Importing Bira beer from India to Canada PDF

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Market Potential for Bira Beer imported from India to Canada | 1

Market Potential for Bira Beer imported from India to Canada

Prepared for Liquor Control Board of Ontario

Market Potential for Bira Beer imported from India to Canada | 2 Table of Content Executive Summary…………………………………………………………………………… 4 Introduction……………………………………………………………………………………. 5 Background……………………………………………………………………………………. 5 Business Opportunities……………………………………………………………………….... 6 Research Objectives……………………………………………………………………………. 6 Methodology………………………………………………………………………………….... 7 Implementation Plan……………………………………………………………………………. 8 Data Analysis…………………………………………………………………………………… 8 Data Interpretation……………………………………………………………………………… 12 Business Implication……………………………………………………………………………. 13 Conclusion……………………………………………………………………………………… 13 References……………………………………………………………………………………… 14 Appendix……………………………………………………………………………………….. 15

Market Potential for Bira Beer imported from India to Canada | 3 Executive Summary This research report has been prepared for LCBO, Canada. It aims at throwing some light on the opportunities of importing Bira beer to Canada from India. Bira 91 is the first of its kind, handcrafted beer manufactured in India. It was launched in 2015 and has been successful at capturing a noticeable market share in India. Bira 91 is a low-calorie beer which is only just available in India and some parts of US. Considering the increasing trend in consumption of craft beers in Canada, Bira has a good chance to make its name in this North American country. Through secondary and primary sources, this research aims to study the opportunities for Bira to enter the Canadian beer market. This report has been written considering various sources. A primary survey of 51 potential consumers was conducted to study the various factors that affect the buying behaviour of consumers and to know how many consumers would be willing to try the product. Moreover, a few recommendations have also been made based on the outcomes of the survey.

Market Potential for Bira Beer imported from India to Canada | 4 1. Introduction In 1991, economic reform of liberalisation, privatisation and globalisation had started. Due to these reforms there is overall improvement in the economy in its national income and in the GDP (Gross Domestic Product). There is free trade of goods and services across the world which promotes the globalisation and licenced free industries so that the world enjoys products and services which are internationally traded. In this we are going to import the Bira Beer 91 from India to Canada. Bira beer is one of the India’s first handcrafted beer. This beer was launched in 2015 and makes a noise in the international market. This was the first Indian beer to be sold in an international market of USA. This is also available in different flavor such as white, blonde, Bira 91 light, honey, caramel and many other different flavors. This beer is mostly available in pubs, restaurants and bars. It has low calories, even lower than a glass of milk (Tripathi, 2017). Canada has pleasant relations with Asian countries. This beer if imported from India, will diversify the Canadian Market in terms of quality, costs, products and the expansion of market in terms of varieties and taste. Moreover, it will also help the Indian market to grow and enhance the growth of economy in terms of foreign exchange investment. 2. Background Bira 91 manufactured in India with the golden grains from Himanchal Pradesh. From Bavarian farms, this gave birth to Bira 91. As the name contains 91 which denotes the ISD code of India. Its first break was launched in Belgium for its brewing but its is completely manufactured in India. In the last month it became the first international beer to be sold in the market of USA. It is India’s first low calorie beer that to be launched. In this there is less percent of alcohol. It is good for health as the many people in Canada wants beer having low calorie, this keeps them fit and they don’t gain weight by drinking Bira91 beer. This is particularly made for healthconscious persons, generally available in Pubs, Bars. it has manufacturing plant in Indore and Nagpur. Now they are looking to increase their market by having the sales target of about 1.5 million this fiscal year and make presence in around about 15 cities (Press Trust India, 2017). As it is premium beer of India which is well known for its quality, low calorie content and in Canadian market the demands will increase significantly because people here are more health conscious and it is also available in different flavors which adds good taste in that market and makes it beneficial to health of people. Now they are also launching two different flavors, having just 90 calories which is lower than a glass of milk and even the orange juice. As India is known for strong drinks so, they decided to launch a strong Bira91 wheat Beer. With 7 percent of alcohol. Another is Bira91 light beer for

