cite these statistics to give an idea ofthe consumption patterns in the country and a better understanding of our targetaudience.

The consumer demographic profile, media reach and beer consumption withrelation to other liquids in India is enclosed herein. Please note that advertisementsin the press and local TV in the category are not permitted by the government ofthe state. They have however been included herein, purely for the purpose ofcomparison. I have taken the liberty of highlighting the segments I feel would be

the most responsive to our product. However, we trust the judgement of youragency in this regard. If you do feel that we need to expand our contract the target

base in any sector, then please keep me updated of the same.

Media Reach - Socio Economic class

SEC Size(mn) Distribution% Press% TV% Satellite% Radio% Cinema%

A 18.0 10.0 86.0 95.0 65.0 22.0 36.0

B 33.0 18.0 71.0 91.0 50.0 21.0 33.0

C 40.0 21.0 57.0 86.0 41.0 20.0 32.0


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D 42.0 22.0 36.0 75.0 28.0 18.0 30.0

E 55.0 29.0 18.0 60.0 17.0 14.0 27.0

Urban 187.0 100.0 46.0 78.0 35.0 18.0 31.0

R1 10.0 2.0 53.0 75.0 22.0 34.0 23.0

R2 30.0 6.0 41.0 64.0 17.0 30.0 22.0

R3 151.0 31.0 24.0 49.0 8.0 24.0 20.0

R4 303.0 61.0 5.0 25.0 2.0 13.0 13.0

Rural 494.0 100.0 14.0 36.0 5.0 18.0 16.0

Total 681.0 23.0 47.0 13.0 18.0 20.0

AB 51.0 28.0 76.0 92.0 56.0 21.0 34.0

ABC 91.0 49.0 67.0 90.0 49.0 21.0 33.0

BCD 115.0 61.0 53.0 84.0 39.0 20.0 32.0

Source- IRS 99

Key Statistics : Demographic profile of India

Census

1991

Estimate

1995

Estimate

1997

Estimate

1999

Area 000sq.km 3287 3287 3287 3287

Population (Est

Jan1,1999)mn 846 925 936 981.3

Urban % 25.7 27.8 27.8 30

Rural % 74.3 72.2 72.2 70

States nos 25 26 26 26


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Union Territories nos 7 6 6 6

Districts nos n.a 466 466 n.a

Urban Agglomerates/ Towns

nos 3768 3768 n.a n.a

Villages 000 n.a 627 581 n.a

Literacy Rate % 52.2 52.2 52.2 62

Male % 64.1 64.1 64.1 73

Female % 39.3 39.3 39.3 50

Average Household

Sizenos 5.5 5.5 n.a n.a

Source : Economic Survey, Statistical Outline of India

Liters Per PersonBeer in comparison with other Liquids

Categories 1995 1996 1997 1998 1999 2000

Beer 0.5 0.5 0.6 0.6 0.7 0.7

Bottled Water 0.1 0.1 0.1 0.2 0.3 0.5

CSDs 1.0 1.2 1.2 1.5 1.6 1.8

Coffee 2.0 1.2 1.3 1.3 1.3 1.2

Distilled Spirits 0.3 0.3 0.4 0.5 0.6 0.6

Fruit Beverages 0.1 0.1 0.1 0.2 0.2 0.2

Milk 41.2 41.7 40.2 40.7 40.1 40.5

Tea 49.7 50.9 49.2 52.5 48.2 44.2

Wine 0.0 0.0 0.0 0.0 0.0 0.0


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Subtotal 94.8 96.1 93.1 97.4 93.0 89.7

All Others* 631.9 630.6 633.6 629.3 633.7 637.0

TOTAL 726.7 726.7 726.7 726.7 726.7 726.7

* Includes tap water, vegetable juices, powders, and

miscellaneous others.

Source: Beverage Marketing Corporation

5. What is the key offering of the product that we think will make a difference?(USP). Why should the consumer buy the product?

The product is a light beer - highly carbonated with low bitterness and noaftertaste. It has fewer calories and lower alcohol content.

