Kirin breweries india entry strategy

This report is a result of my own work which was an integral part of my full time MBA
program. Prior permission must be taken from the author before copying or
reproducing this work.

Author: Deepak Shrivastava (imdshrivastava@gmail.com) Page 1

Contents
Executive Summary ............................................................................................................................. 3
Introduction............................................................................................................................................ 4
Company analysis ................................................................................................................................ 5
Target country selection ...................................................................................................................... 8
Strategic Plan...................................................................................................................................... 11
Entry strategy – Entry mode ......................................................................................................... 11
Segmentation, targeting, and positioning decisions ................................................................. 12
Segmentation .............................................................................................................................. 12
Target market.............................................................................................................................. 13
Positioning ................................................................................................................................... 14
Analysis of potential competitors in the market ......................................................................... 15
Marketing Plan .................................................................................................................................... 16
Product strategy and rationale ..................................................................................................... 16
Promotion strategy and rationale ................................................................................................. 17
Price strategy and rationale .......................................................................................................... 18
Distribution strategy and rationale ............................................................................................... 18
Conclusions ......................................................................................................................................... 20
References .......................................................................................................................................... 21
Appendix A: Kirin Group .................................................................................................................... 24
Appendix B: Beer Categories ........................................................................................................... 26
Appendix C: Indian Beer Industry: ................................................................................................... 27
Appendix D: Labelling rules .............................................................................................................. 29
Appendix E: Beer Importers in India................................................................................................ 29


Executive Summary
Despite of varied range of several documentations about market entry strategies, including
entry mode, selection of distributor and promotion plans, firms have failed to achieve the
desired goal. Several firms often underestimate the complexity of the new market and often
end up wasting time, money and effort. These complexities sometimes make firm to roll back
from the plan of internationalization. These failures can completely destroy the brand and
can close all the doors of future entry. There are several minute details which can’t be
captured by studies or research; hence companies must get their hand dirty.

Here in this paper I have proposed a new market entry strategy for a famous Japanese beer
brand. The paper not only talks about what strategy or steps to follow to enter the market but
also puts across the justification of these steps. The paper has also laid out a marketing
plan for the company for the proposed market and at the end concludes with suggestion
towards the future steps after entering the market.


Introduction
The world is internationalizing at a very fast rate and alcohol industry is no exception to this
phenomena. The rapid consolidation of alcohol industry is acting as catalyst to this process.
Majority of players are coming closer to become big and taking over each other. This
consolidation is making this industry more and more global and international.

The process of entering to new countries or boundaries can be exciting and challenging both
at the same time. The unknown behavior of countries, their governments, and their societies
can place a lot of challenges. There are several variables like culture, religion, language,
social behavior, economic conditions that can add to this complexity. Companies have to
device a thorough researched plan and strategy based on their market research and study to
enter any new market.


Company analysis
Kirin Brewery Co., Ltd (KB) a subsidiary of Kirin Holding Company Ltd enjoys the second
largest brewery status in Japan. It has 30.7% of total Japanese beer market share.

Company Shares (by Global Brand Owner) | Historic | % breakdown
Geographies Categories Companies 2006 2007 2008 2009 2010 2011
Japan - Total Volume Beer Asahi Breweries Ltd 35.7 32.4 33.4 32.2 32.0 33.6
Japan - Total Volume Beer Kirin Holdings Co Ltd 34.3 33.0 32.3 32.9 32.4 30.7
Japan - Total Volume Beer Suntory Holdings Ltd 9.3 10.0 10.9 11.5 11.3 11.4
Japan - Total Volume Beer Sapporo Holdings Ltd 11.4 10.7 9.8 9.6 10.3 10.9
Japan - Total Volume Beer Others 7.7 12.2 12.0 11.6 11.3 10.7
Japan - Total Volume Beer Private Label 0.1 0.1 0.2 0.9 1.3 1.3
Japan - Total Volume Beer Orion Breweries Ltd 0.9 0.9 0.8 0.7 0.7 0.7
Japan - Total Volume Beer AB- InBev NV - - 0.3 0.3 0.3 0.3
Japan - Total Volume Beer Diageo Plc 0.1 0.1 0.1 0.1 0.1 0.1
Japan - Total Volume Beer Heineken NV 0.0 0.1 0.1 0.1 0.1 0.1
Japan - Total Volume Beer Modelo SA de CV, Grupo 0.1 0.1 0.1 0.1 0.1 0.1
Japan - Total Volume Beer Carlsberg A/S 0.1 0.1 0.0 0.0 0.0 0.0

