Can Bira make it in the Big Apple?

ANKUR JAIN calls his plan “audacious”. “This might be the first time an Indian consumer brand is aiming for such a huge scale at such an early stage,” he says. Jain, 36, is founder-CEO of Delhi-based B9 Beverages that manufactures and sells Bira91, India’s first bottled craft beer. Even if you discount the bravado, his plan warrants attention: After introducing Bira91 in the domestic market nary a year ago, Jain is gunning for New York City, where the beer with the quirky monkey logo will debut later this month.

For Jain, an affable guy who looks deceptively like a pugilist, it will be a homecoming of sorts. He first thought of a career in beer while spending Saturday afternoons in New York’s Brooklyn Brewery, a nearly three-decade-old institution and a stalwart of the American craft beer movement. (Fortune last year reported that one in every 10 beers sold in the U.S. is craft beer.) His roots in New York date back to 2002—he drew up base there while running a startup that helped healthcare companies with revenue management, after getting a computer science degree from the Illinois Institute of Technology and interning briefly with Motorola. Jain says NYC’s fine brews made him realise that “India really had no beer worth drinking”. In 2006, he sold his startup to “one of the largest health care providers in New York” (he signed a non-disclosure agreement and won’t discuss details) and headed back to Delhi to fill this void.

Since its launch in February 2015 in the National Capital Region, Bira has found plenty of love. Jain reports sales of nearly 35,000 cases a month, up from 23,000 cases when Fortune India profiled him for the 40 Under 40 issue two months ago. (Market leader United Breweries estimates the beer market at 280 million cases.) It has eschewed the expensive marketing stunts that liquor players are wont to, instead lavishing attention on building a “viral” brand. The strategy has paid off. Jain says Bira has captured 30% of the on-premise premium beer market (bars, restaurants, and pubs) and expanded to seven cities, where it holds 15% of the premium beer market. He expects sales to jump 20% per month—current revenue is Rs 2 crore—and volumes to double every quarter in the next four quarters.

The beer business in India, expected to reach $9.03 billion by 2018 from a little over $4 billion (Rs 57,042.5 crore) in 2013 according to research firm Technavio, can be a hard place for rapid growth seekers. Danish brewer Carlsberg took a decade since entering India to finally break even this year. In 2004-05, UB Group said nearly 33% of all beer consumed in India was Kingfisher, its flagship brand, which has been around since 1978. The group planned to increase market share to 50%, according to the Economic Times. It took them a decade to get there.

Bira’s job is tougher because it is a misfit in the market. The All India Brewers’ Association says 85% of the market belongs to strong beers, which have an alcohol content of 5% to 8%. In contrast, both of Bira’s variants—White (an ale) and Blonde (a lager, slightly more bitter than an ale)—are mild, with less than 5% alcohol.

In January, Jain received a shot in the arm when Sequoia Capital wrote a cheque for $5 million, joining angel investors like Snapdeal co-founders Kunal Bahl and Rohit Bansal and Zomato’s Deepinder Goyal in Bira’s Series A funding worth $6 million. This is Sequoia’s first investment in India’s alcoholic beverages sector, which has been largely off the VC community’s radar. Over e-mail, Sequoia’s India managing director Abhay Pandey says, “We liked the product and the early customer love and traction it was getting. These, coupled with Ankur’s passion and the large market opportunity, made it a very compelling proposition.”

Shortly after the funding, Jain started fine-tuning the move to New York, where Bira will be the official beer of the Tribeca Film Festival (April 13-24), noted for showcasing indie film-makers. As part of the deal, he will host 70 after-parties with Bira as the centrepiece, and make it available in 300 restaurants, pubs, and bars all over New York. All bottles will sport Tribeca’s logo. “We want to be associated with a brand that resonates globally,” Jain says. “Bira is young and unorthodox, and that overlaps with what Tribeca stands for.” The Tribeca management echoes this. “[We are] always looking for cool, progressive brands to be involved in our events,” says Andrew Essex, CEO of Tribeca Enterprises. “When Ankur introduced us to Bira91, we knew it was the right fit for our beer sponsor—groundbreaking, modern, creative, and above all, fun.”

Tribeca is also a strategic choice for Jain because it is “very New York City-centric”. It was founded by a cohort led by Hollywood legend Robert De Niro after the 9/11 attacks as an attempt to revitalise the culture and economy of Lower Manhattan, and has since become an important fixture of the city. “We don’t want to be relegated to an ‘ethnic’ brand in the U.S. We want to [gel] with the American mainstream,” says Jain. He has already set up an office in New York’s 5th Avenue, one of the most expensive shopping areas in the world, and has made his first hire there. He plans to have a team of four by the end of July and expects the U.S. to account for 10% of sales by the end of the next financial year.

The American Brewers’ Association describes craft brewers as “small, independent, and traditional”, meaning their recipes come from “traditional or innovative brewing ingredients”. It’s a charming concept, but that doesn’t guarantee immunity from the cut-throat workings of retail, where legacy brands with massive resources rule the roost.

Jain has handy experience in this area. He cut his teeth in retail as a consultant to grocery seller Reliance Fresh, “then a core startup within Reliance”, soon after returning to India. Jain says the stint helped him develop a professional network in India—more than a third of his business team consists of people he met at or through Reliance. That includes Tanmoy Mukherjee, then Reliance Retail’s marketing head, whom Jain later nabbed as Bira’s chief marketing officer. Working at Reliance also helped him understand the distribution and infrastructure challenges in F&B, and get a feel for the country’s fast-growing startup ecosystem.

In 2009, Jain left Reliance to start Cerana Beverages. Cerana imported premium foreign beers, including New York’s Brooklyn Lager and Belgian labels Duvel and Liefmans. In June 2014, he raised seed funding from unnamed investors to expand the business and launch his own bottled craft beer, initially named Biru.

