Hit by higher cost of operation, Bira 91 acquires Beer Cafe to reach consumers directly

Bira 91 has been struggling because of supply chain disruptions and the rising cost of barley amidst a conflict in Ukraine.

FPJ Web DeskUpdated: Wednesday, October 12, 2022, 04:47 PM IST
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When it was launched back in 2015, Bira 91 created a buzz as the first Indian craft beer, catering to a market which has collected $14 billion in revenues for 2022 alone. From that point, the brand has spread to 15 countries and is sold across 500 towns, and has hit annual sales worth more tha $170 millon. Over the years, Bira 91 has also focused more on its premium products as compared to the offerings meant for masses, because of operating costs increasing by 30 to 70 per cent. But soon it’ll be coming closer to the consumers, after an all-stock deal to acquire the Beer Cafe.

Eyeing a new consumer-base?

Bira is also targeting consumers in larger cities, which is why the Beer Cafe with 33 outlets in 15 cities across India is a good bet for the brand. The company is currently trying to withstand inflation, since supply chains have been disrupted due to the pandemic and the price of barley is up by more than 60 per cent on a year on year basis. The situation isn’t getting any better soon, since Ukraine is a major exporter of barley, and the conflict in the country is only escalating further.

Getting closer to connoisseurs

Although the sales for Bira did cross pre-covid levels in the summer, the acquisition of the Beer Cafe will create a direct to consumer platform for the company. Its promoters Rahul and Bineeta Singh will receive shares under the deal, along with investors Mayfield, Granite Hill and RB Investments. The operations on the other hand will still be headed by Rahul Singh, who will lead Bira’s restaurant division called Bira 91 Taproom.

Despite a temporary slump during the pandemic, Beer Cafe didn’t close any outlet due to the crisis, and has benefited from a surge in demand for dining out that picked up after restrictions were lifted.

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