Market Potential for Bira Beer imported from India to Canada | 5 non-beer people who wants some refreshing drink during summers. To beat the heat of summers this is healthy and refreshing drink (Bira, n.d.). 3. Business Opportunities Importing bira beer from India is a great opportunity for Canada, both in terms of monetary gains and health benefits. As Canadians drink beer (51%) more than other drinks, such as wine (22%) or spirits (27%) and 4 cans of regulated beer contains 612 calories (Healthy Canadians, 2015) and in sharp contrast to this a bottle of bira beer contains 90 calories only. (Economic Times, 2017). Due to consumption of high-caloric content of beer, people are more prone to deadly diseases such as cancer and cirrhosis (Healthy Canadians, 2015), so importing this beer from India can help reduce health ailments. According to the company’s founder, Ankur Jain, Bira 91 has the minimal caloric and alcoholic content from among the various alcoholic beverages, like breezers, cocktails or wines and a glass of milk or orange juice has even more calories than Bira 91 (Economic Times, 2017). Moreover, Bira beer is made by taking malts from Belgium, hops from the Himalayas and water from the finest sources, which brings out the finest beer to the consumers (Imagined in India, For the world). Moreover, this beer had already been selected as UN’s beer of the month and in its home country itself its sales have increased to 200,000 cases per month and it has five different flavours to offer to its customers (Tripathi,2017). Canada is full of Indian immigrants, so we can have an estimation that importing this beer can have a viable market here in Canada. In addition to this, India has low-labour rate and overall lower manufacturing cost, owing to which Canada can avail cheaper beer from India and make huge profits by selling it at competitive price here in Canada. The recent Canada-India Comprehensive Economic Partnership Agreement Negotiation that was held in August 2017, which if got approved and enforced, will increase the trade between these two countries and will also open up way for other related and non-related products (Government of Canada, n.d.). 4. Research objectives a) To identify the various factors that motivates the Canadian consumers to try new craft beers, in order to know how to target the potential market As per the statistics, in the year 2016, a total of 3.2 billion cans, 2.1 billion bottles and 41.1 million kegs of beer were sold in Canada (Beer Canada, n.d.). This indicates that the consumption of beer in Canada is high. Now through primary research we can know how many people would be willing to try new beer options which will ultimately give us an idea about the

Market Potential for Bira Beer imported from India to Canada | 6 target market. Primary survey would give us an idea as to what are the main factors that motivate the consumers to try new beers. b) To determine the buying behaviour of customers in relation to the quantity and time of purchase in order to create an estimated demand plan Thorough primary research we would get to know the expectations of the Canadian consumers. Bira beer has been handcrafted with careful selection of ingredients, it is a wheat beer. The calorie count of this beer is low and therefore would make healthy difference in people’s life over the course of time. Customers would be able to get a great taste in a beer with lower calorie than a wine. The primary survey combined with secondary sources, would give an idea about how often do people buy beers and when and where do they prefer drinking. It would be easier to create an estimated demand plan once these details are known. c) To identify the sales and marketing strategy of competitors to decide Bira’s unique selling proposition to facilitate an excellent marketing plan So far Bira Beer has positioned itself as a beverage that pairs well with spicy food, aligning with hip-hop music and connecting with the tech community (Furnari, 2017). Since people in Canada are more health conscious, through this study the company can know whether people would prefer trying a low-calorie craft beer over the popular ones like Heineken, Budweiser, Corona, Coors Light, Molson Canadian etc. It would also study the competitors price strategy to align its marketing plan accordingly. 5. Methodology This research integrates both secondary and primary source of data. The research focuses on collecting both quantitative as well as qualitative data. More emphasis will be given to primary data to know the feasibility of importing Bira Beer to Canada and its success chances. Starting with the secondary sources of data, various media websites will be used. Journals, publications, blog articles will be evaluated to find authentic data. The Canadian study reports, Governmental regulations, information on bilateral trade between India and Canada, Alcohol consumption report etc. will be scrutinized before moving forward with the primary data. To fill the gap between the required information and data collected from secondary sources, primary data collection technique will then be used. Survey will be conducted to know the market requirement and expectations of consumers. Through this questionnaire, it would be evident what the Canadian customers needs are, their buying behaviour, their perspective of trying a newer and healthier beer option. The survey will be limited to a random sample size of 40 customers.

