Nov 05: After passing through the disastrous period of April-June 2020 like all other Indian wine producers and importers, Sula has not only weathered the current Covid storm magnificently, but it has managed to come out ahead with a gain in market share and the brand stronger than ever, writes Subhash Arora who had a long telecom with Rajeev Samant, Founder CEO of Sula Vineyards, who has been in Nashik since March and enjoying the prolonged stay and the hands-on working, with a big hand in blending wines of vintage 2020
Indian wine industry including Sula has been on a roller coaster since Mid-March this year. Rajeev Samant, Founder CEO of Sula Vineyards, who has been obliged to be in Nashik due to Lockdown, has seen Sula go through difficult phases during the nine months- from April to October 2020. But the company is now out of woods and he is in a very upbeat mood. In the process, he has left his vivid, personal mark on the vintage of 2020 since Kerry Damskey, the consulting winemaker of Sula since inception from Sonoma County California, could not visit this year due to the pandemic. Rajeev had hands-on experience of not only helping in the wine assemblage but also in the administration.
Rajeev likens the situation at Sula with the three stages of Dante’s Inferno, by Dante Alighieri- the iconic Italian writer of 14th century- Hell (Inferno) followed by Purgatory and Heaven. ‘March to July was just hell. With zero sales of wine in India, it was a mitigated disaster’ says Rajeev who sounded his usual cheerful and optimistic self when I had a long telecom with him at the winery yesterday. ‘It was really a question of survival, how to pay staff salaries or the electricity bills etc. with zero income! We had to negotiate hard with banks. The Moratorium really helped us though. We had lots of discussions with grape farmers. Customers, especially the hotels and restaurants, had stopped paying us since their own sources had dried up,’ he says, conceding that the harvest 2020 was however, complete and successful, thanks to the support extended by the state government after the lockdown had been in place.
Purgatory- ‘June-August were really stressful. Markets were opening up. Some sales started taking place. But our iconic hospitality business was totally shut down’.
Glimpses of 'Heaven'- ‘We are very pleased with the sales in September which were quite strong. October has been a bumper month. In fact, our secondary sales in October this year surpassed the sales of the same month last year,’ he disclosed it for the first time to delWine.
Also Read : Sula: Wine Tourism Limping back in Nashik from July 10
‘People are consuming wine at home. Retail sales have gone up by leaps and bounds- and made up for the loss in restaurant sales which has been practically nil. It helps that Diwali is in November this year and we expect a strong November as well-projecting excellent sales. We will sell more in November than the same month, last year. Of course, December is a very busy month too because of weddings and big parties which unfortunately we will miss out on’ says Rajeev.
Stuck in Nashik- blessing in disguise
Rajeev was to leave Nashik in March 2020 to go to London for summer but was stuck because of the sudden lockdown. He says, ’I have overseen 2020-21 production and blending completely since I was in Nashik for such a long time after many years and worked with our chief winemaker Karan Vasani who is our style director. I enjoyed this period with lots of small tweaks done periodically. Kerry Damskey could not come this year obviously. He is usually here for 30 days and oversees the blending. But he has laid a strong foundation for us over the years and since I was here I helped in tweaking the blending of our wines during a longer period of around 90 days.’ Rajeev has enjoyed the process so much that he feels he must spend more time in the winery from next vintage onwards during blending.
Wine Tourism- Sula had expanded Source, their Heritage wine resort earlier this year and added 20 rooms making it a 50-room complex in the vineyards. Added to it was Beyond with 10 rooms, making it a 60-room complex. The whole complex had to be shut down along with the Tasting Room during Lockdown but since it was re-opened, it has become busier than ever. ‘In fact, October has been almost as busy as last October. We have been having a full house on weekends including the coming weekend and even on working days, the occupancy is quite high. The whole area looks so pretty that one loves to spend longer time relaxing here, even though the swimming pool is still shut due to government regulations. We have some guests from Mumbai who have booked it for longer periods of stay- up to even a month,’ he says.
