 If one read the earlier media reports many of which were speculative, or planted stories with several inaccuracies, there was pessimism all around and the dooms day was predicted. Extra stocks with the wineries, disgruntled farmers unable to sell their grapes and continuing financial crunch, were counterbalanced with the optimism shown by wineries like Sula, Four Seasons, Luca and Nine Hills which kept on pushing ahead with their astute marketing policies.
While Sula maintained its budgeted growth path and increased its lead in volumes, Grover that has been the household word for those who drink and think wine as a food product, and which has been in the number two position, has had an engine problem and due to the ongoing internal issues has been stagnating and may not be able to achieve even its last year’s sales.
Four Seasons has been quietly gaining share and hopes to surpass Grover this year. It does not seem likely but next year would depend upon whether Grover’s plans of getting strategic investors succeed. Luca has been a surprise package that has been extremely aggressive in the North with its made-up (manufactured from imported concentrated grape juice) wines. Interestingly, it has been focusing on the niche product, litchi wine which is made from the exotic fruit but is not really ‘wine’ in the traditional sense and is a fruit wine.
Vinsura continues to reel under financial constraints- so does Zampa which did not renew its excise license in Delhi and will be a laggard this year. Fortunately, their quality chart has been moving up with the help of their South African winemaker and their Rose sparkling wine was a winner as also the Rose. Chateau d’Ori , after making an early sprint in the wine marathon seems to be exhausted and badly in need of Vitamin M. Big Banyan is quietly moving ahead with a survival strategy and is expected to bounce back. Vintage Wines has been making a steady progress and one hopes that this pro-active quality conscious producer who brought in praiseworthy wines like Cabernet and Chardonnay Reserve and introduced Italian varietals Grillo, Nero d’Avola and Sangiovese in India, will fly soon.
Good Earth Winery seems to have a secret strategy that is not yet clear. But apparently it has realized that the top end expensive wines may have a niche market and help its branding in future but it would need popularly priced wines as well and introduced a range of mid-priced wine. Most of the producers have now a medium priced range, some of them being the same wine as the premium label in the bottle but at a discounted price. Grover even introduced the Raya label for under Rs.300 in Bangalore last month for the young novices which were also being targeted by Turning Point priced much higher but packaged in a fancy bottle.
A breath of fresh air would be the relatively new Fratelli winery which started with quality wines and has already targeted 5-star hotels who are ordering because of quality. The promoters have pumped in a lot of money and seem to be prepared for the long haul. They are not cutting corners- their Tuscan winemaker who owns a decent sized sweat equity, has been given a free hand. A viticulturist of repute, he is keeping a watchful eye on the vines and is bold enough to experiment with untried grape varietals.
The chord of discontentment is still visible around Indage Vintners with the court proceedings going on for declaring it bankrupt. Though the comeback seems difficult and the creditors including employees and farmers curse the company for mismanagement, the company is maintaining a brave face and takes part in the wine shows and one can see their labels popping up here and there. Reports of a small crush signifies the intentions of the management not to turn their back to the wall. One can only wish that the year 2012 marks a come-back year for Indage as it will be good for the industry and their creditors.
With the help of cheaper wines like ‘Port’ whose days are perhaps numbered (nomenclature –not the fortified wine which due to its price and the high ‘current’ at 20% alc v/v has a growing number of takers at Rs. 80-120 a bottle) because of Portugal getting the registration process for Port almost complete after which they will surely get after them legally, the wine consumption this year should reach 1.2-1.5 million cases.
The decision of the Government delaying the Gazette notification of allowing 51% equity to foreign supermarkets would be disappointing to the trade especially the local producers as the retail sales are expected to gain substantially once these foreign chains are operational and they have adequate expertise to promote such sales. Needless to say they are not going to let the producers or importers make much profits but the consumer would benefit.
There is a good balance between the production, demand and the past inventories in the tanks to merit an increase in domestic production from next year. Similarly the low levels of imported wine stocks, several new hotels coming up and more retail outlets opening in malls and grocery shops bodes well for the imported wines the consumption of which should be between 220-250,000 cases during the current fiscal year ending in March.
India was accepted into the prestigious OIV after going through a grueling process. Indian Grape Processing Board made Herculean efforts to make India a worthy member and though the membership payment has not been made, the Presidential decree has been signed by Madame Patil. But there has not been enough progress in the formation of much needed wine laws though it claims that significant progress has already been made.
Imported wines are still suffering from high taxes and higher costs of distribution. Distributors, retailers, hoteliers, restaurateurs, the government paper and procedure chain continuously demands a higher share, making it very frustrating for the importers who are being crushed with higher investment requirements, pressure from foreign producers to sell more, higher interest costs and the demand that is growing slower than expected. The hotels are either unaware of the quality of several fine wines or their clientele is price conscious but they prefer low quality with even lower prices making it a catch -22 situation.
Despite the cap of 250% margin allowed on the cost of wine, hardly any hotel follows the guidelines strictly. They in turn feel pressured by the high license fees and their finance departments who insist on the multipliers to be like coca-cola.
Brindco continued to be the leading importer and Sansula continued to be optimistic but did not come up to the potential in congruence with the knowledge and passion of its owner. Mohan Bros. has quietly been making progress and getting newer labels but after a lot of promises, FineWinesnMore which held a lot of promise, has been disappointing at least in terms of the visibility in the restaurant lists and retail stores. Perhaps they are doing better at direct selling. Global Tax Free has been aggressive in selective products and in selective labels-wine is a commodity for them.
A pleasant surprise has been Aspri Wines and Spirits which has been continuously adding wines to their portfolio and growing at a phenomenal pace. Moet et Chandon did a steady year with Champagne and their Indian sparkling wine is reportedly undergoing second fermentation in the bottle in York winery which continues to offer its facilities to several different brand marketers. The bubbly is slated for release in 2013 and should help push up the sparkling wine drinking culture.
Ace Beveragez has been making a steady progress but has been in an over-active mode recently with its distribution business taking off exponentially– a very positive sign about the growth of imported wine market in the last few months. Wine Park and Wine Rack have been making steady progress too, former with the South African wines and latter continuing with the premium global wine label selection and placing them in discerning hotels.
Prestige Wines –the collaborative JV of Torres has not done as well as in China which has in fact beaten India in every aspect of wine this year as an industry. But it has been steadily adding non Torres wines to its portfolio and growing fast. One hopes that like in China, Torres will make an entry into the Indian wine production as well and lend its expertise -it is bound to happen sooner or later.
Wine Society of India also gained momentum with around 7500 members as its customers. Direct Marketing of UK reportedly bought over the shares of Steven Spurrier and David Banford- bringing back smiles on their faces, and has now a majority control with Steven still remaining the Chairman and UB remaining a passive, minority partner.
In general both the domestic producers and importers are quite upbeat as the year comes to a close, each expecting a growth of 20-50% over last year. The average growth over last year is expected to be 25-30%. Although there are many negatives-even the general economy has taken a downturn, the growth should be maintainable next year as a significant number of wine drinkers has been added to the pool in the recent past.
Subhash Arora |