B9 Beverages, the company behind Bira 91 beer and the owner of The Beer Cafe pub chain, is gearing up to secure INR 400 crore ($50 million) in new funding, according to sources familiar with the matter. The funds, contributed by both existing and new investors, are earmarked for business expansion. This marks the third fundraising round for B9 Beverages in the past 13 months. Noteworthy existing investors in the company include Japan’s Kirin Holdings, Sequoia Capital, and Sofina of Belgium.
“The deal is expected to be closed in the coming weeks, with all fundraise details having been finalised,” said one of the executives with direct knowledge of the matter.
CEO Ankur Jain of B9 Beverages and Rahul Singh, the founder and CEO of The Beer Cafe, chose not to provide any comments on the matter.
The capital infusion will be utilized to enhance production capacity and broaden the distribution reach of Bira 91’s diverse product lineup, encompassing craft, lager, and strong beer variants like Bira White, Gold, and Boom, in addition to cider ale and seltzers. The investment will also support the expansion plans for The Beer Cafe and Bira 91 Taproom chains, as indicated by the aforementioned executives.
Launched in 2015, Bira91 is currently distributed in over 1,000 towns and cities in two dozen countries. B9 Beverages has six breweries.
Over the last 13 months, Kirin Holdings Co. and MUFG Bank of Japan have individually invested a combined total of $80 million in B9 Beverages. These investments have placed the valuation of the beer maker in the range of $550-600 million.
In November last year, the Japanese beverage group Kirin Holdings increased its stake in Bira 91 to 20%, raising ‘570 crore from 10%, marking the beer maker’s most significant fundraising effort. This substantial infusion of funds facilitated the establishment of two new breweries and bolstered the global presence of the homegrown beer brand. Continuing this trend, in March of this year, Bira 91 secured a $10 million investment from Japan’s MUFG Bank Ltd. Notably, Kirin Holdings had previously invested $30 million in the Indian beer maker in 2021.
The recent fundraising initiative coincides with projections indicating a nearly twofold growth in the Indian beer market, expected to reach $10 billion within the next decade. This growth is anticipated to be driven by strong demand in out-of-home settings such as bars, restaurants, and hotels, along with the preferences of younger consumers. Additionally, factors contributing to this expansion include a changing retail landscape and the introduction of new flavors and innovations in craft beers. Remarkably, this surge is anticipated despite the heavy taxation in the Indian alcobev market and pricing regulations enforced by individual state governments.
Prominent companies in the sector comprise United Breweries, the producer of Kingfisher beer and owned by Heineken; Anheuser-Busch InBev, the owner of popular brands like Budweiser, Hoegaarden, and Corona; and Carlsberg, renowned for its Tuborg brand.
According to market research firm IMARC Group, the Indian beer market achieved a value of ‘41,470 crore in 2023. The company predicts a substantial growth trajectory, projecting the market to expand to ‘78,120 crore ($9.4 billion) in sales by 2032. This anticipated growth reflects a steady annual growth rate of 7.1% between the years 2024 and 2032.
In addition to a rise in festivities and social-cultural events, particularly post the Covid-19 pandemic, certain states have also reduced the legal drinking age. In markets such as Goa, Himachal Pradesh, Sikkim, and Puducherry, the legal drinking age is 18 years, whereas in regions like Delhi-NCR, Punjab, Kerala, and Maharashtra, it ranges between 21 and 25 years.
The Beer Cafe boasts a presence with 43 outlets strategically located in major markets including Delhi-NCR, Mumbai, and Bengaluru.
According to Bira 91’s estimates, it holds a 5% share of the total beer market and accounts for 11% of the premium segment.
