Indian Craft Beer Giant B9 Beverages Bets Big with $70M Brewery to Challenge Global Brands

An Indian craft beer company, B9 Beverages Ltd, supported by Japan’s Kirin Holdings Co., is planning to take on big global beer brands by building a $70 million brewery and raising new funds ahead of a potential public listing in 2026.

B9 Beverages

B9 Beverages, known for its Bira 91 brand, is constructing a new brewing facility in Uttar Pradesh, India. Once completed, this factory will be the largest beer factory in the country, significantly increasing B9’s production capacity, according to founder and CEO Ankur Jain. Currently, the company operates by leasing six brewing units and sells around 8 million cases of beer annually.

To fund this expansion and prepare for an IPO, the New Delhi-based company has appointed Morgan Stanley to lead another round of fundraising.

Challenging Year

“2023 was a challenging year for us because we made significant changes to our sales operations, supply chain, and financial processes,” said Jain. “While this decision slowed us down, it has made the company stronger.”

The new factory will cost between $60 million and $70 million, with a capacity of 50 million cases. The first phase of the factory is expected to be operational by next summer.

Success

Last year, B9 revamped its operations to capture a larger share of India’s beer market and move towards profitability, as its losses had been increasing. Jain brought in consulting firms Accenture Inc. and Boston Consulting Group to help improve financial controls and supply chain management, aiming to generate more cash. India’s beer market is currently dominated by major producers like United Breweries Ltd.’s Kingfisher and brands from Anheuser-Busch InBev NV and Carlsberg A/S. Since its launch, Bira 91 has played a significant role in sparking interest in craft beers in India, attracting a younger, trendier audience with offerings like a blonde summer lager and a special-edition pomelo India pale ale.

“Bira was a trailblazer, not just in the beer industry, but for new Indian alcohol brands,” said Vikram Achanta, CEO of beverage consultancy Tulleeho Portals. “They showed how an Indian brand could achieve great success with innovative marketing.”

Market Value

India’s beer market was valued at ₹415 billion ($5 billion) in 2023 and is expected to grow to ₹781 billion by 2032, according to IMARC Group. Although the Indian alcohol market is one of the fastest-growing globally, per capita beer consumption is still much lower than in countries like the US, UK, Germany, and China, as noted by Indian consultancy Technopak Advisors.

In June, B9 secured $50 million in funding through external loans from key supporters Kirin and Tiger Pacific Capital LP. So far, the company has raised $290 million in equity and debt from investors, including MUFG Bank Ltd. and Peak XV Partners (formerly Sequoia Capital’s India unit), Jain said.

Jain has ambitious plans: He aims to increase Bira 91’s market share from 8% to the early teens and achieve a double-digit earnings before interest, taxes, depreciation, and amortization (EBITDA) margin before going public.

However, the company still faces challenges in becoming a larger and profitable player. B9 reported a 17% increase in revenue to ₹8.5 billion in the year ending March 2023, down from 64% growth the previous year. Losses deepened to ₹4.5 billion as the company invested in expanding its distribution network, restructuring operations, and building the new factory. The current EBITDA is negative.

Looking ahead, Jain is focusing on expanding beyond big cities into smaller towns where beer is gaining popularity.

“It’s not just young people,” he said. “Beer is becoming an everyday drink for many, and as a result, people are open to trying new things.”