By Shonali Advani
In pop culture and perhaps even real life, reunions are best known for reconnecting with old flames. Sometimes these get-togethers serve a higher and better purpose. At one such reunion of St. Joseph’s Old Boys in 2004, two boys forged a partnership to live their dream and brew the elixir consumed by hot-blooded males aged 18 to 80-beer.
Circumstances brought Paul Chowdhury (49) and Narayan Manepally, (49) back to India after corporate stints in US, but the two came back with micro-brewing as a hobby. Manepally, stationed in Portland, started brewing in his garage to cultivate this passion. “It’s a cult in Portland and legal as long as you don’t make more than 30 litres a month,” he says.
Once back in Bengaluru, the idea germinated after that reunion into Beerworks Restaurants and Microbrewery Pvt Ltd in the year 2005. Under this firm, the duo first wanted to start a brew-pub in Goa.
“It’s a smaller, progressive state and we thought it would be easier,” he says. They started brewing and organized tasting sessions with friends to test the Indian palate, the results of which were encouraging. Though ready to take it commercial, excise laws in India didn’t permit anyone to brew and sell beer under the same roof.
“Laws had not been crafted yet to set up a brew-pub and they was illegal in every state. We encountered a fair share of ministers who wanted money to help with amendment of laws,” Manepally says, recalling his experience in Goa, Karnataka, Maharashtra and Rajasthan. Despite running into hassles, they were adamant to get their beverage out in the market. With a few varieties of craft beer ready-Wheat, Pilsner, Dark, Blonde, India Pale Ale and WitBier-they decided to seek advice of mentors. Manish Sabharwal, CEO at TeamLease, was one. His advice changed the course of the company.
“He suggested reverse outsourcing as a viable option,” recalls Manepally.
This advice evolved into Geist-hand-crafted natural beer for the Indian palate, sold in a bottle today. The founders identified a contract manufacturer in Belgium in early 2006, and they continue to work with him for the production. The startup is therefore a de-facto importer of its own brand.
“They needed to seed the market with their brand rather than wait for licenses. In cases like this, the product is more important than who makes it,” says Sabharwal. “There weren’t too many foreign craft beers back then. So the more populated shelves got, the harder it would get,” highlights Chowdhury.
Chowdhury tells us that Geist means ‘endurance’ in German. “No one would pay a premium price for an Indian sounding name so we decided against promoting the Indian-ness of it.”
Geist sells across 40 organized retail outlets, which includes wine stores, 20 five-star hotels and 70 restaurants. It has come to market with three varieties, close to the ones developed earlier for experimenting: Whistling Wheat, Blonde and Dark. The firm imports a container every six months which gets transferred to its bonded warehouse. “We decided to become our own distributors,” he says. From here, products move to the Karnataka State Beverages Corporation Ltd (KSBCL) depot where restaurants and retail stores pick up stock. “We have built individual relations with restaurant- and five-star hotel owners and influence them to buy our beer from KSBCL,” explains Chowdhury, revealing that they have managed to sustain the business with a sales team of two people.
Coming up trumps
Dewars, Bengaluru’s oldest wine shop, has been stocking Geist for over two years, selling 10-15 cases a month and as much as 25 cases in summer, the only craft beer it stocks as of date. “Hoegaarden’s wheat beer was the first entrant but the company ran into trouble. Since then Geist has been able to flood the market and capture share in this category,” says Vikram BJ, Owner of Dewars.
According to the firm, the Whistling Wheat and Blonde varietals are fast-moving, both largely popular with the working population between 25-35 years. Their dark beer appeals to a mature audience. Though there are other Belgian beers in the market, they are industrial brews, imports of which are largely inconsistent, retailers said. “The last import was 200 cases for all of Bengaluru,” mentions Vikram.
Manoj Venkatswamy, Director at Drops, a five-year old organized liquor store in Karnataka, stocks 50 cases of Geist in each of its eight stores. He echoes the issue of irregularity in supply of other Belgian beers which affirms Geist’s advantage in the market along with its mid-segment price.
Getting Geist on shelves has been thanks to goodwill from friends in the right places and word of mouth. The founders had a unique opportunity to cater beer for ex-Infosys Co-Founder, Nandan Nilekani’s 50th birthday celebrations, attended by Bengaluru’s noteworthy lot in 2005, where they understood preferences of Indians.
“Indians don’t like bitter beer and prefer it less fizzy but cold. Women like it sweeter,” says Manepally. Chowdhury also knew several restaurant owners who stocked cases to promote Geist. From restaurants they moved to five-star hotels on the suggestion of friends and by accident, not design ended up at duty-free outlets in hotels. “We started selling more in duty-free than duty paid and got a premium halo with this association,” recalls Manepally.
This paved an entry for them to sell at hotel restaurants too, like Sheraton Hotel, Bengaluru, which was approached by Geist’s team a year and a half ago when their property opened. They have been stocking it since, across their five restaurants selling four-five cases a month at Rs. 475 per bottle plus taxes. “No hotel served craft beers and we wanted to offer variety,” says Shyam Kumar, Beverage Manager, Sheraton Hotel. While the process of populating the shelves continues, India’s excise laws have changed leading to the advent of micro-breweries and the founders have been able to go back to their original idea. They have partnered with two individuals to open two brew-pubs in the city, with a table cover of 250 and 500, respectively. The two locations are to open by April and June 2013.
Back to the pub
“These are both restaurants with a micro-brewery inside. It will be handled by us and we plan to sell 8000-10,000 litres of beer a month. Our full capacity would be 15,000 litres on average,” says Manepally. The founders anticipate about 10-15 brew-pubs to open in Bengaluru, its test market, in the next few years. They are looking to take Geist to Hyderabad, Mumbai and Pune in one year, followed by Delhi and Rajasthan in 2014. “Some things may get difficult as they deal with local licenses in each state,” forsees Narayan Ramachandran, Chairman, InKlude Labs and Director, Beerworks.
Geist has signed up with over five 5-star hotels in Chennai. Its sub-contract manufacturing facility in Goa will be operational in six months, where it will brew 6000 litres per batch, including draught beer.
© Entrepreneur India January 2013
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