Alcoholic beverage giants are looking to expand into India’s dry-state

• United Breweries (UB) and Anheuser-Bush InBev are looking into expanding their products into the non-alcoholic state of Gujarat.
• UB is already testing the launch of its Kingfisher Radler in the state.
  
• The potential for non-alcoholic beverages in India is huge with four dry states and a growing soft drinks market.

Gujarat was the first Indian state to go dry, that is to say that making, selling and drinking alcoholic beverages in the state is banned. But, when the cauldron runs dry, it apparently opens up a whole new market. According to the Economic Times, United Breweries (UB) and Anheuser-Bush InBev (AB InBev) are planning on introducing their non-alcohol range of beverages in the state.

The companies responsible for producing Heineken and Budweiser, respectively, believe that the market is Gujarat presents a unique opportunity for them to expand their portfolio. In fact, UB, already the largest beer maker in India, is testing the launch of its Kingfisher Radler non-alcoholic beer in the state.

While a lot of non-alcoholic beers since have the 0.5% alcohol by volume (ABV), the Kingfisher Radler is completely alcohol-free using an emulsion of barley malts and lemon juice. With 30% less sugar than carbonated drinks and a price point akin to soft drinks at Rs 45, Pepsi and Coke may also have some competition on their hands.

Ab InBev, on the other hand, has plans of entering the market next month. It’s unclear whether they’ll be launching Budweiser, Hoegaarden or Becks since all three lie in the low or non-alcoholic category.

It’s not that Gujarat doesn’t have other alternatives, but they’re mostly imported and sold at exuberant prices.

The potential of non-alcoholic beverages in India

Gujarat isn’t the only state in India to have banned liquor within its borders. Bihar, Nagaland and the islands of Lakshadweep also don’t allow any alcohol to manufactured or sold in their states.

And, it’s not just about exploiting the markets where alcohol isn’t available. Research shows that companies producing non-alcoholic beverages are also driven by the demand from teenagers. In lieu of being underage, the option of a namesake alcohol drink is enticing.

It’s important to note that these beverages, while produced by alcohol brands, won’t be completing against alcoholic beverages, but other soft drinks in the market. Juice, carbonated drinks like Coke and Fanta, energy drinks like Red Bull and Monster as well as concentrated drinks showed a compound annual growth rate of 9.9% between 2012 to 2017.

In comparison, the beer market only grew by 3%. Globally, the market for non-alcoholic beverages is expected to hit $25 billion by 2024, but in India, these beverages account for less than 1% of the beer market.

Consumers may have to wait a while before Kingfisher Radler officially hits the market, but they’ll have the option to choose from lemon, ginger lime and mint lime flavours. All in all, this means there will finally be another option on the table aside from mixers and mocktails for non-alcohol drinkers at a party.