Somewhere along the way, Bira just stopped being itself.
An unorthodox, low-bitterness craft beer brand, Bira 91 started out in 2015 challenging everything that beer had stood for in India. Everything from its name to its logo screamed millennial, fun, and well-thought-out, and for a while there, beer didn’t seem like an industrial product. But, India’s first bottled craft beer brand isn’t very crafty anymore—hasn’t been for a while.
B9 Beverages-owned Bira brought craft beer to urban masses when there was close to no competition. Now, there are more than 45 brands (such as Chhattisgarh-based Simba, Mumbai-based White Owl and Gurugram-based White Rhino) in the same premium price range as Bira—Rs 100-150 ($1.4-2.2) for a 330 ml bottle. All of these in four short years. And now, beer drinkers often complain about the low quality of Bira’s product, say executives at two South Delhi restaurants.
Bira, backed by venture capital firm Sequoia Capital, has been pushing hard to fight this burgeoning competition. And it has taken a few hits. For a brand that was looking to break even by FY19, Bira doubled its consolidated losses in the financial year that ended March 2018—the latest year for which figures are available—to Rs 102 crore ($14.7 million, highest so far) from Rs 55 crore ($7.9 million) in the previous year, on the back of heavy marketing and promotions, according to data sourced from Tofler.
While the company did grow its consolidated revenue five-fold to Rs 160 crore ($23 million) on the back of its entry into new markets as well as the launch of new variants like light beer and Indian Pale Ale, much of the growth came at the cost of the bottomline. In fact, for the year ended March 2019, industry executives believe that Bira’s losses will mount in light of increased production capacities and marketing expenses. In 2018, the company also entered global markets like the US, Nepal and Singapore.
In the face of so much competition, “Bira has reached a saturation point in its top few cities,” said a former top executive at Bira who recently left the company to pursue another venture. He didn’t want to be named as he didn’t want to comment on his former employer. But Bira’s problems go beyond competition. There are production issues (which are taking away its craft title), possible fund crunch and internal management conflict.
To arrest these issues, Bira is breaking character. As contradictory as it may sound, just last month, Bira launched a mass-market strong beer brand called Boom and slinked into the market it once was supposed to disrupt with its craft beer portfolio. Priced between Rs 130 ($1.87) and Rs 160 ($2.3) for a 650 ml bottle, depending on the state, Boom will compete with the likes of the age-old, low-priced Kingfisher from United Breweries and Tuborg from Carlsberg.