Anheuser Busch InBev India Limited (Ab InBev India), formerly known as SABMiller India Limited, is India’s largest brewer. It manufactures, distributes, and sells beer, alcoholic beverages, and soft drinks. As of March 31, 2021, AB InBev had ten breweries in India, including Telangana, Andhra Pradesh, Karnataka, Rajasthan, Maharashtra, Haryana, Madhya Pradesh, Uttar Pradesh, Orissa, and Kerala. Telangana, Rajasthan, Karnataka, and Uttar Pradesh saw the most sales. Ab Inbev is the second largest player in the Indian beer market both in terms of volume as well as value. Additionally, the company operates 3 breweries from which it purchases beer under contract.
AB Inbev India basically deals in 2 types of beers mainly:
- Budweiser is the leading brand in the ABI portfolio and continues to be the market leader in the premium segment in India. The brand saw strong growth in 2018 with expansion into new markets, execution of large-scale through-the-line marketing campaigns like FIFA World Cup, BUDX, Music, etc.
- 7 Rivers- This brand comes under the ‘Craft Beer’ category and hence has immense potential to grow based on the craft market landscape. The unique quality of this brand is the palette of friendly flavour’s and the “out of box” packaging. This brand has gathered a wide digital presence and has achieved a 98% positive response to the liquid.
AB Inbev Asia BV acquired SabMiller as a part of global takeover of SabMiller by AB InBev. The company was Incorporated in 1988 and is headquartered in Mumbai, India. Anheuser Busch InBev India Ltd (previously SAB Miller India Ltd & SKOL Breweries Ltd) manufactures and sells beer. Anheuser Busch InBev India Ltd was founded in 1988, and AB Inbev Asia BV owns 63.02 percent of the firm. Its parent firm, AB InBev, is the world’s largest brewing corporation. AB InBev has a 20% market share in India, whereas Kingfisher has a 50% stake.
AB Inbev Products & Services:
The beer brands of the Company are categorised into following segments: Core: Includes names like Haywards, Knock Out, and Royal Challenge that were formerly associated with SABMiller
- Core plus: Includes Becks
- Premium: Includes Redback, 7 Rivers Machaa, and 7 Rivers Veere, as well as Budweiser (Premium, Super Premium, Magnum, and King of Beers).
- Value: Includes Fosters
Non- Alcoholic Beverages (“NAB”): Budweiser 0.0 and Hoegaarden 0.0.
If we take a look back and see the graphs of FY 18-19, The year 2018-19 noticed an increase in revenue (from 31563 Mn to 30429 Mn) mainly on account of increasing focus on premiumization, introduction of Beck’s ice which has higher margin as compared to core brands, discount optimization and increased focus on moderation plans. (Click here to know the latest price of unlisted shares of AB Inbev India Ltd)
The Company’s Board of Directors at its meeting held on August 3, 2018 has approved a Scheme of Amalgamation of the Company (the “Transferee Company”) with its wholly owned subsidiary – SPR Distilleries Private Limited (“Transferor Company”) Anheuser Busch INBEV India Ltd. today’s share price is 37.9. Its current market capitalisation stands at Rs 1186.92 Cr. In the latest quarter, the company has reported Gross Sales of Rs. 31443.96 Cr and Total Income of Rs.16650.47 Cr. It is listed on the BSE and NSE.
SWOT Analysis of Ab Inbev India:
Ab Inbev Strength: Ab InBev being producer of Budweiser is the leading brand of the brand, with global market share of 29.8%. Furthermore, the company is continuing to put resources into establishing higher-margin brands, expanding distribution, achieving targeted volumes per outlet, and focusing on moderation and localization.
Ab Inbev Weakness: Despite being one of India’s major beer manufacturers, the company is still losing money.
Ab Inbev Opportunities: India is one of the fastest growing alcoholic beverages markets globally with an estimated market size of 52.5 billion dollars (about Rs 3.9 lakh crore). The number of people consuming alcohol increased from 21.9Cr. in 2005 to 29.3 Cr. in FY18 and is projected to increase to 38.6 Cr by FY30. The share of the upper-middle income group in alcohol consumption has increased steadily from 7% to 21% and is expected to increase to 44% by FY30.
Ab Inbev Threats: The governance and pricing models for alcoholic beverages vary widely across the states. The states, through their excise policies, control the entire supply chain of alcoholic beverages from manufacturing and distribution to registration and retail.
Recent News/ Recent Update:
In Oct 2019, the Ab Inbev signed an agreement with several hotels chain The Indian Hotels Company Limited (IHCL) so as to launch a chain of 15 microbreweries over the next five years to sell craft beer at the hotel chain’s top properties in India. With the rising culture of craft beer, this step will help the company to boost its revenue. In the craft beer segment, United breweries recently launched Kingfisher Ultra Witbier while AB Inbev has launched two wheat variants, Maacha and Veere.
The top two beer makers in India i.e. United Breweries and Ab Inbev are expecting a single digit growth in FY 20-21 due to the curb of beer sales in Kerala, Andhra Pradesh and Karnataka by Govt. new regulations. These three states account for 1/4th of total beer sales.
- India is one of the fastest growing alcoholic beverages markets globally with an estimated market size of about Rs 3.9 lakh crores, the Indian Council for Research on International Economic Relations (ICRIER) has said.
- The number of people consuming alcohol increased from 21.9Cr in FY05 to 29.3Cr. in FY18 and is projected to increase to Rs38.6Cr. by FY30.
- Pub and bar culture in India is escalating at a significant pace, and is becoming more popular in the age group of 20-45 yrs. Further, the market is anticipated to grow at a CAGR of 11% over the forecast period as alcohol consumption is growing in urban areas of the country.
- Based on product type, non-craft beers accounted for the largest market share. On the other hand, craft beers being the niche concepts in India have started growing for the past few years and are beginning to take shape now.
- Further, the craft beer segment is expected to reach US 900 mn by the end of the FY30.
- The share of the upper-middle income group in alcohol consumption has increased steadily from 7% to 21% and is expected to increase to 44% by FY30.
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