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Posted: Wednesday, 28 April 2021 23:55

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From Archives (2008): Selling Export Futures in the '200k Cases' Indian market

April 25: I was rather amused and shocked to come across a news item recently in Economic Times which narrated the plans of Nashik based, Vallee de Vins with unlaunched wines, planning substantial export in the current Indian market of 200,000 cases.

Amused- because in an industry where producers start claiming theirs to be the best wine in the market in the maiden year, the news item was indicative of a new trend where producers claim to start the marketing with wine exports, even before hitting the domestic tasting circuit.

Shocked - because the report kept on delving at the small Indian market of '200,000 cases'. I could see Chougules of Chateau Indage having a laugh and hear Rajeev Samant, whose Sula Vineyards only plans to roll out these many cases this fiscal year, chuckle.

Vallee de Vins, owned by Deepak Roy who was a close confidant of UB owner Vijay Mallya, and was expected to lead the combined spirits business of UB group, is coming out with Zampa brand of wines by the month-end. Priced at around Rs.550 ($14), the wines will be slightly higher priced than the existing top sellers Sula, Grover and Chantilly from Indage. The company plans to roll out 20,000 cases the first year, which is about 10% of the Indian wine market, said the report.

Mr. Roy already plans to export to Canada, South America and Middle East. The reason: 'the size of the market is still below 200,000 cases a year and hence the ability to sell wines outside India is considered a recipe to remain competitive in the business.'

Possibly, the genesis of this new trend is repeated statements by the new big bully on the block- UB which has all the financial power, a global distribution set-up because of Kingfisher beer. If the wine is as drinkable as claimed by UB, it may be realistic to push exports in the very first year of Launch, though by no means a cake walk. The distribution system of their French Ladubay may also be an asset. Even the marketing network of White and Mackay may be a help.

Any similarities in the export marketing might end there, even though Zampa folks may have the old UB contacts overseas. Zampa may not be a strange name-in Italy it means leg or foot; there is also French and an Italian opera by that name. But plenty of blood, sweat and tears will be the order for the years ahead. And, if they are successful, Roy and company will open up quite a few doors for the new arrivals on the Indian wine production scene.

One such arrival is Nashik- based Mercury Winery, which is busy bottling its first fermented crush and is launching its Aryaa, Ex and Mex range in Mumbai next Monday. Like UB and the Vallee de Vins, it has not entered the market yet, but has set its sights higher than both.

There is no question that the exports need to be encouraged. There is also no doubt that they are extremely helpful in improving quality- almost as important as it is for our Indian wines to be able to compete with the comparably priced imported wines.

It will be important for the producers to go beyond the niche market that exists for the Indian wines matching Indian cuisine. Canada, South America New Zealand and CIS countries are going to be tough nuts to crack. Undoubtedly the Indian cuisine is getting more popular abroad. But the likes of Cobras and Kingfishers have been making a pile, promoting their beer with food and will not loosen their grip easily.

And now from soft facts to hard facts. Indian wine market is not 200,000 cases. That is an optimist's estimate of the size of current imports. The Indian wines enjoy a market of 600,000 cases, not including the cheap wines costing below Rs.150 a bottle. The total wines including the imported wines on one end and the cheap table wines on the lower end, enjoy perhaps the better side of a million cases annually.

Maybe, the sales figures will take a quantum jump next year when these companies successfully execute their export plans. In the meantime, we hope they have not been talking about 'Export Futures' like En Primeur, trying to create hype for increase in sales in the domestic market.

Also one hopes the Economic Times would take a serious look at the figures and size of the Indian wine market before reportage.

It's a matter of record that Vallee de Vin did not reach anywhere near the export targets. After protracted negotiations in 2010-11, it eventually merged with Grover Vineyards, rechristening the new entity as Grover Zampa Vineyards in 2012-editor

Subhash Arora
January 9, 2008

 

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