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National

In Dry Gujarat, Liquor Cos to Fight Over No-Alcohol Beer

October 10, 2018 07:32 AM

COURTESY ET OCT 10

In Dry Gujarat, Liquor Cos to Fight Over No-Alcohol Beer
UB to enter with Kingfisher Radler this week, AB InBev set to join in a couple of months
Sagar.Malviya@timesgroup.com

Mumbai:

Guess what’s the next battleground for India’s two largest beer makers Heineken-controlled United Breweries and Anheuser-Busch InBev? Gujarat, a state where making, selling and drinking alcohol is banned since 1960.


The two brewers will soon enter the dry state with non-alcoholic beer, industry insiders said. While UB will make its foray into Gujarat with non-alcoholic beer Kingfisher Radler this week, AB InBev is expected to join the race in a couple of months.

“Gujarat is an opportunity market for this product as it’s a state with no access to alcoholic drinks,” said Ramesh Visvanathan, chief new business officer at UB, which has already test-launched Kingfisher Radler in Gujarat and Karnataka.

The western state is one of the largest non-alcoholic beer market in the country, served mostly by drinks sold by traders and importers. “The current products in the market are imported, expensive, sparsely distributed and not supported. Above all, they have a beer taste which people don’t want,” Visvanathan claimed.

The maker of Kingfisher, London Pilsner and Heineken beer now plans to launch a slew of zero-alcohol beer in Gujarat and elsewhere.

Ben Verhaert, president – India at AB InBev, said the Belgium-headquartered company plans to launch a beer in the non-alcoholic beer segment “in the coming months”.

“We see non-alcoholic beer as an opportunity for the beer category to offer choice in India, which is the second largest consumer base in the world where the level of abstinence is high for various reasons,” Verhaert said. “Our intent is to shape the category by making it a more inclusive place for consumers with diverse choices and preferences.”

AB InBev, which sells Budweiser, Hoegaarden and Beck’s in the low or no-alcohol space, said its global mission is to have 20% of total sales from such products by 2025, up from about 8% now.

Even beer pub chains are looking to enter Gujarat.

Rahul Singh, founder of Beer Cafe, said the company will open outlets in the state if the market gets more than a dozen non-alcoholic beer brands. “Gujarat is one of the largest market for food and beverages, and beer is the second largest packaged beverage in India,” he said.

While beer contains 1.2-8% alcohol by volume (ABV), non-alcoholic beer mostly have 0.05% ABV or below.

UB’s Kingfisher Radler, however, is alcohol free and is made of fresh barley malts and natural lemon juice, according to UB.

In India, alcohol is prohibited in the states of Bihar, Gujarat and Nagaland, besides the union territory of Lakshadweep. Brewers look to enter such prohibitive and completely untapped markets with zero-alcohol beer. These companies are also driven by changing consumption trends and rising demand from teenagers due to stringent laws on drinking age.

Globally, non-alcoholic beer market is projected to surpass $25 billion by 2024, according to a research report by Global Market Insights. In India, such products account for less than 1% of the overall beer market.

Marketers said low-alcoholic beer is not really a substitute for beer and is, instead, a healthier replacement for sugary drinks. “Every company would want to have a piece of the opportunity and by launching such products, it can easily leverage on its health platform,” Singh of Beer Cafe said.

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