Coming soon to a pub near you: A draught of fresh beer

About half a dozen brewers including United Breweries, Anheuser-Busch InBev (AB InBev), Bira91 and Simba are either launching or expanding draught beer versions of their brands. They're looking to exploit the beer-on-tap segment that has come to account for more than a third of beverage sales in most pubs and resto-bars. 

The discerning draught drinker can - or should soon be able to - get Beck's Ice, Kingfisher Ultra, Simba and Bira91's Malabar Stout on tap. There's even a low-calorie beer coming from Bira91, for those so inclined. 

Draught beer, sold in bulk or wholesale to outlets directly, is dispensed from a pressurised keg in mugs, pitchers and signature towers rather than bottles or cans. At a time when beer companies are struggling with a sharp increase in glass and barley prices, the draught segment earns a relatively higher margin. 

"In social settings, draught is the preferred format," said Debabrata Mukherjee, chief marketing officer at UB. "Although it contributes very little to our business as the supply chain requirement is huge, it will increase the footprint of the brand." 

The Heineken-controlled company that has half the beer market in India will launch Kingfisher Ultra beer on tap by next month. 

Indians still favour strong beer brands that have an 80% share of the market. Draught is a small portion of the overall mild beer segment. However, most companies say there is a clear trend of consumers moving away from strong beer in the big cities where draught is becoming the preferred choice for out-of-home consumption. 

"Draught growth is outpacing overall growth in pubs as consumers value the beer quality and the overall experience," said Ben Verhaert, president, South Asia, AB InBev, the world's largest brewer. 

In the past two quarters, AB InBev has introduced draught versions of most of its bottled beers such as Hoegaarden, Stella Artois, Budweiser Magnum and more recently, Beck's Ice in about 1,000 outlets. 

New Delhi-based Bira will launch six draught versions, including a low-calorie beer and Malabar stout, in Bengaluru in the next quarter. The company is setting up a new brewery in Mysuru that's expected to be commissioned in September.

Bottles and draught have different cost structures. Draught requires greater refrigeration capacity, which is why many restaurants are sticking to bottled beer. Draught beer has a shorter shelf life of three-six weeks against 12 months for the stuff that comes in bottles. But demand is surging.

"About 40% of our entire business comes from tap beer," said Beer Cafe chain founder Rahul Singh. "Bottled beer contributes a mere 25% while the rest is covered by food and other alcoholic-spirits."

On the other hand, bottled beer attracts the highest taxation of any beverage in the country, with more than half the retail price going to state and central governments through value-added tax (VAT) and excise duty. As for draught, companies directly supply to outlets with minimal approvals required from excise authorities, making it a preferable option.

"In India, 80% of the sales comes from off-premises business, which means liquor stores that sell alcoholic spirits but do not allow consumption onsite unlike a pub," said Prabhtej Singh Bhatia, founder of Simba Beer that will launch its craft beer brand on tap by the end of this financial year in cities such as Delhi, Mumbai and Goa. "The timing now is right to get into this space as our brand is established and has the pull to increase customer reach."

Source:- https://retail.economictimes.indiatimes.com/news/food-entertainment/grocery/coming-soon-to-a-pub-near-you-a-draught-of-fresh-beer/70763771