True to his Brooklyn inspiration, where craft beer is part of a vibrant “hipster” culture, Jain targeted the urban youth in the 25-35 age group. “As part of my import business, I would regularly visit Belgium. The breweries there were far better equipped to handle the kind of quality we wanted,” he says. He began manufacturing and packaging Bira in Belgium and importing it to India. He also signed up a Belgian brewmaster to help design the recipes. Bira’s smooth citrusy flavour and low price, below Rs 200 a pint, proved a major draw, and within four months of launch it was selling 10,000 cases a month in Delhi.

Much of the credit for the early success, says Jain, must go to Bira’s design. His team spent nearly nine months in the branding exercise, including picking a name, mascot, colours, and other aspects of the packaging. Bira’s creative director, Delhi-based designer Dev Kabir Malik, says, “Every element is Indian, but not obviously Indian.” He’s echoing his CEO: “We did not want to be a [narrow] ethnic brand. The idea was to present India in a modern and contemporary fashion.”

Malik got to work a year before the launch. One of his first inputs was the name change. (By now, Cerana had been rechristened as B9.) “Bira is a name that could come from anywhere, and yet has that Indian appeal,” says Jain. It was also short, and Malik felt it could easily replace the word “beer” in conversation.

He also insisted on a mascot that would help build the brand’s connect with consumers, since direct alcohol ads are banned in India and “we did not want to do those surrogate ads for CDs and cassettes and what not”. After several iterations, including fish, tigers, and a monkey-tiger hybrid, the team settled on a monkey standing with his hands on his hips. “Monkeys are Indian animals, they’re often found in urban spaces, and they are friendly, which [reflects our brand image],” Malik explains.

The final piece was a colour scheme to help consumers recall Bira’s variants easily—red-black for Bira White and blue for Bira Blonde. “The naming of the two variants was supposed to be a joke on the Indian obsession with ‘whites’ and ‘blondes’,” says Malik. The team also added the reverse ‘B’ in Bira—a nod to the “rebel brand”—and ‘91’, India’s country code. Recently, Bira launched a new packaging called the Growler—a striking, narrow-necked container that replaces the conventional pitcher. The company has also invested in unusual marketing strategies, including book readings and interactions with crime authors at places like the Oxford Bookstore in Delhi.

With the funding, Jain is turning his attention to scale. The day I meet him, Bira’s first Indian plant started operation in Indore. It’s an important move because Bira is struggling to meet demand—even the Mumbai cafe we met in had none. Jain says the new factory would plug the shortfall by April.

He is also growing the team. He structures his sales and outreach teams by city rather than the accepted consumer goods industry practice of clustering by region, since Bira’s sales are concentrated in the metros. “Each city team is responsible for a certain area, which we define as having a 1 km radius. Each area has two to three staff members, so we run a very intense force field,” Jain says. He has over 50 people running the show in Mumbai. Total employee count has grown from 30 to over 300.

Can Jain’s team hold its own against New York’s muscular craft beer circuit? According to a report by wine consultancy Stonebridge Research Group, New York state has 207 craft brewers, generating a combined revenue of $2.9 billion. Market research agency Mintel says craft beer was expected to be a $24 billion industry in the U.S. in 2015.

“Our point of differentiation is significant not just in India but also in the U.S.,” says Jain, unfazed. He explains that two categories of beer—traditional “blue collar” ones like Miller and Coors, and “esoteric, exotic” craft beers—are fighting it out in the U.S. market. While the former project themselves as unfussy, “manly” products, craft brewers are mostly “these two white guys with beards” making obscure brews and telling consumers, “if you don’t like these beers there’s something wrong with you”. “We’re neither. We’re a brand with a very clean, stark, memorable visual identity,” says Jain.

For the time being though, the U.S. foray is a side show, and Bira has to work hard to sustain its growth in India’s small beer market. Though the premium segment in which Bira competes is one of the fastest growing, with a compounded annual growth rate of about 30%, beer itself accounts for a paltry 5% of India’s alco-bev market, according to industry major SABMiller. Carlsberg estimates India’s per capita beer consumption at only 2 litres in 2015, compared with 29 litres in China, 21 litres in Singapore, and nearly 65 litres in Western Europe.

United Breweries controls about 51% of the domestic beer market, followed by SABMiller (25%) and Carlsberg (11%). Pricing is key: Jain says he has kept Bira affordable at Rs 100 per 330 ml for the White and Rs 80 for the Blonde (in Delhi). Carlsberg’s marketing director Mahesh Kanchan says its brand Tuborg, priced much cheaper at Rs 50 to Rs 80 depending on the state, is the second-largest premium beer in India after perennial leader Kingfisher Strong. “It is growing at about 47% year to date and is the No. 1 international beer brand in India,” Kanchan says. He also attributes a large part of Carlsberg’s success to careful branding and design, from the patented green bottles embossed with the Carlsberg logo or Tuborg’s easy-to-open bottles. Kanchan won’t comment on Bira’s business but says craft beer is a “negligible market with low awareness”.

That isn’t deterring other craft brewers. Javed Murad, founder of Mumbai-based microbrewery White Owl, is about to launch bottled versions of two or three of his six signature brews. Like Jain, Murad says his “plan from day 1 has been to build a product”. He says bottling your beer helps you get to an “exponentially higher” number of locations.

Meanwhile, Bira has its eyes set on the target—and it isn’t to become India’s biggest beer maker. “Indian consumer brands have followed more or less the same growth story. Going international means going to Singapore, or at most Africa, which are diaspora-led markets,” says chief marketing officer Mukherjee. Bira wants to go beyond that template. “We want to be India’s first consumer brand with a truly global footprint,” says Jain. Getting NYC to say cheers would be a start.