Fine dining and wine have become synonymous, but beer, once the traditionaldrink at the table, is making a comeback as a dinner drink. In India especially, thewine market is not significant enough to make any impact on our industry.

Moreover, the Indian palate and food is more associated with beer in any case.Light beers compliment spicy Mexican or Italian foods, and combine nicely withappetizers. The same goes for Indian foods.

The popular wisdom, fostered (I choose the word carefully) by wine writers, isthat one drinks lager with spicy foods. The sub-text is that wine is too sophisticatedand delicate, and that no drink has enough flavour to stand up to a curry. -The

Independent, May 2 1998.

Beer is not fattening. Foster's and Victoria Bitter have only 38 calories per 100ml

- 143 in a 375mL bottle. Compare that with red wine - 75 calories per 100ml,champagne - 70 calories per 100ml, full cream milk - 67 calories per 100ml, CocaCola - 41 calories per 100ml or even skim milk - 46 calories per 100ml. The beerwe are basing our product on -Foster 's L ightI ce, (2.7% alc/vol) has a meagre 26

calories per 100ml .

Research shows that themoderate consumption of alcohol provides significanthealth benefits, primarily through reducing the risk of cardiovascular disease, butalso with respect to reduction in risks associated with other ailments such asstomach ulcers, gallstones, arthritis, etc. Evidence suggests that people who drink

beer regularly and in responsible amounts are substantially healthier. A studysupported by the Canadian government said people who consume one or two


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drinks a day are healthier than non-drinkers. In terms of nutrition,beer is a sourceof vitaminsas well as proteins. It is rich in vitaminsB6andB12andessentialamino acids. It's produced bynatural fermentationand containsall naturalingredients.

Mr K. P. Balasubramaniam, MD, MBL, predicts, A lot of new variants will gainprominence, but only in niche urban segments. Ice beer or light beer will be lappedup only by the sophisticated consumer who drinks beer for the experience and notto get drunk.

I believe we have not taken seriously beer consumption in semi-urban and ruralmarkets, which now gives the industry the bulk of its revenue. You will seeexciting patterns of beer consumption if you were to visit suburbs of smalltownships. Look at Andhra Pradesh where there is a tendency to consume beer

along with a nip of hard liquor. Similarly, preferences vary from region to regionand this is worth a closer look.

If you as the agency deem fit, we can also attempt to generate consumption in newways such as promoting the use of our beer for beer recipes or the like. Here again,we can use theUSPoflow bitterness, no aftertaste, low calories, low alcohol

contentand thus encourage consumers to use ourproduct in household recipes. This will open up anentirely new segment, and bring our product into thekitchens of India, increasing brand association and

reaching out to an entirely different audience thatwould otherwise be uncomfortable with an alcoholic

beverage in their homes. I include this only as asuggestion, and of course will go with whateverdecision your agency takes in this regard. I have alsotaken the liberty of listing some possible recipeswhich could use our product.

Beer Recipes

Appetizers


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Mushrooms in Beer Batter

Onion Rings in Beer

Eggs on Tap

Backyard BBQPotato Salad

Beered And Baked OnionsBeer Caesar Salad

Cheese Beer BreadBeer Marinade

Beer Cocktails

Shandy

Lager and LimeSnakebite

Black VelvetLager & Black Currant

South WindGator Beer

Beer Bloody Mary

Main Courses

Steamed MusselsPepper Flank Steak with Chilli Beer Sauce

Chicken in Dark AlePan Seared Seabass with Beer Sauce

Chicken Cooked in BeerFish in Beer Batter

Beer Barbecued Chicken

As an example, I have included one of my own favourites

Onion Rings in Beer

Ingredients- 1-1/2 cups beer, 1 tbsp. Baking powder, 1 egg (beaten), 1-1/2 cups

flour, vegetable oil, 1 large Spanish onion, paper towels.

