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Posted: Friday, November 20 2009. 10:40

Central Marketing Agency for Indian Wineries

Marketing being a core element in the strategy of board and objectives of the Indian Grape Processing Board, it should form a central marketing agency with public and private shareholders from the wineries whose aim should be not only to market the wine but marketing a wine life style as a whole, writes Rajiv Seth.

Mahatma Gandhi and Dr. Bhimrao Ambedkar, two leaders in the drafting of the Indian constitution, were teetotalers in their days, who believed that it was the responsibility of the states to regulate alcohol.

Constitution and Misconception

Article 47 of the Indian constitution states that "The state shall regard raising the level of nutrition and the standard of living of its people and the improvements of public health as among its primary duties and, in particular, the state shall endeavor to bring about prohibition of the consumption except for medicinal purpose of intoxicate drinks and drugs which are injurious to health".

In this background it was the primary duty of policy makers to de-link wine from liquor, so as general public could better understand the difference between Wine and other alcoholic beverages. Furthermore a blanket ban on advertisements for all alcoholic products took away any opportunity of providing a window to masses, about the health benefits of wine and that resulted in irresponsible drinking habits in rural and urban youth.

The Marketing Mission

One of the foremost objective of newly formed Indian grape processing board under

MFPI is

-   To focus on market research and information, domestic and international promotion  of Indian wines.

 

-   To promote cooperative efforts, backward and forward linkages between growers and wine industry in general.

 

Thus it is evident that marketing is a core element in the strategy of board and its objectives. At present lack of awareness and ignorance in key issues of marketing is a major barrier to the new upcoming wineries in India. Collaborative marketing can overcome this barrier by creating a strong and positive image for Indian wines. It provides benefits which are not obtainable through generic or individual marketing. Other benefits of collaboration are the opportunity to participate in formal strategy, cost efficiency, harnessing individual efforts for category expansion rather than destructive competition and an open door for small companies who would otherwise not gain market access.

 

 

Objectives

 

l          Help in the progress of community acceptance of wine by highlighting its health benefits
and advocating socially responsible wine consumption.

 

l          To help the small Wineries to sell wine under common label to relieve them of the
burden of high label registration fee every year by launching common Wine India logo Brand similar to the pattern  of Wine Australia Logo.

 

l          Establishing the same sales office for multiple brand sales to help wine producers cut administrative and distribution cost, in all the major markets of India namely Delhi, Mumbai, Bangalore and Goa.

 

l          Establishing temperature controlled privately owned public bonded warehouses for wine industry, in all the major wine markets namely Delhi, Mumbai, Goa and Bangalore.

 

l          To counter any emerging monopoly of local distributors or agents so the interest of small producers are safe guarded.

 

l          Communicate to regional communities, governments and key decision makers the economic contribution of the grape and wine industries.

 

l          To help the wine producer to cut the execution time of export orders by providing cash flow.

 

l          To provide facility of cellar to producer who can store their wine en masse. (Bottled and in crates) so that they are able to react very quickly to export orders.

 

l          To explore the possibilities of providing sales channels to foreign wine producers on commission basis to encourage the healthy competition.

 

l          Improve market access and distribution opportunities  :-

 

F         By exploring the possibilities of selling wine through places like Delhi Haat, Big Bazar, Reliance Fresh and other marketing channels.

 

F         By exploring the possibilities of selling wine by using alternative channels like Coffee Shops eg. Barista, Cafe Coffee Day etc.

 

F         By promoting sales of wine in Banquet Functions like marriages and social events.

 

F         By capturing sales in corporate world by direct marketing channels.

 

F         Setting up wine sales kiosks along national highway eating joints / rest houses etc. to promote sales.

 

F         By exploring the possibilities of developing private labels of premium wine for celebrities of sports, Bollywood stars and other famous personalities, by explaining them how this way they could contribute to the economic upliftment of grape growers by promoting wine culture.

 

F         By promoting Indian wine logo through ministry of external affairs in all the diplomatic mission across the globe.

