Being the King, And Having a Good Time
United Breweries' Rishi Pardal is focusing on penetration and premiumization to maintain Kingfisher's 50%-plus beer market share
Rishi Pardal joined United Breweries Ltd (UBL) as the new chief executive officer and managing director in the mid of 2020, the "dry' days. The COVID-19 virus-induced pandemic, and the subsequent lockdowns across the country, meant zero sales. Tough time for a chief to come in.
However, that is past. "I think we managed the last two years well. My biggest hope and desire for this year is that we have a normal summer. I think that is the single most important thing in the short to medium term. It will give us a chance to do stuff that we have only been planning to do in the last couple of years and achieve scale," said Pardal.
During the lockdown when restaurants and bars were closed, UBL started a campaign to encourage consumption of "beer at home' to make it a more socially acceptable drink. "We've always anchored the brand in a deep consumer connect, looked at what the Indian consumer finds aspirational, what parts of those we can leverage for a very social beverage. We have tried to marry those things together."
UBL, the owner of Kingfisher beer, is now controlled by Dutch-based Heineken which own 61.5 per cent stake in the India brewer.
Twin Pillars of Growth
Pardal has planned a two-pronged approach to keep the company's pole position in the beer market: penetration and premiumization. India being a climatically hot country with rising prosperity, beer in this kind of an environment should logically be on the cusp of a large penetration game, he believes. "Market penetration is really the first strategic priority for us as a business. It has been for some time and it'll continue to be so going forward."
India houses 18 per cent of the world population but beer consumption is one per cent of the global volume. India's annual per capita beer consumption is 1.6 litre compared with the global average of 24.4 litre.
In terms of premiumization, the company believes that as people get more exposed to global lifestyles as their own incomes go up, there's a growing desire to consume brands that are globally available.
Worldwide, Heineken apart from its signature beer brand also sells brands such as Amstel and Tiger, among others. UBL also, in addition to its Kingfisher Strong and Kingfisher Premium, has introduced variants under its Ultra series which have captured the market well. As per latest numbers, UBL holds a little over 50 per cent of the Indian beer market share.
"Based on the two pillars of penetration and premiumization, we have a number of initiatives which are already happening and more of which are to come."
Continuing the Legacy
When Kingfisher Strong was introduced in the Indian market, it was not the first strong brand. There were numerous strong beer offerings but the company focussed on its brewery and distribution network to reach the farthest corners of the country. UBL beers are produced from 31 breweries across the country, the highest for any brand.
Nevertheless, as true for any legacy brand, the company now faces competition from numerous new-age and startup brands which are innovating to suit the changing taste buds. "I think to remain relevant across generation is one of the key challenges that brands with long histories have to go through, and there are brands that have failed to pass that test and fallen by the wayside."
However, Pardal said UBL has remained true to its proposition, understood what worked in the past and what will work today. "If you have the honesty and humility to understand that, and then continuously reinvent yourself to remain relevant to consumers, the proposition will work," he said, adding that he and the company is acutely aware of the changing demands.
UBL has a programme wherein its own product are tasted and compared with competitor products, especially the new ones, to keep abreast of changes. "That's actually a regular feature in the company which is done at the blind level and at a paired level to get a sense whether we are headed the right way."
On being asked whether the company will look to acquire any brand which is doing well and penetrating the market, Pardal said while the option is not off the table, it will have to be compelling proposition."I would rather do things that deliver scale and play to our strengths, than try to just do stuff that is cute, stuff that will look nice on headlines."