Vineet Sharma notes that the company believes that the premium edition will be a big driver, which is why it is investing ahead of the curve on building Budweiser, Corona and Hoegaarden
As the premiumisation wave now pours into India’s non-metros as well and with the huge opportunity in an underpenetrated market, AB InBev India is betting on the country from a long-term perspective, Vineet Sharma, Vice President, Marketing and Trade Marketing, told BW Retail World.
“There is a huge leg room for the brand to grow. Young population, where the beer is under penetrated, is a great recipe for success for our brands, and we are betting big time on India as a country,” Sharma stated during an interaction. He noted that a big focus is on winning and dominating the premium-based segment with brands like Budweiser, Corona and Hoegaarden. Edited Excerpts:
What is driving the premiumisation trend in India’s beer market and how is AB InBev India capitalising on it?
We believe that premiumisation is first and foremost led by the consumers, and these are consumers who are a large part of the young population. At the same time, with the advent of technology, travel, these people are globally exposed consumers who are looking for a lot of high-quality products, experiences, and moments. This wave of premiumisation is not just in our beer category, but in larger alcobev, even lifestyle, fashion. This is fuelled by rising disposable income that has happened in India, and that is where the Indian economy doing well helps the consumption economy.
We are very proud that we have some amazing brands globally, as well as here in India. Today, close to 60 to 65 per cent of our revenues are coming from the premium part of the portfolio, led by brands like Budweiser, Corona, and Hoegaarden. We are ready with sharp consumer insights, understanding who our consumers are, what their needs are, and how our brands can play a part in giving great experiences.
We are investing very heavily in India, whether in terms of our brewery capacity, in ensuring that product availability is at large. We are increasing our distribution and width across different parts of India because premiumisation is not just happening in tier-1 towns, but also tier-2, tier-3 towns as well.
Since AB InBev is a global brand, how exactly are you balancing the global brand identity with the local preferences and the narratives?
AB InBev has over 500 brands across the globe, and they are very strong brands globally, as well as some of them are local jewels as well. The top eight out of ten most valuable brands in the world are from the house of AB InBev. That is an honour, but at the same time, a big responsibility for every country to ensure that these global brands are taken care of. What we do very smartly is to understand and locally contextualise these brands for the audience. There is a global brand DNA of what they stand for but at the same time, we tailor it to every audience in different parts of the world.
In India, we are very proud that we understand or keep a very close tap on the consumer’s understanding and that is why we have hopped on the trends of music, sports, lifestyle, even like up and coming sports. Our intent is to have a global association of our brands, but at the same time, contextualise these brands for a local audience. It is a mix of this global aspiration and local relevance that I believe is a strong reason for the success of our brands.
What targets have you set for the Indian market going ahead? Are you betting more on volume or premium portfolio or something else?
The beauty of India is such a huge population, and at the same time, beer is not a very highly penetrated product. There is a huge opportunity to increase the penetration of our brands. It is a very balanced portfolio that we are starting to build in India. Today, a lot of our focus is on winning and dominating the premium-based segment with brands like Budweiser, Corona and Hoegaarden. We want to lead and grow the beer category. Our investments in India are speaking to that, whether it is expanding our footprint, expanding our distribution outlay in India, or increasing the investment behind the brands. That is the main focus.
We are betting on India from a long-term perspective. India has a lot of vitality, but at the same time, volatility as well. We still believe that the premium edition will be a big driver, which is why we are investing ahead of the curve on building Budweiser, Corona and Hoegaarden. Indians have shown a lot of love. There is a huge leg room for the brand to grow. Young population, where the beer is under penetrated, is a great recipe for success for our brands, and we are betting big time on India as a country.
What does the media mix of AB InBev India look like and how do you see it evolving over the next few years?
We have been very digital-first as a company, and why we do that is because we believe that consumers are increasing their habits, spending more and more time on devices, digital platforms. You can sharply target your consumers during the moment, you can also customise which time of the day and week, and you can serve your communication to them, which is very relevant and targeted towards the audience. We focus a lot on social platforms like Instagram, Facebook, and YouTube, our investments are going there. We are seeing a lot of spending also happening in the OTT platform in the last two to three years, where the surge has happened.
It is not that we do not do traditional media, but our media mix is heavier towards the digital side. We also enjoy long-standing partnerships with our partners, like Spotify, who are very into the moment, and this is where the premium audience comes in. We are looking at contextual out-of-home in mall spaces, tech parks. Using our brand experiences to bring alive this media is something that we are working on.
Given the limitations of direct marketing for alcobev brands, how are you leveraging experiences and other strategies to effectively engage consumers?
Experience is something that our consumers value a lot. These are people who are hungry for never-before-seen experiences. In the last couple of years, you would have seen so many international artists coming to India; a lot of Indian artists, too, are getting sold. Experience is the new currency is what we call, and our brands are front and center to take advantage of that.
Our brand Budweiser focuses a lot on young Indians, and we bring never-before-seen experiences in the high-energy electronic music space, and that is something we have pioneered with our partnerships with Sensation, EDC, and more recently with Lollapalooza as well. We have also brought never-before-seen experiences, which are outlet-based, like a boiler room, a mix-mag. Experience is front and centre in the media mix overall, not just traditional or digital advertising, but how do you reach people at the right moment when they are open for consumption of your brands.
From a distribution perspective, what are the key areas that you are looking to tap into this particular year in terms of expanding your offline and online footprint?
The beer category or Alcobev category overall is close to 1,00,000 outlets in India. It is not from an accessibility perspective of a country of 1.4 billion people that we only have close to 1,00,000 outlets. That is a concern for us. We are working very closely with the government to ensure we increase the footprint of where alcohol can be sold.
States have their individual rules and laws regarding alcohol sales, whether it is on sales, distribution, and promotion. At the same time, the pricing of the products, especially beer, is very discriminatory in terms of the taxes that are imposed on the product. We believe accessibility of the product, in particular, will increase in the years to come. There are some progressive states that are already changing the policy. We are very much focused on increasing our capacity footprint so that we can serve the markets very quickly during the peak season. Regarding online sales, currently, online sales in India are restricted. Only two states are allowing the sale of online alcohol, that also via partners like Swiggy and other quick commerce aggregators.
We are very much focused on the offline part of our business, where we want to expand distribution. First, we also want to reach the 1,00,000 outlets in the right way and at the same time, work with the regulatory bodies to increase the accessibility of alcohol from more than 1,00,000 outlets for a country of 1.4 billion people.
