Group2 - ICLA - Gaurav Dhakate

You might also like

Download as pptx, pdf, or txt
Download as pptx, pdf, or txt
You are on page 1of 10

Industry and Competitive Landscape Analysis

Alcoholic Beverages Industry


in India
Division B - Group 2
B004: Abhay Kamath B006: Gaurav Dhakate B021: Nisarg Naik B025: Saakshi Rathi B037: Aamir Suhail B050: Sanskruti Bajoria
Industry & UB Group Overview
Sales Performance of Alcoholic Drinks Alcoholic beverages exported from India
% Y-O-Y Total volume Growth 2010-2024 Between 2015-2020 in ₹ billion

Export Value
15% 30 27.72
10% 24.50
25 23.27 22.63
22.42
5%
20
0% 17.32

-5% 15

-10% 10
-15%
5
-20%
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 0
2015 2016 2017 2018 2019 2020

At least 21 states derive


An average Indian States earn about ₹2.25 Industry supports 40L
more than 15% of their
drinks 5.7 liters of trillion from alcohol tax farmers and employs
tax revenue from the
alcohol a year revenue 20L people in India
sale of liquor

Company Sales of Alcoholic Drinks 2010-2019 UB Group vs Competitors


Million Litres - Total Volume Indexed 2015 = 100
1600 18% 130

1400 16% 125

1200 14%
120
12%
Y-O-Y Growth

1000 115
10%
800
8% 110
600
6%
105
400 4%
200 100
2% 2015 2016 2017 2018 2019
0 0%
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
UB Group Competitors
Industry & UB Group Overview
Market Breakup Price Comparison
Alcoholic Beverages Industry, India

42%
58%

Organised Unorganised

Unorganised Sector
Alcoholic Beverages Industry, India
4%

Indian alcohol Because of heavy


Only $1.36 billion is
industry is the third rules and restrictions,
the legal unorganized
largest in the world 96% of the
sector and around
96% with a value of $35 unorganized sector is
$13 billion is illegal
billion illegal

Legal Illegal
Attractiveness in Alcoholic Beverages Industry
Bargaining Power of Suppliers State wise Per Capita Alcohol Consumption
(Litres / Year)
Threat of
New Entry
Bargaining Power
of Consumers Porter’s Five Forces
1. Threat of New Entry
• Government regulations, policy, and
Licensing requirements
• High economies of scale
• Low product differentiation
Threat of
• Low switching cost
Competitive
Substitute Rivalry • Several distribution channels

2. Bargaining Power of Suppliers


3. Bargaining Power of Consumers
• Small number of players
• Inelastic demand
• Lack of availability of substitutes
• Undifferentiated Products
• Industry is an important customer of
• Few switching costs
the Supplier group
• Supplier's input is undifferentiated

5. Threat of Substitute
4. Rivalry Amongst Existing Competitors
• Relatively low due to inelastic
• Numerous competitors
demand
• Rapid Industry Growth
• Population has become more health
• High Fixed Cost
conscious
• Lack of differentiation and switching
• Several alternatives available such
Cost
as non- alcoholic beverages
Introduction to UB Group
Vittal Mallya
became the Alcohol
prohibition
1915 1950s 1983 2014
first Indian
director of the brand came ₹9000 Cr. SBI imposed by the
company under UB Scam government

Incorporation Extension of Demise of


of UB Group 1947 portfolio to
wines and
1978 Vittal Mallya,
Vijay Mallya
2012 Expansion
within India 2017
by acquiring
spirits business became the Pacific India
by acquisitions chairman Pvt. Ltd.

Stock Prices Net Profit


Dec 2018 - Dec 2020 Between 2016-2020 in ₹ crore
1,600
600
562.78
1,500
1,400 500
1,300 427.23
1,200 393.99
400
1,100
1,000 294.57
300
900 229.33
800 200
700
600 100

0
FY 2016 FY 2017 FY 2018 FY 2019 FY 2020
Analysis of company within the industry
Company Performance vs Market
% Growth 2011-2019
20%
Heavy
15%

10% Kalyani Haywards


Zingaro
5%

0% Thunderbolt Budweiser Heineken


2011 2012 2013 2014 2015 2016 2017 2018 2019

Alcoholic Drinks UB Group

Strengths
Strengths Weaknesses
Weaknesses Budget Premium
•• Nationwide Brewery
Nationwide Brewery presence
presence •• Fewer
Fewer places
places to
to buy
buy and
and consume
consume
•• Distribution
Distribution beer
beer
•• Scale benefits
Scale benefits •• Large
Large number
number of of competitors
competitors
•• Sourcing
Sourcing •
• Ongoing legal cases on
Ongoing legal cases on the
the ex-
ex- Bud Lite
chairman Golden Peacock
chairman

Sandpiper
Opportunities Threats Old Milwaukee Light
Opportunities Threats
Growing market
Growing market because
because of: of: •• Government regulations
Government regulations Fosters
• Kingfisher
• Increasing
Increasing youth
youth population
population •• Micro-breweries are
Micro-breweries are increasing
increasing
•• Higher
Higher disposable
disposable income
income •• Non-availability of water resources
Non-availability of water resources Light
•• Rising
Rising preference
preference for
for low
low alcohol
alcohol
beverage
beverage
•• Gradual
Gradual social
social acceptance
acceptance
Competition Analysis

Founding Date 1915 1826 1975 1969 1986


Type Public Subsidiary Public Public Private
Revenue (Cr.) 41,572 6,773 21,424 - 1823
Market Share 25% 16.3% 9.2% 7.5% 6%

UB Group Alcohol Industry

UB is the leading brand of beer in India Expansion strategy differs by category

Presence via IPL, F1 and Fashion Setbacks for premiumisation

Established distributor relationships Embracing e-commerce

32 production plants in India Conditions favour larger players over micro producers

Strong background in dealing with regulatory environment and


Blurring category lines: Diversification for growth
market complexities
Key Takeaways
High growth potential

Continuous innovation and Competition through excellence

Poor Leadership can adversely impact brand image

Positioning map can be used for strategy formation


References
http://unitedbreweries.com/csr/domain/water/conservation-rejuvenation

http://unitedbreweries.com/pdf/InvestorReport/Annual_Report_2019-2020.pdf

https://www.motilaloswal.com/site/rreports/HTML/636111679438336608/index.htm

https://craft.co/united-breweries/competitors

https://www.marketing91.com/marketing-mix-ub-group/

https://www.moneycontrol.com/india/stockpricequote/breweriesdistilleries/unitedbreweries/UB02

https://www.livemint.com/Industry/0PBqBWHOYz8msKWSD6a84H/Alcohol-consumption-in-India-doubled-in-11-years-W
HO-report.html

https://go.euromonitor.com/passport.html
Thank You

You might also like