Jan 20: Although passing through a current phase of restricted expansion due to various factors, not the least of them being due to governmental policies, Indian wine industry is poised for a major expansion in the next 25 years, says PIO French National Ravi Viswanathan living in Singapore and running the Private Equity Fund VisVires that has a share in many pies in the Indian wine industry and has grandiose future plans
As in many economic sectors, the rosy scenario for the Indian scenery has a sense of déjà vu since China achieved it over the last 25 years with a growth rate of 20%.
In 2045, domestic production of wines could be 2 billion bottles over 500 000 acres of land and 500 000 direct new jobs in the agricultural sector and the wineries, and another 500 000 in retails shops and restaurants.
Including imports, the consumption would be about 2 bottles (1.5 L) per capita per year which is still well below developed economies or even the world average but far above the current pitiful spoonful per capita consumption. Keep in mind that Indians are gulping today 2 bottles of whisky per capita per year.
Apart from substantial economic gains of expanding the wine industry (the retail value of domestic wines would exceed 100 000 crores in 2045 measured in today’s rupees), there will be some material public health benefits as well with a shift away from hard liquor by health conscious younger educated generations (just look at Chinese data to be convinced).
But road ahead has pitfalls
As is now clear to all, the road ahead is full of pitfalls. Let me re-emphasize for the benefits of the policy makers of India that the grapes we use in winemaking don’t compete with other high value crops.
They generally require a poor soil (slopy, rocky, etc), very little water (unlike table grapes for eating which requires a lot more water), very little non organic fertilizers and chemicals. Our vineyards create substantial supplemental income opportunities in the villages for farmers-especially women. Viticulture and winemaking activities recycle almost all of the waste. All modern wineries have effluent / sewage treatment plants. All of this is achieved with no subsidies in marked contrast to other crops.
Despite a bright future thanks in great part to the unstoppable secular rise of the middle class in India, our wine industry faces many hurdles: a heavy tax burden, an ever growing swamp of arcane rules and byzantine regulations designed to deter even the boldest, a pricing structure that gobbles away the wealth creation away from the most important stakeholders (farmers and consumers), agricultural land laws not adapted to a modern and thriving economy, obtuse rules on quarantine and imports of much needed genetic material.
Given all these headwinds It is very difficult for boutique wineries often created and run by passionate entrepreneurs to grow or even survive. But there is nothing that can’t be improved in the long run.
Possible solutions
Our industry should speak with one voice to policy makers to state our needs and explain what we can contribute. The banking ecosystem should be improved to facilitate access to financial resources for our wineries and farmers. The country boasts of some of best agro- research facilities in the world (only last week I visited the impressive KVK labs in Baramati).
But more cooperation is needed between our industry and scientists to study drought resistant vines, or varietals with a longer life cycle in a country where vines do not have the benefit of winter dormancy, and more investment is required in indigenous wine grapes and organic/natural pesticides.
In the era of “Make in India” and despite the multiple and objective proofs of the ever increasing quality of Indian domestic wines, it is simply astonishing that the central government does not require Indian diplomats overseas to display proudly our local wines and help in the export markets-at a time when Indian cuisine is seeing a worldwide boom. (DelWine has made concerted efforts in the past to have the Ministry of Foreign Affairs make it mandatory for our missions overseas to serve Indian wines for all their State functions with mixed result-editor)
Collectively we need also to establish “appellation controlee” systems based on terroir to enhance the economic value of our harvests and to improve the wine quality for the benefit of the consumers.
We need to cooperate within industry wide associations for the education of these consumers and wine professionals through trainings and wine festivals and numerous other ideas. This will help sort out logistics and storage issues with a view of ensuring optimal conservation of wines at all times (unfortunately they are much more fragile than whiskies!).
Wine Tourism important too
Collectively we also need to create a framework to help develop wine- tourism and also coordinate activities among the various estates to cater to larger and larger numbers of wine tourists.
The rosy scenario is definitely achievable if all the chips are lined up. So let’s reconvene in 2045 when, hopefully as a freshly retired winery owner, I will muse over the hard work done since 2019, a glass of vintage Red in hand.
In the meantime, Jai Ho to 2019, Jai Ho to the 800t edition of delWine that provides useful benchmark information about the Indian wine industry and best wishes for a bountiful 2019 harvest which is commencing soon!
Ravi Viswanathan
(Partner, VisVires P-E Fund, Singapore)
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