This year, Delhi’s temperatures have soared to unprecedented levels, yet the beloved summer beverage of tipplers, beer, has struggled to meet the soaring demand.
Numerous well-known brands of this alcoholic beverage are noticeably absent from the shelves, and several liquor stores lack the capacity to offer chilled beer. Industry estimates indicate that while other states, where beer sales thrive, have experienced growth, sales in the national capital have slightly declined for the second consecutive year.
Comparative Sales: Delhi vs. Other States
Estimates indicate that up until April 30 this year, Delhi sold 224 lakh liters of beer, distributed across approximately 660 liquor stores and over 950 hotels, bars, and restaurants. This figure marks a decrease compared to the corresponding period in 2023, which saw sales of 228 lakh liters, and a significant drop from the 369 lakh liters sold in 2022. The surge in sales during 2022 can be attributed to the implementation of a new excise policy, accompanied by promotional schemes and discounts across retail outlets on various alcoholic beverages.
Between January and April of this year, Karnataka and Maharashtra recorded sales of 1,418 and 1,049 lakh liters of beer, respectively, compared to 1,237 and 1,016 lakh liters in 2023. Despite Delhi’s smaller size, population, and network of liquor shops and bars in comparison to Maharashtra and Karnataka, the figures highlight the growth of the alcoholic beverage in other states.
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During the peak summer season, beer constitutes more than one-third of the total volume of liquor sold in stores. Industry insiders suggest that the potential for sales is even greater, given Delhi’s prolonged periods of intense heat and high humidity, spanning nearly six months of the year. However, due to the limited availability of popular brands, residents in areas close to Haryana and Uttar Pradesh often opt to cross state borders to purchase their preferred beverages. An industry expert noted, “This is why the sale of beer and other spirits in neighboring towns experiences an annual growth of 15-20%, while it declines in Delhi.”
Vinod Giri, the incoming Director-General of the Brewers Association of India, concurred that despite the surging demand for beer during the scorching Delhi summer, the supply was lagging behind, leading to a decline in sales compared to 2023 levels. He noted that a widely favored beer brand, typically a top seller, was conspicuously absent from the market. This absence posed challenges for other suppliers attempting to compensate for the shortfall caused by the absence of supplies from that particular company.
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“Moreover, the maximum retail price permitted for companies in Delhi is exceedingly low, resulting in negative margins for most brands,” disclosed Giri. “With demand flourishing across the country, there is little incentive to allocate additional supplies to Delhi.”
“The number of retail shops is unreasonably low, and chiller penetration remains below 50%, significantly impacting beer sales,” he remarked. “To reverse this trend, the number of beer outlets must nearly double, and companies should be granted realistic and improved pricing. Otherwise, we’ll see the same scenario play out year after year during the summer season.”
During the peak summer, state governments where breweries are situated often urge companies to prioritize increasing local supply instead of diverting stock to other states and cities.
A senior official from the Delhi excise department acknowledged that the availability of a popular brand was indeed a concern this time. Conversely, another official asserted that there was no shortage of beer in the city, highlighting the introduction of several new brands across stores that customers were exploring.
As the temperature soared in May, liquor companies anticipate enhanced sales and improved returns. “We’re also observing a rising trend as consumers opt for beer cans for in-home consumption, appreciating their convenience and portability,” remarked a spokesperson from AB InBev India, a prominent player in the beer industry.
Consumer Trends and Preferences
According to another industry insider, breweries are optimistic about increased sales and improved returns as customers gradually transition to premium brands, resulting in a surge in demand for higher-quality beers.
“The increasing prevalence of social gatherings is fueling the popularity of draught beer. We’re experiencing a significant surge in demand and are actively working to enhance supply,” he stated.
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