Instructions- Combine 1-1/2 cups beer, 1 tbsp. baking powder, and 1 egg (beaten)in a large bowl. Stir 1-1/2 cups of flour into the beer mixture gradually. Heatenough vegetable oil for deep-frying to 375 'F in an automatic deep-fryer or large

saucepan. Separate 1 large Spanish onion, sliced thin, into rings and dip into batterto coat them. Immerse a few rings at a time in the hot oil so that they are


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completely covered. Fry for about 30 seconds or until they turn golden brown.Remove rings from oil and drain on paper towels.

6. What should the brand name indicate?

Our only suggestion with regard to the brand name is that it should capitalise on

thebrand heritage which Fosters enjoys, and in its association with Fosters Lagerwhich is already established in the market as one of the leading beers.

Foster's Lager is the international flagship brand for the Foster's group. The brandhas achieved international growth of more than 60 per cent in the last five yearsand is one of the fastest growing beer brands in the world today.

The product is a variant of the international brand Foster's LightIce, and we are notaverse to retaining the name here. However, as LightIce is an international brand,and we might want to make some alterations, for example in the packaging of the

product, we would rather not keep the brand name itself, as any changes weundertake in India would necessarily have to be reflected in the mother brandworldwide. Naming it something like simply Fosters Light allows us toexperiment with the brand while retaining the heritage and association of theFosters label.

Keeping these considerations in mind, the final call rests with your agency asalways.

7. What kind of feelings/imagery should the brand name evoke?

An advertising message encoded in one culture has to be decoded in anotherculture in the case of standardised marketing. This process may be subject tosevere distortions, as the receiver will decode the message in his/her own culturalcontext. A standardised approach could hence run into the danger that the messagewill be unconvincing, as it does not meet the psychological "triggers" required to


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evoke a purchase decision with the consumer. Given research (Woods et al. 1985),this appears to be a problem that we need to keep in mind.

UK NL D

Friendship - 50% 60%

Sex 55% - -

Sport 22% 16% -

Tradition - - 40%

Relaxation 22% 33%

Beer as a product has been confined to form five categories of dominant appeals:friendship, sex, sport, tradition and relaxation.

The categoryfriendshipincluded all commercialsthat focused around drinking beer in a group offriends, or with a friend, where the consumption of

beer was depicted overwhelmingly as a social activity,or implied as such. Our product gels well with thisimage.

A commercial was judged to use "sex appeal", if itdepicted members of the opposite sex makingadvances towards the main character, if they spokeseductively or were dressed in a manner that may beinterpreted as erotic. Our product, being targetedessentially at both sexes, might not do well tooverplay on a predominantly macho image, but can

use sexual undertones to an extent.

Sportincludes all commercials that make aclear reference to sports of all forms, show maincharacters involved in sporting activities or aftersports. Light beer is ideal for this kind of image

as more sportspersons can consume it withoutaffecting their state of fitness and alertness. We


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would like Fosters to be associated with this kind of image as it goes well with the

USP low calories, low alcohol content and is also in line with its international

trend as Foster's Lager is characterised by its worldwide reputation and theexcitement of its sponsorship associations to premier events like Formula One

Grand Prix. Foster's has a long and proud association with Grand Prix FormulaOne racing around the world. Foster's is one of the world's fastest-growinginternational premium beer brands and Grand Prix Formula One racing has greatsynergy with the global marketing of Foster's. Foster's established its involvementwith FormulaOne GrandPrix back in1986 withits sponsorshi

p of the

Australian Grand Prix in Adelaide. At home in Australia or abroad, Foster's hasbeen actively promoting the brand's association with Grand Prix ever since. InIndia, we can capitalize on the mass appeal of cricket, and may even use this todraw the Aussie connection.

Commercials focusingon thetraditionof the

brewery or theproduct, showedhistoric buildings orimages or were set in ahistorical backgroundwere judged to have"tradition" as thedominant appeal. Wewould not advocate animage of this nature, as

our brand personalityis essentially verydifferent from this.

Finally, commercialsshowing the main

character in a clearly relaxing situation, where the main character consumed beerprimarily as a way to unwind and relax (mostly alone), use "relaxation" as thedominant appeal. Again, this is not an accurate representation of the productimage. However, if your agency feels that such an image would cater to certain

untapped sectors of the population, then we are not by any means averse to such an


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image so long as it is in line with the broader brand image.

