Beer Cafe crosses Rs 100-crore sales mark in FY19

Beer Cafe, which is run by BTB Marketing, has crossed the Rs. 100-crore sales mark during FY19, posting a 12% increase in revenues about seven years after it launched its first outlet.

The brand’s per store gross sales of Rs 3 crore on an average was at par with Starbucks and significantly higher than other quick service restaurant startups like Chaayos. As of March 2019, Beer Café was having nearly 36 outlets.

Rahul Singh, Founder of BTB Marketing, which posted a net loss of Rs 19 crore during the year, said, “Most brands in the sector prefer to remain regional but we were determined to be ubiquitous. We are already in 16 cities now in a sector that is highly regulated and complex.”

Beer Cafe’s per square feet revenue at Rs 19,000 is higher than most restaurants, helping them make a profit at store level despite high taxes and regulations in the sector.

Beer Cafe was the first company in the beer quick service restaurant space, which also saw marquee tea and coffee brands, Chaayos and Starbucks, foray into the same year in 2012.

Taxation on Beer

In India, the alcoholic-beverage industry, including beer, is heavily regulated, with excise and other taxes forming an important source of revenue for state governments. Due to this, it is difficult for most companies and retailers to register higher profits.

The beer attracts the highest taxation of any beverage in the country, with only 5% alcohol in beer on average. Furthermore, beer retails from as low as Rs 36 for a Kingfisher beer bottle in Goa to Rs 115 in Madhya Pradesh, indicating how there is a huge price disparity for the same brand.

“With equity infusion of just Rs 84 crore till now, we have done gross revenue of over Rs 500 crore since we started. The burn has come down significantly and the leverage is kicking in,” Singh stated.

Indian Beer Market

As per the report, India Beer Market Overview, 2018-2023, The Indian Alcoholic beverages market observed the highest market share of Whisky which is followed by brandy & beer. Indian Beer market has a market share of 17%, being third in the Indian alcohol beverages market.

The rise in disposable income of the Indian population has somewhere led the consumers to shift from standard beers to premium and craft beers. The population is turning more brand conscious, offering numerous business opportunities to entrepreneurs.

The beer consumption in India, in volume terms, is less than 1.5% of global beer volumes, while spirits consumption is as much as 12%. Also, the country’s per capita beer consumption at around 2 litres per annum remains materially below other markets.