SABMiller is a leading beverages company, bringing refreshment and

sociability to millions of people all over the world. We understand that

our profitability depends on healthy communities, growing economies
and the responsible use of scarce natural resources. Through our local
businesses we work in a way that improves livelihoods and builds
communities. SABMiller India is one of the leading brewers in the
country. In a span of 15 years, SABMiller India has been able to make
its mark on the Indian beer market with a mix of local and global brands
such as Haywards 5000, Knock Out, Fosters, Miller High Life & Ace
and Peroni Nastro Azzurro- a portfolio that appeals to a cross-section of
consumers.
Wellington is a lucrative and mushrooming state. The beer landscape is
fast changing and a stabilizing economy has brought with it a legal
drinking age population that has different and particular preferences,
with higher disposable income to spend.

Case Study
SABMiller India

BEER IN INDIA
In India, traditional beer has been prepared from rice or millet for thousands of years. But it was not until the 18th
century, when the British introduced European beer to India. By 1716, pale ale and Burton ale were being
imported from England. To protect the beer from spoiling during the long journey, it had to have high alcohol
content and hops were added to it. This led to the invention of India Pale Ale in about 1787 by Bow Brewery. In
1830, Edward Dyer travelled to India and set up India's first brewery in Kasauli.

MODERN TIMES
In recent years, foreign companies have been entering India and acquiring local businesses. In 2000, SABMiller
entered the Indian market by acquiring Narang Breweries, in June 2001 the Mysore Breweries and in November
2002 Rochees Breweries. In 2003, SABMiller India acquired 50% stake in Shaw Wallace's beer business.
In May 2005, SABMiller India acquired the balance stake in Shaw Wallace's beer assets for INR 600 crore thus
completing the overall acquisition of the Shaw Wallace Beer business for about INR 1400cr. In 2005, Carlsberg
entered India with its local venture South Asian Breweries. Also in 2005, Singapore-based Asia Pacific
Breweries acquired a 76% share in the local Aurangabad Breweries. In 2006, SABMiller India acquired Foster's
Indian assets.
In February 2006, Anheuser-Busch Inbev, the maker of Budweiser, entered a partnership with Hyderabad-based
Crown Beers. In 2011, United Breweries announced that they would produce the Heineken brand beer in India. All
the major international beer players Carlsberg, SABMiller and Anheuser Busch InBev are now brewing in India.
There has been rapid expansion and growth in Breweries, the mushrooming of micro-breweries and imported beer
market has been hotting up over the last 4 years.

BEER INDUSTRY | KEY SEGMENTS

The size of the Indian beer industry is
~22.3 Million HL (Hecto Liters) and
growing at 6%, 3 yr. CAGR.
The industry is broadly classified into 3
sub-segments based on price index as well
as brand-positioning:
Premium Beer Segment constitutes
~1.1 Million HL of volume but is growing
at a fast pace of 27%
Mainstream Beer Segment The current
Industry is largely a mainstream segment. Constitutes about 19.6 Million HL and is growing at 6%
Economy Beer Segment As the name suggests, a segment which appeals to price-sensitive consumers,
currently constitutes to about 1.7 Million HL. With the rise of disposable income and proliferation of the middle
class, this segment has been under duress and has experienced a decline of 3% as compared to last year.
The growth of the premium segment, esp. premium beers, is pegged at 25% for the next 3 years, faster than the
traditional strong beer segment. This comes as a surprise for a nation where ~85% of the countrys drinkers liked

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their lager strong, until the last few years. Premium mild beers have been around in India for some time, but the
difference now is that more brewers are manufacturing them in India due to increased demand. All the major
international beer players Carlsberg, SABMiller and Anheuser Busch InBev play in this segment.
The Mainstream strong beer segment is growing at 10% CAGR (2010-2015), however the Worthmore segment is
growing much faster at 30% CAGR for the same period. The Worthmore strong beer sub-segment in particular
has also seen a number of brand launches in the past 3 years Carlsberg Elephant, Budweiser Magnum and the
brilliant Miller ACE all of which are strong beers [ i.e. alcohol by volume >5%]. UB has also just launched
Kingfisher Ultra Max in the same segment.
The growth of premium segment and emergence of brewpubs is providing consumers the reasons to experiment
with a wider repertoire of brands. Albeit small but a fast growing urban phenomenon.

