India a critical market for Heineken; consumption of premium beer to grow

New Delhi: India is one of "critical markets" for the Dutch brewing major Heineken, where it expects beer consumption to grow led by factors, including economic recovery, rise in disposable income and increase in market penetration, said a company official.

At present, the average beer consumption is "extremely low" in comparison to other global markets and it has enough headroom for growth. It will provide a full proposition to meet the consumer choices, said Rajeev Sathyesh, Asia-Pacific Director, Brand – Heineken.

"What we see is an amazing recovery in India post-Covid. If you look at the numbers, which we published recently, we have grown double from last year and are significantly ahead of 2019 as well. Therefore, we see number to continue to grow up as well," Sathyesh told PTI.

Consumer behaviour has also "dramatically" changed in favour of the category, he added.

"If I look at the number of people going into bars and restaurants now because consumers feel that they have lost two years of their life and have craving for social interactions, that's gone up," he said.

Moreover, after the pandemic in-house consumption of beer has also gone up.

"Now you have in-home consumption, as well as on-trade consumption, growing... moreover, different players like us are coming with innovations to meet the consumer's need," he said, adding, "in short terms, mid-term and long term, we see the market going up." When asked whether Heineken would introduce more brands to the Indian markets, Sathyesh said, if "we feel the propositions can better meet the needs of the consumers, we would be open to it." In emerging markets such as India, beer is now getting democratised with penetration growth in markets led by factors such as new people entering in drinking age, rise in disposable income, lifestyle changes, choices and socialisation.

"India we see no exception to the trends when we look into the longer term of the horizon," he added.

According to him, per capita beer consumption is about 2 litres in a year, while in most markets of Asia, this is 10 to 20 times higher and 30 to 40 times higher compared to the Western markets.

The penetration and consumption are going to grow and its a matter of time before the trend of premiumisation would continue to grow.

India's largest beer maker UBL and Amsterdam-based Heineken on Thursday announced the launch of Heineken Silver, targeting the fast-growing premium segment.

According to him, the launch is part of the series of positive steps, which Heineken is taking in the Asian Pacific markets, which is an accelerator to the growth of the company.

India "is an extremely critical market for us as a company and now as part of UBL, it is perfect time for us to start leveraging the strengths of the two organisations to make" its market position even bigger, Sathyesh added.

Heineken, which owns a 61.5 per cent stake in UBL, sees India as a "significant market", with an ambition to scale as one of the company's top markets in the foreseeable future.

Last year, Heineken acquired additional ordinary shares in UBL on June 23, taking its shareholding in the company from 46.5 per cent to 61.5 per cent.