MUMBAI: The premium beer category is enjoying rapid growth in India, and thus attracting major brand owners like Carlsberg and Anheuser-Busch InBev.
While the beer market as a whole grew by between 13% and 14% in 2012, Euromonitor International, the insights group, said the premium category grew by 49% in this period, driven by urbanisation and increasing disposable income.
Another segment showing above-average growth was strong beer, which grew by 16% in 2012 and dominates the market, with leading brands including UBL's Kingfisher Strong and SABMiller's Knockout.
This has attracted the attention of other overseas brewers, which have launched new brands into this category. Among these offerings are Carlsberg's Elephant and AB InBev's Budweiser Magnum.
Carlsberg's focus on strong beer is relatively recent, and its leading brand, Tuborg Strong, has already helped the firm attain a 7% market share in India.
"Tuborg is now the number one international brand in India and that is an accomplishment which has been reached in 3.5 years," Soren Lauridsen, managing director, Carlsberg India, told Financial Express.
Carlsberg is aiming for a 10% share within the next couple of years, but will still be a long way behind the market leaders. UBL, the largest beer company in India, controls about 55% of the market, while SABMiller accounts for a further 24%.
Euromonitor noted that growth is also coming from outside the traditional metropolitan cities, with the states of Uttar Pradesh, Rajasthan and Bihar recording above-average increases.
And within those metropolitan cities, there have been various developments buoying the popularity of beer, like the opening of new types of bar, the launch of premium beer menus in restaurants and clubs, and the establishment of microbreweries offering craft beers.
The potential for the beer market becomes evident upon comparing the consumption of the average Indian drinker, at 1.7 litres per year, with other countries: in China the figure stands at 37 litres, and in the US is comes in at 74 litres.
One factor that may hinder the beer market, however, is drought, which is affecting the availability of water for production in Maharashtra, a region that includes key cities such as Mumbai and Pune.
Data sources from The Economic Times/Financial Express/DNA; additional content by Warc staff