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BW Businessworld

In High Spirits

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Indians are known for their love of the good things in life and their appreciation of finer nuances. While wines have always struggled to find appreciation under the umbrella of Indian liquors and alcoholic beverages, they have readily found acceptability across the niche' echelons of the country. However, with changing times and rising disposable incomes, wine has started to gain acceptability across masses and has now become one of the lead consumables in the Indian alcohol market. Though the per capita intake of wine is still low among India's rapidly expanding middle and upper classes, wine drinking and an understanding of the subject has become the latest craze and somewhat of a must-have or must-know are of interest in the current scenario.

Over time India has steadily emerged as one of the fastest growing wine markets in the world wherein the per capita consumption of wine has topped 10 million litres, which shows the immense potential that this still nascent market has in the country. Rising at a phenomenal growth rate of about 25 per cent and currently being valued at approximately 2700 crores — up from a modest 800 crores in 2008— the wine market in India has seen unparalleled augmentation in the past decade or so wherein the wine consumption in India is expected to grow at a compound annual growth rate (CAGR) of around 25-30 percent by 2014. It is imperative to quote the recent report by (International Wine and Spirit Research)IWSR, on the Indian Wine Market which expects the it to gradually mature and reach a consumption level of 2.4 millio nine-litre cases by 2020.

Rocketing over time from 45 million cases in 2001 to at least 135 million cases in 2011, industry experts say that for the wine consumers in the country, 'the good times are here to stay.' The reasons for this could include: favourable governmental policies, openness to wine culture, augmenting disposable incomes, growing tourism sector and changing perception of the society, have helped in creating a varied wine market in the country.

Mumbai accounts for approximately 30 per cent of the total wine consumption in the country, Delhi and Goa account for approximately 20 per cent each along with Bengaluru which accounts for about 15 per cent. They are all expected to add into their quotas which will, by the turn of this financial year, see significant value additions to the coffers of the wine industry of India.

Cultivating A Necessary Luxury
Industry stalwarts point out that while favourable factors, such as the country having a good climate for grape growing and increase in urban youth population who crave for an alternative to hard liquor, has added to the growing acceptance of the medium, other factors like emergence of supermarkets as basic wine distribution infrastructures, linear supply chain, effective business branding and rising domestic disposable incomes have helped the genre of wines become more of a necessity than a luxury. Thus, realising the need to create a favourable trend of drinking wine, wine makers are not leaving any stone unturned to attract new wine drinkers and have been continually organising vineyard visits, factory tours and tastings sessions to entice them in. These sessions while imparting the basic know how of appreciating a wine along with informing them about the correct way to enjoy it lets the enthusiasts create more familiarity with the brand.

While the positives are many, negatives also abound with regards to the wine market of the country. State level taxations and policies, logistic &supply chain, storage facilities &under developed infrastructure and retail system act as some speed breakers in this growth story. Another major hindrance is the lack of knowledge about the beverage from both ends,the seller and the buyer.

But with evolving state regulatory policies, which are expected to change over the next decade as India's population constituent becomes more youth centric, aided with favourable factors, the wine industry in India is sure to augment in the future as well.

When it comes to gender segmentation, over time, Indian women are beginning to prefer wine as a more socially acceptable form of drinking. India today is majorly a still wine market wherein the popular varietals are Sauvignon Blanc, Chenin Blanc and Chardonnayin the whites and Cabernet Sauvignon and Shiraz in the reds. Having said that, consumers today have not only started experimenting with new varietals such as Sangiovese, Riesling and Cabernet Franc but also with different types of wines such as rose, sparkling, sweet wines across old and new world.

The wine boom of the country has benefited both domestic and the international players. In terms of volume the imported wines have roughly a 14 per cent market share; however the same doubles up to 28 per cent in value.  French, Italian and Australian wines have dominated this segment.

In the domestic segment, the past decade has seen a dramatic increase in domestic Indian wineries from a meagre six wineries in 2000 to approximately 65 at the latest count. Between the top five wine producers of the country, the productivity has augmented to approximately 1,700,000 cases a year. The serious Indian wineries (though few) are aiming for consistency in quality and a product that not only competes in the domestic market but also in the international market.

India is currently going through a process of evolution wherein the industry expects India to be one of the top wine producers in the world by 2050. With a positive future outlook fuelled in with factors such as evolving consumer base, quality production, and government support, India is on the verge of fulfilling its wine dream. The economic impediments notwithstanding, the Indian wine market has only one destination: up.

While the numbers point towards the suitability of the sector, it is time to sit back and rejoice in the advent of the industry and revel in the emergence of it. 

Kapil Sekhri is the director and co-promoter of Fratelli Wines