Table 1: Japan Beer market share 2011.
Source: Euromonitor International 2012

The KB also ranked at 10th position in global brewery market share with 2.6% share.
Company Shares (by Global Brand Owner) | Historic | Total Volume | % breakdown
Geographies Categories Companies 2006 2007 2008 2009 2010 2011
World Beer Anheuser-Busch InBev NV - - 19.9 18.5 18.4 18.3
World Beer Others 16.0 15.4 15.3 15.2 14.7 14.4
World Beer SABMiller Plc 9.6 9.6 9.7 9.6 9.4 9.8
World Beer Heineken NV 5.9 6.0 7.0 6.6 8.6 8.8
World Beer Carlsberg A/S 2.6 2.6 5.9 5.8 5.7 5.6
World Beer China Resources Enterprise Co 3.1 3.9 4.0 4.5 5.0 5.4
World Beer Tsingtao Brewery Co Ltd 2.7 2.8 2.9 3.2 3.4 3.6
World Beer Modelo SA de CV, Grupo 3.0 2.9 2.9 2.9 2.9 2.9
World Beer Beijing Yanjing Brewery Co Ltd 2.1 2.2 2.3 2.5 2.7 2.9
World Beer Molson Coors Brewing Co 2.7 2.6 2.7 2.7 2.7 2.7
World Beer Kirin Holdings Co Ltd 1.4 1.3 1.3 1.8 1.7 2.6
Table 2: Global beer market share – 2011
Source: Adapted from Euromonitor International 2012.

Molson Coors Kirin Holdings Co Ltd
Beijing Yanjing
Brewing Co 3%
Brewery Co Ltd
3%
4%
Modelo SA Anheuser-
de CV, Grupo Tsingtao Busch
4% Brewery Co Ltd InBev NV
5% 24%
China Resources
Enterprise Co Ltd Others
Carlsberg A/S
7% 19%
7%

Heineken NV
11% SABMiller Plc
13%

Figure 1: Global Market share beer 2011.
Source: Author1 2012 complied from Euromonitor International 2012.

1
Author i.e. Deepak Shrivastava


KB is not only one of the biggest manufacturer of beer in Japan but also produces,
distributes and sales many international brands. It produces markets and distributes
Heineken, Budweiser and Guinness brands in Japan (Annual Report, 2010, p.08). It has also
acquired and opened few subsidiaries outside Japan and extending its presence in Asia and
Oceana region (Annual Report, 2010, p.08).

―Kirin’s vision as stated in its long-term strategic plan KV2015, is to be a leading company in
Asia and Oceania‖ (Annual Report 2010, p.02). Due falling age of Japanese population Kirin
brewery is aggressively expanding in other parts of the world with a vision of ―30% of liqour
sale from overseas market‖(Annual report 2010, p.02). For more details on group,
subsidaries and product portfolio please refer Appendix A.

SWOT Analysis

Figure 2: SWOT Analysis
Source: Author 2012 complied from Kirin Annual Report (2010), Euromonitor International 2011(Beer In Japan) and
Datamonitor Jul-2011


Value Chain Analysis:

Figure 3: Value chain analysis of Kirin Brewery Co Ltd.
Source: Author 2012 complied from Annual Report (2010), Datamonitor (2011), Kirin Holdings Company Limited Business
Approach (2012) and Kirin Group Medium term business plan (2009)

Company has huge range of beer portfolio (Detail profile in Appendix A) and its best global
brands are Kirin Ichiban Shibori and Kirin Lager Beer. Both these brands are sold in
premium lager beer category (For details on beer categories please see Appendix B).
As per nine strategies windows model (Hollenson 2011, p.18) analysis, company can be
placed in either window 8 or 9 depending. Due to optimistic target goals for 2015 and looking
at the industry trends, company should look for global targets to acquire or alliances. The
beer industry, as per many reports published by Euromonitor, is consolidating day by day
and the only way to penetrate the market is by acquiring or making alliances.


