Prashant Mukherjee By

In a mood to down beer? There’s plenty of choice. From light Kingfisher Ultra to bitter-sweet Carlsberg Pilsner to the full-bodied Stella Artois. For those looking for more exotic brews, there’s London Pride, a smooth dark amber ale, or the creamy Belgian wheat beer Hoegarden and dry beer Asahi—all available in stores across the country.

But if it’s freshly brewed, off-the-tap beer that you seek, you have to head to Bengaluru in the south, Mumbai and Pune in the west or Gurgaon in the north. These are the only places that offer craft beer at the moment, but that should change soon. “The market for microbreweries is developing. Currently, only four to five states have allowed microbreweries. But with more consumers travelling globally and gaining exposure to other beers, the market is going to change,” says Sagar Amol Powale, master brewer at 7 Degrees Brauhaus, a microbrewery in Gurgaon that competes with some 14 other players in the area.

A micro or craft brewery is one that produces small amounts of freshly brewed beer. The ingredients are same as bottled beer—malts, water, hops and yeast; there’s no glycerine. But unlike traditional beer, which takes over five days to produce, craft beer takes six to seven hours to make, and is neither bottled nor stored. “We brew our beer using latest technology from Caspary GmbH, Germany. We also follow German Purity Law of making beer with quality malts, water, hops and yeast,” says RN Rathi, promoter, 7 Degrees Brauhaus. Adds Manaswi Singh, manager of Gurgaon’s Manhattan Craft Brewery: “Beer-making is based on 80 per cent hygiene and 20 per cent brewing. We provide low-alcohol, freshly crafted beer, which youngsters can enjoy without glycerine content.”

The regular beer industry runs to over Rs 24,000 crore and has over 85 large breweries. South India is a dominant market, contributing 50 per cent of total beer sales. Tamil Nadu, AP, Telangana, Karnataka and Maharashtra drive 55 per cent of sales by volume. In comparison, the microbrewery market, with around 45 players, stands at an insignificant Rs 225 crore. But research firm TechNavio says it will cross Rs 50,000 crore by 2018.

The large brewers are unperturbed. There are multiple reasons for that. One, craft beer is far more expensive than regular beer and, hence, is drunk by only a niche audience. A 330-ml can of Kingfisher Premier lager, for instance, costs Rs 55 in Delhi while the starting price of a 300-ml of craft beer in adjoining Gurgaon is Rs 200. Two, as Ankur Bisen, senior vice-president at Technopak Advisors, says, “Overseas, people drink beer for refreshment. Here, it is consumed to get a high. That is why you see stronger beers performing better in Indian markets.” Thirdly, the Indian market is big enough to absorb all kinds of players. “Over 1.74 million people reach drinking age each year. That’s a large enough market for everyone to address,” says Harmanpreet Singh, general manager, United Breweries Ltd. The firm sells beer under the Kingfisher brand and operates multiple units, each producing over 18 million cases a year or 7,20,000 bottles a day. That is half an entry-level microbrewery’s annual production.

Still, the established players are encouraging. Shalabh Seth, managing director, SABMiller India, says, “The emergence of microbreweries is good news for the category as it will add diversity to the world of beer, a low-alcohol beverage. More legal drinking age consumers will have the possibility to experiment with new types and styles of beers.”

Sensing the demand, the Delhi government has decided to allow microbreweries in the National Capital Region (NCR). “We had allowed microbreweries at the airport a couple of years ago. But, the concept didn’t take off. With the increase in disposable income and lifestyle changes, we have now extended the facility in the NCR where there are quite a few restaurants and pubs,” says Neeraj Semwal, excise commissioner, Government of Delhi.

Newly formed Telangana too plans to give permission to microbreweries soon. “It (micro breweries) is under active consideration of the government and soon we will come out with a plan, once the policy is decided. The government is favourably inclined to introduce them here,” says RV Chandravadan, commissioner, Department of Prohibition and Excise, Government of Telangana.

According to him, there will be huge demand for craft beer in Hyderabad. He may be right. Telangana is one of the largest beer-producing states in the country and boasts of six large breweries, including United Breweries, Carlsberg and SABMiller. As many as 6,500 lakh cases of beer are sold every year and beer contributes 30 per cent of the state’s revenue. In fact, Telangana and Andhra Pradesh together account for 31 per cent of the country’s total beer consumption.

In West Bengal, surprisingly, the government has already “approved” the setting up of micro-breweries but there are no takers. Balbeer Singh Malhotra, chief executive officer of Brew Force, a company setting up large and micro-breweries in India, says, “There are two major issues in West Bengal. One, there is no adequate space for setting up a microbrewery. Second, and most important point, is that the government says first you set up the microbrewery and after six months to one year, we will provide you with the licence. No one is interested in paying rent for a space that doesn’t generate revenue or wants to be involved in that kind of risk for so long. Hence, no takers.”

Having said that, setting up a microbrewery is far cheaper than a regular brewery. While licences for large breweries cost upwards of Rs 50 crore, the small breweries cost between Rs 1.5 crore and Rs 6 crore to set up. “A German microbrewery setup of 10 hL plant (1000 l) will cost you about Rs 4.5 crore while a Chinese microbrewery will cost Rs 1.5 crore. The returns of the company depend upon the working and planning of the brewery. It takes seven hours to brew each variety of beer using imported ingredients,” explains 7 Degrees Brauhaus’ Rathi.

Hygiene plays an important role at microbreweries, as bacteria can infect tap lines if not maintained well and cause rancid aromas to creep into the craft beer. But with that under control, and given urban India’s changing lifestyle preferences, the cheers for craft beer are set to get louder and clearer.