Probably the last thing any Westerner thinks of when they think of India is craft beers. But that’s their error. The country’s increasing prosperity has driven its retail and food and drink sectors higher than most people may have even thought possible, and it has allowed for great innovation in the field.
The smart money has been on India for a long time. In fact, Bill E. Ford of private equity firm General Atlantic said in a 2013 interview that emerging market countries like India “are extremely attractive, and these economies are likely to grow at five percent or greater, on average, over the next five to ten years. We think that sets up a very attractive opportunity for capital investment.”
That said, one of the hottest investment trends in India right now is craft beer breweries.
India’s first microbrewery, Doolally, opened in 2009 in Pune, India’s ninth-largest city. Following Doolally’s success, the nation’s entrepreneurs brought forth a variety of craft beers ranging from the traditional IPAs, porters, and stouts to more unusual varieties that cater to local tastes.
Mumbai residents now have a whole range of microbreweries to choose from, including the White Owl, which offers a caramel-flavored brew known as Diablo, among many other flavors, served in jam jars rather than traditional pint glasses. Other Mumbai breweries include Brewbot, Gateway Brewing Company, and Independence Brewing Company. The city even has two craft beer festivals in which thirsty Mumbai citizens can celebrate Indian microbrews.
“Mumbai is one of the last metropolitan cities in India to be introduced to locally-brewed craft beers,” said Rahul Mehra, co-owner of Gateway Brewing Company, “but the public seems to have taken to drinking these at a very fast rate. People seem to be taking to newer beer styles like wheat beers, stouts, porters, and even IPA[s] (which [were] actually made for India by the British).”
One of the most successful equity- and venture-funded microbreweries is B9, maker of Bira 91. Several years ago, General Atlantic Managing Director Shantanu Rastogi and its Senior Vice President Alok Misra, as well as the Naik Family Trust, invested in the company, along with several other PE firms. Now the company has raised another $8 million from venture capital fund Sequoia Capital India Advisors.
B9 Beverages Founder Ankur Jain said the funding will help the company enter five new markets—the UK, Singapore, Hong Kong, Thailand, and the United Arab Emirates—by next summer.
B9 has already entered the U.S. market, having made its debut during the 2016 Tribeca Film Festival in New York City.
“We received a good response in the U.S. Now, we want to enter London, Singapore, Hong Kong, Thailand, and Dubai. We aspire to drive that shift in beer toward more flavors globally,” Jain said.
Although craft beer is a relatively new category in India, the industry is growing at around 20 percent—a much higher growth rate than many other investment areas. According to the All India Brewing Association, there are more than 80 microbreweries operating in India. Overall beer sales in India doubled between 2010 and 2015 to $6.2 billion a year, according to a study by Euromonitor International.
The next time you enjoy a meal in India, don’t just think of curry, masala, and papadams. Those locally-made craft beers could be a great complement to any dish.
Photo: A cold bottle of Indian craft blonde beer Bira 91 in a hand of drinker. Young company B9 Beverages owns Bira 91. Credit: Radiokafka / Shutterstock.com