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Amused- because in an industry where producers start claiming theirs
to be the best wine in the market in the maiden year, the news item was
indicative of a new trend where producers claim to start the marketing
with wine exports, even before hitting the tasting circuit.
Shocked - because the report kept on delving at the small Indian market
of '200,000 cases'. I could see Chougules of Chateau Indage having a laugh
and hear Rajeev Samant, whose Sula only plans to roll out these many cases
this fiscal, chuckle.
Vallee de Vins, owned by Deepak Roy who was a close confidant of UB owner
Vijay Mallya and was expected to lead the combined spirits business of
UB group, is coming out with Zampa brand of wines by the month-end. Priced
at around Rs.550 ($14), the wines will be slightly higher priced than
the existing top sellers Sula, Grover and Chantilly from Indage. The company
plans to roll out 20,000 cases the first year, which is about 10% of the
Indian wine market, said the report.
Mr. Roy already plans to export to Canada, South America and Middle East.
The reason: 'the size of the market is still below 200,000 cases a year
and hence the ability to sell wines outside India is considered a recipe
to remain competitive in the business.'
Possibly, the genesis of this new trend is repeated statements by the
new big bully on the block-UB which has all the financial power, a global
distribution set-up because of Kingfisher beer. If the wine is as drinkable
as claimed by UB, it may be realistic to push exports, though by no means
a cake walk. The distribution system of their French Ladubay may also
be an asset. Even the marketing network of White and Mackay may be a help.
Any similarities in the export marketing might end there, even though
Zampa folks may have the old UB contacts overseas. Zampa may not be a
strange name-in Italy it means leg or foot; there is also French and an
Italian opera by that name. But plenty of blood, sweat and tears will
be the order of the years ahead. And, if they are successful, Roy and
company will open up quite a few doors for the new arrivals on the Indian
wine production scene.
One such arrival is Nashik- based Mercury Winery, which is busy bottling
its first fermented crush and is launching its Aryaa, Ex and Mex range
in Mumbai next Monday. Like UB and the Vallee de Vins, it has not entered
the market yet, but has set its sights higher than both.
There is no question that the exports need to be encouraged. There is
also no doubt that they are extremely helpful in improving quality- almost
as important as it is for our Indian wines to be able to compete with
the comparably priced imported wines.
It will be important for the producers to go beyond the niche market
that exists for the Indian wines matching Indian cuisine. Canada, South
America New Zealand and CIS are going to be tough nuts to crack. Undoubtedly
the Indian cuisine is getting more popular abroad. But the likes of Cobras
and Kingfishers have been making a pile, promoting their beer with food
and will not loosen their grip easily.
And now from soft facts to hard facts. Indian wine market is not 200,000
cases. That is an optimist's estimate of the size of current imports.
The Indian wines enjoy a market of 600,000 cases, not including the cheap
wines costing below Rs.150 a bottle. The total wines including the imported
on one end and the cheap table wines on the lower end enjoy, perhaps the
better side of a million cases annually.
Maybe, the sales figures will take a quantum jump next year when these
companies successfully execute their export plans. In the meantime, we
hope they have not been talking about 'Export Futures' like En Primeur,
trying to create hype for increased in sales in the domestic market.
Also one hopes the Economic Times will take a serious look at the figures
and size of the Indian wine market before reportage.
Subhash Arora
January 9, 2008
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