B9 Beverages, the maker of Bira beer, has raised Rs 25 crore by issuing debentures to Anicut Capital, as it expands its geographic footprint to cash in on the rising popularity of craft beer.
The company, in its latest filing with the Registrar of Companies, said it has issued 250 non-convertible debentures worth `10 lakh each to Grand Anicut Fund 1 last month.
The Rs 300-crore fund is the first for the Chennai based alternative asset management firm that seeks to invest mainly in small and medium enterprises. The brewer, that counts Sequoia Capital as one of its key investors, has so far raised nearly $35 million.
Over the past year, Anicut Capital, has invested in nearly half a dozen companies, including Lendingkart.
B9 Beverages and Anicut Capital declined to comment on ET’s queries on the debenture issue.
Over the past few years, a large number of microbreweries have opened across the country, helping consumers develop a taste for craft beer brands.
Bira, which launched two years ago, initially imported the beverage from Belgium but later started brewing in India because of cost advantages.
While Bira has a 30% higher price tag compared to mainstream brands such as Carlsberg and Budweiser on an average, its ale or blonde lager beers cost less than half of that of imported rivals, including Hoegaarden.
“The company has been offering significantly higher margins to dealers compared to the industry as it would help it get better valuations, which appears to be its focus. As a result, it loses money to sell every bottle of Bira, even as it sees good traction in metro cities,” said a senior official of a rival brewer.
B9 Beverages’ sales numbers reflect that. The company clocked sales of Rs 4 crore with net losses at Rs 12 crore during FY15-16, its first year of operations. It hasn’t disclosed its FY17 financials yet.
In 2016, beer as a category recorded total volume growth of 7% to reach sales of 2.9 billion litres in the country. Imported premium lager was the best performing category in 2016, registering total volume growth of 15% to reach sales of three million litres, according to data from Euromonitor.
Also, India still favours strong beer with more than 80% of the market share taken by that category. Global companies have been producing stronger variants of their flagship beer brands, a segment where Bira has no presence at all.
Apart from mainstream beer brands, experts believe the market could see a slew of new launches in the craft beer segment, an expanding niche. From just two craft breweries in 2008, India now has more than 50 across the country, with most centred around Gurgaon, Pune and Bangalore, as per Euromonitor data.
Heineken, Anheuser-Busch InBev, and Carlsberg have collectively introduced about a dozen new beer brands in India over the past six months, with few in the craft-beer segment. For instance, UB, that controls half of India’s beer market, launched brands including Desperados, a pale lager beer, a wheat beer brand Edelweiss, Mexican brand Sol and Dos Equis, a pale lager from Heineken’s international portfolio.
“There is demand out there from consumers for something else, there is an opportunity for a new kid on the block,” UB’s chief financial officer Steven Bosch told investors last month when asked about Bira’s impact. “This gives some extra energy into the beer category and we have, as a response, increased our portfolio with the brands.”
Source: Economic Times