How Bira's Rebranding Caused a Rs 80 Crore Drop in Sales.

B9 Beverages, the parent company of Bira 91, faced a significant financial setback due to a costly decision to drop ‘Private’ from its name. This rebranding move, part of its preparation for an IPO Investment in 2026, led to an Rs 80 crore inventory write-off and a 68% increase in losses for FY24. The company, based in New Delhi, underwent a lengthy re-registration process that caused months of disrupted sales. This financial strain was further amplified by rising competition in the craft beer market.

The company’s net loss for the fiscal year ending March 2024 reached Rs 748 crore, surpassing its total revenue of Rs 638 crore, a 22% decline from the previous year. The loss was attributed to both the one-time inventory write-off and shifting state policies affecting key markets.

Sales Disruptions and Market Challenges
Founder Ankur Jain explained that re-registration of product labels and state approvals took 4-6 months, halting sales in key regions despite continued demand. Jain noted, "The name change led to a 4-6 month delay in re-registering labels and approvals, resulting in zero sales for several months. Policy shifts in Delhi NCR and Andhra Pradesh, which account for over a third of our sales, further impacted us."

As a result, sales volume dropped to 6-7 million cases in FY24, compared to nine million in FY23. Furthermore, the craft beer segment faced intensifying competition from microbreweries, craft beer brands, and global brewers launching premium products.

Financial Strain and Operational Challenges
Bira 91, which transitioned from being an imported Belgian wheat beer to local brewing for cost-efficiency, expanded rapidly but faced financial strain. B9 Beverages’ latest report highlighted a negative cash flow of Rs 84 crore and accumulated losses of Rs 1,904 crore, raising concerns about its long-term viability. The auditor flagged these financial figures as a material uncertainty, questioning the company’s ability to continue as a going concern.

Recovery and Future Plans
Despite these challenges, B9 Beverages remains hopeful for a recovery. The company expects to achieve operational profitability by the next quarter, with growth picking up since Q3. “The Rs 80 crore inventory write-off directly impacted profitability, but we’re seeing growth again. We expect to turn a profit by next quarter and be well-positioned to raise capital for our 2026 IPO,” they stated.

Craft Beer Industry Growth and Considerations
Experts note that while craft beer brands like Bira 91, Simba, BeeYoung, and Kati Patang are reshaping India’s beer market, careful expansion strategies are key to maintaining their niche appeal. Vinod Giri, Director General of the Brewers Association of India (BAI), advised that craft brands should scale cautiously to preserve their unique identity. “The distinct taste profiles of craft beers are their appeal. Brands must balance growth expectations with consumer adoption rates,” he emphasized.

India’s Beer Market and Global Attention
India’s expanding beer market continues to attract international investment. United Breweries recently announced plans to invest Rs 750 crore in a new brewery in Uttar Pradesh, marking its first greenfield expansion in over a decade. Similarly, Carlsberg plans to increase its investment in India in 2025, recognizing the country’s growth potential despite its market complexities.

As Bira 91 moves closer to its 2026 IPO, the company must balance aggressive expansion with financial prudence to ensure long-term profitability and relevance in the evolving beer market.

Source: Read Full News