Can do: beer sees highs in large cans
The can is cool for urban youth, be it beer or cola. And a can maker is talking high growth amid a slump in the economy.india Updated: Mar 04, 2009 20:56 IST
The can is cool for urban youth, be it beer or cola. And a can maker is talking high growth amid a slump in the economy. Ask Pepsi, whose MyCan initiative has caught youth fancy quickly, or Kingfisher, which is offering beer in 330 and 500 ml cans in larger numbers to conquer a market historically viewed in terms of 750 ml bottles.
“Canned beer used to account for just about 2 per cent of our total beer volumes three years ago. Today, that’s gone up to 10 per cent and in five years, I see it growing to about 20 per cent,” said Kalyan Ganguly, president, United Breweries, which owns the market-leading Kingfisher brand.
UB has just placed its first order for India-made 500-ml cans from Rexam HTW, an Indo-UK joint venture which is already supplying 330 ml cans to soft drink and beer makers. Rexam, now making in India the cans it earlier imported from its Turkish plant, is set to close with a Rs 100-crore revenue figure in 2008-09.
Sanjay Bhatia, managing director, Rexam HTW, said, “By buying cans made in India, drinks manufacturers gain at least a 10 per cent advantage on cost on both 330 and 500 ml sizes. We saw how quickly can demand was growing and decided to invest in its manufacture, first in the 330 ml size and now in 500 ml size too. In 2005, overall demand for cans was around 50 to 60 million units. Last year, the demand was 400 million units.”
Kingfisher expects to close fiscal 2008-09 with 330 million cases of beer sold, of which 10 million cases would have been in cans. “Going by the trend, in the next fiscal, we expect 20-25 per cent growth in canned beer,” he said.
He said 500 ml cans could prove to be cheaper in terms of unit consumption, blending value-for-money pull with urban cool.