Wine funds: Liquid assets you can toast to

Font Size

Print

Feedback

Email

Discuss

Related Articles

Agency to manage govt debt takes shapeSEZs draw investors as hurdles filter policyRising rates could hurt new investment: Kamath'FDI to exceed $35 bn target in 2008-09'

Diversified portfolios, spreading of risks, alternate asset classes and new investment forms have been the focus of the investing world in recent times. Everything has a price and the finer things of life are usually dearer than the rest. Classic cars, old stamps and coins, rare arts and crafts are some of the obvious things that come to mind, while discussing luxury products that grow in value with time. However, another such product that is more sought after as it ages is wine. Sweet, bitter, dry, semi-dry, wet, tangy, thick, fruity, white, red, rose; the variety is mind boggling, from this drink that has universal appeal and is yet a symbol of finesse, class and style.

Wine can be invested in three ways; one is as an individual wine collector, another as a private investor or owner of a vineyard and lastly through wine funds. As per Edelweiss Securities, the wine industry has seen a CAGR of over 25% in the past three years in the premium wine segment. Industry watchers also feel the growth momentum would continue for five to six years. Kapil Grover, CEO and founder of Grover Wines says, "The wine market has grown at a rate of 30% year-on-year for the past three years, and being a conservative guy, I still expect the industry to maintain a growth of 25-30% for the next 3 decades."

Currently, many new players are entering the market, with the likes of Seagram, Diageo and UB also launching wines in India. "With increasing competition and big multinationals now making a foray into the wine markets, some of the current market leaders would experience a drop in market share. However, this will also increase the overall growth of this sector, which will be beneficial to all," explains Kapil. Currently, Chateau Indage, Grover and Sula wines have 90% of the market share in India and are even served overseas in places like New York and London. However, wine experts from there are of the opinion that "While Indian wine is not bad, it still has to mature. Age and experience will help these wines get better as they are still a bit too fruity and sweet. They need to improve on their texture and complexity before they can compete with the more ripe and sophisticated collectable wines."