In Conversation with Ishaan Puri

Founder & CEO, White Rhino Brewing Co.
Friday, 10 Nov 2017
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Ishaan Puri, moved back to India from US after quitting his role as a Finance Quantitative Analyst. The fact that the Indian beer scene needed a breath of fresh air from cheap, commercial lagers made Ishaan realise that here lay an immense opportunity – to make a beer for India that would stand up to an international standard. White Rhino brewery is situated in Malanpur, in the heart of the country. Proximity to cities like Delhi and Gurugram, affordable land and of course a great water source in the form of Chambal river make Malanpur an interesting choice. White Rhino has sourced equipment, ingredients and personnel from far flung corners of the globe. Their bottling and kegging lines are from a highly reputed manufacturer in the Czech Republic.
About
Ishaan Puri, moved back to India from US after quitting his role as a Finance Quantitative Analyst. The fact that the Indian beer scene needed a breath of fresh air from cheap, commercial lagers made Ishaan realise that here lay an immense opportunity – to make a beer for India that would stand up to an international standard. White Rhino brewery is situated in Malanpur, in the heart of the country. Proximity to cities like Delhi and Gurugram, affordable land and of course a great water source in the form of Chambal river make Malanpur an interesting choice. White Rhino has sourced equipment, ingredients and personnel from far flung corners of the globe. Their bottling and kegging lines are from a highly reputed manufacturer in the Czech Republic.

What, according to you, has been driving the beer growth and consumption in India? What are the top three-four trends that have led to the growth?

As far as beer is concerned, India has typically been a market with two or three big brands. Then, beer has been mostly seen as a ‘boring’ space within the liquor and alcohol category. In the last five-six years, however, there has been an influx of imported brands where beer from Belgium, UK, among other global markets, has made its way into the domestic Indian market. All these factors have led to the awareness that there is tremendous ‘style’ in beer.

The beer category is increasing due to consumer awareness, the increase in the number of brands, the ‘styles’ being offered, the expansion in the portfolio of existing commercial brands. What’s also contributing to its growth is the sharp increase in the number of night life venues. Another major reason for the growth in beer is the change in the consumption behaviour – earlier, beer was consumed more for the ‘kick’, now it is for ‘enjoyment’. Premium brands, particularly, have benefitted from this consumer behavioural change. The biggest reason for the growth, undoubtedly, is the emergence of the wheat beer category in not just mass-market brands but also boutique brands such as ours, which offer quality wheat beer to consumers.

Compared to just two microbreweries in 2008, there are now more than 80, as per industry reports. Why are microbreweries and craft brews important or is it just a trend that’s caught up too much, too soon?

When a concept takes hold, everyone rushes to be part of the game. In a short span of time there are many microbreweries, which have opened but barring some, not everyone is doing a good job. Microbreweries are not synonymous with better quality; in fact, 80-90 per cent of microbreweries aren’t doing a very good job. By and large, we have a situation where there is an oversupply of microbreweries. While its novelty factor is what is driving the growth of microbreweries in India, in terms of quality, we need to improve. The market of beer is still price sensitive and so the volume lies in selling low-priced beer. That doesn’t mean that microbreweries can’t do better – the intent needs to be there, the know how needs to be there. Not everyone focuses on making the best beer, they are more interested in the economics of it, which is an important factor of the business but not at the cost of quality.

Will White Rhino always remain a niche brand or will you eventually get into the mass segment category? When should brands remain niche, when should they go mass market? How should niche brands grow?

I’ll give you a hypothetical scenario – I am, for example, two percent of the overall market, selling ten cases of beer. In the next few years, I can still be at two per cent but selling more number of cases of beer. So, I am still a niche brand but grown because the overall market for the sector has grown.

White Rhino will always be niche and premium, but in a much larger market. Even if the market share is constant, it should translate into higher volumes year after year because the overall market is growing. That’s how niche brands see growth. A growing market allows brands in a specific sector to grow. Liquor is a growing sector in India so within it, the category of beer has tremendous scope for growth, to see many more brands emerge.

Liquor is a particularly tricky segment in a market such as India where the threat of nation-wide ban is always looming large. How should brands in such a category devise their respective marketing and advertising strategies?

The dry state model is not sustainable in the long run because it just gives rise to spurious liquor. Complete prohibition of alcohol is not a good sign because companies and brands in this sector not only invest prior to launching their respective businesses but also make continued investments to keep sustaining their respective products.

Liquor, come to think of it, is an intrinsic part of India’s culture and religion. On the festival of Holi, it’s not unusual to see people consume cannabis or bhaang, which is otherwise considered illegal in the country. If you look at the tribal culture of India, alcohol is part of the daily ritual and there’s a reason why there’s even indigenous liquor in so many parts of the country – feni in Goa, mahua in MP…. Also, liquor is a huge source of revenue for Indian states.

Given the challenges in the economic and political landscape, specifically with regard to the alcohol and liquor industry in India, and given the restrictive policies related to advertising and marketing of the category, brands in the industry always need to be cautious. At White Rhino, we don’t adopt mass market strategies. The idea is to be more intimate and targeted about our marketing strategies and that’s a reason why digital plays such an important role for us at White Rhino. Additionally, in terms of activation, our endeavor is to tie-up with like-minded outlets that allow consumers to relate to our product, where the uptake for the brand is very high. We are a collaborative brand so we look at other brands that have a similar target group, similar engagement strategy that require their customers to adopt an openminded intellectual view towards our product.

What is White Rhino’s plan in the next few years? Your growth has been slow but steady. How does this strategy work vis a vis an all-out expansion strategy for brands?

White Rhino’s growth plan is to expand to newer markets. We are a pure craft brewing company that has the reputation of being the best brewery in the country. While being a niche brand, we have created a loyal customer base, which continues to grow. I get several queries from different cities in India asking me when White Rhino will be launched there. To have a slow, organic growth has been one of White Rhino’s important strategies. It has worked very well for a brand like mine because, well, to begin with White Rhino is a niche brand. In fact, word of mouth publicity has been the biggest reason for the brand’s growth. While we add new retail outlets, new bars, pubs, hotels, every month, we don’t do it rapidly. We assess the collaborations carefully, tie up with other likeminded brands who can see value in our brand. Our growth is due to the increase in depth of distribution and that strategy has worked well for us because our average sales per outlet, per month, has been increasing. We have seen large number of conversions in a short span of time and the strategy hasn’t been to rapidly go all out, it has been to target a discerning group of consumers, to tap the right outlets, to have the correct collaborations.

Our expansion into other cities [for now, White Rhino is in Delhi and NCR] will now be easier because we have already built our brand, found a loyal base of consumers that continues to grow and created enough curiosity among consumers in the other cities. My strategy for growth is to reach out to the right consumer without compromising on quality. We are on the right track; our sales have grown 10-fold in the last one year.

What is your expectation from the government – both Central and States – for the category that you operate in?

The Central government has already dropped the ball by not including the category in GST. That was my expectation and in all honesty, I was disappointed after it wasn’t included. The Central government, however, has a limited role to play in alcohol and liquor category because it is a ‘state’ subject.  I hope the state governments lower the entry costs for brands in the category – right now, the entry costs, in the form of license fees, etc, are very high. We need to make India a better market for smaller players to enter it. If that’s not done, we are creating a sector where mass market companies are just repackaging themselves as ‘specialty’ producers but doing nothing different. We need to create a market that is conducive for small boutique players to operate in for that’s the only way to bring quality into the sector. Eventually, the market should be viable in a manner that companies in the segment can create margins that allow them to invest in quality processes and quality raw material while creating business opportunities that are viable at lower volumes.

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