Kingfisher’s market share drops as foreign beer brands gain ground
Mumbai: India’s biggest beer brand Kingfisher is ceding market share to premium foreign brands as urban Indians develop a liking for high-end brands over high alcohol content in their beers.
Kingfisher, which is still the largest beer brand in India, has lost 4.3% market share by volume between 2011 and 2016, according to data from market researcher Euromonitor. This is the steepest decline among the top beer brands in India during this time.
Meanwhile, Danish beer maker Carlsberg A/S, and the world’s largest alcohol maker Anheuser-Busch InBev NV have capitalized on the gap left behind by Kingfisher’s decline. Carlsberg’s Tuborg brand is now India’s second-largest beer by volume with 11.1% market share, a near five-fold jump since 2011. The firm’s flagship beer Carlsberg is also on the list, whose market share has doubled to 5.8% since 2011, Euromonitor data shows.
Anheuser-Busch InBev has also rapidly gained market share through its main beer brand Budweiser whose market share has also witnessed a near five-fold jump from 2011 to 4.9% in 2016. AB InBev has also strengthened its position with brands of SABMiller Plc, the English alcohol maker that merged with AB InBev in 2016. In India, AB InBev now owns Haywards, the country’s third-largest beer by volume share worth 10.7%, as per Euromonitor. However, this share has declined since 2011, when it was 14.6%.
Most of these brands are positioned as premium urban beers and marketed in association with music festivals and other events that target a young working population in the cities. While Budweiser is a sponsor of music events including Electric Daisy Carnival and Tomorrowland, Carlsberg is a sponsor of events including football tournament UEFA Euro in India.
The onslaught of these brands has reduced United Breweries’ sway over the beer market in India, estimated to grow at a CAGR (compound annual growth rate) of 7.5% between 2017 and 2021, according to market intelligence firm BMI Research. UB’s overall market share, through its seven major brands among the top 23 beer brands in India, was 44.1% in 2016, down from 50.1% in 2011, data from Euromonitor shows. However, the company remains the largest in India’s beer market. Carlsberg’s total share is 16.9% and AB InBev has 24.6% share by volume in 2016, according to Euromonitor.
Emails sent to United Breweries’ spokesperson remained unanswered.
“It is clear that SAB getting together with AB InBev makes it a very strong competitor, with a portfolio of strong beers, as well as mild beers, in the mainstream, and also in the premium space,” Steven Bosch, chief financial officer of United Breweries had said in an investor call on 9 November.
“So clearly it is a strong competitor and we have our own portfolio to counter that,” he said, adding that the company has launched premium beer brands Desperados, Sol, Dos Equis, and a few others to capitalize on growth in the craft beer market in large metros with brands including Delhi-based Bira91. These brands are owned by Dutch brewer Heineken that owns over 40% of the firm.
However, Kingfisher remains the company’s core segment, with variations including Kingfisher Premium and Kingfisher Strong, Bosch said. Meanwhile, AB InBev India is banking on Budweiser to lead the firm’s growth here with a premium positioning and focus on tier I and now tier II cities, Mint reported on 17 July.
For Carlsberg, India along with China and Vietnam accounts for 10% of the group’s operating profit worth 8.3 billion Danish kroner (Rs8,471 crore), according to the firm’s latest annual report for calendar year 2016.
Emails to a spokesperson for Carlsberg India remained unanswered.
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