Figure 4: Consolidation in global beer industry.
Source: Adapted from Euromonitor International Feb 2010

Target country selection
As per the Kirin’s group vision of 2015 to be a leading company of Asia and Oceania region
and 30% sales from overseas operation can only be achieved by entering the Indian market.

Reasons for why India?

Kirin has subsidiaries or ties ups with every big and growing economy in Asia and Oceania
i.e. ―Emerging Asia and Industrial Asia‖ (IMF 2011, p.vi) which includes China, Hong Kong,
Indonesia, Korea, Malaysia, Philippines, Singapore, Taiwan, Thailand, Vietnam, Australia
and New Zealand. The only country left to enter is India the 2nd largest economy of Asia and
4th Largest in world in terms of GDP(Purchasing power parity) (CIA, 2011).

Market Screening model described by Hollensen (p. 263,2011) or systematic or non
systematic approaches to international market selection described by Anderson & Buvik
(2002,pp349-350) cannot be used here as India is the obvious choice for Kirin Brewery to
increase its presence in Asia region.


India Country Analysis: PESTEL

• Largest Democracy of the world with federal government system(CIA,2011).
• Stable government led by Indian National Congress
• Few threats to terrorism, regional rebels active in few states, few political pressure parties (CIA 2011)
• Many regional parties make government in states hence state givernment takes precedence over central.
Political/Legal • Comprehensive legal & regulatory framework has enabled business entities in India to grow their business(DM,pp37,2011)
• Cases decided by Judges and not by Jury. Fundamental right of freedom speech, expression, religion and association.
• Common Laws Based English model; personal laws apply to Hindu, Muslims and Christians, Judiciary laws.
• Liberal since 1991 but still highly regulated economy. Created Tax holidays in special economic zones.

• India is developing into Open market economy. Yet few traces of autarkic policies remain. (CIA 2011)
• Fourth Largest GDP with a real growth rate of 7.8% in 2011
Economic • Growing middle class and largest work force in the world. 5th Ranked in FDI attarctiveness Index (DM, 2011)
• Growing per capita income at the rate of 10% per year. (Euromoney,2011)

• Religious country with 4 major religions (Hindu 80.5%, Muslims 13.4% Christian 2.3% and Sikh 1.9%)
• Very diverse people spread across 28 states and 7 Union territory. 65% people between 15-64 age group.
Social • The people speaks 14 official languages with more 1600 dialects (Library oCongress,pp7,2004)
• Very family oriented society where people still prefer to live with their parents. 30% population live in urban areas. f

• Strong progress in telecoms, IT and IT enabled services(DM,pp33, 2011). Low internet penetration 6.9%.
• Strong global reputation in Biotech sector. Strong government support on R&D.
Technological • Huge talent pool of technical education.And low cost research talent cost.
• Increasing number of patents every year.(Datamonitor,pp36 2011)

Figure 5: PEST India
Source: Author 2012 complied from Datamonitor 2011, CIA 2011, Library of Congress, 2004, Asian Development Bank 2002.

Beer Industry Analysis India:

Highlights:

 Beer industry grew by 14% in 2010 and reached to 1.7 billion liters and Expected to
grow by 12% CAGR (Euromonitor 20112).
 United Brewery Ltd largest company with 44.3% market share.
 Imported beer accounts for 2 million liters in 2010. This market is growing at a rate of
35%. (Jacob,2011)
 2.4 liters per capita consumptions by 2015 compared to global average of 30 liters.

