“Indian Beer Maker Says Alcohol Beverage Industry Is Not for Those Seeking an Easy Business Venture”

The alcohol beverage industry in India, despite being a significant revenue generator for state governments, is not an easy field for entrepreneurs, says Avneet Singh, founder and CEO of Medusa Beverages Pvt Ltd, a beer company. Singh points out that while beer consumption in India is rising, particularly in urban areas, the government has not provided much support to producers in terms of business-friendly policies.

Singh, who started Medusa in 2017, notes that young, health-conscious Indians are increasingly choosing beer over other alcoholic beverages. He discusses how he capitalized on gaps in the beer market, such as a lack of variety in flavor profiles and alcohol content. His company launched a beer with a 5.9% alcohol by volume (ABV) to cater to the demand for a stronger but more drinkable beer, which resonated well with consumers.

When asked about expanding into South India, Singh explains that they are focused on building a strong brand rather than expanding too quickly. They plan to enter Andhra Pradesh and Assam, and they are also launching a beer brand in Bhutan, leveraging its high-quality spring water.

Beer consumption in India is growing at a faster pace than spirits, with a 12% annual growth rate. Singh attributes this rise to India’s young population, increasing disposable incomes, and urbanization. However, he raises concerns that if beer consumption continues to grow, the industry may struggle to meet demand due to limited production capacity.

Singh also discusses the challenges in the distribution sector, particularly in hotels and restaurants, due to complex state regulations and high taxes. He emphasizes the importance of policy reforms to improve business conditions for alcohol producers.

Despite the rise of premium products, Singh observes that the craft beer segment has not grown significantly, as Indian consumers still prefer traditional styles like lagers and pilsners over craft beers. He attributes this to a growing health-consciousness and a preference for lower-sugar and less-caloric options.

Regarding the business environment, Singh highlights that the alcohol industry in India is complicated by state-specific policies, high taxes, and complex regulations. He advises that anyone entering the alcohol beverage industry should be prepared for tough competition and numerous bureaucratic hurdles.

Finally, Singh touches on the cultural shift around alcohol consumption, noting that as drinking becomes more accepted in homes, there’s a reduction in binge drinking and related crimes, citing a decrease in accidents and crime rates in Gurugram after wine shops were allowed to stay open late. He suggests that making alcohol more accessible could lead to more responsible consumption and better regulation.