Cover Story

Brewing Disconnect

  • PublishedApril 19, 2019

The business of microbreweries has received a huge impetus in India during the last decade. The craft beer market in India is nascent but it is growing impressively. The growing health consciousness, the increase in disposable incomes in during the last decade, and evolution in F&B preferences of new-age millennial consumers of India have perhaps spawned the craft beer business in India. But the latest guideline by FSSI restricting the yeast count in beer produced in microbreweriesin India to 40 CFU has shaken the brewing world, writes Swarnendu Biswas.

Pratekk Chturvedi, MD, Ministry of Beer

The market for craft beer has been growing since the last decade and if we go by the Euromonitor International’s report titled ‘Beer in India,’ which was published in June 2018, the “Demand for craft beer has been growing thanks to a consumer willingness to try out new products. This has resulted in the opening of many microbreweries in first-tier cities.” The growth of the craft beer market in India portends not only the launch of many craft beer brands in bottles, but also a bright future for standalone microbreweries too, who are producing innovative craft beers with amazing regularity. Even a decade ago, India had only two microbreweries; today there are more than 170.

The Jolting Notification

However, a recent notification by Food Safety and Standards Authority of India (FSSAI), which restricts the yeast count in beer produced in microbreweries in India to 40 CFU, can significantly harm the business prospects of more than 170 microbreweries throughout the country. The notification is expected to come into effect on 1st April. The notification emerged on India’s media space in mid-February. The underlying idea behind this development is to help ensure microbreweries operating or would be operating through the country adhere to impeccable health and safety standards during their brewing and stocking processes. FSSAI’s CEO, Pawan Agarwal had reportedly said regarding this issue that normal beer has to be yeast free. “In case of draught and microbrewery beers, there should be a yeast count ceiling of 40 CFU. The apprehension is that yeast count above the permissible limit may multiply and make the beer unsafe for consumption,” he said. As expected, the notification has brewed lots of discontent among management of microbreweries operating in the country. Many microbrewery owners feel that the stipulated yeast count, as prescribed by FSSAI, is way below than what is needed for the production of craft beers. “If this notification comes into force, it will surely negatively impact the business of microbreweries in India because the yeast count cannot be kept that low in craft beer,” asserted Pratekk Chturvedi, Managing Director, Ministry of Beer. Here it deserves a mention that Ministry of Beer chain is spread across three outlets in Delhi, Gurgaon and Patiala.

Of course, yeast and mould contaminants, which may be unintentionally formed in beer due to not adhering to proper sanitation process thoroughly; must be prevented, and there is no denying the fact that lack of impeccable hygiene is a perpetual lacunae in our food & beverage production, but at the same time severely restricting the usage of yeast as an ingredient in beer may not seem to be a pragmatic option prescribed for the microbreweries.

The Industry View

“The restricted CFU count demanded by FSSAI is way lower than that is required for craft beers. If you restrict the yeast count in the draught and craft beers to FSSAI’s prescribed limit, their aroma would be highly compromised. Then there would no point for our microbreweries to produce their own beers because our consumers will not accept the taste with the severely restricted yeast count,” observed Vikram Rana, the Founder of Vapour Bar Exchange. Both Ministry of Beer and Vapour Bar & Exchange have operational microbreweries within their ambit. Three Vapour Bar Exchange outlets from Gurgaon are offering eight different varieties of craft beers, ranging from Dark Stout to Classic India Pale Ale to popular wheat beer of Belgium. Chturvedi agreed that “Yeast is undesirable in industrial beer to increase its shelf life,” but according to him, “craft beer need not have any such limitations.” “Craft beer is rich in nutrients and these nutrients (which include yeast among others) should be kept to maintain its appeal,” he disclosed. “FSSAI is comparing a container truck with a toy car, which shouldn’t be compared. For example, you can’t compare a roti made at home with a McDonald’s burger,” Chturvedi explained further while talking of these seemingly not much thought out notification. Piyush Jain, the Director of Decode, another sleek food service outlet in Gurgaon with its microbrewery, also agreed that this FSSAI notification was unjustified and totally unpragmatic. “If the notification is being adhered to in its present form it will make our craft beers bereft of their appeal and make them inferior to bottled beers. Then there would be hardly any takers for them,” he elaborated. He also pointed out that this notification didn’t gel with international norms regarding yeast content in microbreweries.

Piyush Jain, Director of Decode

Costs and Greater Cost

According to Chturvedi, on an average approximately Rs.1.2 crore has been the initial investment towards installing a microbrewery in the Ministry of Beer’s Gurgaon, Patiala and Connaught Place outlets (in the Connaught Place outlet the microbrewery is soon expected to be operational), whereas Jain said that there was an investment to the tune of Rs. 80 lakhs for setting up a microbrewery in Decode. Manish Sharma, the Proprietor of The Drunken Botanist, another outlet in Gurgaon with a functional microbrewery, informed this writer that their initial investment on their microbrewery was Rs.1.25 crore. So we can very easily see that the above mentioned notification is latent with huge financial costs. If many microbreweries close down due to this directive, it could not only give severe jolt to many small but enterprising entrepreneurs in India’s food service business, as a microbrewery needs not so insubstantial investment, but would also impede the momentum of beer business in India, which has been witnessing distinct evolution in consumption patterns along with lots of interesting experimentations during the recent years. This expected intangible cost, which could easily stem from the implementation of the above-mentioned directive, is expected to have more long-run adverse impact for our food & beverage industry than the apparent tangible costs.

Nishant Grover, the Brewmaster with Decode and The Drunken Botanist, feels that without the flourishing of microbreweries the beer culture in India would not be able to continually churn up enough innovations and experimentations that it is presently experiencing, thereby giving the discerning consumers of alcoholic beverages lots of frothy choices to explore upon. He said that “German Wheat beer and Raspberry Wit beer are the most popular beers from Decode’s microbrewery.”

Nishant Grover, Brewmaster with Decode and The Drunken Botanist

Open to Discussion

However, in mid-February Agarwal expressed that FSSAI was open to a discussion with microbrewery owners in this matter. He told that if the microbrewery owners in India felt that it was “impossible” to achieve the desired quality with the ceilings coming into effect, they could file a representation regarding this issue, which would be looked into by FSSAI. A media report stated that the Craft Brewers Association of India (CBAI) was intending to file a representation with FSSAI regarding this controversial issue. When contacted by the Spiritz magazine, Gaurav Sikka, the President of Craft Brewers Association of India, said that he was “not in a position to comment on the issue until CBAI has clarity from the regulatory body.” “We are trying to know whether FSSAI is considering yeast as a contaminant or as a raw material to manufacture craft beer. And yes, if such a notification comes into effect, it would be difficult time for microbrewery setups in India and also for several imported bottled beer brands too , as far as their business in India is concerned,” pointed out Rana. Especially, in the light of this directive coming into effect, the sales of imported beer from Germany and Belgium would be severely affected. If this notification doesn’t become a reality due to the prevailing of better sense, then the market for microbreweries in India seems to be brimming with lots of potential. “Craft beer market in India is expected to expand exponentially as there are more well informed consumers now, who are looking for good quality and innovative beers. There will also be consolidation, whereby the non-serious players will make room for serious long-term, passionate craft brewers in India,” opined Chturvedi. To sum up, the glass seems only quarter full as far as the potential growth of nutritious and innovative craft beers in India is concerned, and stand-alone microbreweries, which have mushroomed across urban India during the recent past, are expected to play crucial role in harnessing this huge potential. That is if they are given the chance to do so..

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