The Sula surge

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SummaryThe going was not easy for number one wine player, Sula Vineyards, too. What did it do right that others need to emulate?

The country's number one player in wine making, Sula Vineyards, did not have it easy either. But what propelled the company, the first to establish a winery at Nashik in 1999, on the path of success right away were factors that others floundered on. Sula vice-president Neeraj Agarwal lists these as the patience to understand the business and a good marketing approach, besides sheer persistence. When Sula came out with its first bottle in 2000, it was a level of quality previously unknown in India—and it was well-marketed.

Agarwal recalls that the first year for the company was pretty challenging. “The company had made some 500 cases and it took more than a year to sell them. But there has been no looking back since,” he says. Sula grew at a rate of 75-80% between 2004-05, 30-40% in 2006-07 as the base of the company grew to five lakh cases, and 25% presently, says Agarwal.

Industry watchers say founder and CEO Rajeev Samant made some critical business decisions that helped the company see through the recessionary phase of 2008-09. During this period, the wine industry was amongst the first to be impacted. Sales of Sula’s premium brands had hit a low when Samant came up with affordable wines under the brand names of Samara and Port Wine 1000, priced at under R200 per bottle. Volumes picked up and this portfolio has gained in importance for the company. “The company started educating customers, set up a tasting room, opened its doors to show people how wine is made,” recalls Agarwal. Today, Sula gets over two lakh visitors to its winery every year and has set up a 32-room resort, Beyond, to attract more wine tourists to Nashik.

In November 2002, Wine Spectator, the world’s number one wine magazine, did a five-page feature on Sula, a proud first for an Indian winery. Currently, the company has 1,800 acres of vineyards (own and contract farms) spread across Maharashtra and Karnataka, and has crossed sales of 5.12 lakh cases (12 bottles per case) across its 25-odd brands. Its red wine Cabernet Shiraz and white wines Chenin Blanc and Sauvignon Blanc are among its bestsellers.

Ask Agarwal what differentiates Sula from the others and he says several factors contributed to Sula’s success. “A good marketing strategy, initial funding, a sound banking system, marketing and distribution, and efficiently tackling cumbersome taxation and policy issues made all the difference.

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