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India is a land of diverse cultures with a wide variety of people with varied interests and preferences for almost everything, including food and beverages. Craft beer is becoming more and more popular among urban Indians, so this market has also grown a lot in recent years.
Even though the craft beer industry in India is still young, the All India Brewers Association says that sales of craft beers are growing by 20% each year.
Let’s take a closer look at why this trend is catching on like wildfire with Indians and how these microbreweries are capitalizing on it.
What is "craft beer"?
Craft beer is a type of beer made by independent breweries using traditional brewing methods and ingredients. This beer is often, but not always, linked to the artisan food movement as a whole and has become very popular in India in the last ten years.
While the term "craft beer" has been used for decades as a marketing term by smaller breweries that produce a more hand-made product than the larger commercial breweries, the term has seen a resurgence in popularity in recent years. Unlike the mass-produced lagers that have long dominated the Indian beer market, craft beer is a much more niche segment.
It has been well documented by brewers that wheat beer of around 4% ABV is widely preferred across India. At the same time, 4.5–5% ABV dark beer and lager are also rising in popularity in India.
Which Indian cities have the most popular microbreweries?
There are a number of major cities in India that are home to a large number of microbreweries. Some of the most popular cities for craft beer include Bangalore, Delhi, Mumbai, and Pune.
A slow but steady change that has been good for the industry over the past year is the rise of similar products in tier-two cities. This is because city dwellers who moved back home wanted to keep using the same brands they were using before they moved.
Why has craft beer become so popular in India?
India's craft beer industry grew in part because more and more millennials were interested in trying different kinds of beer. This is because of a number of things, such as higher disposable incomes, more money to spend, and changing tastes.
In addition, brewers and craft beer entrepreneurs have returned home to brew their own fresh, innovative beer, fueling the return of microbreweries, after being inspired by their beer adventures and stories from all over the world. They have done a lot to make India's craft beer industry successful and helped build a strong craft beer culture there.
As the craft beer industry in India continues to flourish, local Indian ingredients are being used for the first time, giving some beers an exotic Eastern flavor profile that had previously been absent. Spices play a particularly prominent role in this trend.
The increasing visibility of brewpub culture in metropolitan areas like Pune, Mumbai, Gurugram, Bengaluru, and Delhi has contributed to more adventurous patrons who love to experiment with different flavors and tastes.
During the pandemic, there were fewer chances to go outside, so craft beer fans decided to try new things to break up the monotony.
The Growth of Microbreweries in India
Part of the reason why this segment is growing so rapidly is that more and more microbreweries are popping up across the country, with a few local governments even facilitating this growth. This includes amending laws to allow breweries to open up in smaller cities and towns.
Some states, such as Maharashtra, UP, and Goa, have also been setting up their own government-run craft breweries.
A recent report from Euromonitor said that India's alcohol industry will grow by 25% this year and reach $41 billion, making it the third largest in the world.
Some Challenges
Success for small breweries in India hinges on the beer market expanding at a steady clip. The growth in production volume and scale needed to sell craft beer is directly related to the amount of working capital invested in brand development.
Increasingly stringent and onerous state government regulations and licensing issues, as well as rising costs of raw materials and inadequate infrastructure, are among the primary challenges facing the craft brewing sector.
Experts say beer should be taxed on ABV (alcohol by volume) and not overall volume, a view shared by many business owners in the craft beer industry. Taxing beer and wine the same way as high-proof spirits like gin, vodka, and whisky is seen as unfair. As a result of these alterations, it is likely that the craft beer market will expand at twice the rate of the commercial beer market.
The Future of the Indian Craft Beer Market
As the Indian craft beer market continues to grow at an impressive pace, the future looks extremely promising. As millennials continue to grow in size and influence, the popularity of craft beer in India is likely only going to increase further. And what really keeps us cheered up is the incessant enthusiasm with which craft brewers work to develop new recipes.
