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Anheuser-Busch InBev (ABI) has extended Budweiser into the energy drinks market in India, a first for the world's largest beer brand globally.

This is part of the Belgian drink and brewing company's wider strategy to focus on non-alcoholic and premium beverages that now accounts for over half its sales. The new product - Budweiser Beats - will compete with Red Bull, which is synonymous with energy drinks in the market.

"With penetration of energy drinks between 5-10% of the carbonated beverages in India, there is huge upside for growth. Despite having almost a monopolistic nature as far as incumbents are concerned, the market is still growing at nearly 20%," said Kartikeya Sharma, president - India and South East Asia president at AB InBev. "And importantly, the success we have seen with our foray zero alcohol beer for consumers who may not be necessarily beer drinkers, but still took to the product. These are the three reasons why we felt this is a category ripe for disruption."

Rival United Breweries, which owns the Kingfisher brand, is by far the leader in the beer segment in India, controlling more than half the market while AB InBev is a distant second with about 20% share. However, AB InBev has more than 65% share in the premium segment, with a portfolio that includes Stella Artois, Leffe and Corona. Rival UB too has pricier products such as Kingfisher Ultra, Storm and Heineken, and has been growing in double-digits, but these account for less than 10% of its total sales.

In India, AB InBev generated 35% of its sales from premium brands until last year, which has now surged to 48%.

"When one thinks of launching a new innovation, you look at markets where the brand's life extension should be in a very healthy state. For Budweiser, India is one of the top three markets in terms of growth and we are the market leader in the premium beer segment," added Sharma.

The packaged non-alcoholic beverages market is forecasted to grow at a CAGR of 16.2% as per the Goldstein Market Intelligence analysis between 2017 and 2030 to reach $20.4 billion as more people opt for packaged drinks. India has a very strict regulation at the state level, with the number of outlets selling alcoholic products restricted. So the push will be towards non-alcoholic beer sub-segment, where it controls over half the market with Budweiser 0.0, Hoegaarden 0.0 and Hoegaarden Rosee 0.0.

However, unlike carbonated beverages companies that built their presence through supermarkets and modern trade, AB InBev has limited presence beyond wine shops and hotels, restaurants and caterers or HoReCa.

"Our priority number one is e-commerce and then comes modern trade and then traditional mom and pop stores. Horeca is a strength and we do know energy drinks play a role as mixers with a lot of the widespread categories. So we do expect that they are our incumbent strength and HoReCa will be a very synergetic aspect of our distribution," said Sharma.

The company’s focus on premiumisation also comes at a time when there is a wave of new craft beer brand launches from labels such as Bira, White Rhino and Simba which count on a younger clientele seeking a more varied experience. India remains one of the largest beer markets, with more than 20-25 million people entering the legal age for drinking every year.