ABOUT SABMILLER
SABMiller India is one of the leading brewers in the country. In a span of just 15 years, SABMiller India has been
able to make its mark on the Indian beer
market with a mix of local and global brands
such as Haywards, Knock Out, Foster`s, Miller
Franchise, and Peroni Nastro Azzurro - a
portfolio that spans across the various
categories.
A well-diversified footprint of owned and
contract manufacturing operations based in
most critical markets ensures that SABMiller
India is well placed to service the markets
quickly and efficiently.
Sustainable Development is integral to
SABMiller India and we have thought hard about the world we want our business to be a part of, with prosperity at
its heart. A prosperous world means a thriving world, where incomes and quality of life are growing; a sociable
world, where our beers are developed, marketed, sold and consumed in a way that maximizes individual and
societal wellbeing; a resilient world, where our businesses, local communities and ecosystems share uninterrupted
access to safe, clean water; a clean world where nothing goes to waste and emissions are dramatically lower; and a
productive world where land is used responsibly, food supply is secure, biodiversity is protected and brewing crops
can be accessed at reasonable prices.
One of our long-term competitive advantages is the calibre of our people. We succeed because we attract,
develop and reward people who have the passion to make a significant contribution to the continued growth of
our business. We provide a culture of accountability, challenge and opportunity that encourages our employees to
develop to their full potential.

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OUR VISION, PURPOSE & VALUES

Our success is built upon a clear strategic direction and a shared commitment to the company's vision, purpose
and values. Our Vision is to be the most admired beverage company in India. Our Purpose is to bring refreshment
and sociability, improve livelihoods and help build local communities.
Our Values center on:
People are Our Enduring advantage
The commitment and caliber of our people sets us apart, we encourage diversity & develop people for the
long term.

Accountability is clear & personal

We promote strong management & self-management practices through aligned and clearly articulated
goals, we prize intellectual rigor and engagement through the objective management of performance

We work and win in teams across the business

We are indivisible individuals immersed in teams, where we collectively develop and share knowledge
while balancing local and group interests, consciously/enthusiastically building camaraderie.

We are customers and consumers focused

With a keen focus on our customers & consumers needs and perceptions, we build lasting relationships
of trust built on quality & innovation, steering towards the preferred product of choice.

Our reputation is indivisible

We build our long term reputation through our fair & ethical dealings, a value that relies on the actions of
each employee and is embedded in the benefit provided to local communities.

We do our best for local communities

This reflects our commitment and purpose, which is to better serve the communities in which we live and
work.

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WELLINGTON STATE | OVERVIEW

Wellington is a higher than average GDP state its economy is largely dominated by service, construction and
agriculture industry. Failed monsoons in past few years have led to decline in agriculture & people are moving
towards Urban centers thereby driving growth in service sector. Pace of urbanization is higher than its other
counterparts; about 38% of states population is below the Legal Drinking Age (LDA).
Wellington is one of the core markets for investment as per the governments smart city program which will see
large investments flowing in into urban rejuvenation across 6 cities. These cities spread over the length & breadth
of Wellington and are expected to drive future GDP growth of the state as various Industries are investing in them.
The State also happens to be one of the countrys critical beer markets in terms of both volume and value, it has
been a winning market for SABMiller India historically. This state has one of the highest beer volumes in the
country, and is the 2nd largest state in terms of beer volumes representing close to 15% of the total Beer Industry.
Despite being a high volume market, over the last few fiscal years the beer industry growth in this state has been
lower than the country average.
Mainstream Strong is the dominating segment in this market, which has added segment share by nipping it from
the Mainstream Mild beer segment, currently on a decline. Premiumisation is aggressive in Wellington driven by
high per-capita disposable income. The premium beer segment accounts for 8% of the total Beer Industry in
Wellington. It is also one of the most competitive markets (high volume & high profitability) with each share point
well contested between United Breweries (50%), SABMiller (30%), Carlsberg (10%), ABI and various local brewers
(~10%).
SABMillers business goal is on maximizing gross profit in the state & it looks at all the levers of Marketing &
Production mix to achieve the same. Unlike other states, the Bar & Restaurant (B&R) channel is well entrenched,
both, in numeric availability & volume contribution. SABMiller has traditionally been less present in this channel
which resulted from a conscious call to maximize returns from the highly profitable Off-premise channel.
The increase in urbanization in Wellington has led to a trend of conversion of erstwhile B&R licenses to premium
B&Rs as consumers move away from addressing functional to experiential/social needs and fuelling aspirations.
The rapid increase in service sector is leading to strong increase in disposable income in the state.
CURRENT OPERATING MODELS
All brewers have adopted a similar strategy of having their own manufacturing capacity in the state. Unlike
majority of the states in the country, Wellington has the added advantage of complete pricing freedom which the
brewers have leveraged.
The brewers have also maximized the easy availability of malt & other raw materials to ensure strong control on
costs. All the brands operating in the market are brewed in-house, packaged and distributed. While UB has been
dominating this state, Carlsberg has recently challenged them with the new brand Dilburg, SABMiller which has
been a second lead in the state is strongly feeling the heat.
ROLE IN THE OVERALL STRATEGIC ARCHITECTURE
As an organization responsible and driven to create shareholders wealth, SABMillers operating strategy in India is
determined by a mix of volume and value which can be created in the geography. The organization has consciously
taken the decision of trying to increase the market share across geographies, while increasing profitability.
Trade is extremely fragmented in the state; however there are areas of consolidation where trade has started
behaving like a cartel in certain zones. Collectively they account for 10% of the states volumes especially in urban

