Why Simba beer maker is looking to shift gears to a more premium play

Mint.In India’s fast-growing but tightly regulated beer market—dominated by three global brewers controlling about 80% of sales—smaller players face mounting cost pressures and limited pricing flexibility. Premiumization is emerging as a key strategy for these brewers to protect margins and expand.Bhatia said the company expects healthy growth in line with or higher than the market average from its FY25 turnover of ₹400 crore, adding that the business has been profitable since its third year of operations.The brewer currently operates at an Ebitda margin of around 20%, compared with 10-15% for listed beer companies, which are significantly larger in scale.The company’s growth comes even as beer makers grapple with rising packaging and logistics costs.Bhatia said packaging accounts for nearly half the cost of production, particularly in cans and glass bottles, while the liquid itself contributes roughly 10-15% of the total cost.These pressures are making the low-priced segment increasingly difficult for smaller brewers, he said.Bhatia said the pricing playbook followed by Budweiser Magnum, owned by AB InBev, has reshaped how smaller brewers think about margins.

Unlike several local brands that compete closely with economy beers, Budweiser entered India at a significantly higher price point and maintained that gap.“They priced themselves ₹30-40 above the market from the day they came in,” Bhatia said, adding that this pricing discipline has helped the brand absorb rising production costs better than most players in the market.“The economy segment is going to become tougher over the next few years,” Bhatia said. “State-led players dominate that category and policy changes can influence the market.