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 In North India, there is a saying that the new bride is like Lakshmi, Goddess of wealth, who brings wealth and good luck to the family. Rajeev Samant’s wife of less than 3 months, Margarita Andronova, seems to have proved to be just such a good luck charm for him. Out of the blue, Sula has bagged Heritage Winery, the leading producer of fortified wines and an undisputed leader of wine tourism in Karnataka. ‘As on February 1, Sula is the owner of Heritage,’ said Rajeev Samant at an exclusive chat yesterday, the concluding day of the 10th edition of SulaFest. He chuckled when I asked him how Sula had been able to keep the acquisition under wraps and says, ‘honestly speaking, 3 months ago there was no talk or even thought of buying this well-established ongoing winery. Within 2 months of our talks the deal was signed and sealed last month. Sula wines had already reached the winery showcase last month and as of February 1, we have become the sole owners.’
As always, Rajeev was not willing to divulge any details of the deal at this point except that it was an outright purchase, lock, stock and barrel including all the labels, and that the previous owner and Managing Director P L Venkatarama Reddy would continue to be the Advisor for a year to help in the transition. He also affirmed that the whole of the existing staff will be retained. ‘It is a win-win situation for both’ is all he was willing to disclose.
Win-win for both
 It is obviously a winning situation for Sula. Heritage has not only been a market leader of fortified/Port wines with an annual sale of 160,000-200,000 cases of wine, most of which is fortified and quite popular in Karnataka, but a lead player in wine tourism since 2011 because of the excellent location on the Mysore Highway. A few years ago, when I visited Alpine Winery, and noticed that Heritage was on my way, I made a couple of quick calls and Reddy was most obliging and organised a tour of the winery for me and I left impressed with the immense potential for the premium wines as well. Most of the tourists on their way to Mysore have the winery visit on their itinerary and the local wine lovers from Bangalore turn up as well, since it is less than 2 hours away from the city.
Why would Reddy sell the winery which is doing so well, I wondered. He has a lot of clout and political connections and gets things done which others find almost impossible to do. ‘At the end of the day, the winery was a very small part of his business. His main construction business is much bigger and also doing well. There are also family reasons-his son is not interested in the winery business and a daughter lives and works in Shanghai and has currently no intention of returning to India,’ says Rajeev. I was rather surprised to learn from him that Reddy was also a passionate and well known actor in Kannada cinema and was getting bigger roles in movies. For him, divesting in the winery makes sense.
 For Sula it would be a gold mine that needs only panning, even though with substantial fresh investments. ‘Obviously, it gives us a base of production in Karnataka and will help us continue with the leadership position it enjoys in wine tourism in Karnataka. Though we cannot replicate the Nashik model due to land constraints, we shall exploit its current leadership status. Heritage is a well established brand in fortified wines and we might continue with it. We will definitely want to be at par with Sula Campus and will need to invest a lot to bring it to the Nashik level. We will consider various options before taking the decision on what course to take. Mr. Reddy’s experience with the wine industry and farmers will be very helpful to us, I am sure.’
What about the working relationship with Indian Ambience winery, their current base for making wines for Karnataka? ‘We shall continue with them for at least 2 more years. We have had a good working relationship with them and will have a smooth transition.’
 Sula now becomes the second wine company in India to have a production base in both Maharashtra and Karnataka, thanks to the unpalatable policies of both the States which impose an import tax on wines from each other’s regions. Bangalore-based Grover Vineyards had earlier acquired production facilities by joining hands with Zampa in Sanjegaon, near Nashik. Based in Akluj Maharashtra, the third largest producer Fratelli is said to be already scouting around for a production base in the State.
The detailed plans and actions of Sula Vineyards will unfold gradually but it is fairly certain that there will be a much bigger boost to tourism in Karnataka with a lot of demand also from the nearby Andhra and Telangana States. The company will clock an additional sale of 200,000 cases, adding almost 20% to its growth in terms of volumes which are targeted at a million cases for the current year. This will further increase the gap between Sula and the other two competitors, Grover Zampa and Fratelli. This even though Rajeev Samant, the dynamic CEO and founder of Sula Vineyards, does not like to talk of volume in cases but always sales in terms of value.
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Blog: Fortified Wine Tourism Karnataka Style
Subhash Arora |