The Covid-19 pandemic has impacted the travel, hospitality and the food and beverage industry in a massive way. Another industry that has been majorly impacted is the AlcoBev industry. Saturday nights with friends weren’t complete without a bucket of beer on the table; or having that delicious cocktail that would go with the meal you ordered. With the restaurants shut, now the taps have run dry, but the consumption has now shifted from outdoor dining to living room. We talk to Deepak Sinha, who is the Global Marketing Head of Bira 91, the Indian brewed beer, to share his thoughts on what’s in store and what the revival plan will be?
1. In what way has the AlcoBev industry been affected due to COVID-19?
So overall we estimate that the industry will de-grow from 30 to 40%. That of course depends on how long the lockdown continues and how the government will continue to respond to our business. Bars and restaurants will be disproportionately impacted. We go to bars and restaurants to socialise to meet our friends and meet new friends and it’s going to be some time before consumers regain that trust in being outdoors. So we do expect a retraction or slowdown to happen in the on-premise channel. However, the retail shops will continue to see a life in their business. A lot of on-premise business is being diverted to the off and within the off.
“So overall we estimate that the industry will de-grow from 30 to 40%”
2. What do you think, the pattern of consumer behaviour will be like?
We are seeing three kinds of consumer behaviours. The consumers are looking for value. They are looking for good product at a great price. And we know this because, because our (Bira) Boom sales are doing very well. They are also looking for a unique product and some premium products and the ones that they recognise. And we are seeing this with our (Bira) White sales. White is our flagship wheat beer and it has been doing well in the early stages of resuming business. And, the third is that consumers are bulk buying. They are not buying one beer or two; they are buying 6, 12 and even walking away with a full case of beer. Bulk buying, we believe will continue to happen.
Consumers are entertaining themselves at home. We call it the ‘at-home entertainment occasion’. And this continues to become critical and we will try to figure out ways how do we get our brands in the living room of our consumers.
3. What are your thoughts on the ‘coronavirus fee’ that has been levied on liquor?
Overall no one likes tariffs. Especially ones that are in excess. We see that anywhere from 20 to 70% some states. Unfortunately, the consumer is the first one to be impacted here because now they are paying so much more money for beer and for alcohol in general. The small companies, such as craft breweries and craft distilleries are being impacted the most in this situation also and we believe that innovation is the life blood of our entire industry, specially in beer. To the point where we installed a micro-brewery within our Mysore brewery to innovate. Because these small businesses are being impacted, we do expect the innovation to slow down significantly. So we hope that there comes some stability to the way we are taxing the alcohol industry very soon.
Also read: ‘Special Corona Fee’ Levied On Liquor MRP In Delhi
4. The bottling would have stopped for Bira 91. Now that the operations have resumed, how are you guys proceeding with this?
We are proceeding by looking for efficiencies everywhere. Starting with the front end. We know that selling the entire portfolio to every market does not make sense. We need to give our sales team a very sharp focus. We also need to sell the brands that make sense. So we have have rationalised which products go where according to consumer demand and that is then translated to lot of efficiencies into production and overall logistics. So, as you know there are mandatory guidelines that have been handed down by the F&B and the FSSAI and we are making sure that we comply with all of those and exceed them. We are also making sure that all of our products are safe. Social distancing is in place at all of our breweries. Of course hand sanitisers and sanitising an entire crew periodically is also happening. So we are really making sure that our workers are safe and our products are safe.
Also read: Maharashtra Allows Home Delivery Of Liquor; To Begin From Thursday!
“There are mandatory guidelines that have been handed down by the F&B and the FSSAI and we are making sure that we comply with all of those and exceed them”
5. What is the revival strategy for Bira 91?
We always start with the consumer. What are the products that they are looking for and how are they going about getting them. So what we have seen earlier on is that they are shopping value and they are shopping premium brands that they recognise. We have now sat down and looked at our entire business and all of our markets very carefully and have mapped out our products within the portfolio to different consumers. So we have rationalised how we go to market. And from there, that will also drive proficiencies on our back end.
“We are also shifting our business to focus more in the off premise because we know that that’s where consumers will continue to shop”
First is to make sure that we are not selling everything to everyone and we keep our sales team focussed on getting the right products to the right consumers’ hands. We are also shifting our business to focus more in the off premise because we know that that’s where consumers will continue to shop and of course there are other trends which are right around the corner as far as e-commerce and home-delivery. I think I am extremely passionate about, along with my team is maintaining the connection with the consumer. Being human right now is most important and that is being done in a couple of different ways. One by talking to our consumers online through different social media platforms. Also, by showing them love right back. So we have seen a lot of user generated content (UGC) over the past two months and reposted all the UGC. We have also held a couple of live sessions with out brewer which has been very engaging and we are kind of doing more of that. So maintaining that connection with out consumers is most important for us and is part of our revival story
6. Liquor is also now being home delivered in India. What kind of an impact, do you think it will have on the consumption pattern?
In some markets liquor deliveries has started and it is so exciting to see this because it has been long overdue and how this will change consumption, in my opinion, in two ways. One, I believe this is really good for premium brands because premium brands depend on information and experiences. Two things you can do online really well; and to be able to connect information and experiences to an online purchase is amazing and really exciting. Premium brands will really be able to have a platform where they engage with a consumer and also then connect them to a purchase.
“I believe home delivery will start to accelerate the rise of the female consumers”
Number two is really exciting for me. I believe that the female consumers were already drinking more and drinking more beer specifically and that trend will accelerate right now. Imagine a group girlfriends hanging out on a Saturday night and not having to go to a liquor store I think that is a pretty sight because of safety reasons and also because of convenience. And I believe home delivery will start to accelerate the rise of the female consumers.
Also read: Karnataka Witnesses ₹45 Crores Worth Of Liquor Sales On First Day Of Stores Reopening
7. The demand for beer has hardly been affected. In fact we had seen how much people were keen on getting their hands on it when liquor shops first opened. Would you agree or disagree?
It’s hard to say right now. It’s too early. What we see right now, is only consumption and a lot of it is ‘pipeline fill’, what we refer to it as. So it’s going to be some time, maybe a month or two before the business starts to level off, and more retail shops become open.
8. Microbreweries had to literally put freshly brewed beer into drains. What are your views on the microbrewery industry?
First of all it breaks my heart to see good beer go to waste. And unfortunately the microbrewery industry has a very long road ahead of them. In terms of recovery. The microbreweries, craft brewers, small distilleries, are all life blood in innovation. So I believe that innovation will slow down in the next year, but it will recover and it will recover very strongly. Because the demand is there and the consumers are ready more than ever to try different beers, flavourful beers, try different cocktails and spirits. So as long as the demand is there, that is all that matters in the end but it will be a rough patch ahead.
We hope that the rough patch ends soon, because we would be waiting at the end of it with a couple of pints to celebrate the revival and survival!
To read more about what’s going in the travel and hospitality industry, and know what experts have to say, click on #CTCares
First Published: June 08, 2020 5:58 PM