United Breweries Limited (UBL) has announced its Board of Directors has approved a comprehensive Productivity and Cost Effectiveness Program aimed at driving operational excellence and growth. This program is designed to optimize resource allocation, streamline operations, and secure enduring growth in the challenging Indian beer market, which faces stringent regulations, high taxation, and rising raw material costs. The transformation includes a thorough reorganization of business functions, aligning teams with evolving requirements and establishing focused teams in Corporate Affairs, Customer Service, and Logistics. The company is also optimizing its brewery network, evidenced by the commissioning of a new Greenfield facility in Uttar Pradesh and the closure of its Mangalore plant. Strategic partnerships in priority markets and localization of premium brand production are key components. A detailed portfolio review is underway to prioritize high-value SKUs and rationalize underperforming products. Cost optimization efforts focus on increasing bottle reuse, reducing logistics expenses, maximizing domestic raw material procurement, and implementing targeted fixed cost measures. These initiatives, many already in motion, are projected to generate sustained annualised savings of 3% to 6%. UBL plans to reinvest these savings to foster market growth and enhance capabilities, ensuring long-term value for stakeholders.