Further details can be seen about industry in the Appendix C

Five Forces Analysis on Indian Beer Industry

2
Full report on Euromonitor International http://www.euromonitor.com/beer-in-india/report


Figure 6: Five Forces analysis of Indian beer industry.
Source: Author 2012 compiled from Euromonitor 20113 and MCXIndia

Threat To Entry
4

3

2
Internal
Threat to Substitute
Competition 1

0

Power of Customer Power of Supplier

Figure 7: Spiderweb plot of five forces 4 highest and 1 lowest.
Source: Author 2012 complied based on above five forces analysis

3
Euromonitor reports on Beer In India, The BRIC Market In Alcohol Drinks, Alcohol Drinks in India.


Strategic Plan

Entry strategy – Entry mode
As per analysis of factors affecting the foreign market entry mode described in Hollensen
(2011, p 322) i.e. internal factors, product factors and few external factors like market size
and direct and indirect trade barrier (high import duty on alcohols4) favours in hierarchical
entry modes. However external factors like culture distance (due to different taste of
customer), country risk and intense competition favours for export modes.

Location advantage (Agarwal & Ramaswami, 1992, p.05) of India like market size, India is
one of the largest producers of alcohol in world and contributes to 65% of world production
(Alcohol Atlas, 2009) also suggests that Kirin Brewery should go for Hierarchical mode of
entry. However for initial stage I propose to go with Intermediate mode of co-operative export
mode (Hollensen, 2011, p.336) with below mentioned reasons. But for future growth, a fast
track mode of manufacturing JV or green field investment will be beneficial (India is 5 th
ranked in terms of FDI attraction index, CIA 2011).

Co-operative export mode:

In this mode I propose, as per Value chain analysis of Kirin in above section, I see that 2
downstream capabilities can be transferable to international market due their experience in
international market.

1) Sale Capabilities – With close tie up with an importer in India.

2) Marketing Capabilities. – Setting up the marketing division in India.

Hence these capabilities can be moved to India to keep a close watch on distribution, and to
gain valuable market and customer insight.

Why export?

Currently in India imported beer market is growing a rate of 35% and it is the safest way
because as per Mr Aman Dhal (MD Brindco importer of wines and beer in India) ―it takes a
beer brand 6-7 years to gradually meet customer tastes‖ (Jaboc, 2011).

As per article from Sarah (2011) there are many brands like Australian Victoria Bitter,
Netherlands Amstel, Corona, and Chinese Tsingtao have exports partnership with many
importers like Brindco, CUB, Bliquidz and now trying to set up manufacturing JV with various

4
As per reports published by Euromonitor, Asian Development Bank and others.


regional and local players. Australian Victoria Bitter which was launched in 2010 is now
looking for a JV for manufacturing it domestically to save the cost.

As per transaction cost analysis (Williamson 1981, p.72) cited in Anderson and Coughlan an
entrant will be better off in choosing an independent distribution. As per CAGE analysis of
the country there are several unknown factors which can add risk profile of the country. The
factors like religion, language, legal issue, society unsaid laws have been considered while
choosing this option.

In terms of exporting beer the Kirin Brewery Singapore (Annual Report 2010) is the suitable
option to export. There are 2 basic reasons to propose Singapore as best place to export.

1) Kirin brewery already have production unit for Kirin Ichiban brand in Singapore and due to
it small geographical distance from India it be cost effective in terms of transportation cost.

2) There are several importers in Indian importing beer from Singapore. As per report
Singapore is the second largest country from where the 25% of value of total imported beer
arrives in India (Euromonitor, 2011). This will company a lot of flexibility in terms of choosing
the importer.

Segmentation, targeting, and positioning decisions

Segmentation
Demographic descriptors:

Age: 21-35 Year

Gender: Men and Women

Income: High disposable income preferable IT and other high profile jobs in various service
sectors.

Behavioral descriptors: Individual who consider premium and international brands as a
part of status symbol. And group of individual who enjoys hanging out with friends in pubs
and outdoors events.

