United Breweries Ltd

Overview

In 1915, the foundation of Good Times was laid with the coming together of 5 breweries in
South India. Today, the beer business has shown strong growth and it is the undisputed king of
the Indian beer market.

The company began in India and has been able to conquer India when it comes to beer
production. The UB group’s products can be found all over India, with its beer drinking in
100% of the bars in India. It is the largest beer producer in India, having about 52.5% market
share by volume. With 79% bottling units and distilleries across India, the company is able to
produce more than what India can consume.

United Breweries Limited is synonymous with innovation and aggressive marketing that is
complemented by a strong distribution network which encompasses an impressive spread of
owned and contract manufacturing facilities across the country.

It’s flagship brand 'Kingfisher', has achieved international recognition consistently, and has
won many awards at international beer festivals. Their most popular beer, Kingfisher Premium
Lager beer, is currently available in 69 countries and leads the way among Indian beers in the
international market.

With a strong distribution network and around 83,000 outlets across the country, UBL has
managed to be the top leader in bear market since many years.

It serves both alcoholic and non-alcoholic brands. Some good brands under United Breweries
are:

• Taj Mahal Premium Larger

• Kingfisher Strong Larger
• Raj Cobra
• Kingfisher Super Strong Larger
• Premium Ice Beer Larger
• Kingfisher Larger
• Heineken
• Flying Horse Royal Larger
• Kingfisher Light Larger
• Kalyani Black Label Strong Larger
Competitor analysis

Some of the major competitor of United breweries in India are:

• Submiller
• ab inbev india pvt ltd
• Carlsberg
• MohanMeakin
• Anheuser buesh
• Molson coors

Market Share

United breweries Carlsberg AB InBev India Pvt. Ltd Other

UB Group Product Mix

Since the time of its inception, the group has been able to stand the test of the times, emerging
as a standout company within the industry. The company is well known to offer the market
with products of different variety. Kingfisher Premium, one of the first mild beers to be
launched under the Kingfisher umbrella, is associated with the Good Times in more ways than
one.

“From music and food to sporting events, the brand will make sure that you always have the
#GoodTimes!”

The management said despite negative externalities such as monsoon, low GDP growth, the
premium brand managed to see a double-digit growth in Q3 of 2019-2020. The contribution
by volume of premium brand in overall portfolio is around 7-8%. Other brands also has shown
a good single digit growth in the same quarter.

Some of the brands that showed a magnificent growth are:

➢ The Kingfisher Ultra brand family has sold over 5 million cases in the year
2018-19. Kingfisher Ultra continued to build on its association with the iconic
Kingfisher Ultra Indian Derby in Mumbai and Kingfisher Ultra Derby in
Bangalore.
➢ AMSTEL, the iconic Dutch beer, made an entry into India in May 2018. This
international premium beer is the world’s 8th largest beer brand and is sold in
over 110 countries. Amstel was launched in Karnataka, Kerala, Pondicherry in
2018 and has recently been introduced in Andhra Pradesh and Tamil Nadu.
➢ Kingfisher STORM which launched in 2017, continued to receive an
overwhelming response from consumers across the country. Till date around 3
Million cases are sold in the country.

Price in the Marketing Mix of UB Group:

The low-price strategy is used in its alcoholic beverages. This is one of the main reasons why
the company’s beer and wines have been able to penetrate the markets. Most alcohol drinkers
would prefer the cheaper options to the expensive one. Comparative pricing strategy is thus
employed. When it comes to other products, quality of service as well as low pricing strategy
where applicable, are used.

Promotions in the Marketing Mix of UB Group :

Innovation and aggression are known to be the characteristics and synonyms of the UB Group.
Through these strategies, the company has been able to reach the worldwide market with its
products. With quality and worldly competitive products, compounded with the strong network
of distribution that the company has been able to employ, there is no way that the company can
go wrong as far as reaching the market is concerned. The company’s marketing
strategy encompasses an impressive spread of contract manufacturing facilities as well as
owned manufacturing facilities that are all over India.

UBL celebrates many events time to time, promoting its brand in a unique way. The events
include food, fashion, music sports adventure.

➢ IPL is one of the important tools of UBL group when it comes to promotion. The Indian
Premier League (IPL) 2019 saw the rise of the ‘Good Times Rap Anthem’. The cricket
stars from teams associated with Kingfisher were seen grooving to the catchy new rap
track in the TVC. The refreshed Kingfisher jingle was loved by the players and fans
alike and was heard across television channels, digital platforms and all major radio
stations across the country. The brand has won the company so many awards not only
within the local festivals but the international beer festivals too.
➢ The much-anticipated Kingfisher Calendar kept its appointment with 2019 and
launched another high-quality calendar. Now in its 17th year, the Kingfisher Calendar
 was shot in Sardinia, Italy. With relevant digital content and contests, the calendar
reached out to the target audience across specific touchpoints providing them a peek
into the exclusive world of the Kingfisher Calendar.
➢ Kingfisher strengthened its long-standing association with India’s biggest music
festival ‘Sunburn’, by becoming the Presenting Sponsor for the 2018 edition of the main
festival held in Pune. Kingfisher fans were treated to a truly memorable experience at
the ‘Kingfisher World’ - a dedicated zone created to engage with consumers during the
three-day festival.

KEY MAR 19 MAR 18 MAR 17 MAR 16 MAR 15

FINANCIAL
RATIOS OF
UNITED
BREWERIES (in
Rs. Cr.)
Basic EPS (Rs.) 21.29 14.90 8.67 11.14 9.71
Net Profit Margin 8.69 7.01 4.84 5.79 5.53
(%)
Return on Equity 17.68 14.65 9.83 13.97 14.03
(%)
Return on Capital 27.73 22.40 15.78 12.39 10.66
Employed (%)
Total Debt/Equity .03 .1 .17 .2 .38
(X)
Current Ratio (X) 1.43 1.47 1.24 1.15 1.21
Quick Ratio (X) .94 1.02 .85 .80 .83
EV/EBITDA (X) 31.57 27.66 29.95 28.90 41.31

• As we can see there has been a consistent growth in the key ratios, which can be
attributed to increase in sales over the years.
• The management is focusing to reduce the cost on the major cost generating
components such as glass and barley, which will further reduce the cost and increase
the profit
• The company have continuously given good returns on equity, which makes it good
option for investment.
• The debt to current ratio is greater than 1, which suggests the company is not facing
any solvency issues.
• The debt is much less as compared to its equity, which gives them an opportunity to get
leveraged and fund its expansion and other projects.
SWOT analysis:

Strength Opportunity

• Strong distribution network • Production can be increased as

• Strong retail network production is less than demand
• Market leader with 52.5% market • Improvisation can be done in Some
share cities that are not giving good results.
• Innovation and ideas • The new technology provides an
• Good Returns on Capital Expenditure opportunity to Kingfisher Plc to
• Superb performance with new practices differentiated pricing
products. strategy in the new market.
• Competitive price advantage. • Liabilities is much less as compared
to its peers, hence can be leveraged
for expansion and growth.
Weakness Threats

• Failure in other verticals of the brand • Intense competition, easy entry to

• Less profit margins as compared to new competitor
its peers • Changing government policies