To shake the ''yuppie beer'' label forHeineken, Lowe Lintas targeted consumers 21to 35 years old. The company also is stepping up its profile withproductplacements in moviessuch asAustin Powers(someone touches Mike Myers'''heinie'') and TV shows such asThe Sopranos. Its $40 million campaign, whichincludes a spot with Mike Myers of Austin Powers fame, may be hitting thosetargets.Heinekensays sales growth is double-digit this year. Ad Track found thespots did appeal to guys: 21% liked the ads "a lot" vs. just 13% of females whodid. They were a tad more popular with 18- to 29-year-olds (19%) than withrespondents ages 30 to 49 (18%). Though the hip spots appear to be about sex andthe city, Davis says they work for a different reason. From the tagline to the plot,they are about a desire forHeineken. ''Our ads make the beer the hero,'' Davis says.

Keeping in mind the restrictions on advertising in the country, we feel that productplacement may be an excellent approach to the promotion of our brand as well,especially as it is a new brand and it will increase awareness greatly.

Stroh's, the great American beer, stormed the Indian market and within a shortperiod has established itself as a force to reckon with.HakkeBeckin collaborationwith Him Neel Breweries has yet to make a dent whileSan Miguel, the Fillipinogiant working with Associated Breweries, is seriously making its presence felt. Itsadvertising campaign though raises an eyebrow or two. Our own Foster's,

Australia's mega brand, has thrown its hat into the ring and its logos alone havegiven it great visibility. The ad campaign reinforces the distinct Australian identityof the brand. We would like to keep the trend going with reference to this product.

I have taken the liberty of enclosing someCarlsbergadvertisements for yourperusal.

8. How should it look, in terms of graphics, colours etc.?

Every day millions of people around the world enjoy drinking Foster's Lager, andthe striking red F and the Foster's Lager blue and gold are instantly recognised by

beer drinkers around the world. We at Fosters follow the five C approach to

branding -

Communication
http://www.foolonahill.com/adcarlsberg.htmlhttp://www.foolonahill.com/adcarlsberg.htmlhttp://www.foolonahill.com/adcarlsberg.htmlhttp://www.foolonahill.com/adcarlsberg.html


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Building familiarity and relevance to consumers is only achieved through effectivecommunication of the brand message. Foster's spreads its brand message through

promotional programs, sponsorship and public relations.

Continuity

Brand equity is enhanced by long-term marketing programs to ensure a cumulativebuild over time. Australianness is the essence of Foster's brand image is promotedin every market in the world. All Foster's lager theme advertising is consistent withan Australian positioning. A powerful range of award winning advertising and

promotional programs has been the driving force of the brand's success.

Consistency

Global consistency in brand packaging and advertising image portrayal, in bothabove and below-the-line programs, builds upon the brand's strengths. Also,stringent controls are in place to ensure the Foster's experience remains consistentaround the world. This experience guarantees a consistent high-quality product and

brand support that makes Foster's Lager instantly recognisable and familiar to beerdrinkers the world over.

Co-operation

Foster's seeks partners to build the brand's success through co-operative

arrangements. An impressive international network of major brewing companies,distributors and hospitality partners make up the worldwide Foster's team. As aleading world brand, Foster's has secured major licensing and brewing agreementsin the Americas and in Europe. Carlton & United Breweries expands the networkin Australia, while Foster's Brewing International distributes their product to theMiddle East and Africa. Foster's Brewing International also produces Foster's lagerin strategically placed breweries in Asia and the Pacific region.

Control

Foster's tightly controls the brand and its image to manage, protect and grow thebrand equity worldwide. Foster's Brewing International has strict controls in placeto protect Foster's image, reputation and identity. Their Australian-based marketingteam set the brand direction, uphold standards and promote the latest technology todevelop communications links between their marketing team worldwide. Foster'shas an electronic, virtual global marketing office.

9. What kind of personality do we desire for our brand? Personification of

brand and detailed brand personality statement is enclosed.


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PersonificationShe is young, employed. An ambitious girl (not lady),

she is a go-getter with a sense of humour and a large

circle of friends.