This segment has majorly travelled abroad and has exposure to international brand and
taste. They consider prefer new premium segment consumption as a status symbol among
friends.

Geographical Descriptors: High end pubs, clubs, restaurants, 4-5 stars hotels and bars of
following cities: Delhi (North India), Mumbai (West India), Pune (West India), Chennai


(Southern India), Bangalore (Indian IT Hub), Hyderabad (Indian IT hub) Chandigarh and also
few cities in east India due to high consumption (Alcohol Altas, 2004) of alcohol in this area.

Target market
 Indian urban youth of age 21-35 with high disposable income and spend their leisure
time at outdoor at club, pubs, restaurant and bars.
 Foreigners travelling from various countries staying in 5 stars hotels.
 Japanese Tourist travelling to India.

Why this Target market?

As per report this segment is more adventures and always ready to taste something. Jabob
2011 in her article says the well travelled youth with rising disposable income are rapidly
developing taste for international brand. One the interviewee the article said he will be ready
to spend more for something new. Age group of 20-29 is expected to grow by 11% between
2010 and 2020 and age group of 30-39 is expected to grow 20.9% between 2010 and 2020.
As per statistic from NIMHANS, Bangalore (2004) published in Alcohol Atlas5, approx 32% of
income spent on Alcohol by urban families. Also as per United Nations 2007 world
population report (2007, p12) approximately 40.8% of Indian population will live in urban
areas by 2030.

Table 3: Consumer segmentation by age.
Source: Adapted from Euromonitor International 2012.

There are lot of foreigners coming to India as tourist and stay at big 4-5 star hotels. These
customers already have taste developed for international brands. As per Ambwani 2011,
there were around 130,000 tourists from Japan in year 2009 and brand already have a great
market share in Japan. Not only Japanese tourists because of brand presence in other
countries like UK, US and southeast Asia.
Kirin’s products at 5-Star hotels will target these foreigners as these hotels service large
number foreigners who know the drink (Mansukhani, 2010).

5
Alcohol Atlas of India – Current Patterns & Trends of Alcohol Use.


Positioning
The product will positioned as imported premium lager and will sold by on-trade mode.

As per reports from euromonitor about beer sales channel around world, on-trade is the
better performing medium of sale in India.

Figure 8: On VS Off trade performance by country in 2010.
Source: Adapted from euromonitor report global performance and prospects for beer

As per euromonitor 2011 report on alcohol Indian consumer prefer ―premiumisation‖ and
which is evident from data that premium segment lager is largest selling beer and has shown
highest growth in 2011 (Euromonitor, 2011).
Report also says that on trade segment has shown highest growth in 2011 due to cricket
world cup and IPL seasons. Due to high import duty on imported alcohol retail price of beer
gets almost double. In-spite of high price the two international brands (Asahi and Peroni),
currently imported in India have seen growth last year (Euromonitor, 2011).

On the question of how we are going to compete we have to position our product on
refreshing and crisp taste. This will align with target customer who wants to spend some
quality time with friends and revitalize him from a tiring day.

As people at the age of thirties are generally married, 79% of Indian in their 30s considered
30 as the right time to get married and hence 30-35 age groups is primarily
married(Euromonitor,2010). To target these customers we have to position our product as a
product preferred and drink by the responsible man.


Analysis of potential competitors in the market
Competitors:

Figure 9: Company Shares of Beer by National Brand Owner 2007-2011
Source: Adapted from Euromonitor International 2011

Domestic Premium and Standard Lager - Segment
UB Group: - The largest market share is with United Breweries Ltd (UB Group) which huge
product portfolio from whiskey, wine, Champaign and beer. Its Kingfisher brand enjoys
largest selling brand status. It products are in two beer segments i.e. premium lager
(Kingfisher Brand) and standard lager (Zingaro Brand). It also has products in strong i.e
8%ABV and light beer of 5% ABV segments. UB Group has ties ups with Dutch International
brand Heineken and gaining considerable amount of growth. UB group has strong tie ups
with every level of supply chain and is capable of launching new brands due to good
customer insight gained in several years. Recently launched Kingfisher RED is classic
example catering to people who switches from Beer to brown drinks in winter (Euromonitor
2011).

