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Delhi Wine Club

Posted: Wednesday, 11 August 2010 10:20

Indian Wine Producers Upbeat

After the sluggish two years because of the Mumbai terrorist attack coupled with recession, the Indian producers are upbeat about growth this year despite no concrete steps taken by them or the government to take advantage of Commonwealth Games in October, with most admitting to a 50% growth in the Apr-July period, writes Subhash Arora.

‘We have achieved a growth of more than 50%,’ says Rajeev Samant, the CEO owner of Sula, the leading producer. It seems the set target of 350,000 cases as compared to last year’s 250,000 cases is quite achievable. Of course, Sula has the advantage of servicing a much wider base of wine drinkers, from the low end fortified ‘Port’ to the high end Dindori Reserve with labels for people on the budget, like Samara and Madera being a part of the portfolio.

After going through a rough patch, Grover Vineyards also appears to be on the growth trajectory with a growth of 51% already achieved during the period as confirmed by Aman Dhall of Brindco, a partner heading the domestic and export market. This has been despite an acute shortage of their signature La Riserva red 2007 which was released only last month. The target of 100,000 to 110,000 (that would be a record performance) cases is within their sight, if all eez well with their quality and they are able to avoid the shortages due to non supply.

Indage is also slowly getting out of hibernation after restructuring and infusion of capital. Although the company is avoiding issuing any fresh statement due to a heavy dent in their credibility earlier, reliable sources say that the preliminary work of getting wines into the market has started. It has suppliers with wine in the tanks, waiting optimistically for the last couple of years. Their own inventory has been gathering dust and it is a matter of weeks before they will be in the market. Despite financial and distribution glitches (eg., their Delhi distributor is already marketing Sula wines now ) they will soon make a comeback. The support from their Thachi winery in Australia would also play an interesting role in the comeback trail.

UB is also reinforcing their distribution strategy but are reluctant to give any estimates of growth. ‘We had just got our distribution system in place and started selling wine during the period last year, so the percentage growth would not be directly relevant. But yes, we are looking at a very good market and are confident to meet the internal targets set by the company,’ says Abhay Kewadkar, UB’s Head of Wine Division and the Chief Winemaker.

Vinsura, Zampa and other players in the over-10,000 case range are also quite optimistic about the current year with Vinsura announcing an aggressive plan to increase the sales many fold. Vintage, Miazma and York are working on the long term basis with an eye on the future rather than a major thrust on the growth this year, but the optimism shows in their body language. Chateau Banyan, despite the handicap of being a liquor company’s satellite company has the backing of funds and passion of its chairman Paul John and hopes for a growth of over 30-40%.  Chateau d’Ori has been strapped for cash like other producers but finds a ray of hope during the current year with their CEO owner Ranjit Dhuru being upbeat after a couple of years of misery.

Newer players are also expected to add to the numbers-just like UB. Good Earth Winery is in the market for the first year and is satisfied with small numbers at higher prices-focusing on the dormant and invisible ultra premium wine market. A new relatively unknown Goan company Tonia winery with a huge market of fortified ‘ports’ and still wines, plans to sell over 15,000 cases of the newly added wines. Mario Sequeira the partner plans to enter the Capital on his very first attempt to conquer the northern market despite high excise duties and procedures and has set target of around 20,000 cases. The Indo- Italian JV, Fratelli wines plans to get a small piece of the action this year too as does Riona Wines which has been selling Italian wines but slow in the Indian wine production.

Karnataka may not be the dark horse anymore-besides its champion stud Grover; several wineries like Humpy and Kinwa wines are placing bets on their being successful in selling significant numbers with many new producers turning out a few thousand cases in the local market at lower excise duties.

With the increased optimism comes the requirement of funds to finance the growth. According to a media report Sula Vineyards which has raised funds from several investors, including the Private Equity firms GEM India Advisors and Haystack Investments Ltd, in the past, is already looking for funds to set up new wineries to add a few million liters of capacity. Rajiv Samant did not deny the report to delWine although he declined to share the details since the talks were still immature, he said. Grover has been reported to be also in touch with investment bankers to take the company to the next level as internal accruals or investments from own resources do not seem to be feasible. Even smaller companies like Chateau d’Ori are feeling the pinch of the recession and are looking for funds in order to pursue their expansion plans. 

There are still a few producers like N D Wines, Flamingo and Renaissance who do not seem to have come out of the gloom, but Indage and Sula may change that  scenario for them soon with their increase in demand-provided they are able to offer products of acceptable quality.

With an expected growth of around 35-40% as compared to last year, the producers may well be singing at the end of the year,’ happy days are here again! Let’s drink wine to say Cheers again!!

Subhash Arora


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