She communicates an image that is stylish andconfident. She is a Generation X girl - independent andcontemporary, yet different. She is unique andintelligent, a great deal of fun to be with. She is thequintessential party monger, vivacious and full of life.

She is adventurous and sporty (pun intended), a risktaker and go-getter. Shes a part of the gang. She isalways where the party is. Not a girl one can forget

easily, even after 3 beers.

Brand PersonalityThe brand is characterised by its Australian heritage, its worldwide reputation andthe excitement of its sponsorship associations to premier events like Formula One

Grand Prix (extend to cricketing events in India).

Australia's climate, landscape, people and attitude, its youthful exuberance, is atthe core of Foster's identity - "Australianness". Foster's Australian image is laid

back and friendly. It typifies the "no worries" approach to life.

Formula One is the most-watched sporting event in the world. The 17-racecalendar attracts an audience of 600 million viewers per race. Both Foster's Lagerand Formula One are international, fun, aspirational, youthful and glamorous. A

partnership between two of the world's most desirable and high profile globalproperties. This relationship with sports may also be extended to Cricket in India.

The association of fit, healthy, successful young athletes building a thirst incompetition and then celebrating with a refreshing Foster's was an irresistibleimage. Foster's sponsored the Australian Rules Grand Final telecast internationallyand introduced signage at every major Test Cricket ground. In 1985 CUB

announced that the Melbourne Cup, Australia's world-famous two-mile horse-race,


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would be worth $1 million and would henceforth be called the Foster's MelbourneCup.

Australia snared a round of the Formula One World Championship in 1985 andfrom 1986 to 1994, Foster's seized the sponsorship rights to the Australian GrandPrix. Today, Foster's is an official sponsor and the official beer of Grand Prix racesaround the world

10. What aspect of the brand offering should the tagline capture? (Examples

included)

The tag line needs to emphasise the arrival of Fosters inthe market with a bang, so that the product has greatervisibility. I am sure you must have already got a fairlygood idea of the Fosters tradition and what it epitomises.You are the king as far as the tagline goes. I can onlymake suggestions which give an inkling into what we aretrying to convey. For example -

Fosters LightIce Beer. Welcome to the Ice Age.

We wanna take you higher

Excuse me, do you have a light?

I am listing a few of the taglines that made the brand in the beer industry.

Heineken: Heineken refreshes the parts other beers cannot reach.Abbot Ale: Worshipped since 1799.Budweiser: Whassup?Grant's: As long as you're up get me a Grant's.

Heineken: Come to think of it, I'll have a Heineken.

I am also listing some famous beer quotes that may help if only to funnel creativethought.


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He was a wise man who invented

beer Plato

Life, alas, is very drear. Up with the

glass! Down with the beer! LouisUntermeyer (1885-1977)

If God had intended us to drink beer,

He would have given us stomachs. -David Daye

Without question, the greatestinvention in the history of mankind is

beer. Oh, I grant you that the wheel

was also a fine invention, but thewheel does not go nearly as well with

pizza. -Dave Barry

The problem with the world is thateveryone is a few drinks behind. -Humphrey Bogart

Give me a woman who loves beer andI will conquer the world. -Kaiser

Wilhelm

Not all chemicals are bad. Without chemicals suchas hydrogen and oxygen, forexample, there would be no way to make water, a vital ingredient in beer. -Dave

Barry

Beer is living proof that God loves us and wants to see us happy. -BenjaminFranklin

I work until beer oclock. -Steven King

11. Other considerations

Legislation: Alcohol advertisement


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The Cable Television Network

(Regulation) Amendment Bill, in force

September 8, 2000, completely prohibits

cigarette and alcohol advertisements.

The government controlled channel,

Doordarshan, does not broadcast such

advertisements but satellite channels

however are replete with them.

LimitationsThe per capita consumption in India is hovering around a measly 0.5litres per annum. These figures pale into insignificance if one compares them withthose of Czech Republic that has the highest per capita consumption of 156 litres

per annum. Per capita consumption is directly related to the taxation, according toan industry observer. For instance, in Maharashtra there is a direct 100% exciseduty on Beer. An equivalent 650 ml bottle is available for approximately Rs 8 inChina. Which is why the per capita consumption in China is a high 16 litres perannum.

