32249931 Beer Industry in India

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SWOT ANALYSIS


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COMPETITIVE ADVANTAGE Management Team

Professional Managed

Seasoned Professionals with Significant Industry Experience

Segment Market Presence

Least Vulnerable to Policy Volatility due to Large Spread

Local Sourcing

Almost Completely Locally Sourced

Manufacturing Technology

Largest Manufacturing Space

Maximum Capital Utilization

Branding

Value Chain Ownership Initiatives Planned for Integrating into Retailing

Core Competency

Strong brand image with continuous innovation and technology along

with good marketing and distribution channel are the core strength of

the company


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CARLSBERG


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OVERVIEW Danish brewing company founded in 1847 by J. C. Jacobsen

Entered Indian market in 2006 & operates here through a joint venturenamed South Asia Breweries. Positioned itself as a premium mild beer.

With the launch of its flagship brand, the company is trying to create apremium, all-malt beer category.

In 2009 Carlsberg is the 4th largest brewery group in the world.Products are sold in more than 150 markets. In 2008 the Group soldmore than 120 million hectolitres of beer, nearly 100 million bottles ofbeer a day.

Carlsberg India Pvt. Ltd. headquartered in Gurgaon, National Capital

Region, India is a Foreign direct investment company formed to brewand market Carlsberg beer in India.

Brought Tuborg and Palone brands into India. Palone is sold as a'strong' beer with 7.5% alcohol by volume. Strong beers dominate theIndian market, estimated in 2008 to total approximately 17 millionhectolitres with over a 72% share.


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SEGMENTATION, TARGETING & POSITIONING Segmentation

International beer companies have a good enough reason to tapmarkets like India. That their main markets, North America andEurope, are either flat or in a state of decline is no secret.

Carlsberg has segmented the Indian market in following ways:a) Geographical

Major consumer for alcoholic beverages is Southern India.

Consciously chosen the north, east and west regions of thecountry to set up its breweries

Strategy adopted by Carlsberg is to concentrate on to theuntapped market of north and west India in the initial stageof the production. Moreover, since it has positioned itself asa premium product, it is only catering to the urban cities ofIndia.


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b) Demographic

India is becoming younger. Population of youth is high in India. Withits international image as the sponsor of a football team, it has createdan impression in young ones mind.

Rise in disposable income of the urban middle class

c) Psychographic- The culture, the lifestyle, the personality of an Indian ischanging which is good for international brands like Carlsberg

Targeting

Urban cities ; It may not be called a niche marketing because of the natureof the product but yes the product is placed at a higher price because of theimage of the brand it wants to cash on.

Positioning

Carlsberg has positioned itself as a premium beer in the Indian market.Most expensive beer compared with its competitors Budweiser, the UBGroup's Kingfisher and Tiger beer by Asia Pacific Breweries

Betting on the shift in urban consumers to spend on quality.

Under the process of test-marketing its strong beer brand Okocim Palonefrom Poland. As its long-term strategy for the Indian market, it plans todeploy a portfolio


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PESTEL ANALYSIS Political

Different states have different rules for liquor. Somestates like Gujrat are Dry states where the sales of liquorare completely banned. Some states have time limits

i.e., after 9 the sales of liquor are prohibited.

Even the age limit for drinking in India is underdiscussion. Right now it is 25, so Carlsberg has to be

very specific when targeting its consumer.

As the advertisement of liquor is banned in India,Carlsberg has cashed its international image to boost itssales in the domestic market. They have targeted thepublic houses and discotheques for their promotion

which is very apt.


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Economic Disposable income of people specially living in urban cities is also

increasing rapidly. The Carlsberg group has realized this potentialand thus has targeted only the urban cities of India in their earlystage to penetrate the market. According to the MD of the CarlsbergGroup, Mr. Gidwani, Carlsberg has aimed to grab a market share ofapprox. 10 % by next 2 years, once that target is achieved, they willexpand their base to other cities and the rest of the country.

Social Per capita income is rising, but at the same time the gap between

the haves and have-nots is also widening. Though we hope that this

gap will be narrowing in the near future, but the scenario is a bitbitter right now. There is a school of thought against the so calledpub culture and then there are rest, but as they say change isinevitable thats why The Carlsberg Group is relying on the changeand has targeted the new Indian who is open to change.


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Technological

Importing beer attracted heavy taxes from the government resultingin higher prices of the same. Therefore to increase the base in theIndian market, it was advisable to set up plant in India itself.Carlsberg has set up four breweries in Rajasthan, Maharashtra,Himachal Pradesh &West Bengal to reduce the cost. According tothe company sources, it is using an advanced technology to ensurethat the beer that gets out is of better quality and great taste.

Environmental

Environmental factors include the weather and climate change. Asthe climate here is generally warm, Carlsberg increases thepromotions during summer time. As the company is new, we yethave to see its effect on environment and vice versa.


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BRIGHT FUTURE FOR BEER INDUSTRY

a) Rising Income Levelso India's 'very rich', 'consuming' and 'climbers' classes to grow at a

CAGR of 15%, 10% & 2% respectively.

b) Changing Age Profile

o Large proportion of the Indian population is in the age group of 20-

34 years - most appropriate target for beer marketers.c) Changing Lifestyles

o As urban consumers become more exposed to western lifestyles,through overseas travel &media, their attitude towards alcohol isrelaxing. Social habits are undergoing a transformation as mixed

drinks are becoming more popular.o More and more women are consuming beer the penetration in

metropolitan areas is almost twice as high as the penetration in otherlarge cities implying that the greater tolerance towards alcoholconsumption in metropolitan areas facilitates the consumption of

beer.


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BRIGHT FUTURE FOR BEER INDUSTRY

d) Reduction in Beer Priceso Indian consumer typically values an alcoholic beverage on the basis of

its 'kick' factor versus its price.o Most states do not have a differential tax structure based on the alcohol

content. As far as the Light beer segment goes, there is no existingcompetition in the market. However, a number of well-establishedbrands, especially lagers, have a significant market presence.

In India the future of beer industry is very much optimistic because: India has predominantly a warm/hot climate.

The beer-drinkers in the country are much younger than the averagebeer-drinker elsewhere in the world. This makes them more likely tocarry the brand with them for a lifetime.

Increasing exposure to beer and wine drinking, mainly due to media andconsumer mobility.

All these factors combined make the scenario very promising for beerindustry and are 'in sync' with their strategy for India.


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32249931 Beer Industry in India