Kingfisher-maker UBL thinks beer market in India can grow more
Top beverage company United Breweries is expecting a mid to high single-digit growth in India's beer market, per CEO Vivek Gupta. With beer currently having low penetration in both urban and rural areas, Gupta sees a big opportunity for expansion. In an interview with CNBC-TV18, he said, "My goal is to lead the category growth in India. We are fortunate to delight almost 60% of the consumers in this category, and we continue to expand our lead, bringing great innovation."
Competition and market penetration opportunities
Gupta says competition will help increase market penetration. He thinks that as more companies enter the beer market, more people will talk about beer, leading to higher penetration. Gupta sees a chance to introduce entry-level beer in India, stating, "India still has a spirits-dominated market, with 80-85% consumers drinking hard liquor." "There is an opportunity to have an entry-level beer, a premium beer, and even more aspirational beer and global brands in India," he adds.
Premium business growth and shift toward high-end beverages
United Breweries predicts its premium business will grow by 40-45% next year. This follows the recent launch of Heineken Silver Draught beer in India, aimed at offering consumers a premium, smooth-tasting drink. Avendus Capital Public Markets Alternate Strategies observed a significant shift toward high-end beverages, both alcoholic and non-alcoholic. CEO Andrew Holland commented on the growing popularity of luxury drinks in travel and entertainment sectors, expecting this trend to continue for the next three to five years.
United Breweries' stock performance
At the time of writing, United Breweries' shares were up by 0.68%, reaching Rs. 1,715 on the National Stock Exchange (NSE). Over the last six months, the company yielded investors a near 20% return, outpacing the benchmark Sensex's 10% rise. Notably, the Bangalore-headquartered company's market capitalization has surged to Rs. 44,960 crore.
