From Archives (2007): Grover Vineyards in Expansion Mode
When you meet Kapil Grover, owner Director of Grover Vineyards you find him a relaxed, laid back person with a C’est La Vie outlook to life. Perhaps, because he drinks his La Reserve or perhaps he is more in the French wine producers mould, where he is charging ahead with enviable exports.
But make no mistake. He is very upbeat and clear about the expansive years ahead. Sales have gone up 47% during the last 6 months even after increasing the price of La Reserve by Rs. 100 a bottle, he says. The sales in the US are about to double to about 4000 cases a year. UK market is expanding from 2500 cases a year to the targeted 5000 during the next 18 months or so. He has just tied up with a new vineyard with Australian expertise near Bangalore with a 26% stake, which will help him more than double his production in 2010 with even better quality wines. Clearly, Kapil is on a roll.
So what has caused the change
‘The re-structuring we did earlier this year has certainly made us realize and helped us in improving our targets. Brindco took a 20% stake and with Jerry Rao’s 15% and the passive 14% from Veuve- Clicquot- Ponsardin of France, the family keeps the majority but has a strategic alliance. ‘Earlier, we were concentrating more on the quality with Michel Rolland being by our side but marketing and finance were not our forte. With Aman Dhall taking up a 20% stake and the domestic marketing responsibility from April this year our marketing efforts got re-inforced.
The quality of their la Reserve has been their forte. A couple of weeks ago I met Seteven Spurrier in London. One of the editors of Decanter who had declared it the best New World Red last year, he was all praise for it. When I visited Gordon’s, the first and the oldest wine bars in London, I found the Sommelier chirping about it too. Apparently, the market penetration was not deep enough and with Brindco concentrating on marketing , the results are gratifying.
‘We sent a new person to London to help our UK Distributor in London, Shailen Patel. With a container in October and already a demand for another one in December means we are moving in the double sales territory,’ says Kapil.
And how is Sante doing? ‘Well the feedback from Bangalore and Goa is very encouraging. Mumbai is doing fine. We are about to launch it in Delhi soon. It is a new product and it does take some time to find its feet on the ground,’ he informed delWine.
‘We own 51% majority in the company and that is going to remain for ever,’ he emphasizes. The 2.5% owned by Rolland, of course is included in this as ‘we consider him a part of the family,’ says Kapil with a smile. Any chance you may further dilute your equity? I ask. ‘Absolutely Not,’ was his instant reply.
Has the equity from Brindco and Jerry come into the company? ‘No, not yet,’ says Kapil. ‘The problem is that all three of us are traveling so much that we hardly find time to be together. Anyway, by December 1, it will be in place and the equity shares will be allotted to them,’ he adds.
We hope to achieve 125 million bottles this fiscal (about 100,000 cases). Last year they had done 60,000 cases.
The sales growth is expected uniformly from all corners of the markets. Exports will continue to be targeted towards France, UK and the US markets, confirms Kapil.
So what is the new grape project coming up
Kapil plans to invest 26% in a new vineyard project coming up near Bangalore. ‘ About 15 kms from our vineyards, as the crow flies, this new company called Draakshi has bought 100 acres of land in Hindupur. With a climate similar to ours, it is easy to buy land there. The vines will be planted in January and we expect the fruit for crushing available in 2010.’
The company owned by one D.D. Saxena a banker in the Australia will have Saxena, Kapil and a friend of Saxena, Rahul Tandon as founding Directors. There will be a few HNI investors unknown to Kapil but friends of friends. Kapil met Saxena through Simon, a viticulturist in Australia who has been coming to India frequently. He had earlier set up some vineyard projects with financial help from Saxena’s bank in Australia. Knowing the market trends in India for wine, Simon knew that the market expansion will depend upon the grape quality and Saxena was in touch with Kapil for a year.
It becomes a win-win situation for both as Saxena finds a ready and captive buyer in Grover and Grover finds good quality grapes with a commitment. His 26% stake will help the bonding further. The company plans to acquire 1000 acres during the next couple of years, thus tripling the grape availability for Grovers and ensuring high quality too with viticulture help from Australia.
With the sales on the rise, company on strong footing and on an expansive mode Kapil is smiling up his sleeves.
November 8, 2007