‘During Covid-19 city hotels have found it tough to fill but rural hotels and wine hotels like ours are in huge demand because of being outdoors. We have 40 acres of open landscaping where one can wander around.’
‘Tasting Room has also opened but with the restriction of 50% capacity but we have several areas around it and all visitors are accommodated comfortably. We still have 25-30% less than average number visiting the Tasting Room right now. One of the features loved by the visitors is that all the wines sold at the Resort are at MRP with no extra VAT or service charge. In fact, if some wine is left over, the guests are welcome to carry the bottle with them.’ There has been no change in the Tasting procedure-though Sula strictly follows regulations about hygiene.
Sun shining brighter at Sula
‘Notwithstanding the Covid Cases that are going up, the sun is shining brighter on Sula now. There is a strong bouncing back. We are keeping up with the dispatches which have been going on smoothly. The winery isalso running smoothly at 100% capacity.’
Also Read : Blog: My Journey with Sula and Samant
Double digit growth days are back in the vision. There will certainly be a dip in this year’s sale but the future looks bright. When I asked him when Sula would become a 1-million case sales company, he said instinctively, ‘next year (2021-22)! this year will be a dip certainly because we cannot make up for zero sales in the first quarter.’ He refuses to take a guess of the drop though delWine estimates it at a minimum of 10-15%.
Also, the December month which is usually excellent and smaller in sales compared only with November, will be a challenging month with no big fat weddings and celebrations allowed due to Covid. But by being flexible and proactive Sula has been able to increase its overall market share by 5% during the Covid time, touching 70% of the share of the market in certain areas. It appears that the consumers are re-valuing the brand and are drinking more Sula wines.
The Big Picture
Some of the wine players might not survive the current crisis. Mergers and acquisitions are expected to take place-though Rajeev insists that Sula is not interested in any such proposals. Sula has weathered the storm by controlling expenses, reducing the staff to an optimum level and making the organisation lean and more efficient. ‘We had around 800 people working with us a couple of years ago. Today we have about 700, thanks to the attrition and realignment of staff. I am happy to say we did not resort to mass layoffs or pay cuts, though bonuses of last year were impacted- affecting the net take-home pay packet. There were naturally no salary increases. In fact, I have taken a voluntary cut in salary as a show of solidarity with the staff. Employee leaves and a few such adjustments were of course made,’ Rajeev concedes.
‘We are a more efficient and leaner organisation. We have shrunk our head office in Mumbai. We have evolved a system of 3-day work-at-home and only 2-day work in the office and I think this will carry on for quite some time. We have also instituted other cost-cutting measures like no visiting overseas trade shows, curtailed travel and no big celebrations (including the 20th anniversary celebration of Sula this year). SulaFest has already been cancelled for 2021 because of Covid restrictions.
Change of Guard
There have been some important administrative changes as well. With National Head of Sales, Deepak Bhatnagar retiring on March 31 this year and taking on the role of Advisor, there has been a change of guard with Neeraj Sharma taking over as the National Head of Sales from April 1 during Lockdown. He has decades of useful experience in the alcohol industry including Diageo and William Grant, and will help Sula achieve its sales targets.
Gregoire Verdin, Sula’s Brand Ambassador from France has been unfortunately stuck there for the last few months and has been working from home but is due back in India soon. He has been assigned the duties as Head of Marketing. now
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Imported wine business
Sula has done good business in imported wines as well-in particular the French label ‘Le Grand Noir’ which has become number three foreign wine brand, according to
Rajeev. (this will be the subject of another Article in future). Sula has a keen eye on a share of this pie as well, though the size is much smaller.
The Indian wine industry may not be out of woods yet but thanks to the astute and visionary Rajeev Samant, Sula has sailed through the storm proficiently and effectivelyand the Sula Sun (their logo) is set to shine brighter in the months to come.