Industry Overview

The alcohol and drinks realm comprises numerous companies, ranging from producers and
distributors to retailers, which cater to the needs of customers by offering a wide range of
alcoholic drinks, including beer, wine, spirits, and so on. The sector is shaped by many factors,
including consumer tastes, demographics, income levels, regulations, taxes, health care
awareness, and social trends. The industry is experiencing some difficulties, which include,
competing with nonalcoholic beverages, environmental challenges and the impact of the
COVID-19 pandemic.
As for the market size of the alcoholic beverage segment in 2023, it was about 55 billion U.S.
dollars in India. The alcohol industry’s market size is expected to expand at a CAGR of 7 percent,
in 2027, to reach 73 billion dollars.

The distillers and the brewers are the two main sectors within the liquor Industry. Indian
Distilleries (ID) which is the leading supplier of IMFL liquor (~65-70% of the industry’s revenue)
and brewers of beer (~25-30% of the industry’s revenue) are the major players in the Indian
alcoholic beverages industry.
Rahul Guha, the Director of CRISIL Ratings, comments, “We expect the growth to come from the
tourism and hotel sectors rebound, the positive effect of increased disposable incomes and the
premiumization trend.” The high-end products segment (Rs.1000 and above) is predicted to
have a humongous growth of more than 20% and that too on a lower base. There are the other
part of the market, which is price sensitive, i.e., the mass consumer segment is comprised of
hooch priced below Rs.700 per 750 ml bottle and contributing to over 3/4th of the liquor
industry revenues will see volume growth of 5-7% as prices in this segment have remained
unchanged.”

A profitability growth will be attained from the player's both increased revenue and softened
input costs. ENA and neutral alcohol / rectified spirit together with barley comprise the biggest
share of input cost in brewing and distilling, accounting for ~55% of that cost, while the other
materials used for packaging, such as glass, plastics and labels, make up the rest.

Porter's Five Forces analysis:

Threat of New Entrants:

 The craft beer industry in India is experiencing unprecedented growth and has now
become attractive for entrepreneurs to launch their own breweries.
 High initial expenditures could stop fresh players off the market.
 Those distribution channels that are in use at the moment benefit the players who are
already building up their market bases.
 Alcohol control laws in India, especially for brewers who are aiming to enter the market,
are very restrictive.
  The range of Bira 91’s evocative products surges forward in an industry crowded with
new entrants.
Bargaining Power of Suppliers:
 Suppliers, nevertheless, can take advantage of high-quality ingredients in addition to
making strict demands.
 The suppliers’ power is distributed among a large number of players and therefore
doesn’t lie in the hands of one.
 Costs which are related to new suppliers are an important parameter of negotiations.
 The fewer suppliers of specialized ingredients, subsequently the higher their power.
 The issue of pricing in the present competitive world can take various forms including the
situation when suppliers use a possibility to be competitors as well.
Bargaining Power of Buyers:
 A wide range of craft beer choices enlarges consumer's ability to choose and decide.
 Consumer sensitiveness to price fluctuations can sway sales. Sensitivity can either
negatively or positively affect sales.
 To say strong brand loyalty to Bira 91 and as the result great decrease of consumer
bargaining power may omitted.
 Unlike sellers of other well known products, sellers of unique products have a little scope
of buyers' influence.
 Sellers must be mindful that the buyers in the market today are more price conscious.
Threat of Substitute Products:
 The fact that there are numerous non-alcoholic drinks substitutes for alcohol gives the
substitution threat.
 Consumers might swap premium products for cheaper ones.
 Consumer tasting is dynamic and often a changing fashion can create a new choice for
consumers.
 A brand identity of a proper DSTC should be designed to outweigh the effect of
substitutes.
 Lifestyle choices and health/wellness trends may redirect consumer attention to
alternative options.
Rivalry Among Existing Competitors:
 The situation of a market being overcrowded leads to heavier competition.
 Branding is a way of not only distinguishing the product but also creating a great
touchpoint.
 This possibly can be seen as a sign of more active competition.
 High costs of exiting the market lead to the temptation for companies to remain in the
competition as the best way of survival.
 Companies compete for specific market.
Company Overview
B9 Beverages Private Limited was established on May 28, 2012 in compliance with the
Companies Act, 2013 as a private limited company with its registered office at Plot No. 106,
Second Floor Block H, Connaught Circus, New Delhi-110001 India.