Adding to the trouble is the fact that distribution of alcohol is a state-controlled

activity. This means that not only do taxes vary significantly across states (a 330ml bottle of Fosters is available for Rs 21 in Delhi and at Rs 32 in Hyderabad) but

also there is a possibility of tax being levied at two levels. Fosters found this outwhen we were planning a foray into the Goan market. The Government ofMaharashtra was enforcing an export fee pass while the Goan government wasasking for an import pass fee.

Brewers now want the government to classify beer as a beverage. All-IndiaBrewers' Association President Zinia Lawyer has suggested that the taxes on beerand raw material be reduced to make it more affordable with the uniform and

rational tax structure through all states. "We price beer higher than a 180 ml bottleof spirit because of the high taxes and that is why it is encouraging consumers todrink hard liquor," says beer industry consultant B. Purnayya, advocating thatAndhra Pradesh follow the Maharashtra pattern of grading restaurants andallowing some categories to serve beer to make it a win-win situation for thegovernment, restaurants and consumers. Such a move would benefit our product toa great extent.

Causes for optimism -

However, we are very optimistic about our future in India because:


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1. India has predominantly a warm/hot climate

2. The beer-drinkers in the country are much younger than the average beer-drinkerelsewhere in the world. This makes them more likely to carry the brand with themfor a lifetime.

3. Increasing exposure to beer and wine drinking, mainly due to media andconsumer mobility.

All these factors combined make the scenario very promising for Fosters and are

'in sync' with our strategy for India.

The Strategy

In India, pint-sized bottles have been an exception rather than the rule. In fact, 99%of beer consumed is from 650 ml bottles. This was in tune with the trend in otherdeveloping countries.

In 1993, Kingfisher Lager took suit and was introduced in cans and pints inMumbai.

However, Fosters entered the market with both sizes, though pint-sized (330 ml)bottles are more aggressively promoted. We want to establish Fosters as an

international premium lager beer. Therefore, the international packaging and size,justifies Pradeep Gidwani, Managing Director, Fosters India Ltd. 70% of Fosterssales come from the pint-sized market and we enjoy 31% of the market inMaharashtra.

Initially, we plan tolaunch our product only in Maharashtra. Then wewillmove onto GoaandsubsequentlyintoAndhra Pradesh and Pondicherry.We can start moving towardsDelhi in February 2004. Plans to ventureintoHimachal Pradesh, Punjab, Haryana and UttarPradeshcanthencommence.


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Our company has decided tostay off the surrogate-advertising route(which isnecessitated by restrictive advertising laws) andconcentrate on sponsorships andother promotional activities. In a cricket-crazy nation, the alternatives are not toohard to find;cricket and Formula One racingare the two chosen vehicles for

brand endorsement.

We set up a 1.5 hecta-litre manufacturing capacity in Aurangabad becoming thefirst international brewery to set up manufacturing facilities in India. All other

players have opted for the licensing and royalty arrangements route. This gives thecompany control over the operations and of course a logistical advantage

For United Breweries, its online facility is making a huge difference. Allconsumers need to do is log on to www.kingfishernetshop.com and get their beer -a minimum of six bottles - home-delivered. According to UBL Branch Manager S.

Diwakaran, the move has been a big draw with info-tech professionals and"discreet" women drinkers. The online outlet apart, much of the beer boom has

been through sales from some 1,600 shops, and not pubs and bars. We think asimilaronline facility for promoting and facilitating the sale of ourproductwill help not only in the advancement of the product itself but will also govery well with the image of the product, while cutting into UBs virtualmonopoly as the target audience of such a feature is more in tune with the Fosters

brand image.

YuksomBrewerie

s Limited,Melli

The major success story of Yuksom Breweries has been its world class Dansberg blue beer,recently rated as the best beer in the country. Yuksom Breweries has already opened its

second unit in Orissa and third unit is underway in Assam.