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centers. Rural centers have high outlet density and hence the power of one outlet to impact its share is very low.
SABMiller historically has been very well distributed, being present with all our SKUs PET & draught more
recently introduced. However, recently our distribution has fallen into the late 70s. Brands like Knock Out are
universally available but brands like Fosters are struggling at 50% availability. Miller franchise, though a recent
entrant, is currently available in 40 % of the outlets and well placed in the urban centers of Wellington state.
AMBITION: TEMPER OR FLARE
SABMiller India wants to enhance its growth in the market of Wellington. Knock Out, the lead brand in the market,
is being challenged by new incumbents like Dilburg and other mainstream brands which have been offering the
trade higher margins as compared to Knock Out. Although consumers continue to repose their faith in the brand
by way of higher brand equity, as articulated by the consumers in research, the market share for the brand is
under stress and its higher equity is not translating into sales.
Miller High Life, a premium American styled lager, has been rolled out and plays selectively in certain markets. This
brand has almost doubled its volume since the time of launch.
Fosters a brand which has been re-launched by SABMiller India is in its initial stages of cementing its foothold in
the market and is yet to make any visible impact. As a consumer once said its just that I have many options
today. A similar trend was noticed with the trade by reduced share presence.
SABMiller India has distributors across the Wellington State. One of the largest distributors is becoming
increasingly disinterested in doing business with us, due to the decreasing market share and volumes, and is being
wooed by one of our competitors to get affiliated with them. The distributor is critical to our business. However, as
a result of our market realities in the state, hes been reducing market investments and delaying our payments.
While the business wants to take a strong stance against him, it is constrained by lack of interest amongst the
potential distributors in the geography.
The business is keen to ensure the team in the state is able and equipped with the right talent in the right roles.
Being a key state for SABMiller India, there has been increasing pressure on the field sales force, resulting in
elements of fatigue. Because of this pressure, there is a higher turnover in the field force and the team has had 4
Area Sales Managers in the last 2 years. Further complexities are being experienced as the teams portfolio of
brands is increased and they have new (less experienced) team members as a part of the companys gender
diversity initiatives.
PRODUCTION
SABMiller India has a brewery in Wellington. The brewery is running at 80% capacity. Most of the other brewers
also have a brewery in the state and capacity maximization leads to a different approach by most brewers.
However like most players in this category, breweries are built not just to support the local market but also
support the peripheral markets.
While that strategy allows organizations to ensure that operating cost of running the brewery is fully leveraged (as
the utility percentage goes up), it also comes at a cost in form of Import and Export duties which are levied by the
Government.
THE BIG AMBITION
Given the backdrop of industry, segments, and the ever increasing competitive scenario in the state, organization
now wants to be very ambitious about the Wellington market and wants to attain a respectable & scalable
profitable position in the territory over next 5 years.
Keeping the ambition in mind, develop an 18 month business plan addressing the following aspects:
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 Strategy for SABMiller India in Wellington

What is the right portfolio for SABMiller - Which segments to play in, how and why?
Pricing strategy (approach to pricing, trade-offs)
Trade drivers and focus areas (distribution strategy, activation in trade, partnerships with Off-premise and Onpremise, etc.)
Essential Talent Management approach to ensure enhanced & diverse talent is on ground
WHAT TO SUBMIT
a.
b.
c.

Participating teams must submit an approach note not exceeding 800 words in a word document
The same must reach the SABMiller on or before 12th August 2015
Approach note must consist of the Expectations spelt out in the case study

RULES OF PARTICIPATION
a.
b.
c.
d.
e.

The team must consist of 3-4 participants

All participants must be from the same campus (and location)
A diverse team educational background, specialization, interests, etc. would make a good group
In case the approach note gets shortlisted, the team would require to make a detailed face to face
presentation to the SABMiller India team
All information provided by SABMiller during the competition is proprietary, and must not be used in any
other form (classroom case study etc.) on the campus or outside

Wishing you all the very best!!!

CHEERS!

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2015, SABMiller India. No contents must be reproduced, redistributed without permission.