 

F         By promoting Indian wine logo through ministry of defense in all the distribution channels of defense services..

 

l          To explore the possibilities of barter trade with foreign Wine companies.

 

l          To help the wine importers by providing them bonded warehousing facility on rational rates based on charges per bottle policy rather then percentage on cost of wine.

 

l          Help in attracting FDI in industry aimed at enhancing market competitiveness of Indian wine industry.

 

l          Designate a single industry body to be responsible for aligning all industry funded promotional activities with market development objective of this strategy and to implement promotion action plan.

 

l          Maximise the contribution of the Indian grape processing board in raising the knowledge and understanding of Indian wine.

 

l          Place a high priority on developing International markets that have strong chances of high growth such as China, Japan and Korea.

 

l          Create a National Wine Tourism Strategy Plan.

 

l          Establish India as a globally recognised wine tourism destination which will integrate with incredible India campaign.

 

l          Secure a place for India as the world leader in low price segment of wines.

 

l          Pro-actively negotiate agreements to facilitate improved international market access.

 

l          To create a dedicated responsible trained sales team for marketing Indian wines.

 

l          To enhance the image and reputation of Indian wine.

 

l          To ensure the Indian wine presence in the global wine market.

 

l          To set up E-commerce channels of distribution within and out side the country.

 

l          To pro-actively participate to promote Indian wine clubs in Domestic and International Markets.

 

l          Publishing small pocket leaflets to educate masses about the difference in wines and spirits, and health benefits of drinking wines.

 

 

The Business Model of Central Marketing Agency

 

The business model of the central marketing agency should be of a private company, with public and private shareholders, whose aim should be not only to market the wine but marketing a wine life style as a whole.

 

The IGPB should form an association of wine producers to collectively raise the initial funding requirements for this marketing agency. Each operating winery member (out side the wine park) will be asked to compulsory  pay a membership fee of Rs. 50,000/- as the one time membership fee. Plot holders in wine parks of MIDC  will  also  have  to  contribute Rs. 20,000/- each. Since MIDC has two wine parks in Maharashtra, one in Nashik and the other in Sangli and total no. of plots in these two wine parks is approximately 200. A sum of Rs. 40 lacs will be collected from these plot holders. Besides this at present a total no. of 58 wineries are currently producing wine out side wine parks. So a sum of Rs. 29 lacs will be collected as membership fee. Thus taking the total sum to Rs. 69 lacs. This collection by the association will be used to wards purchasing shares in central marketing agency. Other than this preferential shares  should  be  offered to existing wineries, and a total target of Rs. 100 lacs should be achieved.

 

Besides this, MIDC (Maharashtra Industrial Development Corporation) should be a partner in this project as it is the main agency identified by Maharashtra Government for the development of the wine  sector,  MIDC  on  its  part  should  at  least  come  up  with Rs. 100 lacs as share capital thus  taking the total capital to Rs. 200 lacs (2 crores).

 

Eventually, public, private  institutions and venture capital firms should be targeted to raise the funding. The idea to raise funding through some foreign wineries by offering them membership and thus access to Indian markets through this channel can be worked out besides offering participation of wine importing firms will be an added advantage.

 

The assumption is to have an initial capital of Rs. 500 lacs (5 crores) through various partners.

 

The two promoting partners namely association of wine producers and Maharashtra Industrial Development Corporation would keep a 20% of shares each.

 

Furthermore, promoting partners would have golden shares for some basic decisions in company development, such as:

 

            -           Majority representation in the Board of Directors;

            -           Majority representation in the Marketing Committee;

            -           Right of veto on crucial subjects.

 

The company can foresee distribution of dividends.          

 

 Rajiv Seth

 

Rajiv Seth became the first Indian in the year 1987 to receive a gold medal from Wine and Spirit Education Trust, London. Presently he is making continues efforts in educating the lab assistants of a number of wineries on procedures of micro vilification through his manuals.

 

The views expressed in the article are the personal views of the author-editor

 

       

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