Surge in demand for varied beer experiences

Beer is witnessing increased acceptance in India, driven by shifting consumer preferences. Younger consumers are gravitating towards eco-linked sustainability with low and no-alcohol beer options that retain bold flavours. Growing social acceptance to moderate low alcohol drinking has further fuelled its growth. This explains why a relatively new entrant like TAG has been able to make successful inroads into this competitive market. Amit Khemani, Vice Chairman of Blossom Industries Ltd., sheds light on the brand’s strategies and the broader trends shaping the Indian beer industry.

India’s beer market is undergoing a transformation, with a growing preference for premium and craft beers. Metro and Tier 1 city consumers are actively seeking non-alcoholic, flavourful, and low-calorie options. This shift is largely influenced by digitally savvy millennials who are more inclined towards experimentation and adventurous in their drinking choices. “The rise of craft breweries has been pivotal in fostering a culture that appreciates unique and locally produced beers,” says Amit.

Craft breweries, once a niche concept, have seen a rapid rise, particularly in cities like Delhi, Mumbai and Bengaluru. Consumers are increasingly drawn to artisanal, locally produced beers with unique flavour profiles. This movement has sparked a renewed appreciation for beer, with mini-metro cities also embracing craft beer culture. What was once limited to metro cities is now expanding into Tier II and III markets, fuelling demand for diverse beer options.

Blossom Industries, the company behind TAG beer, offers both lager and strong variants in 650 ml glass bottles and 500 ml cans. Distributed across India in regions such as Daman & Diu, Silvassa and Chhattisgarh, the brand has also expanded internationally to markets including the UAE, Bahrain, Madagascar and Seychelles. TAG beer is competitively priced to align with leading brands, gaining traction as a popular choice among beer enthusiasts.

Establishing Presence

With three years in the market, TAG beer has focused on aligning its products with market demands before exploring innovative offerings. The company’s marketing and R&D teams engage closely with young consumers to anticipate emerging trends.

Future product innovations are being developed to cater to the growing demand for unique flavours and styles, including responses to the trend of zero and low-ABV beers. “There are a few innovative concepts and products being developed which should be seen in the markets soon,” Amit informs.

Brewing Challenges

Despite its growth potential, beer manufacturers in India face numerous challenges that impact production and market stability. A major hurdle is the complex taxation system, which varies significantly across states, leading to pricing disparities. Navigating these evolving alcohol regulations at local, national, and international levels requires constant vigilance, as inconsistencies can hinder growth and create competitive imbalances.

“We have established a dedicated compliance team to ensure that we adhere to all the regulations and stay informed about any changes. This includes regular audits and consultations with legal experts,” Amit says.

Additionally, beer production is significantly affected by fluctuations in raw material prices, particularly barley, hops, and glass bottles. Recent trends indicate a rise in barley prices due to various factors, including lower crop yields linked to global events like the Russia-Ukraine war. Such fluctuations impact overall production costs and pricing strategies.

“We are continuously innovating our supply chain and sourcing to mitigate these challenges, which include adjusting pricing strategies while maintaining competitive positioning,” Amit shares.

Sustainability At Core

With consumers considering factors like water conservation, eco-friendly packaging and carbon footprint reduction while choosing their drink, sustainability has become a prevailing ethos, transcending the realm of buzzwords to become a core value for beer producers.

“We at Blossom Industries make a conscientious effort to adopt environmentally aligned operations, which underscores the company’s commitment to sustainability as a constant practice and endeavour,” Amit states.

Beer Market Ahead

The Indian beer market is growing at an annual rate of 7-8 percent, with a projected CAGR of 9-10 percent until 2030. While Tier II and III cities are contributing significantly to the market’s expansion, Indian beer brands have yet to gain global recognition on par with Indian spirits like Indian single malts. Historically, beer has been perceived as a less premium product compared to spirits, which remain the dominant alcoholic beverage choice worldwide.

Marketing It Right

For new beer brands to succeed, innovative marketing is crucial. TAG beer employs a mix of digital campaigns, brand activations, events, and on-ground promotions to establish a strong presence. “The idea is to resonate with modern consumers’ preferences for unique experiences around beer consumption,” Amit explains.