Microbrewery industry is the buzz word right now in lot of Metropolitan cities in India. There are several reasons behind it which is seeing a massive movement where consumers are migrating from bottled beer to the freshly brewed beer and sipping it sitting in the great environment. Invertors entering the field are creating their own uniqueness in terms of type of beer manufactured and how the complete resto-bar set up is created. Ultimately consumers are having gala time. In this article, we are covering a very important topic which is if really everything so rosy in the segment or there are some potential show stoppers which slow down the speed a bit. The industry is little troubled with few underlined challenges on a global scale, here’s a look at how.
# 1 BIG FISH EATS THE SMALL FISH
It’s a known fact big flagship microbreweries have deep pockets. The challenge can become pertinent in near future that with more marketing budget they take away the major chuck of customers and small microbreweries which have unmatched taste with them keeps on fulfilling the loyal customer base only which doesn’t increase in the rate which is required to keep the business sustainable. This situation hasn’t become a major concern so far however there is a major money being pumped in the system which can make this situation arise. Globally it has been seen that major giants in bottled beer manufacturing acquire the local microbreweries to do the customer acquisition so in worst case genie goes in the bottle and the uniqueness of the acquired microbrewery is lost forever. You never know this situation can arise in Indian Microbrewery segment as well.
It has been widely seen beer drinkers don’t mind paying premium to buy their favourite drink from the favourite hangout however if big breweries emphasis too much of their consideration on attaining or evolving craft beer brands, they could risk distancing their essential, high-margin products, which would be bad news for such companies in the long run.
# 2: BECOMING DAMPENED DOWN BY INEXPERIENCED NEW BREWERS
As we have shared there is much ease now to get into the business, newer microbreweries are coming up with every passing month. And there comes few naïve ones who have some spiralling negative impact on the whole business. For new entrant getting a grip on product differentiation, its quality control and very important part selection of the right location is tough. When too many entrants exist, chances are that majority of them will be concerned about money making ways instead of creating a product differentiation. If that happens, it starts hurting the overall segment. It even leads the drifting of the crowd. You can acquire the customer first time with your great Marketing, however if beer is not great, in all likelihood these acquired customers are not likely to return which will ultimately hit the bottom line of the microbrewery.
Increased natural churn may sooner or later would become a new normal for a while.
At this point of time it’s safe to say “The sun is shining on draught beer”. Obviously, sector is poised to face some tests in the coming years if its current growth trajectory remains unchanged. Beer enthusiasts understand the good products. Government is backing the sector by favourable policies. Investors are feeding the money and money is creating more money. This situation will prevail till the time Good Beer is ruling the roost.
M/s Rohit Jafa is the most renowned name in Microbrewery sector across Pan India. If you are looking to set up a microbrewery plant set-up, you can contact us where we can discuss on the advantages, complete business plan, likely pitfalls etc. so that whatever money you spend gives you the best yield. You can contact us at www.microbreweryindia.com or call us at +91 98112-33358.