| With
the wine consumption in India growing at a rapid pace,
the company is expecting a turnover of over Rs 100 crore
(US $ 25 million) in this fiscal year 2007-08, according
to a company official who did not want to be identified.
"The outlets will specialise in selling and educating
consumers about wines," he said.
He, however, declined to comment on investment planned
for the retail expansion which would be a mix of franchise
and company-owned outlets and would be branded as 'IVY
Wine Bars'.
The company would showcase a wide range of wines in
these outlets, including Chateau Indage's own brands
and imports from Australia (where it had bought Tandu
winery earlier and reported in delWine), and South Africa.
To boost its sales, the company is also revamping its
marketing strategy with more intensity given on below-the-
line activities.
It would host Wine Fests in 25 cities across the country
in a period of two months coinciding with its silver
jubilee celebration this year.
The official claimed that the company already has more
than 70 per cent share in country's total wine market
and 75 per cent in the premium segment. Chateau Indage
has a total wine production capacity of 65 million litres
across five countries. It is also making two more wineries
in India, one each at Baramati and Nashik.
Source: http://www.headlinesindia.com
The report is quite confusing, to say the least.
A simple calculation shows that per bottle the recovery
would be about Rs. 220. With their Chantilly, Ivy and
MDP all selling between Rs. 400-550,(even though inclusive
of duty and VAT) and even Riviera at around Rs.350,
the volumes must include the low end Vino which sells
for around Rs.95. and all other entry level wines. This
does not make it feasible for them to have a 75% share
in the premium segment, dominated by Sula and Grover
(in fact Sula often claims to be the market leader in
premium wines with Grover running the same lap.
Wine bars are coming up in Maharashtra and other
states quite fast. But one is not sure, if they are
allowed to retail wines from the bars. If it were so,
the wine bars would be springing up everywhere. Places
like Delhi do not even encourage opening of bars alone
as the taxes are extremely high.
Why would the company officials not like to be
identified? A news agency like PTI surely would have
easy access to the Chougules who are quite affable -
editor.
'Outperformer' Report by a Research house
In the meantime, some clarification can be seen from
the Research report of a Mumbai based brokerage and
research firm of Prabhudas Lilladhar ad reported in
moneycontrol.com about the working of the company.
Bullish on the future performance of Indage with a
verdict of ‘Outperformer’ the report says,
‘ Champagne Indage’s(parent company)Q1 FY08
results excelled our expectations. Net sales jumped
186% yoy (our expectation: 264%), operating profit shot
up 146% and net profit rocketed 94% (our expectation:
94%). The operating margin dropped 380bp—from
26.4% to 22.6% (our expectation: 14.6%)— due to
the change in product mix.'
The consolidated results include those of Seabuckthorn
Indage, Indage UK and Thachi Wines,
' Most of growth came from the rise in volumes, as
there has been no major price change. The company has
initiated several retail measures like the opening of
wine bars, shop-in- shop, display at shopping malls,
etc. The Maharashtra Government has allowed wine as
a “food” item and relaxed storage and distribution
norms. It has also abolished excise duty on wines. These
steps have helped boost sales growth.
The acquisition of Thachi Wines (TW), Australia, has
given Champagne Indage a global footprint. TW has contractual
arrangements for vineyards and a winery in Australia,
and processes 2.7m litres of wine a year. At present,
TW markets its products in Australia, China and Europe
under the brand name Broken Earth. Most of this wine
is sold unbranded. The acquisition would provide a ready-made
market for CIL to hawk its own brands in these countries
through TW’s distribution channels.
CIL plans to bring TW’s bulk wine to India and
bottle it at its plant here. This is likely to be marketed
domestically as a wine of Australian origin. This would
generate additional revenue.
The company’s economy brand, Vino, has reported
healthy growth in FY07 and brings in about 12% of revenue.
CIL expects beer drinkers to migrate to Vino due to
the latter’s attractive price of Rs 99 a bottle.
The company has set up a 100% subsidiary in the UK
under the name Indage (UK) to market its products to
Indian restaurants in the UK and Europe. This is likely
to enhance its exports.
CIL’s established brands come at all price points.
It has more than an 80% market share in the home
market. With the national wine policy under implementation
and the relaxation of distribution norms, the company
is likely to benefit in future.
Sale of wine in supermarkets is now allowed in Maharashtra,
Karnataka, Chandigarh, Goa and Haryana. This is likely
to widen and deepen wine consumption.'
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