The Company is creating an innovative, forward-thinking beer brand, Indianized by Bira 91. Bira
91 is determined to take intriguing flavors to the new world and for that purpose Bira 91 has
come up with a wide range of award winning beers for the occasions and still looks forward to
global shift in beer towards more color and flavor. Currently, Bira 91 is sold in more than 500
towns and cities spread over 15 countries and brews its beer in five breweries in India.
Bira 91 has its brewery in Bangalore where it releases one new experimental beer every week,
pairing it with its curry-shop menu. Also, branded merchandize across categories such as
glassware, apparel or gifts are available to make every day a lot more playful.
Bira 91 is a brainchild of a dynamic team of more than 600+ enthusiastic beer lovers and is
backed by Sequoia Capital India, Sofina of Belgium, and Kirin Holding of Japan. (Source:
Company Management)
 - SWOT analysis

- Resource and capability assessment

Vision Statement
Refreshingly modern beer, Imagined in India with the effect of unleashing your inner self -
that playful, friendly, smart & slightly odd creature that is inside all of us.

Tagline:
FOR THIS GENERATION, BEER MEANS FLAVOR.

Long-term goals
Expansion and Market Leadership: Bira 91 aims to expand its business fivefold over a few years
and establish a leadership position in the Indian premium beer market.
Initial Public Offering (IPO): The company plans to go public through an IPO, which would help
in raising capital for further expansion.
Global Presence: One of the key long-term objectives is to make Bira 91 not just a product
rooted in India but also a global leader in the craft beer segment.
Sustainability: Bira 91 is working towards becoming India’s first Net Zero Beer Company by
2025, focusing on brewing the greenest beers for the planet.
Innovation and Quality: Maintaining a commitment to brewing high-quality products and
innovating in the beer market is a continuous goal for Bira 91.

SWOT Analysis for Bira 91:

Strengths:

 Innovative branding and design fostering strong brand recall.

 Diverse product portfolio catering to evolving consumer tastes.
 Successful international expansion.
Weaknesses:

 Relatively limited marketing expenditures.

 Potential challenges in building enduring brand loyalty.
Opportunities:
  Expansion of product variants to capture diverse market segments.
 Further penetration into international markets.
Threats:

 Intense competition from both established and emerging players.

 Regulatory uncertainties and economic fluctuations affecting consumer spending.

BIRA91 PESTEL Analysis

Political Factors
- Rarity of political consensus between different parties on taxation level and type of
investment policies. Throughout time, the country has made efforts sequentially to
break down the entry barrier and remove tax hurdles.
- Political institution and legal structure – the system stays stable and the economic
policy tends to be consistent with foreign policy.
Economic Factors
- The foreign reserve movement, the state of the economy can be determined. Bira Beer
really should deals with the currency exchange inflow and outflow deeply. Among Brazil,
Argentina, and Venezuela, more beer brands operating under the Bira Beer name have
been importing at a loss because of turbulent FX market.
- As Gaganpreet Singh puts it, there are no magic solutions, but we can make choices,
create opportunities, and hold individuals accountable to create the society we want to
live in. Bira Beer should often track the disposable income level of consumers, the level
of debt of the household, and the efficiency level of local financial markets.
Social Factors
- Another aspect of economics observed in the social sphere is the demographic shifts in
the economy, which can predict not only the general trend for the market but also the
demand for Bira Beer products among the core consumer groups.
- Consumer buying behavior and consumer buying process – Bira beer should ensure to
precisely observe the changes in the dynamics of why and how the consumers buy the
products, both in already existing categories as well as in the segments where Bira Beer
wants to have its footprint.
Technological Factors
- The mass production of phones has thusly built a generation that can only be
entertained or informed through mobile phones. In light of these developments, Bira
Beer must adapt its marketing strategy.
- 5G, with the potential to transform the business environment especially when it comes
to marketing and promotion, Bira Beer is definitely the case.
Environmental Factors
- Consumer activism is affecting Bira Beer through its branding and marketing and its
CSR initiates.
- Complying with environmental regulations may affect the cost structure of Bira Beer. It
may also force firms to adjust their market prices in certain geographical regions.
Legal Factors
- In most of the markets, Bira Beer is operating, health and safety norms are not
rigorous which makes the playing field more competitive.
- Legal actions on intellectual property rights come up as a potential risk which Bira may
face in some of the markets it operates in.
Business Model Evaluation:

 Transition from an import and distribution model to in-house craft beer production.
 Commitment to high-quality craft beer with a focus on unique flavors.
 Strategic distribution and word-of-mouth marketing contributing to brand recognition.

Financial Overview:
Balance Sheet:

31-Mar- 31-Mar- 31-Mar-

category 22 21 20

Equity 55.91 114.58 18.26

Liabilities 936.87 806.61 567.81

Total Equity and Liabilities 992.78 921.19 586.07

Net Fixed Assets 86.8 77.84 79.15

Capital Work-in-progress 280.36 277.41 243.2

Other Non current Assets 261.17 196.5 60.68

Current Assets 364.45 369.44 203.04

(Total Assets 992.78 921.19 586.07

In crores*

Profit and loss of Bira91 Unlisted shares:

 category 31-Mar-23 31-Mar-22 31-Mar-21

Net Revenue 824.32 717.77 428.21

Total Operating Cost 1121.73 890.99 523.65

Other Income 36.43 15.98 34.62

Depreciation and Amortization Expense 119.77 90.09 74.24

Finance Costs 95.91 87.72 76.2

Exceptional Items Before Tax 0 0 0

In crores*

Note: All the data has been taken from Altius Investech.

Revenue

 Bira 91's revenue grew from Rs 431 crore in FY21 to Rs 719 crore in FY22, a 66.8%
increase.
 In FY23, the company's revenue grew to Rs 824 crore, a 14.6% increase from FY22.
 The sale of beer accounts for nearly all of Bira 91's revenue.
Losses

 Bira 91 has been making losses since its inception.

 In FY22, the company's losses increased by 57.8% to Rs 396 crore.
 In FY23, the company's losses were Rs 445 crore, slightly higher than the previous year.
Margins

 Bira 91's gross margins improved from 22.3% in FY22 to 33.7% in FY23.
 However, the company's EBITDA margins remain negative.
 In FY22, the company's EBITDA margin was -54.7%.
 In FY23, the company's EBITDA margin was -26.4%.
Other financial highlights

 Bira 91 has a presence in 18 countries with around 31,000 outlets across 550 cities.
  The company has been experimenting with non-alcoholic beverages, but beer still
accounts for the vast majority of its sales.

Strategic Initiatives:
Sustainability Efforts: Under the ‘Mission To Zero’ campaign, Bira 91 aims to achieve zero carbon
emissions by 2025. This includes shifting to 100% clean energy, reducing energy consumption by 60%,
cutting water usage by 50%, and eliminating landfill waste.

Innovation in Brewing: The company has introduced a variety of unique beer flavors and operates
taprooms in Delhi NCR and Bengaluru, which serve as experiential hubs for consumers to enjoy weekly
experimental brews.

Marketing and Branding: Bira 91 has adopted an unconventional brand and logo, with marketing
strategies tailored to appeal to young Millennials. They’ve also produced a travelogue series called ‘Bira
91 Hot Stuff’ and launched a hip-hop channel on Saavn to connect with their audience.

Partnerships for Growth: The partnership with Kirin Holdings led to the formation of the B9 – Kirin
Centre for Sustainable Growth, focusing on environmental sustainability and business synergies.