SABMiller: Is the second largest brewery company which has brands like Haywards 5000
(Premium) and Knockout (standard). The SABMiller’s long presence in India and its global
reach makes it a strong competitor. SAB also has strong tie ups with supply chain, in 2009 it
has made a contract with farmers from Rajasthan, India for growing barley for its beer
industry (Thottam, 2009).

Imported Premium Lager Beer Segment

Following brands are currently imported in India: Geist, Chimay, Orval, Achel, Asahi,
Christoffel, Amstel etc. All these brands are imported by 22 importers who have huge


distribution network across the country. These brands constitute just 1% of the total Indian
beer market.

Marketing Plan

Product strategy and rationale
Product: Kirin Brewery promotes its Kirin Ichibori Shibori brand as global brand currently in
Japan and at other places it is considered as a youth drink who enjoys refreshing beer (Kirin
Ichiban TV Commercial 2009) with friends. This brand has the crisp, smooth and refreshing
taste (as per Kirin Brewery website) which is perfectly what most youth in hot country wants.
Balanarayan NT reporter of news paper agency reported that youth like Chinmay and Achel
cited in his report like crisp taste in beer like most youth as the taste is not overpowering.

Packaging: Currently Kirin Ichiban is available in 330ml CAN & glass and 650ml glass bottle
sizes like most of their competitors in global markets. For Indian market the size of the
bottles are as per global standard. And due to our product positioning (i.e. Clubs, Pubs, and
Restaurants) metal CANS will not work.

Labels: I will divide labeling of beer in 2 parts:

1. Front label: I will propose it to keep it same as per global market, currently Kirin
Ichiban Beer has, as it is written in English and has its Brand logo. The target group
is educated group and capable of reading English.

Figure 10: Kirin Ichiban Shibori 330ml
Source: Google Images.

2. Back Label: There are few policies on labeling on Alcohol product and hence the
labeling needs to change from Singapore labeling. Details of Labeling can be found
in Appendix D.


Promotion strategy and rationale
In India any kind promotion related to alcohol is prohibited by any media and hence that’s
the big challenge in India. Hence all the promotions are done via surrogate promotion
techniques like mineral water or soda commercials.

Figure 11: Alcohol promotion policy in India.
Source: Author 2012 complied from WHO report and Alcohol Atlas of India – Policies and Interventions

The only available way to promote the brand is via social media and point of purchase but
only bars, pubs, clubs, restaurants. Hence I propose 3 way promotion strategies:

1. Organize exclusive summer outdoors events and club event: Indian weather is quite
hot and except for couple of months of winter majorly it is hot in almost all the cities
we are targeting. Also most of the targeted customers prefer to spend their weekends
with friends at clubs, events, and pubs. These events are generally covered by many
lifestyle (local and national) TV channels, news papers and lifestyle magazines.

2. Educating the bar tenders, waiters about the brand: As per Sosa cited in Jacob 2011
article, customers always ask bar tender and waiters for something new, that means
the brand awareness needs to be created not only to the end customer but also to
the bar tenders and waiters. One of the big importer of beers in India explains in
Mansukhani 2010 article that ―If the beer brand is a virtual unknown, then how well
the bartender or waiter knows the beer will determine if it sells or not‖.
3. Creating social media pages for brand awareness via
a) Educating people about health benefits of having beer.
b) Educating people about Beer includes types, ingredients, process and other
general aspect.
c) Sending random invite to events talked above.


The targeted audience is educated and is a social media users, hence this is the best
way to reach out to customer. This will also help us in gathering lot of valuable
information about the customer base. Our product placement is quite different from
strong beer segment and other brands, our less alcohol content and crispness can
be promoted by educating people about how other beers are different from our beer
brand. Also health benefits education will also attract family oriented 30-35 age group
to enjoy the beer with their near ones.

