Climate change isn't the only factor that will impact beer consumption in India

On Monday, there was panic even amongst those who don't understand climate change, as a report suggested that fluctuating temperatures could affect beer production. And while the amount of beer consumed (or not consumed) is insignificant in the larger scheme of things when it comes to climate change, the popularity of the drink the world over probably contributed to the study.

India already is the lowest alcohol consumer in asia, as per a BMI Research report. As per the report, total alcohol consumption in India is at 5.1 litres per capita in 2018, considerably lower than the Asian per capita average of 20.9 litres.The low consumption is due to reasons like conservative attitudes, licensing regulations, restrictions on the sale of alcohol in certain states and a preference for locally produced spirits such as whiskey.Stating that government regulations and hike in duties remain a risk to India's developing beer market, the report said the outlook for beer market in India is favourable on the back of changing cultural attitudes and a young, increasingly affluent population.

WATER OR THE LACK OF IT

A major factor that has affected beer production, particularly in India, is the drought situation that has crippled several parts of the country. How this affects beer production is simple. Beer requires water in every step of preparation. An efficient brewery requires seven gallons of water for a gallon of beer. This can go up to 10 gallons of water for one gallon of beer in case the brewery is less efficient.

United Nations Data from the past few years shows that around 2 billion people i.e. 20% of the world’s population live in areas of scarcity. The report adds that another 1.6 billion people face economic water shortage (where countries lack the necessary infrastructure to take water from rivers and aquifers).

In July this year, a Niti Aayog report said that India was suffering its ‘worst water crisis in history’. “By 2030, the country’s water demand is projected to be twice the available supply,” the Niti Aayog report reads. “[This will cause] severe water scarcity for hundreds of millions of people,” the report said, adding that the expected degree of water scarcity will account for a 6 per cent loss in India’s gross domestic product.

NOT JUST THE WATER

A report that was published on Monday by Nature Plants shows that the average barley yields during extreme events are expected to drop between 3 and 17 percent, depending on the condition.

Government data, however, suggests that the production of barley, a relatively small winter crop in north India, has been relatively steady around 1.6-1.8 million metric tonnes (MMT) on demand from the malting and brewing industry. Barley production in MY 2018/19 is forecast at 1.8 MMT on reported higher planting in the traditional barley growing western states on relatively lower water requirement compared to wheat.

However, a Times of India report reveals that the government had hiked the MSP of all six rabi crops, including barley. This means that the end user - particularly a brewery will have to spend more when it comes to purchasing raw materials to manufacture beer. According to data available, barley saw a 2.13% rise between March and May this year. This, experts point out, is also the reduced production of the crop.

Unseasonal rainfalls have also been a factor in damaging India's rabi crop. In 2016, Down To Earth Magazine reported how barley, along with wheat, mustard, and oat was severely damaged due to sudden weather change, accompanied by hailstorms.

Nandikesh Sivalingam Climate and Energy Manager, Greenpeace India said, "A majority of barley producing states are in central and northern India. Research shows that central Indian state are more vulnerable for impacts of climate change. Variability of monsoon and extreme weather events such as extended drought and in flash floods could impact crop yield in a significant way if we dont keep global temperature rise to 1.5c."

ECONOMIC ISSUES

In 2017, the Economist released an article on the decline of beer consumption the world over. “The overall decline is almost entirely because of downturns in three of the five biggest markets. China, Brazil and Russia accounted for 99.6% of the global decrease in the volume of beer drunk in 2016,” the report added, saying that one of the main reasons for the decline in beer consumption, particularly in a country such as China was that people were moving away from traditional brews to sample more exotic and imported beers.

In India, another problem has arisen that has affected the market. Anand Morwani, Co-Founder, Director & Executive Chef at Brewbot Eatery and Pub Brewery, a popular microbrewery in Mumbai said that his company imports its raw materials and the bigger challenge for them is the devaluation of the rupee against the dollar.  ​"Brewbot import​s​ 100% of ​its​ ​r​aw materials from Europe, the United States &  Australasia. More than climate change at the moment, it’s the inflation of the dollar that is causing a rise in the cost of raw material acquisition which in turn will affect beer pricing and supply in the short and long run."

While these factors won't reduce the consumption of beer, it certainly will have an effect on the types of beer we purchase in future.