INDIA – Kirin Holdings, a leading Japanese beer maker, is has announced that it will invest US$30 million in New Delhi-based craft beverages maker B9 beverages even as it seeks to secure a spot in India’s growing craft beer market amid falling sales at home.
Sources from Kirin Holdings revealed that following the investment, the Japanese brewer will acquire a stake of under 10% in B9, the maker of India’s popular craft beer Bira.
According to a report by Reuters, B9 beverages had been in talks with international brewers – including Kirin – and other investors to sell a stake of up to 20% in the company.
Currently, Bira is estimated to be over US$300 million with U.S.-based Sequoia Capital holding a roughly 45% stake in the company, while CEO Jain and his family own around 30%. Data provider PitchBook estimates.
According to B9 Beverages CEO Ankur Jain, if the deal goes through, Bira, which has posted losses in recent years and has been hit by the COVID-19 pandemic, will be in a better position to break even in the 2022 fiscal year which starts in April 2021.
“The companies will be exploring business synergies,” Jain said, adding that the investment would allow Bira to accelerate plans to launch its products in Japan later this year.
While Bira, launched in 2015, is one of the smallest players in India’s broader beer industry, its craft beer offerings have become increasingly popular in recent years.
Bira estimates that it has a 5-10% share of the beer market in cities such as New Delhi, Mumbai and Bengaluru.
Kirin’s recent focus on craft breweries, on the other hand, reflects the group’s effort to shift into products that command higher prices and larger margins than lager-style, easy-to-drink beers.
The Japanese group and Lion, its Australian subsidiary, last year acquired New Belgium Brewing, the fourth-largest craft brewer in the US, and bought a 25 per cent stake in Brooklyn Brewery in 2016.
Kirin also acquired Fourpure Brewing and Magic Rock Brewing, two UK craft brewers, in 2018 and 2019, respectively.
But its M&A record overseas has been patchy, with the Japanese firm selling its unprofitable Brazilian unit in 2017 to Heineken for US$700 million after losing market share.
Its entry into Myanmar in 2015 has also come under scrutiny amid a probe into its local partner’s connections to the military.
Kirin also agreed to sell its Lion Dairy business in Australia, completing the withdrawal from struggling overseas businesses.
Despite its misfortunes, Japanese company has sought to diversify from the shrinking domestic beer business by strengthening its biotechnology and pharmaceuticals divisions.
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