In a regulatory statement, the company highlighted that the Indian beer sector continues to grapple with stringent regulatory frameworks, high taxes, increasing raw material costs, and fierce competition from both domestic and international entities. However, United Breweries noted that India still presents a structurally under-penetrated beer market with considerable long-term growth prospects.
“While India remains a structurally under-penetrated beer market, United Breweries Ltd sees substantial long-term growth potential and is committed to investing further in India’s beer market,” the company stated.
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It further elaborated that its investments encompass expanding production capacity, innovating product offerings with new premium brands and flavors, boosting its manufacturing and distribution networks, as well as engaging in policy initiatives, category expansion, and brand enhancement.
As part of the sanctioned program, the company is undergoing a thorough transformation aimed at improving productivity and cost-effectiveness. “In our steadfast commitment to operational excellence, the Company is launching a comprehensive transformation program to enhance productivity and achieve greater cost efficiency,” United Breweries declared, noting that several initiatives within the program have already been implemented.
The company stated it is reorganising its business functions to better align teams with changing needs, including streamlining roles across sales, supply chain, and related divisions. Additionally, focused teams in corporate affairs, customer service, and logistics are being established to better support market demands.
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United Breweries mentioned that its network strategy involves optimising brewery locations through the establishment of a greenfield facility in Uttar Pradesh, the closure of its Mangalore plant, and forming strategic partnerships in key markets. Localising the production of premium brands within states aims to enhance supply chain resilience and adaptability.
A comprehensive portfolio review is currently in progress to prioritise key SKUs and rationalise underperforming products. Cost optimisation strategies include increasing the reuse of old bottles, lowering logistics expenses, maximizing domestic sourcing of raw materials, and implementing focused fixed cost measures.
“These collective actions, many of which are already underway, are expected to yield sustained annualised savings of 3% to 6%,” the company stated, adding that it intends to reinvest these savings to foster market growth and enhance capabilities. United Breweries will provide updates on progress as the program unfolds.
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On Friday (January 23), shares of United Breweries Ltd closed at ₹1,451.00, rising by ₹6.10, or 0.42%, on the BSE.
