As India braces for a hot summer, beer makers have much to cheer

livemint.com:

Mint. The company makes Godfather and Six Fields beers. The company has recently signed two production tie-ups in Uttar Pradesh's Barabanki region, and in Assam scaling its production to six states.

With this, the company expects to increase its capacity from six to 10 million cases by the end of 2025. The beer maker earlier had no tie-ups in Assam, Arunachal Pradesh and Tamil Nadu, but was supplying to these states through its existing units. Another major challenge for the industry is navigating the complexities of state-specific duties and high freight costs.

This means that most beer manufacturers need to set up local production units to be able to keep costs down. Kingfisher maker United Breweries Ltd (UBL) is hopeful of a strong outlook but has taken into account supply disruptions. UBL, the entity behind Kingfisher and Heineken beers, remains positive about the upcoming season despite anticipating supply disruptions.

“Considering the evolving economic landscape and changing consumer preferences, we maintain an optimistic outlook for the upcoming summer season, anticipating a high single-digit growth for the beer industry compared to the previous summer. However, we do anticipate certain supply chain disruptions stemming from the restrictions imposed by states during elections," Vivek Gupta, CEO of United Breweries told Mint. According to a recent report by rating agency Icra, beer companies will witness a 9-11% year-on-year increase in revenue in 2024, largely led by a 4-6% growth in volumes.