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Delhi Wine Club

Posted: Friday, February 05 2010. 17:41

Nature may help end Great Grape Glut

The grape glut that the farmers of Maharashtra and Karnataka suffered last year due to recession and over production may not be a headache this year due to the Downy Mildew hitting hard most of the growing areas suffering heavy un-seasonal rains last November and wiping off a significant portion, writes Subhash Arora.

Coupled with the increasing sales starting August last year, most wineries have registered higher sales with Sula clocking up even more than 40% in the North, making Rajiv Samant, owner of Sula very optimistic about this year’s sales to be around 275,000  cases as compared to about 190,000 for last year.

Almost every producer present at the Taste- Expo in Mumbai expressed the view that the fall in grapes available for crush will be 10-30% lower due to the crop destruction, making the grape prices go up to similar levels as in the crushing season of 2008-though the current strategy of vintners emptying their tanks first may imply less crushing for another year.

It is now an open secret that the wine lying in the tanks for 2 years and past its prime for most of the small wineries will become undrinkable if the tanks are not emptied this season. Some wineries have indicated to delWine that they have excess wine that they are willing to sell in bulk at around Rs.80-100 a bulk liter, lower than the ruling bulk wine price last year.

Big Banyan, ND Winery and Chateau d’Ori are a few of the wineries which are in the process of emptying their tanks or getting rid of their bottled wine from the earlier season. However, Ranjit Dhuru, the CEO of d’Ori was optimist that the quality of grapes has not been affected due to rains, though the quantity would be around 15-20% lower. This assessment was echoed by Kiran Patil of Vintage Wines who have been growing consistently at around 20% but for the last year.

Abhay Kewadkar, Head of the wine division at UB says that the maximum damage was done to the eating grape varieties-up to 40% since they traditionally prune early and when the rain came, it damaged the crops. The mildew caused a drop of about 15% in Baramati, ‘but we shall continue to pay our farmers at the contracted rates, no matter what happened,’ he affirms.

Grover Vineyard which had suffered an unprecedented setback in 2008 bringing the sales down to around 55,000 cases is targeting sales of a million bottles, says Kapil Grover. With the problems hopefully behind them and the need to capture the market lost to Sula, they are expected to be aggressive in their sales. A recent positive rating by Robert Parker is expected to boost their market share, but they would perhaps need some more time to regain the lost ground and take advantage of the gap left by Indage.

 The X Factor continues to be Indage which has had crumbling sales last year but reportedly are gearing up for a comeback. Apparently, they have done some financial restructuring last month that would enable them to make a comeback to the market, increasing the demand for grapes. The only problem is that the last two years have been horrifying for their contracted farmers-as well as the employees, distributors and all their stakeholders. They would need more than the charismatic charm of their chairman Sham Chougule to get the grapes and business back to normal- meaning the grape demand could still be in a slump.

Propelled by the recession and the pressure from imported wines, several wineries have come up with lower priced wines while the others have been forced to follow the legend left by Indage of ‘one-for-one’ offer. Whereas, Grover continues with Madera, Four Seasons with its much promoted Zinzi; Sula seems to be following the Indage model, introducing more and more of the low end wines to increase the top line and fill in the vacuum left by the former number one seller. This may not be good for their bottom line in the short term- their profits came down to Rs.18.5 million in 2009 from Rs.90 million in 2008 despite the sales going up in value by 6% to around Rs. 540 million last year. But the strategy might help the farmers in the short term due to the extra grapes crushed for their higher volume.

With the crushing just started or around the corner, the wine media will be sniffing more than just what’s in the glass during the next couple of months!

Subhash Arora


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