Consumer Trends shaping the Indian Beer Market
SAMAR SINGH SHEIKHAWAT
A consumer goods veteran, Samar Singh Sheikhawat is linked to the success of many developing brands from PepsiCo, Dabur & SpenCer’s. Equipped with a maxim of imparting knowledge and sharing it with the next generation, Sheikhawat is a powerhouse of experience spanning across multi-industries and locations. From chocolates to batteries, Samar Singh Sheikhawat has played the role of a business management leader for decades.
As a marketing and sales professional who has worked in this fascinating, beautiful, confusing, infuriating and diverse land called India for 30 years now, I have been privileged to learn about consumers on the job every day. I have worked in categories as diverse as chocolates, malted food drinks, ice creams, batteries, pharmaceuticals, natural products, fruit juices, carbonated soft drinks, food and grocery retail, lifestyle retail and alcoholic beverages. And I have seen consumer trends that manifest across most categories. This article focuses on consumer trends specific to the beer sector, a predominantly urban category.
These trends are true for younger, newer consumers in larger markets across urban India. It needs to be remembered that the majority of Indian consumers still consume mainstream strong beers and are fairly loyal to their small set of brands, out of familiarity and comfort, inertia, force of habit and simple physical availability. But affluence, urbanisation, media penetration and the growth of aspirations will all start manifesting these trends and behaviour more and more across markets in India. Obviously, there will be exceptions, but these are the strong markers of current and future consumer behaviour.
FIRST, Indian consumers are very proud of their Indianness. While we are open to western ideas and concepts and brands, we are equally at home with indigenous offerings. Witness the number of multinational and foreign brands that have customised their product portfolio, look and feel, sponsorships and associations, communication tonality and even pricing to get a bigger slice of the Indian market. Examples that come to mind are strong beer brands and super premium brands launched by many companies specifically for the Indian market.
SECOND, urban, educated, affluent Indians think and speak by and large in their native language, even though they read English. Nowhere is this more evident than in research focus groups. This has implications for beer marketers as far as creative and communication strategy, and media plans go. Marketers need to recognise that in order to build brand preference, communication that touches the hearts and minds of consumers will always work better. And so, marketers need to sometimes think in vernacular and transcreate communication.
THIRD, consumer choice is driving brand fortunes. Ten years ago, one was never sure if one would get or be served the brand asked for at points of sale or consumption. Consumers now ask for brands by name. Gone are the days when a retailer or barman could offer a consumer a brand that was similar in price and offering to his asked for brand. This has also been aided by much improved availability of most mainstream beer brands in most markets, thus making consumer choice the predominant driver of sales.
FOURTH, consumer loyalty is a leaky bucket. Every day brands will lose consumers. And hence they need to recruit new consumers every day, at a pace and scale that will result in a net accretion of consumers. This is true for both established and new brands, for there is always the next newer, cooler alternative available to them. Consumer repertoire is increasing across categories, and beer is no exception. Consumers are no longer loyal to brands. Brands have to be loyal to consumers. The same consumer will consume mainstream strong and mild beers, super premium strong and mild beers, craft beers and offerings at micro-breweries and brew pubs, depending on the occasion, budget, company, mood and location.
FIFTH, consumers don’t believe advertising anymore. They rely far more on reviews by bloggers and vloggers, peer endorsements, ratings, word of mouth from people they trust and what their friends and family say. This has massive implications for beer brands, who have to reimagine and rethink their consumer outreach programmes if they are to get through to this emerging dynamic.
SIXTH, premiumisation is a reality. With a rise in affluence and awareness, as well as a willingness to pay, the fastest growing brands in India are the super-premium strong and mild beer brands. This is being driven by the experience seeking generation, described further in this article. But there is also the element of not wanting to drink the beer brand that my father drank, or even what truck driver’s drink. There is significant value to be captured from this generation of drinkers because of the simple law of demand and supply. The players that have these offerings in their portfolio will stand to benefit disproportionately compared to those that do not.
Premiumisation is a reality. With a rise in affluence and awareness, as well as a willingness to pay, the fastest growing brands in India are the super-premium strong and mild beer brands. This is being driven by the experience seeking generation.
SEVENTH, younger consumers consume products very differently than older ones. They are far less emotional in their buying behaviour, and much more experimentative. Some of this is being driven by the isolation caused by social media and relatively dispassionate online buying behaviour. Witness young, single and newly married consumers who wouldn’t think twice about buying a different brand if their preferred brand is not available, especially if there is a great deal, quicker delivery, cooler brand proposition or other benefits available on the alternate brands. This also explains the rise of a profusion of quirky, eye-catchingly named and packaged, smaller beer brands in urban India.
EIGHTH, for younger consumers, there are two driving forces of consuming behaviour. Hope and fear. Hope, or more specifically the hope of looking cooler and more happening than everyone else, drives trying out new things, always prioritising experiences over possessions. And hence that Instagram or snapchat moment or video with that cool new brand in that cool, new place. Fear, or more specifically FOMO (Fear of Missing Out) drives the same behaviour. They want it all, and they want it now.
NINTH, while beer is overwhelmingly a male drink, increasingly younger, urban female consumers are being added to this list. They still are a very, very small percentage of beer consumers though. This trend manifests itself more in urban, affluent markets. And men and women who are beer consumers exhibit different consuming behaviour. Their reasons for buying brands are very different. Men will buy a beer brand for the way it makes them look to others. And hence things like brand associations, sponsorships and cool quotient matter to them. Women will buy a beer brand for the way it makes them feel. And hence taste, bottle shape, colour and packaging matter to them. Most marketers are aware of this, but are not necessarily prepared to handle the consumer interface that is required at the front end.
LASTLY, consumers display non-linear behaviour. A consumer who is buying an expensive beer brand will prefer to have it straight from the bottle that can be seen by others. The same consumer buying a mainstream popular brand may prefer it to be served in a glass that doesn’t let others know what he is drinking. A female consumer will want it to be served in an aesthetically designed glass placed on a lovely looking coaster. The main difference is between males who want to project their feelings outwards and females who want to project their feelings inwards.
These then are some of the consumer trends that are manifesting themselves strongly in the beer market. But one could indeed take a step back and observe the same thing happening in most consumer product categories. And for a marketer, that would be a worthwhile lesson to learn.