 Prats was the CEO of Saint- Estephe based Bordeaux Second Growth Château Cos d’Estournel which exports wine to India, till February this year. ‘With India’s federal and state import duty structure proving prohibitive for many foreign wine brands, clearly there is an advantage to being a local producer,” he says according to a report in Drinks Business.
He understands very well the Indian market and its intricacies, having made several visits as the CEO of Cos, once owned by his father. He would be clear about strategizing for the Indian market where Moet Chandon has already made strong inroads, using innovative policies and the powerful branding and loyalty that it enjoys globally. He says, “The market wants great bubbles of two types: celebration wines like Veuve Clicquot or Moët & Chandon and then with Chandon we are just below that for a young, upcoming people who maybe don’t want to spend quite that much.” Incidentally, both are a part of the luxury goods conglomerate LVMH.
This statement would signify their desire to capture a lion’s share of the sparkling wine market in India. With the price of the Indian bubblies being sold at Rs.550-950, and French and Australian sparkling wines as also Prosecco at around Rs.1500-1800 it would be disastrous to overprice themselves and if I could read his lips, I would put my money at Rs.1400 (I hope it is not considered betting-and it is only my hope that they ‘fix’ the price at around Rs.1400-it has nothing to do with the IPL scam that we are all being entertained with at the cost of a few jailed cricketing and bookie buccaneers.)
From a broader perspective, Prats strategic thinking behind this strengthening and expansion of the Chandon brand implies that we shall see the market share of bubbles increased as well. There is a vast Indian population that likes to drink the bubblies but shuns because of high prices of over Rs.5,000 in retail. Brands like Jacob’s Creek and Bouvet Ladubay are present but have not overwhelmed the sparkling wine market. ‘We’re exactly where the market is going,” he emphasised., says the report. Highlighting a further appeal presented by India for the Chandon brand, Prats noted: “In India today there is a slightly more love for bubbles than there is in China.” True, but Indians want value for their money and Chandon at Rs.1400 or under, might just be a turn-on for several people.
A proper pricing will also put pressure on the Prosecco and Cava that is selling at similar prices and trying to create a splash but has managed a steady growth only.
India will become one of the five countries producing Chandon outside France. Napa Valley-based Domaine Chandon celebrates its 40th anniversary this year when both China and India join the action as well. Argentina, Brazil and Australia are the other producers, making Moet perhaps the only Champagne Company with a significant presence-all in the New World; Moet claims to be the first to have stepped out of the caves or Champagne and gone to discover the New World.
Curiously, Prats whom I have met at many occasions, seems to be quite bullish about India though he rightly believes that ‘things take more time in India’. In the recent statements he named India and China with the growth potential for Moet Chandon whereas on another occasion, he referred to India and Africa being the future-India being the common denominator. Both statements were made outside India.
It will be interesting to see the impact of his company’s branding strategy, as he says ‘ Soon we will have six estates with a common packaging, style and market dedication to feed the young, up and coming consumers who want great bubbles, but maybe don’t want to spend quite the same money as Champagne,” he reportedly told db.
The project in India marks the next phase of Moët Hennessy’s pioneering ethos. “Moët has always been a forward thinker,” says Prats who undoubtedly would have plans to visit India at the launch or soon after (October can be sometimes busy , as it is just after the harvesting month).
Construction of the new Chandon winery is already under progress near Nashik, Maharashtra, as Moët Hennessy’s first winery in India. The company also claims to have bought land and grapes are already growing, though it is not clear how they could manage it under Maharashtra agricultural land ownership laws where only the state farmers can buy land within limits.
Having produced its first vintage in 2012 at York Winery with bought out grapes, the launch this October in Mumbai will be the sixth piece in the Chandon jigsaw-including the Moet Chandon.
Although Moet has initiated a project in China for making still red wines because of their increasing popularity, it is too early to tell whether the company will venture into this area in India as well. Logically, they will first establish the bubbles business and then move on to the still wine market. In the meanwhile, their viticulturists and winemakers in Australia would have gathered the relevant information and would be ready when the strategy so required.
It is certain that the company will expand only if the right quality can be made. As Prats says, "Bordeaux has had difficulty in the last two to three years to find the right prices. Burgundy is having difficulty to feed the demand for its wines. California is more focused on its domestic market. This leaves the door open for new producers and new regions from the New World. But you have to the right quality. That is a must."
Whichever way you look, India is ready to gain and welcome the bubbly from a premier producer and one can look for a positive growth in consumption due to their presence.
Subhash Arora |