Cerana’s handcrafted beer is focussed on the 10 per cent of non-mass market which comprises the urban young willing to experiment with new tastes. Based on quality, word-of-mouth and digital marketing, it aims to record revenues of Rs. 100 crore in 12 months and foray into 35 cities in the next three years.
After a brief stint in Motorola, Ankur Jain, then 22, started his first company in the healthcare management space in New York City, one that he spent close to five years growing and eventually selling it. During his time in New York, his office was down the street from the iconic Brooklyn Brewery where he spent most of his Friday evenings recovering and recuperating from the week, and discovering fine beer. “For someone who never used to drink beer, I started appreciating craft and speciality beer which was different from what was available in the main stream market,” recalls Jain. Once he returned to India, he believed that it was an interesting gap to address. The market for beer was very large and growing at a big scale. It had a large number of new drinkers coming into the fore including females and younger consumers.
Eventually, in 2009, Jain set up Cerana Beverages, a craft beer company, which imported quality beer to the Indian consumer. “We brought in speciality beer from Germany and the U.S.,” states he. In 2013, Jain noticed couple of gaps in the market – one, a gap for a craft beer and speciality beer with an unapologetically Indian identity and two, a low penetration of draft beer and the experience of drinking fresh draft beer missing. In an effort to fix both these gaps, the company introduced its own brand, Bira 91 in 2013. “91 signifies the +91 that displays on your phone. We see ourselves as a brand which is unorthodox, Indian and young, and focussed on delivering high quality beer drinking experience,” shares he. Cerana has come a long way since the time it was incorporated. Priced at Rs. 100 per 330 ml bottle, the company currently sells over 10,000 cases a month (over the last few months).
Jain bootstrapped the company during its early days and raised a round of private capital, mostly from an angel fund in New York and some HNIs in India. He is looking at raising further funds to expand the business further and take the brand to more cities.
Operational parameters
A large part of what the company aims to do is to ensure that the beer is available fresh to its consumers. With a production capacity of about 330,000 cases a month, the company outsources its manufacturing facilities and has brewery partners in Belgium and in Rajasthan, India. “In both locations, the partners allow us to use their facilities to make the beer that we want to make and distribute the finished product,” shares he.
The company’s key brands include Bira 91 White (a low bitterness wheat beer) and Bira 91 Blonde (an extra hoppy craft lager) available in draft and bottle formats. It also owns and operates the draft beer dispense network in restaurants and bars across the country. “Handcrafting the world’s greatest beer is our life’s work,” says Jain. This begins with careful selection of ingredients – malts from France and Belgium, hops from Himalayas and from traditional Bavarian farms.
Beer market in India is about US $6 billion dollars and has been growing at about 11 per cent to 12 per cent (CAGR) in the last three to four years. It is expected to almost triple in terms of volume over the next eight years. Moreover, 90 per cent is the mass market, comprising 650 ml bottles of strong beer which is sold in the retail shop. “We do not cater to the mass market,” states Jain. He continues, “The urban, young and new India’s consumer focuses on taste and experience and most of our beers focus on these two aspects.” Market is growing quickly and at the same time there is a wide diversity of taste that the Indian consumer is demanding.
“Our belief was that the market is going to grow quickly and evolve into a much more premium and discerning market place with the consumers demanding a variety of taste,” recalls he. And that’s the belief that formed Cerana and Bira 91’s journey. The company started with importing many craft beer brands to India in 2009 and continues to do that. The company launched Bira 91 in February this year and it is currently almost 90 per cent of its revenue. “The import business is only from partnership standpoint,” shares he.
Overcoming the challenges
The company faced three key challenges during its initial days. “First, of course for any start up is building a team. Second is finding a legitimate gap in the market where we could add value which took a bit of time to identify. And lastly, there is always a certain degree of unfamiliarity when you are launching new products and categories because you don’t know what to expect from consumers,” says Jain.
Now that the company knows its product is well accepted in the market place, its next set of challenge is around scaling the business. “We are trying to hire a large team over the next few months,” shares the founder. Currently, the company has a team size of 50 and is expected to increase this number to 400 in the next eight to nine months. The company is also looking at expanding into new markets like Mumbai, Pune, Goa and Kolkata in the next month or so. It aims to grow its business in about eight cities before the end of the financial year. Its beer is currently available in Delhi and Bengaluru. “It is also important to execute at a pace where we can retain and keep the product in good quality,” opines Jain.
Rolling out the future strategy
The company’s communication with its consumer is very direct. It focuses on two things. One, the point of sale: How do they get the consumer to taste their first Bira? “We are very confident that once that happens we will build loyalty automatically,” says Jain. Second, is digital. “The reason why we think digital is very important is because of the way consumers are using media today. Also, the fact that it is direct and peer-to-peer,” says he. This resulted in an interesting outcome for the company in New Delhi where without spending much on marketing mediums like radio, TV and other areas, the brand went viral. “We are now the largest selling draft beer brand in Delhi by a wide margin. We have great consumer engagement on Facebook and other mediums,” says Jain.
The company is in the process of rolling out the country’s largest craft beer network which should be in place in the next two to three years. Jain has a revenue target of Rs.100 crore for Cerana in the next twelve months and wants to ensure that Cerana’s beers are available in the top 35 cities in India in the next three years. “In the next three years, we see ourselves as both market and thought leaders in the speciality beer space,” says Jain on a parting note.
CRITICAL SUCCESS FACTORS FOR A CRAFT BEER MANUFACTURER TO SURVIVE IN INDIA
Common to a lot of start-ups is the quality of leadership team
Ability to look at the market from an outsiders’ perspective. This is when you start noticing white spaces in the market place.
Do not be condescending to the consumer as the consumers know what they want.
Deliver quality
Snapshot
Cerana
Founder: Ankur Jain
Year: 2009
Funding: Raised a round of private capital from an angel fund in New York and some HNIs in India.
Business Profile: A craft beer company with two key brands that include Bira 91 White (a low bitterness wheat beer) and Bira 91 Blonde (an extra hoppy craft lager) available in draft and bottle formats.