Market Potential for Bira Beer imported from India to Canada | 7 6. Implementation plan For conducting the research, the time and cost estimates are as follows. Also, the group has agreed upon the following four steps for conducting the research. 1. Firstly, the secondary data available would be studied with the help of initial research-7 days 2. Then we will decide the data collection methods and survey questions would be prepared-2 days. 3. Data would be collected-2 days 4. Lastly, we would analyse the collected data-7 days Overall, the maximum time of completing the whole research would be less than 3 weeks. The estimated budget is $12,000 CAD. 10% of the budget will be allotted for collecting secondary data, 20% of the budget would be allotted for preparing the survey questions, 45% of the budget will be allotted for data collection and 25% of the budget will be allotted to analyse the data. 7. Data Analysis Consumer preferences Firstly, this group has conducted an online survey of 51 respondents from Canada in order to determine the demand and strength for those who are willing to taste handcrafted Bira 91 beer. In this survey we noticed that most of the age groups that lies under 18 to 24 (74. 51%).Based on the chart depicting the gender preferences the Bira Beer is famous almost equally but the female drinking this beer is coming up to be slightly higher hence the analysis of age and gender would be accordingly.

Market Potential for Bira Beer imported from India to Canada | 8

Secondly, in the survey the question was asked about the people’s favorite time and place of drinking where their preferences according the chart are that like drinking at the bar, at house parties and their respective places and when they are in good mood.

Thirdly coming to the question of how often they buy beers our respondents answered by maximum of them being non-drinkers who don’t buy beers at all and then comes the second majority people who buy beer once a month and at the third place comes the people who buy beer at alternative days or once a week.

Market Potential for Bira Beer imported from India to Canada | 9

Lastly, the below graph depicts about the number of people who wants to drink beer which have low calorie content and it shows out of 51 there are 30 people who demands for the low-calorie content in the beer and besides that it provides the great health benefits some of which are: it prevents from heat strokes.   

It is most energetic drink in summers. It’s has the cooling effect in our body. Less chances for putting on weight as it has low calories.

Market Potential for Bira Beer imported from India to Canada | 10 Other Factors Influencing Beer drinkers: Firstly, comes the question we asked our consumers that if they really stick to the brand they always drink where the majority said no which would really help Bira Beer to be successful in Canada as being a traditional hand crafted Indian beer people who tend to try new beers will give it a shot. Hence this research would let us know about the Canadian consumers readiness to try new crafty beers.

Secondly through our survey we conducted we were willing to know that our Canadian consumers will/will not try the new craft beers to which we got a very positive response where more than half of the respondents answered by saying that would be willing to try the new craft beers which is a boost to our Bira Beer being launched in Canada as it is a our new crafty idea on the whole.

Lastly when we asked the Canadian consumers about the motivating factor to try new craft beers maximum of them said taste and their second preference was popularity then comes the availability followed by price and then other factors. This response is a positive one for our

Market Potential for Bira Beer imported from India to Canada | 11 Bira91 as our beer is top fermented ale giving it a unique and rich taste that is low on bitterness, high on honey and caramel notes.

8. Data Interpretation With the increasing trend in the consumption of beers in Canada, it is more likely to target mass consumers. According to the survey, 58% people refused to stick to the same beer brands always. This proves the enthusiasm of Canadian consumers to try new beer brands. As per the survey results, it can be observed that more than 60% respondents agreed to be willing to try new craft beers. Moreover, 25% people prefer drinking in a bar whereas 15% admitted to drinking during happy hours. Taking advantage of this opportunity, Bira can later also expand its brewery here in Canada. The major drawback for Bira would be competing with giants like Corona, Budweiser and Heineken since more than 65% people admit to having tried these beers. Clearly, this beer brands enjoy customer loyalty and popularity which is because of the established brand recognition. To survive this competition, Bira would have to create a marketing plan to attract mainly youngsters. One idea that Bira can implement is to lay more emphasis on its low-calorie count and associate the brands name with health consciousness. Bira 91 retails for CAD $3.5 in India. The survey revealed that majority of the consumers are willing to pay $5-7 for a bottle of beer, giving a wonderful opportunity to the brand to earn extra bucks. On the other hand, a 22 oz bottle of craft beer often retails for around $9-12 (Craft Beer Restaurant, n.d.). As far as the motivating factor is concerned for people to buy the beer, Bira should lay more emphasis on promoting its taste and creating popularity in the Canadian market through aggressive marketing. To start with, Bira can participate in various beer festivals happening in the country to further study the response and acceptance of consumers. For instance, Bira can participate in the Toronto Craft Beer Festival 2018 which will be held in the last week of June.

