The Rise and Fall of Bira 91: A Cautionary Tale in India’s Craft Beer Industry
Bira 91, once a beacon of India’s craft beer revolution, has experienced a dramatic decline, transitioning from a market leader to a company grappling with financial instability, regulatory challenges, and internal unrest. Founded in 2015 by Ankur Jain, Bira 91 quickly gained popularity among urban millennials with its distinctive branding and innovative flavors. However, a series of missteps and external challenges have led to its current predicament.
Financial Struggles and Operational Setbacks
Despite initial success, Bira 91’s financial health began to deteriorate. In the fiscal year 2023–24, the company reported a net loss of ₹748 crore on revenues of ₹638 crore, a significant decline from the previous year’s figures. This downturn was attributed to several factors, including increased procurement costs, rising employee expenses, and a dip in sales volumes from nine million cases in FY23 to approximately six to seven million cases in FY24.
The company’s expenditure surged by 14% to ₹1,282 crore, with excise duties, procurement costs, and employee benefits being major contributors. Notably, excise duty payments accounted for 29% of the total expenditure, amounting to ₹365.8 crore in FY23.
Regulatory Challenges: The Costly Name Change
A pivotal moment in Bira 91’s decline occurred in 2023 when the company changed its registered name from B9 Beverages Private Limited to B9 Beverages Limited. This rebranding, intended to comply with listing norms, led to extensive re-registration requirements across states, causing a halt in sales and forcing the company to write off approximately ₹80 crore in unsold inventory. The compliance delays resulted in a 22% drop in sales and a 68% increase in losses for FY23–24.
Internal Turmoil: Employee Unrest and Leadership Challenges
Internally, Bira 91 faced significant challenges. Over 250 employees petitioned for the removal of founder and CEO Ankur Jain, citing governance lapses, unpaid salaries, and vendor payment delays. Reports indicated that salaries had been delayed for up to six months, leading to widespread dissatisfaction within the company. The workforce shrank from over 700 to just above 260, with over ₹50 crore owed to current and former employees.
The leadership crisis escalated dramatically after a September town hall meeting revealed employee grievances and unified calls for change. Many staff expressed frustration over governance issues, lack of transparency in decision-making, and leadership’s failure to address financial problems proactively.
Strategic Shifts and Market Position
In an attempt to stabilize operations, Bira 91 is planning to raise $132 million, including $50 million in equity from Global Emerging Markets (GEM) and $82 million via structured credit. The funds are intended for working capital and debt clearance. Despite these efforts, the company continues to face challenges in regaining its market position against industry giants like AB InBev, Carlsberg, and Heineken.
Conclusion
Bira 91’s journey underscores the complexities of scaling a brand in a competitive and regulated market. While the company achieved early success through innovative branding and a unique product offering, a combination of financial mismanagement, regulatory hurdles, and internal leadership issues have led to its current challenges. The company’s ability to navigate these obstacles and implement effective strategies will determine its future in India’s evolving craft beer landscape.
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