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Lockdown ease fails to lift spirit of beer-makers, brands expect low demand for next six months

Beer-makers are finding it tough to get back to normal as the lockdown during peak summer has hit them hard. Despite the government allowing liquor sales, they aren't hoping for a quick turnaround as all pubs and most retail vends remain shut. How are liquor companies planning to live with the Covid-19 virus? BestMediaInfo.com finds out

Despite high demand, beer companies have not been able to reach out to the consumer as pubs and bars are likely to remain shut for some more time and most retail vends across cities are still closed.

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The companies are bracing for a long-time impact as uncertainty in the supply chain is likely to remain. However, they are still trying to remain connected with the consumer on the back of innovative marketing strategies.

Javed Murad

According to Javed Murad, Founder, White Owl Brewery, the beer industry has faced a 40% loss on its annual revenue due to the lockdown. Most of the peak season (April, May, June) for beer sales has also passed. Beer-makers are going to have a general business overhang from losing out on the first months of the year.

The idea of business recovery for beer brands will depend upon how the market opens up.

White Owl has taken a patient approach called Time Zero, which basically means creating normalcy in the supply chain.

The brand has its presence in four states — Maharashtra, Delhi, Karnataka and Goa.

With bars, clubs, experiential events and restaurants out of reach and sight, and as consumers remain confined to their homes, brands are focusing on driving engagement, building brand affinity online and creating a strong evolved retail presence.

Gurpreet Singh

“In our marketing efforts, we have tried to show brand messaging in the form of fun and engaging digital content and games to our audience,” said Gurpreet Singh, Head Marketing of UBL.

During the initial phases of the lockdown, Kingfisher rolled out India's first Instagram based branded audio AR filter: BYOB – Bring Your Own beat. As the lockdown progressed, they came up with virtualised musical associations with Sunburn at home with Kingfisher and Bollyboom at home with Kingfisher Storm.

The brand ventured into the gaming territory with a digital game whose objective was to keep the bird indoors. "As the situation evolves, we will in a relatable manner keep finding ways of providing good times to our audience to build on brand affinity," said Singh.

Murad said supply needs to be strong and organised, giving people the first options to pick. "The idea will be to focus on the evolved retail, which is home delivery," he said.

"Across the country, Karnataka and Delhi have opened up, and we are still confused about how things are progressing in Maharashtra. We expect all of these to settle down in the next seven to 10 days because we see progress towards the government clarifying on how business can and should be conducted," Murad said.

Offline experiential activities and restaurants business will bear a long-term impact of lockdown, and how these channels will function for beer brands after opening is unclear to manufacturers.

The pandemic has also brought about many changes in consumer behaviour.

The demand for beer will remain less for the next three to six months as consumers will be cautious on unnecessary spends. Cost-cutting measures in companies across sectors have pushed the slowdown.

Consumers will be more concerned about how and what they are consuming and it will automatically eliminate low-quality brands. Premium quality beer at a reasonable price will dominate the market.

The ability to run business in these months will be challenging for smaller beer companies but the situation is expected to get better in the long term.

"For the long term, we have to understand what consumers' requirements are and how brands can progress in a better manner. What the consumers would enjoy and how they would enjoy consuming it and the options brands have for engaging consumers in a post-Covid world as compared to pre-Covid," said Murad.

The challenging time has made digital a significant medium for brands to communicate. Both UBL and White Owl will spend on digital for brand promotions.

Speaking on marketing post-lockdown, Singh said, "We are keen on creating exciting and engaging communication on digital media and drive some appetising advertising through point-of-sale communications."

Murad said spends on digital marketing will become much higher. "We will build our brand affinity through digital mediums by having general conversations with communities," he said.

Speaking on home delivery, Murad said, "The model is good and the required evolution to the alcohol supply chain in general. It will make our industry a lot more efficient to what it is now keeping in mind the rules and regulations that every state will have to create to make sure that the entire home delivery model functions correctly."

"We don't have complete clarity on this, and it's very early days to say how this plays for us. Certain states have more robust plans on home deliveries and others have been given temporary relief on home delivery during the lockdown," he said.

Manufacturers are seeking more details and to understand how it is going to impact the companies.

"How can a retailer service the end consumer? Earlier it was all happening across the retail counter. Now the idea is to take orders from other mediums through the phone, online and then create delivery models to address that needs.

“Whether this migrates to third-party aggregating is something that is really a big question. If there are 20 retail stores in an area, then will those stores have an individual serving platform or will there be one consolidated platform that services everyone?"

Alcohol is the second-largest money spinner for state governments, with most states taxing it exorbitantly to shore up their revenue.


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