What the rise of the craft beer business tells us
Across India, the community of home brewers is growing and there are at least 100 members across Bengaluru, Pune, Mumbai and the NCR, says a brewing consultant
Shailendra Bist, a mechanical engineer, started home brewing as a hobby in California in 2004. He moved to India in 2012 as microbrewery licensing opened up and set up Independence Brewing Company Pvt. Ltd two years later in Pune.
Bist now supplies his craft beers to 25 clients across Pune and Mumbai, besides running two microbreweries. With his microbrewery sales growing at 20-25% per annum, Bist is expanding. Next month he will be opening his third brew pub and restaurant in Pune.
In Mumbai, there is the story of Navin Mittal, Rahul Mehra and Krishna Naik of Gateway Brewing Co., all passionate home brewers who got together and started their own venture.
In Delhi, there is Ishaan Puri of White Rhino Brewing Co., who discovered his love for brewing while studying in the US and came back to launch his brand of craft beers.
In Bengaluru, there is Arbor Brewing Co., a branch of the Michigan-based brewing pub, which was started by an American couple as a home brewery way back in 1995, and is now a global craft beer brand.
According to a March report by the Brewers Association (BA), a not-for-profit trade association representing small and independent brewers in America, there were 6,300 breweries in the US in 2017. Small and independently-owned craft breweries accounted for 98% of all US operating breweries. Overall, craft beers now account for 12.7% of the overall beer market sales and are growing at 5% in volume terms even as larger US beer volume sales were down by 1% in 2017. In value terms, craft beers already account for over one-fifth of the overall beer market revenues.
According to Derek Thompson of The Atlantic magazine, there is a very interesting story behind the rise of craft beers in America. While most industries are becoming concentrated, beer is becoming less so. The rise of the small breweries is also a tale of individual entrepreneurship and initiatives. Most people are willing to pay more for these good quality, artisanal or small batches of hand-crafted brews than for a beer. Also, it is easier to set up a brewing company than a technology start-up. It requires fewer skills, capital and support.
This story could be replicated in India as well. There are over 60 craft breweries in India. Bengaluru has the most, about 40, with the remaining spread across Pune, Mumbai and the National Capital Region (NCR).
In Pune, about five craft breweries are being helmed by home brewers, counts Nakul Bhonsle, 32, who learned how to make craft beers as a hobby in Brooklyn and then returned to India about four years ago to set up his own commercial venture. However, starting up, was not easy. It has taken Bhonsle about 18 months just to get the licence to start manufacturing.
Across India, the community of home brewers is growing and there are at least 100 members across Bengaluru, Pune, Mumbai and the NCR, says John John Eapen, a brewing consultant and blogger, who runs Tales of Froth.
However, most of these people prefer to call themselves beer enthusiasts and are cautious of promoting the art and culture of home brewing.
The reason: India’s antiquated laws around alcohol consumption. Alcohol is a state subject in India and policies are more pre-prohibition than consumption. For instance, the excise law in Maharashatra is called the Bombay Prohibition Act of 1949. It technically doesn’t allow for drinking, but makes certain exemptions. Hence, people drinking in the state are required to carry drinking permits. Remember 2012, and assistant police commissioner Vasant Dhoble’s crackdown on partygoers not carrying the drinking permit.
All the same, home brewing is gathering steam. Earlier this week, Arishtam, a one-stop-shop in Bengaluru and online store for home brewing and fermenting, ran a monsoon sale and sold out its home brewing kits in three days.
There is a lot of curiosity around home brewing and there is nothing wrong with it, explains Ankur Agarwal, founder Arishtam, who has sought legal counsel on the subject.
According to Agarwal, home brewers need to comply with three rules.
Firstly, don’t distil—it’s not allowed and it’s dangerous. Second, don’t sell commercially. And third, don’t transfer alcohol from one state to another. This, too, is not allowed.
The story, though, is much larger—it is about consumption. It is about the consumers’ willingness to pay more for a better quality product. It is about choice. It is about Make in India. It is about the ease of doing business . It is about start-ups and entrepreneurship. And it is also about the need to revisit our antiquated laws.
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