Marketing Strategy:

A. Target Audience: Bira 91 primarily targets young urban Indians (21-35 years) with a
premium lifestyle and a taste for experimentation.
B. Positioning: They position themselves as a premium Indian craft beer brand offering
unique flavors and a modern image. This differentiates them from traditional beer
brands and caters to growing demand for premium products.
C. Marketing Channels: Bira 91 uses a multi-channel approach, including:
D. Digital marketing: Extensive presence on social media platforms like Instagram and
Facebook, influencer marketing, and online advertising.
E. On-ground activations: Events, pop-up stores, and partnerships with restaurants and
bars to create brand experiences.
F. Strategic collaborations: Partnerships with music festivals, fashion brands, and other
relevant entities to increase reach and brand association.
2. Operational Strategy:

 Production: Bira 91 primarily uses contract brewing to optimize production and minimize
initial investment. This allows them to focus on brand building and distribution.
 Distribution: They have a focused distribution network targeting premium outlets like
supermarkets, restaurants, and pubs in major cities. Recently, they've expanded online sales
with partnerships like Amazon and Swiggy.
 Innovation: Bira 91 prioritizes continuous product innovation, launching new flavors and
experimenting with local ingredients. This caters to consumer preferences for variety and
aligns with their brand image.

Risks for BIRA 91

Market Risks:
Competition: Bira 91 faces intense competition from both domestic and international beer brands. To
manage this risk, the company focuses on product differentiation and unique branding strategies.

Regulatory Changes: The alcoholic beverage industry is highly regulated. Bira 91 must stay compliant
with changing regulations to avoid legal risks.

Operational Risks:
Supply Chain Disruptions: Reliance on a diverse supplier base can mitigate risks related to ingredient
availability and quality.

Production Efficiency: Maintaining efficient production processes is crucial to minimize waste and
manage costs.

Financial Risks:
Currency Fluctuations: As Bira 91 expands globally, it must manage the risk of currency exchange rate
fluctuations impacting its financials.

Pricing Strategy: Setting competitive prices in different markets is a delicate balance to maintain
profitability while attracting customers.

Strategic Risks:
Brand Reputation: Continuous innovation and maintaining high-quality standards are vital to protect the
brand’s reputation.

Global Expansion: Entering new markets comes with risks related to cultural differences and local
competition.

Environmental Risks:
Sustainability Commitments: Bira 91’s commitment to sustainability involves risks related to achieving
its ‘Mission To Zero’ goals, such as reducing carbon emissions and water usage.
Key Success Factors:
 Unique branding and design fostering strong brand recall.
 Timely entry and success in the burgeoning craft beer market.
 Establishment of a robust distribution network and effective word-of-mouth promotion.

Recognition and Awards:

Packaging:

Spiritz Magazine Awards 2022: Six awards in the Packaging category, including "Grand Gold" for
"Kokum Sour" and "Gold" for "Brown Ale."

Beer Quality:

Asia Beer Challenge Award 2020: Bronze medal for "Bira 91 White" in the Belgian Witbier
category.

European Beer Challenge Winner: Awarded multiple years

Industry Recognition:

Featured in the "Inc. 5000 Asia Pacific" List 2020: Recognizing Bira 91 as one of the fastest-
growing companies in the region.

Future Outlook and Recommendations:

 Continued international expansion, targeting regions with untapped market potential.
 Diversification of product offerings to cater to evolving consumer preferences.
 Strengthening digital marketing strategies for enhanced brand engagement.
 Proactive monitoring and adaptation to changing regulatory environments to mitigate
potential risks.
 (Note: This detailed report provides an exhaustive analysis, delving into various aspects
of Bira 91's business strategy and positioning.)
Sources:

https://hoteliersweb.com/News/articles/5346

https://www.entrepreneur.com/en-in/news-and-trends/bira-91-raises-70-mn-in-series-d-funding-from-
japanese/439635

https://embapro.com/frontpage/casestudysolution/21214-bira-beer

https://www.brewer-world.com/sudhir-jain-svp-of-manufacturing-and-sustainability-at-bira-91-on-
mission-to-zero/

https://www.brewer-world.com/bira-91-targets-to-be-indias-first-net-zero-beer-company/

https://altiusinvestech.com/blog/bira-91-brewing-success-and-navigating-challenges-indias-dynamic-
beer-industry/