Price strategy and rationale
Due to high import duty and additional state taxes the price of imported beer are always
much higher than normal premium beer. Due to high price of the imported beer they can only
be placed in high street pubs, restaurants, clubs and etc. Currently import duty is 100% plus
state taxes which vary from state to state. This is mainly to control the consumption of
alcohols.

From customer’s point of view, currently customers are ready to pay higher for international
premium brands as per interviews taken by few new agencies (Already mentioned above).

A close analysis of various factors affecting the pricing decision mentioned in International
pricing framework in Hollensen (2011, p.519) tells that our product price is majorly impacted
by external factors of tariffs and duties. As per price promotion framework from Sousa,
(2012) ―Rapid Skimming‖ will be the pricing strategy. As our product is highly priced and
requires a lot of promotion for brand setup.

Based on reports from Jacob, 2011 the imported beer in India costs around INR 120-150 for
a 330ml bottle and at some places it is even costlier i.e. around INR 175-300 and gets
costlier in restaurants (Manusukhani,2010).

I propose to keep the price at par with its rival in this segment i.e. Asahi. Currently Asahi is
also positioned as imported premium lager beer in India. In home market also both these
brands are rivals. Asahi price was INR 126 in 2009 (Ghosh, 2009) and now it will be
approximately INR 150-180 for 330 ml.

Hence I will proposed to keep the price approx INR 150-180 range for 330ml and INR 300-
400 for 650 ml bottle for pubs, clubs, restaurants plus additional taxes like VAT.

Distribution strategy and rationale
Distribution Strategy: As per strategies of distribution in Hollensen (2012, pp555) I would
select exclusive distribution strategy.


Why exclusive distribution?

Our product positioning is a premium imported lager beer which will be served in high end
pubs, clubs, 5-star hotels and restaurants hence we want exclusive coverage. While
choosing the channel width defined in Hollensen 2012, p555 the only place our product fits
in is exclusive distribution.

Currently in India there are 25 alcohol importers as per International Beverage network for
details please see Appendix E. There are few leading players in this segment like Brindco,
Pearl Wines, BLiquidz and Aspri Spirits. Majority of the big players have good reach to
various cities in India. As per Aspri Spirits director Arun Kumar cited in Jacob 2011 the
distribution dynamics and inventory management decides whether the brand is actually
visible in India.

India is a vast country and we want to target few cities mentioned in the target market
section above. These cities are widely spread across India (see the map is Appendix C) from
north to south and west to east hence to address promptness to the market we have to have
at least 2 importers:

1) Especially covering high end pubs, clubs, restaurants and hotel where Japanese travelers
pay visit. As per Ambwani 2011, Many Japanese especially in summer make religious trip to
Buddhist circuit in India. India and Japan share a common link of Buddhism and it is second
largest religion in Japan (CIA Fact file Japan, 2011).

2) Covering rest of the cities in India.

Partnership with these players will motivate these players for future and will provide
company a great deal of control. The company can set up its own marketing department for
designing and executing marketing strategies and most importantly understanding the fast
growing Indian market.


Conclusions
India’s growing market will provide Kirin Brewery a great place to expand and establish their
brand. However this fast growing tempting market is full of uncertainties like unknown
customer taste and changing taste, constantly changing government laws (state and central)
and strong presence and hold of big players.

As per our analysis we have found that in this environment beer importing along with
bringing marketing function in house will be beneficial. The selection of distributor must be
done carefully. Most the distributors are having good distribution network and are financial
strong. Most of them have a good experience in handling the international brand.
Additionally option of choosing 2 different distributors will provide Kirin some flexibility.
Where Kirin don’t have to do any change in product but have to change its strategy for
promotion completely due to Indian regulations. Pricing the product is a challenge, currently
placing the product in high price and making a luxury brand can hinder the future path of
making brand a common people brand.

