Jain is exploring ways to drop his pricing to around T100 and thinking of local production – the company’s Vice President of Production, Jaideep Wanchoo, recently joined from Carlsberg India where he was the head of quality. Interestingly, most of Cerana’s leadership have little background in the alcohol industry, though all of them are fanatical beer lovers.
Chief Operating Officer Anuj Krishan’s last job was at UBS Investment Bank in London. He loves his beer pilgrimages to Belgium, “trying their various lambics – beer fermented with wild yeast”.
Marketing head Tanmoy Mukherjee was earlier with Lavazza Coffee. He once “drank himself silly in Stockholm bars”. And Jain’s most memorable beer experience was “staying overnight in the dorms of the Abbey of Chimay, waking up at 5 a.m. for a prayer, and then heading to the breakfast room for a beer with the monks.”
Jain is a techie. His first job was at Motorola in the US, where he developed mobile applications. His first start-up, in Brooklyn in 2002, was in health-care management. He sold the firm in 2006 and moved to India to work with Reliance Retail. “In Brooklyn, my office was down the street from the Brooklyn Brewery, where I used to spend a large part of my time every Friday and Saturday,” Jain recollects. “I was not a beer drinker before I moved to New York, but Brooklyn made me one.” Cerana started as an import and distribution company in 2009, but pivoted in 2013, when Jain saw an opportunity in craft beer.
The path ahead is likely to be bumpy. Excise is a state subject and changes in tax rates is one headwind every alcohol company faces. Cerana learnt this lesson early. The company initially launched the beers in Delhi and Gurgaon, but had to pull back from the latter from April
1, as Haryana upped excise duty on imported liquor and its beers became three times more expensive.
The start-up is now ex- panding in Bangalore, Mumbai, Pune and Kolkata. But as it expands, distribution costs and complexities will increase. Pradeep Verma, Senior Partner at CFB Consulting GmbH, and a beer consultant, says one needs deep pockets to become a pan- India brand.“You need money to establish the brand. For smaller companies, brand promotion will be limited,” he says, and adds a second challenge: “Big daddies keep a watch. They can offer better schemes to retailers and distributors.”
Samar S. Sheikhawat, Senior Vice President of Marketing at UBL, thinks microbreweries and craft beer is largely a big city phenomenon. For the next five years, he predicts, the market for craft beer will remain small. Today, 85 per cent of the market is strong beer, or those with seven to eight per cent alcohol content. Indians like to get a “kick”, and mild beer (including craft beer), with less than five per cent alcohol, will not have many takers.
All entrepreneurs are optimists – Jain believes craft beer, including microbreweries, would capture 15 to 18 per cent of the market by value in 10 years. The overall Indian beer market would expand, too. The per capita consumption of beer in India is below two litres whereas Russia guzzles 76 litres, Brazil 64.5 litres, and China 34.5 litres. The ICICI Direct report says India’s per capita beer consumption will rise to five litres over the next decade thanks to favourable demographics, greater social acceptance and higher disposable income. To Jain, that very thought is more intoxicating than the drink he makes. ♦