Mallya Hops Onto The Us Speciality Beer Market

Indian beer baron Vijay Mallya is storming the United States. Mallyas United Brewe-ries is set to enter the fast-growing US speciality beer market by buying small manufacturers and creating a nationwide network, even as the original owners continue to run operations as minority shareholders, according to a New York Times report on Friday.

The network will initially consist of seven microbreweries producing 50,000 barrels of beer, which had a combined turnover of $8.5 million last year.

United Breweries, the eighth largest beer and alcohol manufacturer in the world with a turnover of $1.2 billion, plans to acquire more microbreweries under the name United Craft Brewers after securing the requisite approval from the Securities and Exchange Commission (SEC).

 

The microbreweries will continue producing speciality beers under their existing labels. Microbrews are made from heavily guarded all-malt recipes, which do not contain any artificial ingredients. Traditionally, the brews are made in small batches.

The New York Times reports that Mallya, who has moved to Sausalito, California, will directly oversee the growth of his new beer plans. His strategy is already creating bubbles of excitement in the highly competitive beer industry. Analysts said this was the first time that an attempt was being made to consolidate the fragmented microbrewery segment.

It is also the first time that a foreign company has made a bold foray into the American microbrewery market, directly challenging industry giants such as Anheuser Busch and the Miller Brewing Company.

Microbreweries slowed to a 26 per cent growth rate last year after growing at an astonishing 40 and 50 per cent in previous years.

The decline was largely because of increased price cutting and competition among the countrys 1,000-odd microbreweries.

Mallyas network aims to bolster microbreweries within the group by strengthening both capacity and marketing. Sales of microbrews accounted for 2.6 per cent of the $50 billion US beer market last year.