United Breweries moving up value chain

United Breweries Limited (UBL), which commands over 50 per cent share of the Indian brewing market, as part of its expansion plans announced that it is expanding its product range in its top markets in India — Andhra Pradesh. UBL, on Monday, debuted its premium beer brand ‘Kingfisher Blue’.

“Andhra Pradesh is the 26th state in the country where we have launched Kingfisher Blue. The state holds a lot of promise for the brand and we expect to replicate the national success here, too.

While Goa is not yet on our radar, we will be launching the brand in Uttar Pradesh in a couple of months from now,” Samir S Sheikhawat, senior vice president (marketing), UBL, told reporters here. Andhra Pradesh is the largest market for beer in the country, with the state accounting for 25 per cent and 15 per cent of the national mild and strong beer sales respectively.

Stating that the domestic beer market (comprising 83 per cent bot, 8 per cent pint and 8 per cent canned) was growing at a compound annual growth rate of 15 per cent and was projected to touch 270 million cases during the current financial year, Sheikhawat said the market was driven primarily by the strong beer segment.

The company, which has 30 breweries across the country, including three in Andhra Pradesh, is also looking to roll out new products every two years. “We are working on a few products based on the consumer needs and new segments. It is, however, too premature to disclose the product pipeline now,” he said. UBL, in which global beer major Heineken holds 37.5 per cent stake, during the past quarter said its net profit grew about 40 per cent while its volume grew 6 per cent and sales 10 per cent.

The overall volumes were tepid, hugely affected by the unfavourable ordering pattern of Tasmac in Tamil Nadu.

Outside of this, UBL posted growth in key profitable markets in Karnataka, Maharashtra, Rajasthan, Bihar and Uttar Pradesh. It also posted growth in AP.

The company during the past quarter was able to contain costs on the packaging front which offset the increase in prices of other inputs.

UBL further added that its greenfield brewery in Nanjangud in Karnataka has started commercial operations and the other brownfield expansions are progressing as scheduled.