Detailed Project Report on makgeolli beer plant

MAKGEOLLI BEER PLANT

[CODE NO.4197] 

Beer comprises about 12%1 of the total alcohol consumed in India. While the alcohol beverages industry in India has been dominated by spirits, beer remains the preferred alcoholic beverage for young Indians. Beer has registered robust growth in the last one and half decades. From a total industry consumption of about 100 million cases in 2005, the consumption crossed over 300 million cases in 2019. The current industry size is estimated to be over 320 million cases per annum. Three leading players contribute over 85% of the total industry sales with our Company being the market leader having a market share of about 52%2. 

The Indian beer market shrunk during the FY 20. As per our estimate, a number of markets across the country remained sluggish during the second half of last Financial Year. April and May 2019 saw General Elections in India in a phased manner in each State, where dry days were imposed for a few days before and after elections and during election results which had reduced sales. Restrictions on production during this period also curtailed our ability to service market demand. Generally, high-end consumer prices dampened sales during the year. 

In addition, due to COVID, retail was completely shut from March 23, 2020 with on-trade outlets being progressive closed in the weeks prior, causing a secular drop in sales for beer and spirits. The last 8 days of March 2020, when normally increased primary dispatches’ happen due to start of the peak season, such dispatches actually became negligible due to lockdown.

It is expected that the initial months of the new financial year will remain very challenging as retail only reopened in many states in India during 1st week of May. Demand is likely to only gradually recover and is negatively impacted due to increased taxation and other impediments. On basis of alcohol content, beer in India can be categorized into Strong and Mild Beers Strong beer which has alcohol content between 6% and 8% dominates the beer market accounting for over 85% of the total beer consumed in India. 

The Super Premium beer segment within both the Strong and Mild beer categories has been growing faster than the overall beer industry and has grown at a Compounded Annual Growth Rate (CAGR) of almost 30 per cent over the last three years. 

The Indian beer market continues to grow in line with expectations. Industry volumes grew  wat a CAGR of about 7% during the last five years. However, during 2019-20, the Indian beer market shrunk slightly over the previous year, in part related to COVID. Compared to the global average per capita consumption of about 30 liters, the per capita consumption in India still hovers around 2 litres1 . However, the scope for growth in India continues to remain positive given the climate, young demographics and increasing disposable income. 

Beer has become one of the most popular alcoholic beverages in the country over the past two decades. A plethora of beer brands are available in India to address the palate of various consumer segments. Majority of beer market growth is driven by young consumers, who consider beer a trendy drink, compared to traditional spirits. Brew pubs have emerged in large cities such as Bengaluru, Pune and Gurgaon over the last few years. 

These outlets have introduced consumers to new types of beers for example ‘craft beer’. Beer Industry in India continues to remain traditional and is controlled by State Governments. It remains highly regulated with high taxation, restrictions on cross border movements, constraints on production, retailing and other barriers. In many parts of the country, wholesale and/or retail distribution is controlled by State Government monopolies. Also, in over 60% of the markets, State Governments directly dictate the price at which beer can be sold.

Indian beer industry is primarily dominated by strong beer which accounts for over 85% of the total beer volumes sold in India. The beer consumption in the country is inclined towards the southern states which accounts for more than half of the volumes consumed in India. Around 30% of the total consumption is contributed by western region and equally spread between northern and eastern states. India has one of the lowest per capita alcohol consumption rates globally which is an indicator of the prevailing opportunity. 

The growth in the beer market is predominantly driven by young consumers and professionals who consider beer as a trendy drink, as compared with traditional spirits. Furthermore, rising disposable incomes, changing preferences and favorable demographics coupled with increasing social acceptance is also anticipated to contribute to growth of the industry in the medium term. India adds over 19 million people to the legal drinking age every year and only one in eight women consume beer, compared to one in two in more mature markets. This presents significant industry growth potential. In 2020 India accounted for consumption of 2,426 million liters or 311 million cases of beer. (1 case is equivalent to 12 bottles of 650 ml each). 

The beer consumption increased by 5.4% compared to same period last year. Beer volume is anticipated to record a 2018-23 CAGR of 4.5% to reach 3,024 million or 388 million cases. In value terms, the beer industry was valued at Rs, 519 billion in 2018, which is an increase of 8.0% compared to same period last year. Beer industry is expected to reach a value of Rs. 736 billion by 2023, indicating a CAGR of 7.2% during the same period. Higher growth rate of value compared to the volume growth is an indicator of shifting preference towards premium products. (Source: Euro monitor International)

COST ESTIMATION

Plant Capacity                                 866 Case/Day

Land & Building (12000 sq.mt.)    Rs. 7.51 Cr

Plant & Machinery                           Rs. 5.90 Cr

Working Capital for 2 Months       Rs. 5.86 Cr

Total Capital Investment               Rs. 19.79 Cr

Rate of Return                                 42%

Break Even Point                           36%

• INDUSTRY OVERVIEW
• GROWTH FACTORS
• DEMAND DRIVERS FOR THE ALCOBEV INDUSTRY
• THREATS AND CONCERNS
• BARLEY, YEAST AND HOPS SNAPSHOT IN INDIA
• CONSUMER DEMOGRAPHICS AND PREFERENCES
• ALCOHOL CONSUMPTION IN INDIA
• HISTORY OF BEER
• CLASSIFICATION OF BEER
• SOME POPULAR BRANDS OF INDIAN BEERS
• BREWING-RAW MATERIALS
• MACHINERY TECHNICAL DETAILS
• BEER MANUFACTURE PROCESS
• PROCESS FLOW DIAGRAM
• PLANT LOCATION: STATE/CITY
• LICENSES REQUIRED
• HOW TO STORE BEER
• TOP INTERNATIONAL BRANDS LIST
• SOME INDIAN BRANDS LIST
• MARKET SEGMENTATION
• BEER MEASURES
• PRINCIPLES OF PLANT LAYOUT
• PLANT LOCATION FACTORS
• EXPLANATION OF TERMS USED IN THE PROJECT REPORT
• RAW MATERIAL SUPPLIERS
• MACHINERY SUPPLIERS
• MACHINERY PHOTOGRAPHS
• RAW MATERIAL PHOTOGRAPHS
• PLANT CAPACITY
• MANPOWER
• UTILITIES
• UTILITIES (EQUIPMENTS)
• REQUIREMENT OF POWER
• CONNECTED ELECTRICAL LOAD AT A GLANCE
• EFFLUENT TREATMENT AND DISPOSAL
• WASTE TREATMENT
• QUALITY CONTROL IN BEER PRODUCTION
• SWOT ANALYSIS
• ORGANIZATION CHART
• PLANT LATOUT
• TURNKEY CONSULTANT
• IMPLEMENTATION SCHEDULE

APPENDIX – A:

01. PLANT ECONOMICS

02. LAND & BUILDING

03. PLANT AND MACHINERY

04. OTHER FIXED ASSESTS

05. FIXED CAPITAL

06. RAW MATERIAL

07. SALARY AND WAGES

08. UTILITIES AND OVERHEADS

09. TOTAL WORKING CAPITAL

10. TOTAL CAPITAL INVESTMENT

11. COST OF PRODUCTION

12. TURN OVER/ANNUM

13. BREAK EVEN POINT

14. RESOURCES FOR FINANCE

15. INSTALMENT PAYABLE IN 5 YEARS

16. DEPRECIATION CHART FOR 5 YEARS

17. PROFIT ANALYSIS FOR 5 YEARS

18. PROJECTED BALANCE SHEET FOR (5 YEARS)