Gradually by gaining experience through its marketing function Kirin can find suitable
manufacturing partner and start the production locally. Due to rapid consolidation of brewing
industry around world and even in India, Kirin has to soon think of next step towards
expanding in India. India’s thriving market is the way for Kirin brewery to achieve its 2015
vision of becoming a leader in Asia and Oceania region.


References
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Akiraht (2009): Youtube channel: Kirin Ichiban Shibori CM 2009 Available from:
http://www.youtube.com/watch?v=0-IMdmT4Y4o [01/03/2012]

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Balanarayan, NT (2009), Bangaloreans say cheers to imported beer (online) Bangalore, DNA India.
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Appendix A: Kirin Group

Figure 12: Various Businesses under Kirin Group
Source: Adapted from Kirin Holding Annual Report 2010.
Kirin Brewery Co., Ltd.

Figure 13: Business Details of Kirin Brewery
Source: Adapted from Kirin Holding Annual Report 2010


Product Portfolio:

Figure 14: Various products under Kirin Brewery and its subsidiary.
Source: Author 2012 complied from Annual Report 2010, Business Strategy Report 2012.
Subsidiary Details:

Figure 15: Kirin Holding Subsidiary
Source: Kirin Group Sustainability Report 2011


Appendix B: Beer Categories

Figure 16: Beer Category.
Source: Adapted from Euromonitor International 2011


Appendix C: Indian Beer Industry:

Figure 17: India Beer Forecast
Source: Euromonitor International 2010

Figure 18: Global alcohol production
Source: Adapted from alcohol Atlas of India 2010

Figure 19: Alcohol Consumption of India 2005-2010.
Source: Adapted from Euromonitor 2010


Figure 20: Prevalence of alcohol use in adult men in India.
Source: Alcohol Atlas of India

Figure 21: Sales of Beer by On-trade VS Off-trade
Source: Adapted from Euromonitor report beer in India 2011

Figure 22: Domestic Lager beer price in India
Source: Adapted from Euromonitor report beer in India 2011


Appendix D: Labelling rules
Country Basic Label Requirement Labeling of Ingredients
Singapore - Product Name Ingredients should be listed in
- Name and address of manufacturer, importer, packer, and descending order of proportions by
distributor, Country of origin weight
- Date marking of minimum duration (expiration date)

Japan - Name of the product - Ingredients—other than additives—
- The word "Imported" and country of origin, if applicable must be listed in descending order of
- Name/address of the importer weight percentage
- Alcohol content - Food additives must be listed in
- Container volume (listed in milliliters or liters) descending order of weight on a
- Net weight (in metric units only) separate line from other ingredients
- "Best before" date
- Special instructions for use, storage, or preparation (when
established by the Minister of Health, Labor, and Welfare for the
product or when their absence could cause confusion)

China Labels must include the following information (may be done in NA
English):
- Brand name
- Alcohol content by degree or percentage
- Quantity or volume
- Name and address of winery, factory, or importer
- Symbol of product registration when applicable

India - Name, trade name, or description of the product - Ingredients must be listed in
- Net weight and gross weight descending order of their quantity
- Date markings, including shelf life of the product and/or
expiration dates
- Special instructions for storage or use
- Bar codes (if applicable) are issued by EAN (European Article
Numbering) at New Delhi
- Market retail price, including taxes, duties, transportation
- Distinctive batch, lot, or code number
- Month and year the product was manufactured or packed
- Vegetarian food must have a symbol of a green color-filled
circle inside a square with a green outline prominently displayed
on the package, contrasting against the background on the
principal display panel. Must be in close proximity to name or
brand name of the food

Table 4: Alcohol Labeling regulation in few countries,
Source: Author 2012 complied from http://www.icap.org/table/alcoholbeveragelabeling

Appendix E: Beer Importers in India


Figure 23: List of Alcohol Importers in India
Source: Adapted from International Beverage Network 2011
Distribution network of Aspri Spirits a alcohol importer:

Figure 24: Country wide presence of Aspri Spirits.
Source: Adapted from http://www.aspri.org/network.php


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