Som Distilleries and Breweries Limited:
Som Distilleries and Breweries Limited is an alcoholic and beverages company that operates in India. The company has focused its primary interest in beer and spirits. Based in Bhopal, Madhya Pradesh, the company was first set up in the year 1993. Over time, this concern has developed slowly but surely to become one of the best-known brands in India’s highly competitive alcoholic beverage market. Being listed on both the Bombay Stock Exchange and the National Stock Exchange, the company makes it an attractive proposition for investors interested in tapping the growing alcohol and beverage sector in India. The above article mentions history, product portfolio, financial performance, and future prospects of growth.
A Little History of Som Distilleries and Breweries Limited:
Som Distilleries and Breweries Limited was established to produce and sell quality drinks across India. Since inception, the company has elaborated upon a broad vision for its enlarged operations and long portfolio of diversified products aimed at a greater customer base. It is a small concern that has evolved into one of the most important alcohol companies in India, with branches spread over 23 states.
Bhopal, Madhya Pradesh, houses the company’s main production facility; and it manufactures one of the highest capacities of distillates in the country. At this facility, besides beer production, it manufactures an entire category of spirits, including rum, vodka, and whisky, catering to a diversified audience.
Product Portfolio:
Som Distilleries and Breweries Limited has a vast range of alcoholic beverages with a focus on beer and spirits. The flagship beer brand of the company is “Hunter”, which has been applauded by different customers over the years. Regarding beer and spirit products, SDBL apart from Hunter offers other beer and spirit products targeting the taste buds of different patrons.
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Beer Products
1. Hunter Beer: Som Distilleries’ flagship beer brand, Hunter is rich on the palate with ABV levels that are high. This has made it extremely popular in all of the northern and the central states of India. Available in strong and mild variants.
2. Black Fort Beer: Black Fort is another premium lager that Som Distilleries introduced into the market. It arguably is one of the creamiest beers available with flavor. Black Fort thus competes in this category of premium beers where demand is on the rise because of the ever-increasing change in the preference of masses for premium products over normal consumption ones.
3. Woodpecker Beer: Woodpecker is a wheat beer with an edge flavor profile. It is designed for people who enjoy something light, refreshing tasting. Being one among the very few wheat beers available in India, Woodpecker has succeeded in building a presence in urban markets by riding along with experimental and craft beers.
Spirit Products
1. Milestone 100 Whisky: This is one of SDBL’s flagship spirit brands. Miles 100 has been performing well in the market in terms of acceptance due to the smoothness in its organoleptic properties and because of pocket-friendly affordability.
2. White Fox Vodka: It has targeted the premium vodka space, which has been widely accepted by the youngest demographic. Being a crisp and refined yet affordable substitute within the vodka space, it is being accepted quickly as urban markets boom.
3. Power Star Rum: The rum brand focuses on budget-conscious customers and boasts of being one of the strongest rum brands in India where demand remains steady. Being a power for smoothness and rich flavor, Power Star rum is so popular both in urban and rural markets.
In addition, SDBL also produces other spirits such as gin and brandy, thereby accommodating a wide range of consumers in the country for alcohol.
Financial Performance
Over the past few years, Som Distilleries and Breweries Limited has continued to see growth straight as propelled by its growing product portfolio and expanding consumption base. In fiscal 2022-23, this company generated consolidated revenues of about INR 900 crore. The beer segment happens to be a heavy contributor to the revenues in this company, accounting for close to 70% of total sales.
The company’s improvement in EBITDA margins further supports the notion that management is controlling costs and working efficiently. As Som Distilleries continues to increase premiumization within its product portfolio, it would generate higher-margin products, which would enhance profitability in the future.
Som Distilleries is also engaged in increasing its production capacity. In 2019, the company acquired a brewery in Karnataka that gives it access to southern markets. The southern states of India are the growth markets for alcoholic beverages. Acquisition has helped the company to increase its presence manifold in states such as Karnataka, Kerala, and Tamil Nadu by reducing dependence on northern and central markets.
Future Prospects
Som Distilleries and Breweries Limited is strategically positioned to take advantage of a number of significant trends in the Indian alcohol market. The following are factors indicating a good future prospect for the company:
1. Liquor Consumption in India is Rising
The Indian alcoholic beverages market is growing exponentially. The key driving factors for growth have been an increase in disposable incomes and urbanization, besides a trend in shifting customer preferences from mainstream to high-end and craft alcoholic drinks. Beer consumption is growing slowly, but surely, specifically among young drinkers within urban space. Strong brands of beer, Hunter and Black Fort, make Som Distilleries an ideal destination for share in the market.
2. Premiumization and Product Diversification
Coming across premiumization in the Indian alcohol market, consumers are now looking at better products; this trend is not left behind by Som Distilleries. The company has been using this opportunity to enhance premium brands; for instance, Milestone 100 Whisky, and Black Fort Beer. Premium will be destined with bigger margins and improved profitability as time unfolds.
3. Increasing Capacity Level
The acquisition of the Karnataka brewery and future expansion in capacity signalling a serious Som Distilleries’ intent to take advantage of the rising tide that is rising across all of India. New capacities will allow it to penetrate new markets much better, particularly the fast rising southern states. The company is also automating and up-grading technology at its plants to enhance operating efficiency, among other things to cut production cost.
4. Geographical Expansion
Som Distilleries has been consistently working to build up its distribution network beyond its traditional stronghold bases. Though it has a robust base for its products in northern and central India, the company is now focusing most of its attention to augment its market share in southern and eastern parts of the country. This geographical spread is expected to result in handsome revenues in the long run.
5. Export Market Potential
As Indian brands start getting international reputation, Som Distilleries has a potential opportunity for the export market. Liquor produced in India is fast gaining popularity overseas, especially in countries having a large Indian expatriate population. Brands like Hunter Beer and Milestone 100 Whisky that are exported to international markets will generate new revenue avenues for the company .
Challenges
Though the future of Som Distilleries looks promising, the company does have its fair share of difficulties. The alcohol industry in India is highly regulated, with varying state-level policies, while selling the same product. There have been quite a few instances wherein operational complications were compounded by regulatory hurdles. Established competition from United Breweries and Radico Khaitan also remains a challenge for reasons of market share.
Som Distilleries and Breweries Limited is reported to be one of the significant players in the Indian alcohol market. The company sells a range of beers and spirits while its most influential brands include Hunter Beer, Milestone 100 Whisky, and White Fox Vodka. The business is well-poised to maintain the trajectory with volume-capacity expansions, geographic footprints, and premiumization of product portfolios. For an investor targeting growth momentum of Indian alcoholic beverage markets, Som Distilleries may be a relevant investment destination for potentially healthy returns in a long period.
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