Bira’s rebranding backfires, ₹80 cr sales down the drain

B9 Beverages, maker of Bira 91, has seen losses rise by 68 percent in FY24 due to a ₹80 crore inventory write-off and name change-related sales suspension, according to media reports.

As part of its preparations for public listing in 2026, the company transitioned from B9 Beverages Private Ltd. to B9 Beverages Ltd., triggering an extensive re-registration process that halted sales for months. This was due to compliance issues till it registered a new product label. As a result, its net loss widened to ₹748 crore for the fiscal year ending March 2024, surpassing its total revenue of ₹638 crore, a 22 percent decline compared to FY23. Sales volume dropped to 6-7 million cases in FY24 from 9 million in FY23. The company attributed this loss to both the one-time inventory write-off and evolving state policies that impacted its key markets.

“Due to the name change, there was a 4-6 month cycle where we had to re-register labels and re-apply across states which resulted in literally no sales for several months despite demand for our products. While availability dwindled, we also saw policy and route to market changes in Delhi NCR and Andhra Pradesh, which accounts for more than a third of our sales," said Ankur Jain, founder at B9 Beverages Ltd.

The Delhi-based company’s IPO plan came at a time when it faced intensified market pressure from microbreweries, craft beer producers, and international brewers introducing premium products. The company, which had said that beer needs high capital expenditure and working capital allocation to grow, planned the IPO to raise fresh funds for its growth plans.

Bira started a decade ago by importing its Hefeweizen-style beer from Belgium, before shifting to local brewing for cost efficiency. It eventually added half a dozen third-party breweries. However, the company’s rapid growth has also placed financial strain on its operations.

According to B9 Beverages’ latest annual report, its auditor highlighted negative cash flow of ₹84 crore and accumulated losses of ₹1,904 crore, raising concerns about long-term financial sustainability. The report warned that these figures indicate “material uncertainty that may cast significant doubt about the group’s ability to continue as a going concern.”

Despite these setbacks, B9 Beverages remains optimistic about its recovery and growth prospects. The company anticipates a turnaround, with operational profitability expected by the next quarter. "We had to write off ₹80 crore worth of products due to the name change which amounted to ₹80 crore one-time cost, directly impacting our profitability. However, growth is back since the third quarter and we expect to make operating profit by next quarter and have enough scale and size to raise capital by 2026," the company explained in a statement.

The beer industry has contributed ₹92,324 crore to India's Gross Domestic Product (GDP) in 2023 alone. Industry experts emphasise that while craft beer brands like Bira 91, Simba, BeeYoung, and Kati Patang have helped reshape India’s beer market through their experimental approaches and innovative products, they must carefully manage their expansion strategies to retain their niche appeal.

Vinod Giri, Director General of the Brewers Association of India (BAI), advised that craft brands should resist the temptation to scale up too quickly, as this could dilute their uniqueness. “The appeal of a different taste palate, whether wheat, dark lager, or craft, is rooted in its uniqueness. Their growth strategy should balance investor expectations with the rate of consumer adoption,” he told ET. “So, their growth ambitions and expansion strategy should resist temptations of a quick scale up to become a mainstream product. That will just dilute the uniqueness of the product in consumers' minds and would be neither here nor there," he added.