Posted: Thursday, 03 Oct 2024 12:40
Fratelli to invest Rs. 600 million in Wine Tourism
Established in 2007 at Akluj, Maharashtra by brother-duos Sekhri (Delhi), Mohite-Patil (Maharashtra) and Secci (Tuscany), with the winemaker Late Piero Masi from Tuscany also joining as a partner, the project has successfully progressed to a production level of 500,000 wine cases, making them the second largest producers, behind Sula-the market leader since 2009 and overtaking Grover Vineyards which was relegated to third position in 2017.
Sula was a pioneer in promoting wine tourism, a hallmark of the wine industry in Napa Valley and Sonoma with whom Rajeev Samant, the Founder CEO had been interacting before returning to India after studying in Stanford and working with Oracle. He had set up a small Tasting room in around 2005, followed by tented accommodation for the wine tourists, taking it eventually to a level of 400,000 visitors annually. Many visitors like to also buy wines at the winery if they know that winery is always the best place to buy wine – especially in India where the transportation leaves them bruised to some extent.
Fratelli did always have wine tourism on their mind; they even have a tasting room with 3 large rooms for overnight stays -but this was not on a profit-center like Sula, especially since Fratelli is not in the popular wine making region where one could visit other wineries as well, like in Nashik where Grover, Vallonne, Soma, York (now bought over by Sula) and even smaller wineries like Virgin Hills, Good Drop Cellars and Reveilo vineyards have a facility at a driving distance while visiting the leader Sula Vineyards.
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Fratelli would ostensibly hope to compete with Sula and Grover which also has had grandiose plans for wine tourism but seems to be wavering in the execution. Fratelli plans to infuse fresh investment of around Rs, 550-600 million in a 40-room high-end resort being constructed on its own vineyard in Akluj.
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The new resort will enable the company to increase visitors to the winery in a big way, thus engaging with consumers who will not only pay for the visit and tasting but also direct purchase of wine, thereby cutting out the hefty margins of the Maharashtra retailers who are notorious for their ridiculous schemes that leave the producers with little profits. Incidentally, the company boasts of the largest privately owned 300-acre estate in India and makes several award winning wines.
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With the current production at 500,000 cases, Fratelli plans to reach 1 million cases annually. It operates four wineries across Maharashtra and Karnataka, including the owned facility in Akluj-equipped with state-of-the-art European equipment. Last year, it added 134 acres in Jambhali, Maharashtra, bringing its total vineyard acreage to over 1,100 acres. Its wine production capacity, currently at 4.7 million liters, will be increased to 5.6 million liters by the end of 2024.
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Fratelli claims a 30% market share in India, with 70% of its sales coming from its premium labels. Although it exports to over 10 countries including France and Italy, exports account for less than 2% of its total sales. Majority of sales come from 23,000 retail outlets in India.
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It may be noted that it is not practical for most people to combine a visit to Fratelli and Sula and other wineries in Nashik from Mumbai since they do not fall on the same route. Akluj is closer to Pune while other wineries can be accessed from Mumbai or a direct flight to Nashik. They are thus on two different wine routes.
Fratelli Vineyards (previously listed as Tinna Trade) are listed on Bombay Stock Exchange (BSE). The closing price was Rs. 399.90 on 1 September, 2024 with a one-year Hi/Lo of Rs. 494.80/23.85.
Subhash Arora