A name to reckon with quality, reliability & integrity, Yuksom Breweries Ltd., at Melli Bazar,South Sikkim, Sikkim- 737128 is a well established manufacturing entity of the globalbeverage industry.


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Established way back in 1987, Yuksom Breweries today takes pride in its ultra-modern plantand machinery, state of the art German brewing technology with the most modern brewing

plant in the country, equipped with top of the line sophisticated machinery from Germanyalongside a traditional culture of wine wizardry superbly honed instincts to create a product

that can transport you into a state of euphoric and magical realism.

Since from the inception, YBL has come a long way to assert its supremacy as the leading

manufacturers of impeccable quality brands including Heman 9000 Ultra Super Strong Beer,Hit-Super Strong Beer, Himalayan Blue (Premium Lager Beer), Yeti (Super Strong Beer) andexports its products to United States, Bhutan, West Bengal, Meghalaya, Assam, Tripura,Bihar, Jharkhand, and other states across India.

With its humble gross turnover of Rupees 182.03 Lakhs in the late 80s, the brewery has

expanded its revenue manifold to 2915.99 Lakhs during the financial year 2010-11alongside it has also expanded six times its initial capacity of 50000 HLPA.

Revenue for Govt. of Sikkim(In Lacs of Rupees)

FinancialYear

Revenue for Govt. of Sikkim (In Lacs of Rupees)

ExciseDuty

ExportPass Fee

SikkimSales Tax

EducationCess

Ecology Fund &Environment Cess

Cess onHSD

Total

1987-88 64 64

2007-08 738.58 39.87 581.98 98.62 29.1 3.57 1491.72

2008-09 914.51 70 681.43 127.4 34.07 15.39 1842.84

2009-10 1172.8 62 825.16 148.00 28.82 5.04 2241.78

2010-11 1560.2 51.27 1056.7 194.3 52.84 0.60 2915.99

Kingfisher Beer starts its production in Sikkim

Posted onMay 7, 2011byiSikkim| Category:Business & EconomyFeatured PostSlider Post| 2,623 views |15

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Denzong Albrew Pvt. Ltd. situated at Darpaney, Mulukhey, Rongli Road, Rhenock, East Sikkim has started

production of Kingfisher Beer in Technical Collaboration with United Breweries Ltd. a flagship company of Dr.

Vijay Mallya.

Mr. Kalyan Ganguly, President and Managing Director of United Brewery along with Mr. Cedric Vaz- Executive

Vice President- Manufacturing and Mr. Gourishankar, Divisional President (East) visited the plant on 5th May.

Mr. Ganguly highly appreciated the unit located in such a scenic area. The brewery shall expand its capacity of

150000 HL to 300000 HL per annum to cater the growing market of United Breweries Ltd. in the Northeast

States, West Bengal and Bhutan. Impressed by high potential of tourism in Sikkim and plant scenic location and

its high tech technology Mr. Ganguly has planned to have the unit as a tourist destination, where tourist will be

taken around the plant and process of beer making explained to them with beer testing like many plants in

European countries in consultation with Government of Sikkim, further Kingfisher airlines will also include the

same in its magazines and other ad materials to boost Sikkim Tourism.

The plant is located near Aritar which is famous tourist spot in East Sikkim. The plant will also start selling

draught beer in Sikkim market.

The unit is state of art modern brewery with ful ly automated processing plant and one of the best in-house

laboratory facilities in the country. The plant was set up by Denzong Albrew Pvt. Ltd. In consultation with United

Breweries Ltd. and the process plant has been manufactured and supplied by Praj Industries Ltd., Pune on

turnkey basis.

The bottling plant is supplied by KHS India and utilities by Thermax, IMDC and Chicago Phuenumatic. The

filtration plant has been imported from Della Toffola, Italy.

Mr. L.D. Bhargava, Ex. UB Project Head was overall incharge of the project. The unit is giving boast to local

employment and rendering technical training in UBs breweries. The plant is scheduled to be completed for

inauguration in June 2011 as per Director, Mr. Rishi Kumar Mittal.

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