India's beer manufacturers have clearly understood the importance of packaging and shelf space to push retail sales. Little surprise then, beer-makers are introducing cans in the Indian market.
Cobra Beer owner Karan Bilimoria told Business Standard that he will introduce 500 ml cans across beer categories this year. However, he believes that packing beer in cans will be good for exports too. "I see a great potential in the canned segment. It will also help us export Cobra from India," he said.
The company already has the required infrastructure to package India-brewed Cobra beer in cans at its Bihar brewery. In fact, most of its nine breweries can start canning lines.
With a view to making India an exporting hub to feed the Asia-Pacific as well as other international markets, canning beer was the next logical thing. "We may even export canned beer to the UK and South Africa," Bilimoria said.
Asia Pacific Breweries Ltd, the makers of Tiger beer, too, is planning to set up canning lines in its breweries by early next year. Vivek Chhabra, regional director (South Asia), says, "Canning is a very important category for growth. We are focusing on determining the production costs and backward integration to start canning in another year's time."
Liquor major United Breweries already sells canned beer. "We have been canning our beer for a while now and the sales have picked up with the changing lifestyles of the consumers. As more and more people take to beer, packaging becomes important to be able to cater to consumer sensibility," says Sundeep Kumar, director (corporate affairs and communications), SABMiller India, a subsidiary of the world's second-largest beer maker.
The beer cans segment has been growing phenomenally over the past few years. In 2007-08, the segment grew by 50 per cent and contributed to over 10 per cent of the revenues. Though initially, cans were popular in the West and North, over the years, they have gained popularity in the South also, notes an industry observer.
"We expect this robust growth in the cans segment to continue over the next few years. We are in the pursuit of increasing our canning capacity over the next few years. Canned beer for domestic consumption is significantly higher than exports," says Kalyan Ganguly, president & managing director, United Breweries Limited.
At present both UBL and SABMiller, the two dominant players in the beer market, have three canning lines each in the country.
On an average, a canning line requires an investment of around Rs 1 crore (Rs 10 million). In India, the packaging material for cans has been imported so far.
But with almost three new canning players slated to set up shop in India this year, beer makers are looking forward to sourcing the canning material domestically leading to a drop in the average cost of a can. Beer manufacturers hope to reduce costs of their canned beer once the new can makers open shop in India.