Market Potential for Bira Beer imported from India to Canada | 12 9. Business Implications According to the report conducted by the Chief Public Health Officer on the State of Public Health in Canada in 2015, the proportion of beer consumption was highest with an account of 51%, giving rise to various deadly diseases such as cancer and cirrhosis because of the high caloric and alcoholic content, so the introduction of Bira beer into the Canadian market can potentially help in reducing the health issues related to the consumption of high caloric content beer. According to the survey conducted by our team, more than 40% people are willing to try the new handcrafted Bira beer, due to its low-calorie and alcoholic count, because people are fond of drinking beer more than any other beverage and if Canadian consumers are provided health benefits of Bira beer from reliable sources, it can help increase the demand of Bira beer in Canada. Moreover, India and Canada are already sharing good trade relations, so import of this new product can strengthen trade relations and increase the economy of Canada both in terms of monetary gains and health benefits. With the previous analyses, LCBO have an opportunity to import Bira beer from India and if the suppliers come up with more varieties of beer, with added health benefits, it can be rewarding for both the countries. 10. Conclusion The trade of Bira Beer between India and Canada is a potential trade as it would give India the best possible sales opportunity. Also, Canada and India have venerable bilateral relations built upon common traditions of democracy, pluralism and strong interpersonal connections. (Global Affairs Canada, 2018). Import of Bira beer from India to Canada would benefit Canada in monetary terms due to the currency gap, overall low manufacturing cost and low-labour rate and in terms of health benefits as it is handcrafted with world’s best ingredients; malts from Belgium, hops from the Himalayas and water from the finest sources. (Bira, n.d.) The research proposed for import of Bira beer from India to Canada would help us to study the Canadian consumers readiness to try new craft beers and their preferences. On the other hand, the competitive advantage of Bira beer would be known with the help of this research. The conclusions drawn from this trade would also study the market competition and would help in creating a feasible marketing plan. Also, the government goals of promoting global trade between a developed and developing country would be benefitted from this trade.

Market Potential for Bira Beer imported from India to Canada | 13 References Healthy Canadians. (2015). Alcohol Consumption in Canada. Retrieved April 8, 2018, from http://healthycanadians.gc.ca/publications/department-ministere/state-public-health-alcohol2015-etat-sante-publique-alcool/alt/state-phac-alcohol-2015-etat-aspc-alcool-eng.pdf

Beer Canada. (n.d.). Industry Trends 2016. Retrieved from https://industry.beercanada.com/statistics

Bira. (n.d.). Imagined in India, For the World. Retrieved April 06, 2018, from http://www.bira91.com/

Craft Beer Restaurant. (n.d.). Pricing craft beer in a restaurant. Retrieved from http://craftbeerrestaurant.com/Craft_Beer_Restaurant/Pricing_craft_beer.html

Economic times. (2017, May 25). Bira 91 launches 2 new beers, and one of them has only 90 calories! Retrieved April 08, 2018, from https://economictimes.indiatimes.com/magazines/panache/bira-91-launches-2-new-beers-andone-of-them-has-only-90-calories/articleshow/58842246.cms

Furnari, C. (2017, October 10). 3 Years and $38 Million Later, India’s Bira 91 Eyes 300,000 Barrels. Retrieved from https://www.brewbound.com/news/3-years-38-million-later-indias-bira91-eyes-300000-barrels

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