A detailed portfolio review is underway, prioritising its most valued stock-keeping units (SKUs) and rationalising underperforming products to enhance operational efficiency
Highlighting that the company is embarking on a comprehensive transformation programme to boost productivity and achieve higher cost efficiency, United Breweries is looking to generate sustained annualised savings of 3 per cent to 6 per cent. Recognising current affordability pressures in the Indian beer category, the company is intensifying its investment in building robust brands and consumer engagement programmes.
A detailed portfolio review is underway, prioritising its most valued stock-keeping units (SKUs) and rationalising underperforming products to enhance operational efficiency and improve the customer experience. Cost optimisation actions focus on increasing the reuse of old bottles, reducing logistics costs, maximising domestic procurement of raw materials and introducing targeted fixed cost measures, it said in a regulatory filing.
“These collective actions, many of which are already in motion, are projected to generate sustained annualised savings of 3 per cent to 6 per cent. We are committed to reinvesting these gains to foster market growth and capability enhancement, ensuring long-term value for our investors, stakeholders and partners. Progress updates will be provided as the programme advances,” the company noted.
The company’s network strategy is centred on optimising its brewery presence, reflected by the commissioning of a greenfield facility in Uttar Pradesh, the closure of its Mangalore plant and forging strategic partnerships in priority markets. Localising the production of premium brands within states strengthens supply chain resilience and responsiveness, it highlighted.
The transformation includes a thorough reorganisation of business functions, aligning the company’s teams and expertise with evolving business requirements. “We are streamlining roles in sales, supply chain and related departments while establishing focused teams in corporate affairs, customer service and logistics to better support our markets,” it noted in a regulatory filing.
The company highlighted that the rising cost of raw materials and strong competition from both domestic and international players have made it a tough environment for breweries to sustain and expand operations. Whilst India remains a structurally under-penetrated beer market, United Breweries sees significant long-term growth potential and continues to invest in India’s beer market, it added.
