Craft beer maker B9 Beverages, one of the most successful craft beer makers in India, is in talks with international brewers and investors to sell a stake of up to 20% in the company, Ankur Jain, founder and CEO of the company told Reuters on Tuesday.
Jain is an entrepreneur with a degree in computer science who moved back from the United States to India in 2008 to start importing traditional craft beers from Europe and US. After being successful in this business he launched his own beer brand Bira 91 (the number stands for India’s country code) in early 2015, which Jain first brewed in Flanders region of Belgium where a craft distillery was used to contract manufacture the beer with ingredients from France, Belgium, Himalayas and Bavarian Farms. After initial success, the company thereafter began manufacturing the beer in India with the same ingredients. In order to finance the venture, Jain raised over USD 130 million across several funding rounds from financial investors U.S.-based Sequoia Capital and Belgium-based Sofina (inside.beer, 10.5.2018).
B9 Beverages claims to have more than 5% of overall beer, and over 20% share in the premium beer category in India. However, despite a strong growth in the first years since 2015, the company has increasingly seen competition and the nationwide COVID-19 lockdown has hardly-hit the company which already has experienced losses in the years before. For this reason B9 Beverages, has raised at the end of April an additional USD 20 million in a bridge round from its existing financial backers.
Market observers believe that the intention to sell a minority stake in the company is partly forced by Sequoia Capital and Sofina. Sequoia Capital holds a roughly 45% stake while Jain and his family own only around 30% of the shares.
"We've been talking to beer companies that are not competitive in India or have minimal operations in India," said Jain without disclosing names. However, Reuters cited Indian industry sources saying that B9 and Kirin had been in negotiations. A deal would not only help finance the Indian business but would also allow the Japanese brewer to offer its brands directly in India's estimated USD 7 billion beer market.
In recent years Kirin has increasingly started to tap the craft beer market. Since 2016, Kirin owns a 24.5% stake in Brooklyn Brewery, the 12th-largest U.S. craft brewer by volume (inside.beer, 12.10.2016). In addition, Kirin is also the owner of Little Creatures, one of the most successful Australian craft beer companies established in 2000 in Fremantle, Western Australia, and since 2012 part of Lion, which itself is part of Kirin. Through Lion Kirin has also purchased craft brewer Fourpure Brewing, based in UK’s capital London (inside.beer, 9.7.2018) in July 2018. The same year Lion also bought one of the oldest craft breweries in New Zealand, Harrington's Brewery in Christchurch (inside.beer, 1.8.2019), and UK-based craft beer legend Magic Rock (inside.beer, 1.4.2019).
In the light of these acquisitions, B9 Beverages would perfectly fit in this string of pearls. Reuters cited a Kirin spokesman who said that there was “absolutely no discussion at the moment” with B9 and that due to COVID-19 the company would avoid “non-essential” investments at present.