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Posted: Wednesday, March 05 2008. 15:40

Booming Wine Market of India

Despite being a Paradox, India is forging ahead with wine consumption increasing a steady 30% annually with several big players also jumping in the bandwagon, reports Subhash Arora, President of Indian Wine Academy in this article published in the February edition of Meininger;s Wine Business International, Germany

Gordon's, London's oldest wine bar, serves wine to up to 400 customers a night - some of which is Grover's Cabernet Shiraz 'La Reserve', from India. Kapil Grover exported 750 cases to the UK last year and wants to grow that to 2,000 cases in 2008.

While the sophisticated and saturated British Isles may never be more than a niche market for Indian wines, it – like other markets – is a goal for Indian producers. They’re thinking about the Indian diaspora of over five million potential consumers, as well as the increasing popularity of Indian cuisine.

The big three

With wine sales expanding annually at 25% to 30% over the past five years, producers have never had it so good. The decade-old Sula Vineyards sold 129,000 nine litre cases last year, plans to market over 190,000 this year and hopes to continue growing at over 35% annually for the next three years. Grover, which sold 60,000 cases last year, plans to reach the 90,000 this year. Chateau Indage, the biggest producer, has already crossed the 200,000 case mark. The big three may not be alone for long. United Spirits, owned by Vijay Mallya of Kingfisher beer, who bought French sparkling producers Bouvet Ladubay in 2006 for €15m, plans to change the Indian wine map. His business acumen is in sync with his political clout – and the grape power of the Pawar family of Maharashtra, with whom he has a strategic partnership. The family includes Sharat Pawar, the federal Agriculture Minister who dictates the wine policies in Maharashtra, where over 85% of all Indian wine is produced. Apart from recently launching the entry level Zinzi, the new company already imports wine. “We do not wish to be traders and small time producers. We will develop brands and work for long term gains,” says Abhay Kewadkar, chief winemaker and senior vice president.

Vineyard in Dindori

The multinational giants, Diageo and Pernod Ricard, are also producing Indian wines, partly to more effectively market their own imported wines. Diageo rolled out its Indian label Nilaya in Goa recently at a competitive price of Rs350 ($8.95/€6) to Rs550 for premium Indian wines. Similarly, Pernod Ricard, which imports over 12,000 cases of Jacobs Creek, launched Nine Hills in 2006 with a modest target of 10,000 cases. It plans to maintain annual growth of 60-70% over the next two years. While the entry of these companies will change the market’s equilibrium, the existing players show no outward signs of anxiety. Rajeev Samant, the owner of Sula Vineyards, says “we have a well established brand. The new entrants will have to create market if they want to expand.”

Other new wineries such as Miazma, Vintage Wines, Mercury and Chateau d’Ori have also appeared. From only six wineries six years ago, Maharashtra now boasts 45, with more coming. Growers have also benefitted from the sudden demand, with grape prices rocketing. Lucio Matricardi, the Italian winemaker for Big Banyan, which had its first vintage in 2006, says: “We had inspected the grapes and told some of our contracted farmers to wait for three or four days to allow the grapes to fully ripen, only to find later that they had sold them to the higher bidders.”

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