Heineken Hits Trouble Entering Indian Market

Heineken is one of the best known (and most loved) brands of beer in the world. They’ve long held a serious hold on many markets and have recently entered several new markets. One of those that seemed the most promising was India, where beer consumption is growing and there are few established brands within Heineken’s niche market. However, it seems as though the company’s deployment in the Indian market has hit a few snags.

A Toehold Only

Heineken does have some presence in the Indian market – the company imports their beer though the price to Indian consumers is very high thanks to the trade restrictions on imported beer. The brewery came up with a way to get around the cost issue and achieve more than a mere toehold in the market. Heineken purchased almost 40% of India’s largest brewery. 

Problems from the Outset

The company faced serious challenges from the outset, though. Their initial forecast of offering Heineken brewed in India during 2010 had to be put off because they had to bring in an entire new line of brewing equipment and even had to grow the right barley for the beer in order to maintain their trademark taste. Their revised release date of late 2011 seems to have also been off the mark with news sources now claiming that Indian-brewed Heineken will not be available to consumers until sometime in 2012. 

Why Brew Local?

Why is Heineken so concerned about brewing locally? For a “luxury” beer brand, a high price point does not necessarily equate to a bad thing. However, when considering the other beer brands available in the market and their various prices, it becomes clear that imported Heineken is really just too expensive for most citizens of India to afford. The move to brew locally will reduce the cost of the beer to consumers by a substantial amount and make it easier for Heineken to be competitive there.

A Symbiotic Relationship

The purchase of shares in UB will certainly benefit Heineken. However, UB hopes that goes both ways. The idea is to use the relationship to help UB’s other beer offerings gain notice on a global stage and make the company more profitable while introducing the world to some unique brands of beer previously unavailable to consumers. 

In the end, it all comes down to being a waiting game. Indian citizens will certainly get India-brewed Heineken at some point. The only question is when.

Posted on June 29, 2011 .